A. The Oklahoma Lottery Commission is authorized to issue negotiable bonds or a promissory note in anticipation of the collection of all or any part of its revenues, not to exceed Ten Million Dollars ($10,000,000.00) for the payment of the initial expenses of start-up, administration and operation of the Commission and the lottery. Any such debt shall be approved by the Council on Bond Oversight and shall further be approved by the Attorney General as to legal form. Any such debt shall not constitute a debt of the state and under no circumstances shall the general funds of the state be used in order to satisfy any obligation of the Commission. Any such debt shall be repaid solely from future lottery revenue and under no circumstances shall it be repaid from other state funds or appropriations. The Commission may pledge, to the payment of the interest and principal on such bonds or notes, all or any part of the revenues derived from the operation of the lottery.

B. The bonds or notes authorized pursuant to this section shall be authorized by resolution of the Commission and may, as provided in such resolution:

1. Be issued in one or more series;

2. Bear such date or dates and may mature at such time not exceeding five (5) years from their respective dates;

3. Bear interest at such rate or rates which shall be consistent with prevailing market rates; and

4. Contain such terms, covenants and conditions as may be necessary to effectively market the bonds or place the notes as the Commission shall determine.

C. Any resolution authorizing the issuance of bonds or notes pursuant to this section may contain covenants, including, but not limited to:

1. The purpose or purposes to which the proceeds of the sale of bonds or notes may be applied, and the deposit, use and disposition thereof;

2. The use, deposit, securing of deposits and disposition of the revenues of the Commission, including the creating and maintenance of reserves; and

3. The ability to refinance or refund any of the bonds or notes issued.

D. In the discretion of the Commission, any bonds or notes issued pursuant to the provisions of this section may be secured by a trust indenture by and between the Commission and a corporate trustee, which may be any trust company or bank having the powers of a trust company within the state. Any trust indenture may pledge or assign the revenues of the Commission, but shall not convey or mortgage any properties, except such revenues. Any trust indenture or any resolution providing for the issuance of the bonds or notes may contain such provisions for protecting and enforcing the rights and remedies of the bondholders or noteholders as may be reasonable and proper and not in violation of law, including covenants setting forth the duties of the Commission in relation to:

1. The use of funds, acquisition of property, acquisition of services and other costs, in connection with which such bonds or notes shall have been authorized; and

2. The custody, safeguarding and application of all monies.

It shall be lawful for any bank or trust company incorporated under the laws of this state, which may act as depository of the proceeds of bonds, notes or of revenues, to furnish such indemnifying bonds or to pledge such securities as may be required by the Commission. Any such trust indenture may set forth the rights and remedies of the bondholders, noteholders and of the trustee, and may restrict the individual right of action by bondholders or noteholders as is customary in trust agreements or trust indentures securing bonds, notes and debentures of corporations. Any such trust indenture may contain such other provisions as the Commission may deem reasonable and proper for the security of the bondholders or noteholders. All expenses incurred in carrying out the provisions of any such trust indenture may be treated as a part of the cost of operation or acquisitions for which the bonds are authorized.

E. Monies received pursuant to the Oklahoma Education Lottery Act, whether as proceeds from the sale of bonds, notes or as revenues from the operations of the Commission, which have been identified for bonds or note repayment purposes, shall be deemed to be trust funds, to be held and applied solely as provided in the Oklahoma Education Lottery Act. The resolution authorizing the issuance of bonds or notes of any issue or the trust indenture securing such bonds or notes, shall provide that any officer to whom, or any bank or trust company to which, such monies shall be paid, shall act as trustee of such monies and shall hold and apply the same for the purpose hereof, subject to the requirements as the Oklahoma Education Lottery Act and such resolution or trust indenture may provide.

Added by Laws 2003, c. 58, § 33, adopted at election held on Nov. 2, 2004.