Bill Text For HB1837 - Committee Substitute

 1|                          STATE OF OKLAHOMA                            |
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 2|             1st Session of the 56th Legislature (2017)                |
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 3|COMMITTEE SUBSTITUTE                                                   |
  |FOR                                                                    |
 4|HOUSE BILL NO. 1837                  By: Osborn (Leslie)               |
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 7|                        COMMITTEE SUBSTITUTE                           |
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 8|       An Act relating to amusements and sports; amending 3A           |
  |       O.S. 2011, Section 713, as amended by Section 27,               |
 9|       Chapter 304, O.S.L. 2012 (3A O.S. Supp. 2016, Section           |
  |       713), which relates to the Oklahoma Education Lottery           |
10|       Act; modifying provisions related to disposition of             |
  |       net proceeds; requiring annual reports; setting                 |
11|       maximum percentage for administrative costs;                    |
  |       providing for disposition of net proceeds in excess             |
12|       of designated amount; requiring appropriation;                  |
  |       specifying purpose of expenditures; and providing for           |
13|       codification.                                                   |
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16|BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:                  |
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17|    SECTION 1.     AMENDATORY     3A O.S. 2011, Section 713, as        |
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18|amended by Section 27, Chapter 304, O.S.L. 2012 (3A O.S. Supp. 2016,   |
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19|Section 713), is amended to read as follows:                           |
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20|    Section 713.  A.  All gross proceeds shall be the property of      |
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21|the Oklahoma Lottery Commission.  From its gross proceeds, the         |
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22|Commission shall pay the operating expenses of the Commission.  At     |
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23|least forty-five percent (45%) of gross proceeds shall be made         |
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24|available as prize money.  However, the provisions of this             |
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   Req. No. 6746                                                   Page 1
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 1|subsection shall be deemed not to create any lien, entitlement,        |
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 2|cause of action, or other private right, and any rights of holders     |
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 3|of tickets or shares shall be determined by the Commission in          |
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 4|setting the terms of its lottery or lotteries.                         |
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 5|    B.  For each fiscal year, the first Fifty Million Dollars          |
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 6|($50,000,000.00) of net proceeds shall equal at least thirty-five      |
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 7|percent (35%) of the gross proceeds.  However, for the purpose of      |
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 8|repaying indebtedness issued pursuant to Section 732 of this title,    |
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 9|for the first two (2) full fiscal years and any partial first fiscal   |
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10|year of the Commission, net proceeds need only equal at least thirty   |
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11|percent (30%) of the gross proceeds be transferred to the Oklahoma     |
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12|Education Lottery Trust Fund.                                          |
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13|    C.  All of the net proceeds remaining after the apportionment      |
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14|required by subsection B of this section shall be transferred to the   |
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15|Oklahoma Education Lottery Trust Fund as provided in subsection B      |
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16|Section 2 of this section act.  The Oklahoma Lottery Commission        |
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17|shall submit a written report of its findings and any                  |
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18|recommendations regarding the impact of having the net proceeds        |
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19|minimum requirement set at a fixed dollar amount.  The report shall    |
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20|be submitted to the Governor, the Speaker of the Oklahoma House of     |
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21|Representatives and the President Pro Tempore of the Oklahoma State    |
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22|Senate not later than October 1, 2019, and annually thereafter.        |
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23|    B. D.  There is hereby created in the State Treasury a fund to     |
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24|be designated the "Oklahoma Education Lottery Trust Fund".  Except     |
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   Req. No. 6746                                                   Page 2
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 1|as otherwise provided in subsections H C, J and I K of this section,   |
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 2|on or before the fifteenth day of each calendar quarter, the           |
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 3|Commission shall transfer to the State Treasurer, for credit to the    |
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 4|Oklahoma Education Lottery Trust Fund, the amount of all net           |
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 5|proceeds accruing during the preceding calendar quarter.               |
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 6|Expenditures from the fund shall be made upon warrants issued by the   |
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 7|State Treasurer against claims filed as prescribed by law with the     |
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 8|Director of the Office of Management and Enterprise Services for       |
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 9|approval and payment.                                                  |
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10|    E.  Upon their deposit into the State Treasury, any monies         |
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11|representing a deposit of net proceeds shall then become the           |
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12|unencumbered property of this state, and neither the Commission nor    |
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13|the board of trustees shall have the power to agree or undertake       |
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14|otherwise.  The monies shall be invested by the State Treasurer in     |
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15|accordance with state investment practices.  All earnings              |
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16|attributable to such investments shall likewise be the unencumbered    |
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17|property of the state and shall accrue to the credit of the fund       |
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18|funds provided for in subsections B and C of this section.             |
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19|    C. F.  Monies in the Oklahoma Education Lottery Trust Fund         |
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20|deposited pursuant to subsection B of this section shall only be       |
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21|appropriated as follows:                                               |
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22|    1.  Forty-five percent (45%) for the following:                    |
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   Req. No. 6746                                                   Page 3
