Bill Summary – FastDemocracy

WEST VIRGINIA LEGISLATURE
       2023 REGULAR SESSION
                   Introduced Senate Bill 636
 By Senators Barrett, Jeffries, Nelson, Phillips, Queen,
          Rucker, Takubo, Weld, and Plymale [Introduced February 15, 2023; referred to the Committee on Finance]
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  A BILL to amend and reenact §29-22A-10 of the Code of West Virginia, 1931, as amended,
         relating to racetrack video lottery; providing for certain transfers to and from the Licensed
         Racetrack Modernization Fund; and specifying the eligible purpose for recoupment of
         funds on deposit in facility modernization account within the Licensed Racetrack
         Modernization Fund.
     Be it enacted by the Legislature of West Virginia:
     ARTICLE 22A. RACETRACK VIDEO LOTTERY.
     §29-22A-10. Accounting and reporting; commission to provide communications protocol data; distribution of net terminal income; remittance through electronic transfer of
            funds; establishment of accounts and nonpayment penalties; commission control of accounting for net terminal income; settlement of accounts; manual reporting and payment may be required; request for reports; examination of accounts and records.
         (a) The commission shall provide to manufacturers, or applicants applying for a
  manufacturer’s permit, the protocol documentation data necessary to enable the respective
  manufacturer’s video lottery terminals to communicate with the commission’s central computer for
  transmitting auditing program information and for activation and disabling of video lottery
  terminals.
         (b) The gross terminal income of a licensed racetrack shall be remitted to the commission
  through the electronic transfer of funds. Licensed racetracks shall furnish to the commission all
  information and bank authorizations required to facilitate the timely transfer of moneys to the
  commission. Licensed racetracks must provide the commission 30 days’ advance notice of any
 proposed account changes in order to assure the uninterrupted electronic transfer of funds. From
 the gross terminal income remitted by the licensee to the commission:
        (1) The commission shall deduct an amount sufficient to reimburse the commission for its
 actual costs and expenses incurred in administering racetrack video lottery at the licensed
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 racetrack and the resulting amount after the deduction is the net terminal income. The amount
 deducted for administrative costs and expenses of the commission may not exceed four percent of
 gross terminal income: Provided, That any amounts deducted by the commission for its actual
 costs and expenses that exceeds its actual costs and expenses shall be deposited into the State
 Lottery Fund. For the fiscal years ending June 30, 2011 beginning on or after July 1, 2011 through
 June 30, 2030, the term "actual costs and expenses" may include transfers of up to $9 million in
 surplus allocations for each fiscal year, as calculated by the commission when it has closed its
 books for the fiscal year, to the Licensed Racetrack Modernization Fund created by subdivision
 (2), of this subsection. For all fiscal years beginning on or after July 1, 2001, the commission shall
 not receive an amount of gross terminal income in excess of the amount of gross terminal income
 received during the fiscal year ending on June 30, 2001, but four percent of any amount of gross
 terminal income received in excess of the amount of gross terminal income received during the
 fiscal year ending on June 30, 2001, shall be deposited into the fund established in §29-22-18a of
 this code; and
        (2) A Licensed Racetrack Modernization Fund is created within the lottery fund. For all
 fiscal years beginning on or after July 1, 2011, and ending with the fiscal year beginning July 1,
 2030, the commission shall deposit such amounts as are available according to subdivision (1) of
 this subsection into a separate facility modernization account maintained within the Licensed
 Racetrack Modernization Fund for each racetrack. Each racetrack’s share of each year’s deposit
 shall be calculated in the same ratio as each racetrack’s apportioned contribution to the four
 percent administrative costs and expenses allowance provided for in subdivision (1) of this
 subsection for that year. For each $2 expended by a licensed racetrack for facility modernization
 capital improvements at facilities of the licensed racetrack located in this state, having a useful life
 of three or more years and placed in service after July 1, 2011, the licensed racetrack shall receive
 $1 in recoupment from its facility modernization account. If the licensed racetrack’s facility
 modernization account contains a balance in any fiscal year, the unexpended balance from that
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 fiscal year will be available for matching for one additional fiscal year, after which time, the
 remaining unused balance carried forward shall revert to the lottery fund. For purposes of this
 section, the term "facility modernization improvements" includes acquisitions of new and unused
 video lottery terminals and related equipment Video lottery terminals financed through the
 recoupment provided in this subdivision must be retained by the licensee in its West Virginia
 licensed location for a period of not less than five years from the date of initial installation.
