H-0590.2  _______________________________________________

 

                          HOUSE BILL 1685

          _______________________________________________

 

State of Washington      55th Legislature     1997 Regular Session

 

By Representatives Hankins, Mitchell, Sehlin, Ogden, Carlson, Johnson, Talcott, K. Schmidt, Radcliff, Parlette, Dyer, Skinner, Honeyford, Zellinsky, Keiser, Dickerson, O'Brien, Blalock, Chopp, Hatfield, Regala, Conway, Lantz, Kenney, Wood, Doumit, Morris, Kessler and Cooke

 

Read first time 02/05/97.  Referred to Committee on Capital Budget.

Creating a school construction endowment and providing property tax reductions.


    AN ACT Relating to the creation of a school construction endowment with associated property tax reductions; amending RCW 67.70.040 and 67.70.240; adding a new section to chapter 84.55 RCW; creating a new section; providing an effective date; and declaring an emergency.

 

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

 

    NEW SECTION.  Sec. 1.  (1) The legislature finds that the student population in the public school system is growing and that there exists a high demand for construction of new schools and modernization of existing schools and that only about one-half of the future demand for state school facility funding can be financed by school trust land timber revenues.  The legislature finds that providing adequate funding for school facilities through a mechanism that provides a stable and perpetual source of income to supplement school trust land revenues is consistent with the vision of the permanent school fund created in the state Constitution.  The legislature also finds that reducing state property taxes will lessen the tax burden on property owners and indirectly benefit local school bond levies.

    (2) The purpose of this act is to utilize current state lottery revenues to fund an endowment that will provide a perpetual source of income for construction of school facilities and eliminate the need for state indebtedness to finance future construction and modernization of public school facilities.  The money deposited into the permanent common school fund will be invested and the interest earnings will be dedicated to funding school construction.  After eight years the lottery revenues should deposit at least one billion dollars into the endowment fund and then the lottery revenues will be used to reduce the state property tax by the amount of lottery revenue.

 

    Sec. 2.  RCW 67.70.040 and 1994 c 218 s 4 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.  The use of electronic or mechanical devices or video terminals which allow for individual play against such devices or terminals shall be prohibited.  Approval of the legislature shall be required before entering any agreement with other state lotteries to conduct shared games;

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

    (c) The numbers and sizes of the prizes on the winning tickets or shares;

    (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.  Approval of the legislature is required before conducting any on-line game in which the drawing or selection of winning tickets occurs more frequently than once every twenty-four hours;

    (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;

    (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) transfers to the lottery administrative account created by RCW 67.70.260((, and)); (iii) transfer to the state's general fund; and (iv) transfers to the permanent common school fund.  Transfers to the state general fund shall be made in compliance with RCW 43.01.050;

    (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.

 

    Sec. 3.  RCW 67.70.240 and 1995 3rd sp.s. c 1 s 105 are each amended to read as follows:

    The moneys in the state lottery account shall be used only:  (1) For the payment of prizes to the holders of winning lottery tickets or shares; (2) for purposes of making deposits into the reserve account created by RCW 67.70.250 and into the lottery administrative account created by RCW 67.70.260; (3) for purposes of making deposits into the state's general fund; (4) for purposes of making deposits into the ((housing trust fund under the provisions of section 7 of this 1987 act)) permanent common school fund; (5) for distribution to a county for the purpose of paying the principal and interest payments on bonds issued by the county to construct a baseball stadium, as defined in RCW 82.14.0485, including reasonably necessary preconstruction costs; (6) for the purchase and promotion of lottery games and game-related services; and (7) for the payment of agent compensation.  Beginning July 1, 1997, and ending July 1, 2005, no deposits shall be made into the state general fund under subsection (3) of this section, and the amount that would otherwise be deposited under subsection (3) of this section shall be deposited into the permanent common school fund under subsection (4) of this section.  No deposits shall be made under subsection (4) of this section after June 30, 2005.  Three million dollars shall be distributed under subsection (5) of this section during calendar year 1996.  During subsequent years, such distributions shall equal the prior year's distributions increased by four percent.  Distributions under subsection (5) of this section shall cease when the bonds issued for the construction of the baseball stadium are retired, but not more than twenty years after the tax under RCW 82.14.0485 is first imposed.

    The office of financial management shall require the allotment of all expenses paid from the account and shall report to the ways and means committees of the senate and house of representatives any changes in the allotments.

 

    NEW SECTION.  Sec. 4.  A new section is added to chapter 84.55 RCW to read as follows:

    (1) As used in this section, "full levy" means the levy amount that would be allowed otherwise under this chapter without regard to this section.

    (2) The state property tax levy for collection in 2005 and thereafter shall be the full levy reduced by the amount of lottery revenues deposited into the general fund under RCW 67.70.240.

 

    NEW SECTION.  Sec. 5.  If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

 

    NEW SECTION.  Sec. 6.  This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect July 1, 1997.

 


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