RESULT OF "YES" VOTE: "Yes" vote converts education endowment fund to stability fund; specifies conditions for using fund principal; transfers $150 million from fund to State School Fund; creates school capital matching subaccount in stability fund.
RESULT OF "NO" VOTE: "No" vote rejects: converting education endowment fund to education stability fund; using fund principal under certain conditions; transferring $150 million from fund to State School Fund; creating school capital matching subaccount in stability fund.
SUMMARY: Amends Constitution. Under existing law, the state deposits a portion of state lottery proceeds into the education endowment fund; fund's earnings are used for public education; principal is retained in fund. Measure converts education endowment fund to education stability fund. Measure increases percentage of net proceeds from state lottery placed in education stability fund and limits amount in fund. Measure authorizes legislature to use any portion of education stability fund principal for public education if three-fifths of the members of each house of legislature approve, and either (1) legislature makes required finding as to decline in projected state revenue or in seasonally adjusted nonfarm employment, or (2) Governor declares emergency. On May 1, 2003, measure transfers $150 million from stability fund to State School Fund to be used for kindergarten through grade 12 public education. Creates school capital matching subaccount in education stability fund.
ESTIMATE OF FINANCIAL IMPACT: The education stability fund will be reduced by $150 million in May 2003. This amount will go into the State School Fund to be distributed to school districts at that time.
Growth in the balance of the education stability fund will be increased by an estimated $10 million per year. There is a corresponding reduction of lottery funding for other programs, mainly the State School Fund and economic development.
Distribution of earnings on the education stability fund, for debt service on education bonds and for need-based college scholarships will be reduced by about $7 million per year.
PARAGRAPH 1. Section 4, Article XV of the Constitution of the State of Oregon, is amended to read:
Sec. 4. (1) Except as provided in subsections (2), (3), (4), [(5) and (6)] (10) and (11) of this section, lotteries and the sale of lottery tickets, for any purpose whatever, are prohibited, and the Legislative Assembly shall prevent the same by penal laws.
(2) The Legislative Assembly may provide for the establishment, operation, and regulation of raffles and the lottery commonly known as bingo or lotto by charitable, fraternal, or religious organizations. As used in this section, charitable, fraternal or religious organization means such organizations or foundations as defined by law because of their charitable, fraternal, or religious purposes. The regulations shall define eligible organizations or foundations, and may prescribe the frequency of raffles, bingo or lotto, set a maximum monetary limit for prizes and require a statement of the odds on winning a prize. The Legislative Assembly shall vest the regulatory authority in any appropriate state agency.
(3) There is hereby created the State Lottery Commission which shall establish and operate a State Lottery. All proceeds from the State Lottery, including interest, but excluding costs of administration and payment of prizes, shall be used for any of the following purposes: creating jobs, furthering economic development, financing public education in Oregon or restoring and protecting Oregon's parks, beaches, watersheds and critical fish and wildlife habitats.
(4)(a) The State Lottery Commission shall be comprised of five members appointed by the Governor and confirmed by the Senate who shall serve at the pleasure of the Governor. At least one of the Commissioners shall have a minimum of five years experience in law enforcement and at least one of the Commissioners shall be a certified public accountant. The Commission is empowered to promulgate rules related to the procedures of the Commission and the operation of the State Lottery. Such rules and any statutes enacted to further implement this article shall insure the integrity, security, honesty, and fairness of the Lottery. The Commission shall have such additional powers and duties as may be provided by law.
(b) The Governor shall appoint a Director subject to confirmation by the Senate who shall serve at the pleasure of the Governor. The Director shall be qualified by training and experience to direct the operations of a state-operated lottery. The Director shall be responsible for managing the affairs of the Commission. The Director may appoint and prescribe the duties of no more than four Assistant Directors as the Director deems necessary. One of the Assistant Directors shall be responsible for a security division to assure security, integrity, honesty, and fairness in the operations and administration of the State Lottery. To fulfill these responsibilities, the Assistant Director for security shall be qualified by training and experience, including at least five years of law enforcement experience, and knowledge and experience in computer security.
(c) The Director shall implement and operate a State Lottery pursuant to the rules, and under the guidance, of the Commission. The State Lottery may operate any game procedure authorized by the commission, except parimutuel racing, social games, and the games commonly known in Oregon as bingo or lotto, whereby prizes are distributed using any existing or future methods among adult persons who have paid for tickets or shares in that game; provided that, in lottery games utilizing computer terminals or other devices, no coins or currency shall ever be dispensed directly to players from such computer terminals or devices.