         (c) The amount resulting after the deductions required by subsection (b) of this section
 constitutes net terminal income that shall be divided as set out in this subsection. For all fiscal
 years beginning on or after July 1, 2001, any amount of net terminal income received in excess of
 the amount of net terminal income received during the fiscal year ending on June 30, 2001, shall
 be divided as set out in §29-22A-10b of this code. The licensed racetrack’s share is in lieu of all
 lottery agent commissions and is considered to cover all costs and expenses required to be
 expended by the licensed racetrack in connection with video lottery operations. The division shall
 be made as follows:
         (1) The commission shall receive 30 percent of net terminal income, which shall be paid
 into the State Lottery Fund as provided in §29-22A-10a of this code;
         (2) Until July 1, 2005, 14 percent of net terminal income at a licensed racetrack shall be
 deposited in the special fund established by the licensee, and used for payment of regular purses
 in addition to other amounts provided for in §19-23-1 et seq. of this code, on and after July 1, 2005,
 the rate shall be seven percent of net terminal income;
         (3) The county where the video lottery terminals are located shall receive two percent of
 the net terminal income: Provided, That:
         (A) Beginning July 1, 1999, and thereafter, any amount in excess of the two percent
 received during the fiscal year 1999 by a county in which a racetrack is located that has
 participated in the West Virginia Thoroughbred Development Fund since on or before January 1,
 1999, shall be divided as follows:
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        (i) The county shall receive 50 percent of the excess amount; and
        (ii) The municipalities of the county shall receive 50 percent of the excess amount, said 50
 percent to be divided among the municipalities on a per capita basis as determined by the most
 recent decennial United States census of population; and
        (B) Beginning July 1, 1999, and thereafter, any amount in excess of the two percent
 received during the fiscal year 1999 by a county in which a racetrack other than a racetrack
 described in paragraph (A) of this subdivision is located and where the racetrack has been located
 in a municipality within the county since on or before January 1, 1999, shall be divided, if
 applicable, as follows:
        (i) The county shall receive 50 percent of the excess amount; and
        (ii) The municipality shall receive 50 percent of the excess amount; and
        (C) This proviso shall not affect the amount to be received under this subdivision by any
 other county other than a county described in paragraph (A) or (B) of this subdivision;
        (4) One percent of net terminal income shall be paid for and on behalf of all employees of
 the licensed racing association by making a deposit into a special fund to be established by the
 Racing Commission to be used for payment into the pension plan for all employees of the licensed
 racing association;
        (5) The West Virginia Thoroughbred Development Fund created pursuant to §19-23-13b of
 this code and the West Virginia Greyhound Breeding Development Fund created pursuant to §19-
 23-10 of this code shall receive an equal share of a total of not less than one and one-half percent
 of the net terminal income;
        (6) The West Virginia Racing Commission shall receive one percent of the net terminal
 income which shall be deposited and used as provided in §19-23-13c of this code;
        (7) A licensee shall receive 46 and one-half percent of net terminal income;
        (8)(A) The Tourism Promotion Fund established in §5B-2-12 of this code shall receive
 three percent of the net terminal income: Provided, That for the fiscal year beginning July 1, 2003,
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  the tourism commission shall transfer from the Tourism Promotion Fund $5 million of the three
  percent of the net terminal income described in this section and §29-22A-10b of this code into the
  fund administered by the West Virginia Economic Development Authority pursuant to §31-15-7 of
  this code, $5 million into the Capitol Renovation and Improvement Fund administered by the
  Department of Administration pursuant to §5A-4-6 of this code, and $5 million into the Tax
  Reduction and Federal Funding Increased Compliance Fund; and
         (B) Notwithstanding any provision of paragraph (A) of this subdivision to the contrary, for
  each fiscal year beginning after June 30, 2004, this three percent of net terminal income and the
 three percent of net terminal income described in §29-22a-10b(a)(8)(B) of this code shall be
 distributed as provided in this paragraph as follows:
        (i) 1.375 percent of the total amount of net terminal income described in this section and
 §29-22A-10b of this code shall be deposited into the Tourism Promotion Fund created pursuant to
 §5B-2-12 of this code;
        (ii) 0.375 percent of the total amount of net terminal income described in this section and in
 §29-22A-10b of this code shall be deposited into the Development Office Promotion Fund created
 pursuant to §5B-2-3b of this code;
        (iii) 0.5 percent of the total amount of net terminal income described in this section and in
 §29-22A-10b of this code shall be deposited into the Research Challenge Fund created pursuant
 to §18B-1B-10 of this code;
        (iv) 0.6875 percent of the total amount of net terminal income described in this section and
 in §29-22A-10b of this code shall be deposited into the Capitol Renovation and Improvement Fund
 administered by the Department of Administration pursuant to §5A-4-6 of this code; and
        (v) 0.0625 percent of the total amount of net terminal income described in this section and
 in §29-22A-10b of this code shall be deposited into the 2004 Capitol Complex Parking Garage
