Download This Version in Microsoft Word format
Indicates Matter Stricken
Indicates New Matter
COMMITTEE REPORT
January 20, 1999
S. 1
Introduced by Senators Passailaigue, McConnell, Ford, O'Dell, Elliott and Branton
S. Printed 1/20/99--S.
Read the first time January 12, 1999.
To whom was referred a Joint Resolution (S. 1), proposing an amendment to Section 7, Article XVII of the Constitution of South Carolina, 1895, relating to lotteries, etc., respectfully
That they have duly and carefully considered the same, and recommend that the same do pass with amendment:
Amend the joint resolution, as and if amended, by striking Section 7 as contained in SECTION 1, beginning on Page 1, and inserting:
/Section 7. No Except when conducted by the State, no lottery shall ever be is allowed or may be advertised by newspapers, or otherwise, or its tickets be sold in this State. Only the State may conduct lotteries as provided for by the General Assembly.
The proceeds derived from the lottery conducted by the State must first be used to pay the operating expenses of the lottery, including all prizes, without any appropriation required by law. The net lottery proceeds must be paid into a Lottery for Education Account, which is separate and distinct from the general fund of the State, with earnings on it remaining a part of the account. The Lottery for Education Account must be used to support improvements and enhancements for educational programs and purposes, and these account proceeds must be used to supplement, not supplant, nonlottery educational resources or funding. The educational programs and educational purposes for which the Lottery for Education Account proceeds may be appropriated include only the following:
(a) capital outlay projects for public pre-kindergarten through twelfth grade educational facilities;
(b) pre-kindergarten initiatives;
(c) tuition grants, scholarships, and loans to citizens of this State in order to enable them to attend higher education institutions in this State;
(d) education shortfall reserves; and
(e) teacher professional development programs.
The game of bingo, when conducted by charitable, religious, or fraternal organizations exempt from federal income taxation or when conducted at recognized annual State state and county fairs, shall is not be deemed considered a lottery prohibited by this section.
The General Assembly shall provide by law for the implementation of the state lottery authorized by this section./
Amend further, SECTION 2, Page 2, by striking the question on lines 16 through 20 and inserting:
/Shall Section 7, Article XVII of the Constitution of this State be amended so as to authorize lotteries to be conducted only by the State with the proceeds, less operating expenses and prizes, deposited to a separate Lottery for Education Account, the earnings which remain a part of the account, the proceeds of which must be used to support improvements and enhancements for educational programs and purposes and not to supplant nonlottery resources or funding for educational programs and purposes, and to provide that educational programs and purposes only include: (1) capital outlay projects for public pre-kindergarten through twelfth grade educational facilities; (2) pre-kindergarten initiatives; (3) tuition grants, scholarships, and loans to citizens of this State in order to enable them to attend higher education institutions in this State; (4) educational shortfall reserves; and (5) teacher professional development programs?/
Renumber sections to conform.
Amend title to conform.
JOHN DRUMMOND, for Committee.
REVENUE IMPACT 1/
This Bill would have no impact on the General Fund Revenue. It is expected to provide $90 million for the Lottery for Education Account in FY2001-02.
Explanation
To assess the potential earnings from a lottery in South Carolina, the Board of Economic Advisors examined the other thirty-six states that operate lotteries. There are substantial differences in the operations of lotteries throughout the United States. The Board of Economic Advisors chose the lottery of Kentucky as a standard for evaluating the potential of a lottery in South Carolina. Of the six southeastern states with lotteries, Kentucky's economy is the most similar to that of South Carolina.
In 1997 Kentucky netted $154 million from its lottery, which amounted to $39.33 per capita in that state. If South Carolina were to implement a lottery as successful as Kentucky on a per capita basis, the potential net earnings could reach $150 million. First year experiences of other states suggest that South Carolina will encounter start-up problems. It may take South Carolina longer than other states to reach its full potential because other states allocate a larger percentage of gross revenues to operations and advertising. Whereas this bill allocates only seven percent to operations, Kentucky uses thirteen percent from its lottery. In 1993 before Kentucky reached its full potential, it netted $99 million. In the first year of operation South Carolina could reasonably expect to generate approximately sixty percent of its full potential, which would yield $90 million for the Lottery for Education Account.
In order to implement the lottery, it must be approved in a referendum at the next general election, which will be November 2000. If approved by the voters it is expected that the General Assembly will ratify the results during the 2001 session. Upon completion of these steps, it is expected that the lottery results of $90 million will be available for FY2001-02.
Approved By:
William C. Gillespie
Board of Economic Advisors
1/ This statement meets the requirement of Section 2-7-71 for a state revenue impact, Section 2-7-76 for a local revenue impact, and Section 6-1-85(B) for an estimate of the shift in local property tax incidence.
PROPOSING AN AMENDMENT TO SECTION 7, ARTICLE XVII OF THE CONSTITUTION OF SOUTH CAROLINA, 1895, RELATING TO LOTTERIES, SO AS TO AUTHORIZE LOTTERIES CONDUCTED ONLY BY THE STATE AND TO PROVIDE THAT THE NET REVENUE DERIVED FROM THE LOTTERIES BE USED SOLELY TO SUPPORT IMPROVEMENTS AND ENHANCEMENTS TO EDUCATION PURPOSES AND PROGRAMS AS PROVIDED FOR BY THE GENERAL ASSEMBLY.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. . It is proposed that Section 7, Article XVII of the Constitution of this State be amended to read:
"Section 7. No Except when conducted by the State, no lottery shall ever be is allowed or may be advertised by newspapers, or otherwise, or its tickets be sold in this State. Only the State may conduct lotteries as provided for by the General Assembly.
The revenues actually collected during a fiscal year from an authorized state lottery must be paid into a Lottery for Education Account, which is separate and distinct from the general fund of the State with all deposits to the Lottery for Education Account to be invested by the State Treasurer with interest earned remaining a part of the fund. No more than seven percent of the gross revenues each year may be used for operational expenses of all state lotteries, and of the net revenue remaining after payment of operational expenses, fifty percent must be expended in prizes. The remaining revenues, including interest, must be used solely to support improvements and enhancements to education purposes and programs, under terms and conditions that the General Assembly may prescribe by law.
The game of bingo, when conducted by charitable, religious, or fraternal organizations exempt from federal income taxation or when conducted at recognized annual State state and county fairs, shall is not be deemed considered a lottery prohibited by this section.
The General Assembly must provide by statute for the implementation of this section."
SECTION 2. The proposed amendment in SECTION 1 must be submitted to the qualified electors at the next general election for representatives. Ballots must be provided at the various voting precincts with the following words printed or written on the ballot:
"Shall Section 7, Article XVII of the Constitution of this State be amended so as to authorize lotteries to be conducted only by the State with the revenues, less prizes, and administrative costs to be used only for improvements and enhancements to education purposes and programs as provided for by the General Assembly?
Those voting in favor of the question shall deposit a ballot with a check or cross mark in the square after the word 'Yes', and those voting against the question shall deposit a ballot with a check for cross mark in the square after the word 'No'."
SECTION 3. This joint resolution takes effect upon approval by the Governor.
This web page was last updated on
Friday, June 26, 2009 at 2:56 P.M.