AN ACT Relating to the state lottery; amending RCW 67.70.040; adding a new section to chapter 67.40 RCW; and creating a new section.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. The legislature finds that there is a need for state encouragement and support of business and industrial development and expansion to create new jobs, strengthen our economy, and provide for future tax revenues. At the same time, the legislature finds that continued reliance on the state lottery for general fund revenues is improper and imprudent. It is in the best interests of the state that it provide for a phased reduction of general fund reliance on lottery revenues.

Sec. 2. Section 4, chapter 7, Laws of 1982 2nd ex. sess. and RCW 67.70.040 are each amended to read as follows:

The commission shall have the power, and it shall be its duty:

(1) To promulgate such rules governing the establishment and operation of a state lottery as it deems necessary and desirable in order that such a lottery be initiated at the earliest feasible and practicable time, and in order that such lottery produce the maximum amount of net revenues for the state consonant with the dignity of the state and the general welfare of the people. Such rules shall include, but shall not be limited to, the following:

(a) The type of lottery to be conducted which may include the selling of tickets or shares, or the use of electronic or mechanical devices or video terminals which do not require a printed ticket;

(b) The price, or prices, of tickets or shares in the lottery;

(d) The manner of selecting the winning tickets or shares;

(e) The manner and time of payment of prizes to the holder of winning tickets or shares which, at the director's option, may be paid in lump sum amounts or installments over a period of years;

(f) The frequency of the drawings or selections of winning tickets or shares, without limitation;

(g) Without limit as to number, the type or types of locations at which tickets or shares may be sold;

(h) The method to be used in selling tickets or shares, which may include the use of electronic or mechanical devices and video terminals;

(i) The licensing of agents to sell or distribute tickets or shares, except that a person under the age of eighteen shall not be licensed as an agent;

(j) The manner and amount of compensation, if any, to be paid licensed sales agents necessary to provide for the adequate availability of tickets or shares to prospective buyers and for the convenience of the public;

(k) The apportionment of the total revenues accruing from the sale of lottery tickets or shares and from all other sources among: (i) The payment of prizes to the holders of winning tickets or shares, which shall not be less than forty-five percent of the gross annual revenue from such lottery, (ii) the payment of costs incurred in the operation and administration of the lottery, including the expenses of the lottery and the costs resulting from any contract or contracts entered into for promotional, advertising, or operational services or for the purchase or lease of lottery equipment and materials, but the payment of such costs shall not exceed fifteen percent of the gross annual revenue from such lottery, (iii) for the repayment of any moneys appropriated to the state lottery fund pursuant to sections 36 and 37, chapter 7, Laws of 1982 2nd ex. sess., and (iv) for transfer to the state's general fund: PROVIDED, That no less than forty percent of the gross annual revenue from the sale of lottery tickets or shares shall be transferred as follows: Until July 1, 1986, one hundred percent of this amount to the state general fund; and on and after July 1, 1986, fifty percent of this amount to the new economic development fund and fifty percent of this amount to the state general fund;

(l) Such other matters necessary or desirable for the efficient and economical operation and administration of the lottery and for the convenience of the purchasers of tickets or shares and the holders of winning tickets or shares.

(2) To ensure that in each place authorized to sell lottery tickets or shares, on the back of the ticket or share, and in any advertising or promotion there shall be conspicuously displayed an estimate of the probability of purchasing a winning ticket.

(3) To amend, repeal, or supplement any such rules from time to time as it deems necessary or desirable.

(4) To advise and make recommendations to the director for the operation and administration of the lottery.

NEW SECTION. Sec. 3. A new section is added to chapter 67.40 RCW to read as follows:

There is hereby established the new economic development fund, a special fund to be used for the purposes of attracting new business and industry to the state, encouraging the expansion of existing businesses and industry, supporting private sector efforts to create new jobs, and providing for increased tax revenues as a result of increased business and industrial activity. The fund shall be administered, and its moneys distributed by, the departments of commerce and economic development, community development, and agriculture pursuant to rules established by the office of financial management, after consultation with those departments.