FISCAL NOTE

House Bill 501 as introduced proposes a constitutional amendment, which if ratified, would establish the Alabama Education Lottery (lottery) to allow lottery games in the state, including multistate lotteries but excluding video lotteries and video lottery terminals, which would increase net lottery receipts to the Alabama Education Lottery Trust Fund (AELTF), created by this constitutional amendment in the State Treasury, by an estimated range of $198 million to $285 million annually, after the payment of operating expenses of the lottery and all prizes.

This amendment requires proceeds deposited in the AELTF to be appropriated each fiscal year through an independent supplemental appropriation bill for the following:

(1) a scholarship or other program to support educational attainment or fulfillment of the state’s workforce needs, as further provided by general law;

(2) bonuses to retired educators and education support staff;

(3) dues and other fees to allow school-aged children to participate in public or private agricultural education programs; and

(4) public or private programs to address problem gaming.

However, this amendment prohibits the appropriation of AELTF funds until the balance in the AELTF reaches $250 million.

This amendment also creates the nine-member Alabama Education Lottery Commission to administer and regulate the lottery within the state and provides for additional powers of the commission to be established by general law. This amendment further provides that the commission may retain a portion of lottery proceeds to fund the obligations of its operation.

Further, this amendment allows the Legislature, by general law, to provide for the payment of a state tax on the proceeds from a lottery prize or gambling wager in lieu of any state or local income tax.

In addition, this amendment will increase the proclamation expenses of the Governor, paid from the State General Fund, by an estimated $100,000 for the fiscal year ending September 30, 2023.