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STATE OF OKLAHOMA
2nd Session of the 58th Legislature (2022)
HOUSE BILL 4388 By: Baker
AS INTRODUCED
An Act relating to amusements and sports; amending 3A
O.S. 2021, Section 713, which relates t o the Oklahoma
Education Lottery Act; requiring proceeds in excess
of certain annual amount be deposited to certain
fund; creating the Teacher Empowerment Fund; placing
fund with the State Department of Education;
establishing fund characteristics; establishing
funding procedures; providing instructions for use of
funds that are not expended; providing an effective
date; and providing for conditional effect .
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 3A O.S. 2021, Section 713, is
amended to read as follows:
Section 713. A. All gross proceeds shall be t he property of
the Oklahoma Lottery Commission. From its gross proceeds, the
Commission shall pay the operating expenses of the Commiss ion. At
least forty-five percent (45%) of gross proceeds shall be made
available as prize money. However, the provisio ns of this
subsection shall be deemed not to create any lien, entitlement,
cause of action, or other private right, and any rights of ho lders
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of tickets or shares shall be d etermined by the Commission in
setting the terms of its lottery or lotteries.
B. The Oklahoma Lottery Commission shall submit a written
report of its findings and any recommendations regarding the impact
of removing the requirement that net proceeds shall equal at least
thirty-five percent (35%) of the gross proceeds. The report shall
be submitted to the Governor, the Speaker of the Oklahoma House of
Representatives and the President Pro Tempore of the Oklahoma State
Senate not later than October 1, 2020, and annually thereafter.
C. There is hereby created in the State Treasury a fund to be
designated the "Oklahoma Education Lottery Trust Fund ". Except as
otherwise provided in subsections I and J of this section, on o r
before the fifteenth day of each ca lendar quarter, the Commission
shall transfer to the State Treasurer, for credit to the Oklahoma
Education Lottery Trust Fund, the amount of all net proceeds
accruing during the preceding calendar quarter. Expenditures from
the fund shall be made upon war rants issued by the State Treasurer
against claims filed as prescribed by law with the Director of the
Office of Management and Enterprise Services for approval and
payment.
D. Upon their deposit into the State Treasur y, any monies
representing a deposit of net proceeds shall then become the
unencumbered property of this state, and neit her the Commission nor
the board of trustees shall have the power to agree or undertake
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otherwise. The monies shall be invested by the State Treasurer in
accordance with state investment practices. All earnings
attributable to such investments shall like wise be the unencumbered
property of the state and shall accrue to the credit of the fund
provided for in subsection C of this section.
E. Monies in the Oklahoma Education Lottery Trust Fund shall
only be appropriated as follows:
1. Forty-five percent (45%) for the following:
a. kindergarten through twelfth grade public education,
including but not limited to compensation and benefits
for public school teachers and support employees, and
b. early childhood development programs, which shall
include but not be limited to costs associated with
prekindergarten and full -day kindergarten programs;
2. Forty-five percent (45%) for the following:
a. tuition grants, loans and scholar ships to citizens of
this state to enable such citizens to attend colleges
and universities located within this state, regardless
of whether such colleges and universities are owned or
operated by the Oklahoma State Reg ents for Higher
Education, or to atte nd institutions operated under
the authority of the Oklahoma Department of Career a nd
Technology Education; provided such tuition grants,
loans and scholarships shall not be made to a citizen
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of this state to attend a c ollege or university which
is not accredited by the Oklahoma State Regents for
Higher Education,
b. construction of educ ational facilities for elementary
school districts, independent school districts, The
Oklahoma State System of Higher Education, and car eer
and technology education,
c. capital outlay projects for elementary school
districts, independent school districts, The Oklahoma
State System of Higher Education, and career and
technology education,
d. technology for public elementary school district,
independent school district, state h igher education,
and career and technology education facilities, which
shall include but not be limited to costs of providing
to teachers at accredited public institutions who
teach levels kindergarten through twelfth g rade,
personnel at technology centers under the authority of
the Oklahoma State Department of Career and Technology
Education, and professors and instructors within The
Oklahoma State System of Higher Education, the
necessary training in the use and applic ation of
computers and advanced elect ronic instructional
technology to implement interactive learning
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environments in the classroom and to access the
statewide distance learning network and costs
associated with repairing and maintaining advanced
electronic instructional technology,
e. endowed chairs for professors at institutions of
higher education operated by The Oklahom a State System
of Higher Education, and
f. programs and personnel of the Oklahoma School for the
Deaf and the Oklahoma School for the Bl ind;
3. Five percent (5%) to the Sch ool Consolidation and Assistance
Fund. When the total amount in the School Consoli dation and
Assistance Fund from all sources equals Five Million Dollars
($5,000,000.00), all monies appropriated pursuant to this paragr aph
which would otherwise be deposite d in the School Consolidation and
Assistance Fund in excess of Five Million Dollars ($5,000,000.00)
shall be allocated by the State Department of Education to public
schools based on the audited end -of-year average daily membership in
grades 8 through 12 d uring the preceding school year for the purpose
of purchasing technology equipment. If at any time the total amount
in the School Consolidation and Assistance Fund drops below Five
Million Dollars ($5,000,000.00), the monies appropriated pursuant to
this paragraph shall be deposited in the School Consolidation and
Assistance Fund until the Fund again reaches Five Million Dollars
($5,000,000.00); and
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4. Five percent (5%) to the Teachers ' Retirement System
Dedicated Revenue Revolving Fund.