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 1|         a.    kindergarten through twelfth grade public education,    |
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 2|              including but not limited to compensation and benefits   |
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 3|              for public school teachers and support employees, and    |
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 4|         b.    early childhood development programs, which shall       |
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 5|              include but not be limited to costs associated with      |
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 6|              prekindergarten and full-day kindergarten programs;      |
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 7|    2.  Forty-five percent (45%) for the following:                    |
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 8|         a.    tuition grants, loans and scholarships to citizens of   |
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 9|              this state to enable such citizens to attend colleges    |
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10|              and universities located within this state, regardless   |
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11|              of whether such colleges and universities are owned or   |
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12|              operated by the Oklahoma State Regents for Higher        |
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13|              Education, or to attend institutions operated under      |
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14|              the authority of the Oklahoma Department of Career and   |
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15|              Technology Education; provided such tuition grants,      |
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16|              loans and scholarships shall not be made to a citizen    |
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17|              of this state to attend a college or university which    |
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18|              is not accredited by the Oklahoma State Regents for      |
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19|              Higher Education,                                        |
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20|         b.    construction of educational facilities for elementary   |
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21|              school districts, independent school districts, the      |
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22|              Oklahoma State System of Higher Education, and career    |
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23|              and technology education,                                |
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   Req. No. 6746                                                   Page 4
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 1|         c.    capital outlay projects for elementary school           |
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 2|              districts, independent school districts, the Oklahoma    |
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 3|              State System of Higher Education, and career and         |
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 4|              technology education,                                    |
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 5|         d.    technology for public elementary school district,       |
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 6|              independent school district, state higher education,     |
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 7|              and career and technology education facilities, which    |
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 8|              shall include but not be limited to costs of providing   |
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 9|              to teachers at accredited public institutions who        |
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10|              teach levels kindergarten through twelfth grade,         |
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11|              personnel at technology centers under the authority of   |
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12|              the Oklahoma State Department of Career and Technology   |
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13|              Education, and professors and instructors within the     |
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14|              Oklahoma State System of Higher Education, the           |
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15|              necessary training in the use and application of         |
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16|              computers and advanced electronic instructional          |
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17|              technology to implement interactive learning             |
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18|              environments in the classroom and to access the          |
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19|              state-wide statewide distance learning network and       |
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20|              costs associated with repairing and maintaining          |
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21|              advanced electronic instructional technology,            |
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22|         e.    endowed chairs for professors at institutions of        |
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23|              higher education operated by the Oklahoma State System   |
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24|              of Higher Education, and                                 |
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   Req. No. 6746                                                   Page 5
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 1|         f.    programs and personnel of the Oklahoma School for the   |
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 2|              Deaf and the Oklahoma School for the Blind;              |
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 3|    3.  Five percent (5%) to the School Consolidation and Assistance   |
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 4|Fund.  When the total amount in the School Consolidation and           |
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 5|Assistance Fund from all sources equals Five Million Dollars           |
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 6|($5,000,000.00), all monies appropriated pursuant to this paragraph    |
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 7|which would otherwise be deposited in the School Consolidation and     |
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 8|Assistance Fund in excess of Five Million Dollars ($5,000,000.00)      |
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 9|shall be allocated by the State Department of Education to public      |
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10|schools based on the audited end-of-year average daily membership in   |
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11|grades 8 through 12 during the preceding school year for the purpose   |
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12|of purchasing technology equipment in order to conduct on-line         |
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13|testing as required by the Achieving Classroom Excellence Act of       |
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14|2005.  If at any time the total amount in the School Consolidation     |
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15|and Assistance Fund drops below Five Million Dollars                   |
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16|($5,000,000.00), the monies appropriated pursuant to this paragraph    |
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17|shall be deposited in the School Consolidation and Assistance Fund     |
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18|until the Fund again reaches Five Million Dollars ($5,000,000)         |
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19|($5,000,000.00); and                                                   |
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20|    4.  Five percent (5%) to the Teachers' Retirement System           |
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21|Dedicated Revenue Revolving Fund.                                      |
