READ FIRST TIME 02/24/10.   

     AN ACT Relating to creating the Washington opportunity pathways account; reenacting and amending RCW 67.70.240, 67.70.340, and 43.135.045; adding a new section to chapter 28B.76 RCW; and creating new sections.

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

NEW SECTION.  Sec. 1   The legislature finds that institutions of higher education are key to the future employment opportunities of Washington citizens and to the economic well-being of the state. The legislature finds that the recruitment of entrepreneurial researchers at institutions of higher education and the formation of research innovation teams will further enhance faculty recruitment and economic development. The legislature further finds that current financial aid and early childhood education programs are underfunded and subject to the unpredictability of the state budget. It is the intent of the legislature to direct lottery account moneys toward the Washington opportunity pathways account and that those funds stabilize and increase existing resources for the recruitment of entrepreneurial researchers, innovation partnership zones and research teams, early childhood education, opportunity grants, educational opportunity grants, get ready for math and science scholarships, passport to college promise scholarships, college bound scholarships, the state work study program, the state need grant, Washington scholars awards, the Washington award for vocational excellence, and Washington promise scholarships. It is also the intent of the legislature to continue funding the education construction fund by redirecting a portion of general state revenues to that fund.

NEW SECTION.  Sec. 2   A new section is added to chapter 28B.76 RCW to read as follows:
     The Washington opportunity pathways account is created in the state treasury. Expenditures from the account may be used only for programs in chapter 28B.12 RCW (state work-study), chapter 28B.50 RCW (opportunity grant), RCW 28B.76.660 (Washington scholars award), RCW 28B.76.670 (Washington award for vocational excellence), chapter 28B.92 RCW (state need grant program), chapter 28B.101 RCW (educational opportunity grant), chapter 28B.105 RCW (GET ready for math and science scholarship), chapter 28B.117 RCW (passport to college promise), chapter 28B.118 RCW (college bound scholarship), chapter 28B.119 RCW (Washington promise scholarship), chapter 43.215 RCW (early childhood education and assistance program), and RCW 43.330.280 (recruitment of entrepreneurial researchers, innovation partnership zones and research teams).

Sec. 3   RCW 67.70.240 and 2009 c 500 s 11 and 2009 c 479 s 44 are each reenacted and 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 education construction fund created in RCW 43.135.045 and the Washington opportunity pathways account created in section 2 of this act. On and after July 1, ((2004)) 2010, all deposits not otherwise obligated under this section shall be placed in the ((education construction fund)) Washington opportunity pathways account. Moneys in the state lottery account deposited in the ((education construction fund)) Washington opportunity pathways account are included in "general state revenues" under RCW 39.42.070;
     (4) 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. Three million dollars shall be distributed under this subsection during calendar year 1996. During subsequent years, such distributions shall equal the prior year's distributions increased by four percent. Distributions under this subsection 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;
     (5) For distribution to the stadium and exhibition center account, created in RCW 43.99N.060. Subject to the conditions of RCW 43.99N.070, six million dollars shall be distributed under this subsection during the calendar year 1998. During subsequent years, such distribution shall equal the prior year's distributions increased by four percent. No distribution may be made under this subsection after December 31, 1999, unless the conditions for issuance of the bonds under RCW 43.99N.020(2) are met. Distributions under this subsection shall cease when the bonds are retired, but not later than December 31, 2020;
     (6) For the purchase and promotion of lottery games and game-related services; and
     (7) For the payment of agent compensation.
     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.