In no instance shall the annual maximum percentage for
administrative costs, not including marketing and advertising costs,
funds set aside for prizes, commissions paid to retailers, contract
fees paid to gaming system vendors and insta nt ticket providers or
emergency-related capital expenses, exceed three percent (3%) of
sales.
F. The portion of lottery annual net proceeds deposited to the
Oklahoma Education Lottery Trust Fund that exceeds Sixty Million
Dollars ($60,000,000.00) shall b e deposited into a Teacher
Empowerment Fund and appropriated by the Legislature on a cash basis
to be allocated by the State Department of Education to serve as a
state match to local public school dollars allocated for advanced,
lead, and master teaching certificates as outlined in Section 6-190
of Title 70 of the Oklahoma Statutes starting in the 2022-23 school
year. The fund shall be a continuing fund, not subject to fiscal
year limitations, and initial funding for the 2022-23 program will
start with an initial cash appropriation of Twenty Million Dollars
($20,000,000.00) funded through the additional profit contribute d by
the Lottery that exceeds the fiscal year 2021 appropriation. Annual
funding for 2023 and beyond will be based on dollars co ntributed
above the base appropriation of Sixty Million Dollars
($60,000,000.00). If all of the funds are not expended annually out
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of the Teacher Empowerment Fu nd, the funds will roll over for use in
the next fiscal year and accrue annually for use as outlined in
Section 6-190 of Title 70 of the Oklahoma Statutes.
G. The Legislature shall appropriate funds from the Oklahoma
Education Lottery Trust Fund only for the purposes specified in
subsection E of this section. Even when funds from the trust fund
are used for these purposes, the Legislature sha ll not use funds
from the trust fund to supplant or replace other state funds
supporting common education, higher education, or career and
technology education.
G. H. In order to ensure that the funds from the trust f und are
used to enhance and not suppla nt funding for education, the State
Board of Equalization shall examine and investigate appropriations
from the trust fund each year. At the meeting of the State Board of
Equalization held within five (5) days after t he monthly
apportionment in February o f each year, the State Board of
Equalization shall issue a finding and report which shall state
whether appropriations from the trust fund were used to enhance or
supplant education funding. If the State Board of Equa lization
finds that education funding was supplanted by funds from the trust
fund, the Board shall specify the amount by which education funding
was supplanted. In this event, the Legislature shall not make any
appropriations for the ensuing fiscal year u ntil an appropriation in
that amount is made to replenish the trust fund.
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H. I. Except as otherwise provided by this subsection, no
deficiency in the Oklahoma Education Lottery Trust Fund shall be
replenished by reducing any nonlottery funds, including sp ecifically
but without limitation, the General Revenue Fund, the Constitutional
Reserve Fund or the Education Reform Revolving Fund of the State
Department of Education. No program or project started specifically
from lottery proceeds shall be continued f rom the General Revenue
Fund, the Constitutional Reserve Fund or the Education Refor m
Revolving Fund of the State Department of Education. Such programs
must be adjusted or discontinued according to available lottery
proceeds unless the Legislature by gen eral law establishes
eligibility requirements and appropriates specific funds theref or.