(d) There is hereby created within the General Fund the Oregon State Lottery Fund which is continuously appropriated for the purpose of administering and operating the Commission and the State Lottery. The State Lottery shall operate as a self-supporting revenue-raising agency of state government and no appropriations, loans, or other transfers of state funds shall be made to it. The State Lottery shall pay all prizes and all of its expenses out of the revenues it receives from the sale of tickets or shares to the public and turnover the net proceeds therefrom to a fund to be established by the Legislative Assembly from which the Legislative Assembly shall make appropriations for the benefit of any of the following public purposes: creating jobs, furthering economic development, financing public education in Oregon or restoring and protecting Oregon's parks, beaches, watersheds and critical fish and wildlife habitats. Effective July 1, 1997, 15% of the net proceeds from the State Lottery shall be deposited, from the fund created by the Legislative Assembly under this paragraph, in an education [endowment] stability fund. Effective July 1, 2003, 18% of the net proceeds from the State Lottery shall be deposited, from the fund created by the Legislative Assembly under this paragraph, in an education stability fund. Earnings on moneys in the education [endowment] stability fund shall be retained in the fund or expended for the public purpose of financing public education in Oregon as provided by law. [Moneys] Except as provided in subsections (6) and (8) of this section, moneys in the education [endowment] stability fund shall be invested as provided by law and shall not be subject to the limitations of section 6, Article XI of this Constitution. The Legislative Assembly may appropriate other moneys or revenue to the education [endowment] stability fund. The Legislative Assembly shall appropriate amounts sufficient to pay lottery bonds before appropriating the net proceeds from the State Lottery for any other purpose. At least 84% of the total annual revenues from the sale of all lottery tickets or shares shall be returned to the public in the form of prizes and net revenues benefiting the public purpose.
(5) Notwithstanding paragraph (d) of subsection (4) of this section, the amount in the education stability fund created under paragraph (d) of subsection (4) of this section may not exceed an amount that is equal to five percent of the amount that was accrued as revenues in the state's General Fund during the prior biennium. If the amount in the education stability fund exceeds five percent of the amount that was accrued as revenues in the state's General Fund during the prior biennium:
(a) Additional net proceeds from the State Lottery may not be deposited in the education stability fund until the amount in the education stability fund is reduced to less than five percent of the amount that was accrued as revenues in the state's General Fund during the prior biennium; and
(b) Fifteen percent of the net proceeds from the State Lottery shall be deposited into the school capital matching subaccount created under subsection (8) of this section.
(6) The Legislative Assembly may by law appropriate, allocate or transfer any portion of the principal of the education stability fund created under paragraph (d) of subsection (4) of this section for expenditure on public education if:
(a) The proposed appropriation, allocation or transfer is approved by three-fifths of the members serving in each house of the Legislative Assembly and the Legislative Assembly finds one of the following:
(A) That the last quarterly economic and revenue forecast for a biennium indicates that moneys available to the state's General Fund for the next biennium will be at least three percent less than appropriations from the state's General Fund for the current biennium;
(B) That there has been a decline for two or more consecutive quarters in the last 12 months in seasonally adjusted nonfarm payroll employment; or
(C) That a quarterly economic and revenue forecast projects that revenues in the state's General Fund in the current biennium will be at least two percent below what the revenues were projected to be in the revenue forecast on which the legislatively adopted budget for the current biennium was based; or
(b) If the proposed appropriation, allocation or transfer is approved by three-fifths of the members serving in each house of the Legislative Assembly and the Governor declares an emergency.
(7) The Legislative Assembly may by law prescribe the procedures to be used and identify the persons required to make the forecasts described in subsection (6) of this section.
(8)(a) There is created a school capital matching sub-account within the education stability fund created under paragraph (d) of subsection (4) of this section.
(b) The Legislative Assembly may by law appropriate, allocate or transfer moneys or revenue to the school capital matching subaccount.
(c) To the extent funds are available, the Legislative Assembly may appropriate, allocate or transfer moneys in the school capital matching subaccount and earnings on moneys in the subaccount for the purpose of providing state matching funds to school districts for capital costs incurred by the school districts.
(9) Notwithstanding paragraph (d) of subsection (4) of this section, on May 1, 2003, the State Treasurer shall transfer $150 million from the education stability fund created under paragraph (d) of subsection (4) of this section to a fund created by law and known as the State School Fund. Moneys transferred under this subsection may be used in the manner provided by law for moneys in the State School Fund.
[(5)] (10) Effective July 1, 1999, 15% of the net proceeds from the State Lottery shall be deposited in a parks and natural resources fund created by the Legislative Assembly. Of the moneys in the parks and natural resources fund, 50% shall be distributed for the public purpose of financing the protection, repair, operation, and creation of state parks, ocean shore and public beach access areas, historic sites and recreation areas, and 50% shall be distributed for the public purpose of financing the restoration and protection of native salmonid populations, watersheds, fish and wildlife habitats and water quality in Oregon. The Legislative Assembly shall not limit expenditures from the parks and natural resources fund. The Legislative Assembly may appropriate other moneys or revenue to the parks and natural resources fund.
[(6)] (11) Only one State Lottery operation shall be permitted in the State.
[(7)] (12) The Legislative Assembly has no power to authorize, and shall prohibit, casinos from operation in the State of Oregon.
PARAGRAPH 2. The amendment proposed by this resolution shall be submitted to the people for their approval or rejection at a special election held throughout this state as provided in chapter 1, Oregon Laws 2002 (third special session) (Enrolled House Bill 4059).
NOTE: Boldfaced type indicates new language; [brackets and italic] type indicates deletions or comments.