Sec. 4   RCW 67.70.340 and 2009 c 576 s 2 and 2009 c 479 s 45 are each reenacted and amended to read as follows:
     (1) The legislature recognizes that creating a shared game lottery could result in less revenue being raised by the existing state lottery ticket sales. The legislature further recognizes that the fund most impacted by this potential event is the ((education construction)) Washington opportunity pathways account. Therefore, it is the intent of the legislature to use some of the proceeds from the shared game lottery to make up the difference that the potential state lottery revenue loss would have on the ((education construction)) Washington opportunity pathways account. The legislature further intends to use some of the proceeds from the shared game lottery to fund programs and services related to problem and pathological gambling.
     (2) The ((education construction)) Washington opportunity pathways account is expected to receive one hundred two million dollars annually from state lottery games other than the shared game lottery. For fiscal year ((2003)) 2011 and thereafter, if the amount of lottery revenues earmarked for the ((education construction)) Washington opportunity pathways account is less than one hundred two million dollars, the commission, after making the transfer required under subsection (3) of this section, must transfer sufficient moneys from revenues derived from the shared game lottery into the ((education construction)) Washington opportunity pathways account to bring the total revenue up to one hundred two million dollars.
     (3)(a) The commission shall transfer, from revenue derived from the shared game lottery, to the problem gambling account created in RCW 43.20A.892, an amount equal to the percentage specified in (b) of this subsection of net receipts. For purposes of this subsection, "net receipts" means the difference between (i) revenue received from the sale of lottery tickets or shares and revenue received from the sale of shared game lottery tickets or shares; and (ii) the sum of payments made to winners.
     (b) In fiscal year 2006, the percentage to be transferred to the problem gambling account is one-tenth of one percent. In fiscal year 2007 and subsequent fiscal years, the percentage to be transferred to the problem gambling account is thirteen one-hundredths of one percent.
     (4) The commission shall transfer the remaining net revenues, if any, derived from the shared game lottery "Powerball" authorized in RCW 67.70.044(1) after the transfers pursuant to this section into the state general fund for the student achievement program under RCW 28A.505.220.
     (5) The remaining net revenues, if any, in the shared game lottery account after the transfers pursuant to this section shall be deposited into the ((general fund)) Washington opportunity pathways account.

Sec. 5   RCW 43.135.045 and 2009 c 564 s 939 and 2009 c 479 s 37 are each reenacted and amended to read as follows:
     The education construction fund is hereby created in the state treasury.
     (1) Funds may be appropriated from the education construction fund exclusively for common school construction or higher education construction. During the 2007-2009 fiscal biennium, funds may also be used for higher education facilities preservation and maintenance. During the 2009-2011 fiscal biennium, the legislature may transfer from the education construction fund to the state general fund such amounts as reflect the excess fund balance of the fund.
     (2) Funds may be appropriated for any other purpose only if approved by a two-thirds vote of each house of the legislature and if approved by a vote of the people at the next general election. An appropriation approved by the people under this subsection shall result in an adjustment to the state expenditure limit only for the fiscal period for which the appropriation is made and shall not affect any subsequent fiscal period.
     (3) Funds for the student achievement program in RCW 28A.505.210 and 28A.505.220 shall be appropriated to the superintendent of public instruction strictly for distribution to school districts to meet the provisions set out in the student achievement act. Allocations shall be made on an equal per full-time equivalent student basis to each school district.
     (4) After July 1, 2010, the state treasurer shall transfer one hundred two million dollars from the general fund to the education construction fund by June 30th of each year.

NEW SECTION.  Sec. 6   In consultation with independent experts and in collaboration with the higher education coordinating board, the state lottery commission shall upon the effective date of this section develop and begin implementation of a strategy and plan for actively marketing the state lottery as an essential contributor to Washington's opportunity pathways. The commission shall report to the economic development, higher education, and commerce committees of the legislature on the key messages, components, performance objectives, and anticipated revenue impacts of the strategy by September 1, 2010, and by December 1, 2010.

NEW SECTION.  Sec. 7   The joint legislative audit and review committee shall conduct a review of marketing and vendor expenditures and incentive payment programs at the state lottery commission to identify cost savings and efficiencies to maximize contributions to beneficiaries under this act. This review shall include examination of the following:
     (1) The expenditures at the state lottery commission related to marketing and vendors compared with ticket sales. This review shall include an analysis of: Marketing expenses for fiscal years 2005 to 2010 and the impact on ticket sales; the impact to sales of tickets from the change in lottery beneficiaries provided in this act from the education construction fund to the Washington opportunity pathways account; and the competitive bidding process for vendors in Washington. In its final report on this subject, due to the legislature by November 2010, the joint legislative audit and review committee shall provide: A description of the competitive contracting processes for marketing services and vendors, and any marketing programs or expenditures funded through the lottery administrative account; an all-state survey of marketing and vendor contractors for other state lotteries; identification of whether there are duplicative or unproductive marketing activities; identification of whether savings may occur from changing vendors; and an analysis of marketing expenses and ticket sales for fiscal year 2000 through the months of fiscal year 2011 for which data are available.
     (2) The incentive payment program for employees at the state lottery commission. This review shall include an analysis of the state's laws, policies, procedures, and practices as they relate to incentive payments. In its final report on this subject, due to the legislature by November 2010, the joint legislative audit and review committee shall provide: A description of how the incentive payment program at the state lottery commission operates, and comparison to best practices for outcome-based performance payments.