 Fund administered by the Department of Administration pursuant to §5A-4-5a of this code;
        (9)(A) On and after July 1, 2005, seven percent of net terminal income shall be deposited
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 into the Workers’ Compensation Debt Reduction Fund created in §23-2d-5 of this code: Provided,
 That in any fiscal year when the amount of money generated by this subdivision totals $11 million,
 all subsequent distributions pursuant to this subdivision shall be deposited in the special fund
 established by the licensee and used for the payment of regular purses in addition to the other
 amounts provided in §19-23-1 et seq. of this code;
        (B) The deposit of the seven percent of net terminal income into the Workers’
 Compensation Debt Reduction Fund pursuant to this subdivision shall expire and not be imposed
 with respect to these funds and shall be deposited in the special fund established by the licensee
 and used for payment of regular purses in addition to the other amounts provided in §19-23-1 et
 seq. of this code on and after the first day of the month following the month in which the Governor
 certifies to the Legislature that: (i) The revenue bonds issued pursuant to §23-2D-1 et seq. of this
 code have been retired or payment of the debt service provided for; and (ii) that an independent
 certified actuary has determined that the unfunded liability of the old fund, as defined in chapter 23
 of this code, has been paid or provided for in its entirety; and
        (10) The remaining one percent of net terminal income shall be deposited as follows:
        (A) For the fiscal year beginning July 1, 2003, the veterans memorial program shall receive
 one percent of the net terminal income until sufficient moneys have been received to complete the
 veterans memorial on the grounds of the State Capitol Complex in Charleston, West Virginia. The
 moneys shall be deposited in the State Treasury in the Division of Culture and History special fund
 created pursuant to §29-1I-3 of this code: Provided, That only after sufficient moneys have been
 deposited in the fund to complete the veterans memorial and to pay in full the annual bonded
 indebtedness on the veterans memorial, not more than $20,000 of the one percent of net terminal
 income provided in this subdivision shall be deposited into a special revenue fund in the State
 Treasury, to be known as the John F. ‘Jack’ Bennett Fund. The moneys in this fund shall be
 expended by the Division of Veterans Affairs to provide for the placement of markers for the graves
 of veterans in perpetual cemeteries in this state. The Division of Veterans Affairs shall promulgate
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 legislative rules pursuant to the provisions of §29-3-1 et seq. of this code specifying the manner in
 which the funds are spent, determine the ability of the surviving spouse to pay for the placement of
 the marker and setting forth the standards to be used to determine the priority in which the
 veterans’ grave markers will be placed in the event that there are not sufficient funds to complete
 the placement of veterans’ grave markers in any one year, or at all. Upon payment in full of the
 bonded indebtedness on the veterans memorial, $100,000 of the one percent of net terminal
 income provided in this subdivision shall be deposited in the special fund in the Division of Culture
 and History created pursuant to §29-1I-3 of this code and be expended by the Division of Culture
 and History to establish a West Virginia veterans memorial archives within the Cultural Center to
 serve as a repository for the documents and records pertaining to the veterans memorial, to
 restore and maintain the monuments and memorial on the capitol grounds: Provided, however,
 That $500,000 of the one percent of net terminal income shall be deposited in the State Treasury
 in a special fund of the Department of Administration, created pursuant to §5A-4-5 of this code, to
 be used for construction and maintenance of a parking garage on the State Capitol Complex; and
 the remainder of the one percent of net terminal income shall be deposited in equal amounts in the
 Capitol Dome and Improvements Fund created pursuant to §5A-4-2 of this code and Cultural
 Facilities and Capitol Resources Matching Grant Program Fund created pursuant to §29-1-3 of
 this code.
        (B) For each fiscal year beginning after June 30, 2004:
        (i) Five hundred thousand dollars of the one percent of net terminal income shall be
 deposited in the State Treasury in a special fund of the Department of Administration, created
 pursuant to §5A-4-5 of this code, to be used for construction and maintenance of a parking garage
 on the State Capitol Complex; and
        (ii) The remainder of the one percent of net terminal income and all of the one percent of
 net terminal income described in §29-22A-10b(a)(9)(B) of this code shall be distributed as follows:
 The net terminal income shall be deposited in equal amounts into the Capitol Dome and Capitol
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 Improvements Fund created pursuant to §5A-4-2 of this code and the Cultural Facilities and
 Capitol Resources Matching Grant Program Fund created pursuant to §29-1-3 of this code until a
 total of $1,500,000 is deposited into the Cultural Facilities and Capitol Resources Matching Grant
 Program Fund; thereafter, the remainder shall be deposited into the Capitol Dome and Capitol
 Improvements Fund.
        (d) Each licensed racetrack shall maintain in its account an amount equal to or greater than
 the gross terminal income from its operation of video lottery machines, to be electronically
 transferred by the commission on dates established by the commission. Upon a licensed
 racetrack’s failure to maintain this balance, the commission may disable all of a licensed
 racetrack’s v