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22|In no instance shall the annual maximum percentage for                 |
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23|administrative costs, not including marketing and advertising costs,   |
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24|funds set aside for prizes, commissions paid to retailers, contract    |
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   Req. No. 6746                                                   Page 6
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 1|fees paid to gaming system vendors and instant ticket providers or     |
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 2|emergency-related capital expenses, exceed three percent (3%) of       |
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 3|sales.                                                                 |
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 4|    D. G.  The Legislature shall appropriate funds from the Oklahoma   |
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 5|Education Lottery Trust Fund only for the purposes specified in        |
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 6|subsection C F of this section and Section 2 of this act.  Even when   |
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 7|funds from the trust fund are used for these purposes, the             |
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 8|Legislature shall not use funds from the trust fund to supplant or     |
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 9|replace other state funds supporting common education, higher          |
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10|education, or career and technology education.                         |
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11|    E. H.  In order to ensure that the funds from the trust fund are   |
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12|used to enhance and not supplant funding for education, the State      |
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13|Board of Equalization shall examine and investigate appropriations     |
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14|from the trust fund each year.  At the meeting of the State Board of   |
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15|Equalization held within five (5) days after the monthly               |
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16|apportionment in February of each year, the State Board of             |
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17|Equalization shall issue a finding and report which shall state        |
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18|whether appropriations from the trust fund were used to enhance or     |
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19|supplant education funding.  If the State Board of Equalization        |
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20|finds that education funding was supplanted by funds from the trust    |
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21|fund, the Board shall specify the amount by which education funding    |
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22|was supplanted.  In this event, the Legislature shall not make any     |
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23|appropriations for the ensuing fiscal year until an appropriation in   |
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24|that amount is made to replenish the trust fund.                       |
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   Req. No. 6746                                                   Page 7
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 1|    F. I.  Except as otherwise provided by this subsection, no         |
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 2|deficiency in the Oklahoma Education Lottery Trust Fund shall be       |
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 3|replenished by reducing any nonlottery funds, including specifically   |
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 4|but without limitation, the General Revenue Fund, the Constitutional   |
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 5|Reserve Fund or the Education Reform Revolving Fund of the State       |
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 6|Department of Education.  No program or project started specifically   |
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 7|from lottery proceeds shall be continued from the General Revenue      |
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 8|Fund, the Constitutional Reserve Fund or the Education Reform          |
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 9|Revolving Fund of the State Department of Education.  Such programs    |
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10|must be adjusted or discontinued according to available lottery        |
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11|proceeds unless the Legislature by general law establishes             |
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12|eligibility requirements and appropriates specific funds therefor.     |
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13|No surplus in the Oklahoma Education Lottery Trust Fund shall be       |
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14|reduced or transferred to correct any nonlottery deficiencies in       |
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15|sums available for general appropriations.  The provisions of this     |
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16|subsection shall not apply to bonds or other obligations issued        |
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17|pursuant to or to the repayment of bonds or other obligations issued   |
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18|pursuant to the Oklahoma Higher Education Promise of Excellence Act    |
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19|of 2005.                                                               |
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20|    G. J.  There is hereby created in the State Treasury a revolving   |
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21|fund to be designated the "Oklahoma Education Lottery Revolving        |
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22|Fund".  The fund shall be a continuing fund, not subject to fiscal     |
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23|year limitations, and shall consist of all monies received by the      |
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24|Commission.  The Commission shall make payments of net proceeds from   |
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   Req. No. 6746                                                   Page 8
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 1|the fund to the Oklahoma Education Lottery Trust Fund on or before     |
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 2|the fifteenth day of each calendar quarter as provided in subsection   |
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 3|B D of this section.  All monies accruing to the credit of the         |
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 4|Oklahoma Education Lottery Revolving Fund are hereby appropriated      |
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 5|and may be budgeted and expended for the payment of net proceeds,      |
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 6|prizes, commissions to retailers, administrative expenses and all      |
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 7|other expenses arising out of the operation of the education           |
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 8|lottery, subject to the limitations provided in the Oklahoma           |
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 9|Education Lottery Act.  Expenditures from the fund shall be made       |
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10|upon warrants issued by the State Treasurer against claims filed as    |
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11|prescribed by law with the Director of the Office of Management and    |
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12|Enterprise Services for approval and payment.                          |
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13|    The monies in the fund shall be invested by the State Treasurer    |
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14|in accordance with state investment practices.  All earnings           |
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15|attributable to such investments shall likewise accrue to the credit   |
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16|of the fund.                                                           |