No surplus in the Oklahoma Education Lottery Trust Fund shall be
reduced or transferred to correct any nonlottery deficiencies in
sums available for general appropriat ions. The provisions of this
subsection shall not apply to bonds or other obligatio ns issued
pursuant to or to the repayment of bonds or other obligations issued
pursuant to the Oklahoma Higher Education Promise of Excellence Act
of 2005.
I. J. There is hereby created in the State Treasury a revolving
fund to be designated the "Oklahoma Education Lottery Revolving
Fund". The fund shall be a continuing fund, not subject to fiscal
year limitations, and shall consist of all monies received by the
Commission. The Commission shall make payments of net proceeds from
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the fund to the Oklahoma Edu cation Lottery Trust Fund on or before
the fifteenth day of each calendar quarter as provided in subsection
C of this section. All monies accruing to the credit of the
Oklahoma Education Lottery Revolving F und are hereby appropriated
and may be budgeted a nd expended for the payment of net proceeds,
prizes, commissions to retailers, administrative expenses and all
other expenses arising out of the operation of the educati on
lottery, subject to the limitations provided in the Oklahoma
Education Lottery Act. Expenditures from the fund shall be made
upon warrants issued by the State Treasurer against claims filed as
prescribed by law with the Director of the Office of Manage ment and
Enterprise Services for appro val and payment.
The monies in the fund shall be invested by the State Treasurer
in accordance with state investment practices. All earnings
attributable to such investments shall likewise accrue to the credit
of the fund.
J. K. When appropriations from the Oklahoma Education Lottery
Trust Fund are made t o common education pursuant to the provisions
of paragraph 1 of subsection E of this section, the appropriations
shall be made available on a monthly basis. In addit ion to the
provisions of subsections C and D of this section, the following
process shall be used to ensure that the appropriations are made
available to common education in a timely manner:
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1. Beginning in July of the fiscal year in which appropriations
are made to common education from the Oklahoma Education Lottery
Trust Fund, the Commissio n, on or before the ninth day of each
month, shall transfer to the State Treasurer, for credit to the
Oklahoma Education Lottery Trust Fund, the amount of net proceed s
accruing during the preceding month equal to the amount of total
monthly collections due to common education as required by paragraph
1 of subsection E of this section;
2. The Director of the Office of Management and Enterprise
Services shall allocate t he transfers provided for in paragraph 1 of
this subsection to the State Department of Edu cation on a monthly
basis, not to exceed one -twelfth (1/12) of the annual apportionment
for the fiscal year; and
3. The total amount of transfers to the Oklahoma Edu cation
Lottery Trust Fund of net lotte ry proceeds made pursuant to this
subsection shall not exceed the total appropriations made to common
education from the Oklahoma Education Lottery Trust Fund for the
specific fiscal year.
K. L. When appropriations fr om the Oklahoma Education Lottery
Trust Fund are made to The Oklahoma State System of Higher
Education, the appropriations shall be made available to the System
on a monthly basis. In addition to the provisions of subsections C
and D of this section, the following process shall be used to ens ure
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that the appropriations are made available to The O klahoma State
System of Higher Education in a timely manner:
1. Beginning in July of the fiscal year in which appropriations
are made to The Oklahoma State System of Higher Education from the
Oklahoma Education Lottery Trust Fund, the Commission, on or be fore
the ninth day of each month, shall transfer to the State Treasurer,
for credit to the Oklahoma Education Lottery Trust Fund, the amount
of net proceeds accrui ng during the preceding month equal to the
amount of total monthly collections due to the Okl ahoma State
Regents for Higher Education as required by paragraph 2 of
subsection E of this section;
2. The Director of the Office of Management and Enterprise
Services shall allocate the transfers pr ovided for in paragraph 1 of
this subsection to the Okl ahoma State Regents for Higher Education
on a monthly basis, not to exceed one -twelfth (1/12) of the annual
apportionment for the fiscal year; and
3. The total amount of transfers to the Oklahoma Educ ation
Lottery Trust Fund of net lottery proceeds made p ursuant to this
subsection shall not exceed the total appropriations made to The
Oklahoma State System for Higher Education from the Oklahoma
Education Lottery Tru st Fund for the specific fiscal year.
SECTION 2. This act shall become effective November 1, 2022.
SECTION 3. The provisions of this act shall be contingent upon
the enactment of the provisions of House Bill No. ___ of the 2nd
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Session of the 58th Oklahoma Legislature and shall not become
operative as law otherwise.
58-2-9504 CMA 01/04/22