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17|    H. K.  When appropriations from the Oklahoma Education Lottery     |
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18|Trust Fund are made to common education pursuant to the provisions     |
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19|of paragraph 1 of subsection C F of this section, the appropriations   |
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20|shall be made available on a monthly basis.  In addition to the        |
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21|provisions of subsection B subsections D and E of this section, the    |
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22|following process shall be used to insure ensure that the              |
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23|appropriations are made available to common education in a timely      |
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24|manner:                                                                |
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   Req. No. 6746                                                   Page 9
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 1|    1.  Beginning in July of the fiscal year in which appropriations   |
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 2|are made to common education from the Oklahoma Education Lottery       |
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 3|Trust Fund, the Commission, on or before the ninth day of each         |
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 4|month, shall transfer to the State Treasurer, for credit to the        |
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 5|Oklahoma Education Lottery Trust Fund, the amount of net proceeds      |
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 6|accruing during the preceding month equal to the amount of total       |
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 7|monthly collections due to common education as required by paragraph   |
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 8|1 of subsection C F of this section;                                   |
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 9|    2.  The Director of the Office of Management and Enterprise        |
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10|Services shall allocate the transfers provided for in paragraph 1 of   |
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11|this subsection to the State Department of Education on a monthly      |
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12|basis, not to exceed one-twelfth (1/12) of the annual apportionment    |
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13|for the fiscal year; and                                               |
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14|    3.  The total amount of transfers to the Oklahoma Education        |
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15|Lottery Trust Fund of net lottery proceeds made pursuant to this       |
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16|subsection shall not exceed the total appropriations made to common    |
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17|education from the Oklahoma Education Lottery Trust Fund for the       |
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18|specific fiscal year.                                                  |
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19|    I. L.  When appropriations from the Oklahoma Education Lottery     |
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20|Trust Fund are made to The Oklahoma State System of Higher             |
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21|Education, the appropriations shall be made available to the System    |
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22|on a monthly basis.  In addition to the provisions of subsection B     |
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23|subsections D and E of this section, the following process shall be    |
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   Req. No. 6746                                                   Page 10
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 1|used to ensure that the appropriations are made available to The       |
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 2|Oklahoma State System of Higher Education in a timely manner:          |
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 3|    1.  Beginning in July of the fiscal year in which appropriations   |
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 4|are made to The Oklahoma State System of Higher Education from the     |
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 5|Oklahoma Education Lottery Trust Fund, the Commission, on or before    |
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 6|the ninth day of each month, shall transfer to the State Treasurer,    |
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 7|for credit to the Oklahoma Education Lottery Trust Fund, the amount    |
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 8|of net proceeds accruing during the preceding month equal to the       |
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 9|amount of total monthly collections due to the Oklahoma State          |
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10|Regents for Higher Education as required by paragraph 2 of             |
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11|subsection C F of this section;                                        |
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12|    2.  The Director of the Office of Management and Enterprise        |
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13|Services shall allocate the transfers provided for in paragraph 1 of   |
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14|this subsection to the Oklahoma State Regents for Higher Education     |
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15|on a monthly basis, not to exceed one-twelfth (1/12) of the annual     |
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16|apportionment for the fiscal year; and                                 |
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17|    3.  The total amount of transfers to the Oklahoma Education        |
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18|Lottery Trust Fund of net lottery proceeds made pursuant to this       |
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19|subsection shall not exceed the total appropriations made to The       |
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20|Oklahoma State System for Higher Education from the Oklahoma           |
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21|Education Lottery Trust Fund for the specific fiscal year.             |
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22|    SECTION 2.     NEW LAW     A new section of law to be codified     |
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23|in the Oklahoma Statutes as Section 713.1 of Title 3A, unless there    |
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24|is created a duplication in numbering, reads as follows:               |
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   Req. No. 6746                                                   Page 11
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 1|    The portion of lottery annual net proceeds deposited to the        |
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 2|Oklahoma Education Lottery Trust Fund that exceeds Fifty Million       |
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 3|Dollars ($50,000,000.00) shall be appropriated by the Legislature on   |
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 4|a cash basis to be allocated by the State Department of Education to   |
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 5|public schools based on the audited end-of-year average daily          |
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 6|membership in grades PK-12 during the preceding school year for the    |
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 7|purpose of implementing prekindergarten-through-third-grade reading    |
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 8|intervention initiatives or science, technology, engineering and       |
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 9|math (STEM) programs.                                                  |
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11|    56-1-7031      JM     02/21/17                                     |
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   Req. No. 6746                                                   Page 12
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