(a)

1. (1) By Acts 2021, No. 636, the General Assembly amended the Arkansas Scholarship Lottery Act and established procedures and funding requirements for the creation or amendment of scholarships funded with net revenue available.
2. (2) The Office of the Arkansas Lottery was charged with promulgating rules to determine the manner in which the net proceeds from the lottery are deposited and disbursed based on what is most financially prudent.
3. (3) The provisions in this section of this part are adopted pursuant thereto.

(b) The office shall establish the Lottery Scholarship Trust Account to fund the Arkansas Academic Challenge Scholarship Program, the Arkansas Workforce Challenge Scholarship Program, the Arkansas Concurrent Challenge Scholarship Program, and any other scholarship funded with net proceeds from the lottery at a financial institution into which the office shall transfer:

1. (1) Excess funding returned to the office under Arkansas Code § 6-85-212(d)(2)(B)(i) from the previous academic year; and

2. (2) Net proceeds remaining in the Lottery Scholarship Trust Account from the previous academic year after the office:

   1. (A) Transfers funds requested by the Division of Higher Education; and
   2. (B) Deposits the amount necessary into the Scholarship Shortfall Reserve Trust Account to maintain an amount equal to twenty million dollars ($20,000,000).

(e) The funds transferred by the office into the Lottery Scholarship Trust Account for the Arkansas Academic Challenge Scholarship Program, the Arkansas Workforce Challenge Scholarship Program, the Arkansas Concurrent Challenge Scholarship Program, and any other scholarship program shall be used for:

1. (1) The Arkansas Academic Challenge Scholarship Program;
2. (2) The Arkansas Workforce Challenge Scholarship Program;
3. (3) The Arkansas Concurrent Challenge Scholarship Program;
4. (4) Any other scholarship funded with net proceeds from the office; and
5. (5) Any management fees charged by the financial institution to manage the trust account.

(h) Annually, the division shall transfer to the office the unused funds from the previous academic year, if any, that were transferred by the office to fund:

1. (1) The Arkansas Academic Challenge Scholarship Program, Arkansas Code § 6-85-201 et seq.;
2. (2) The Arkansas Workforce Challenge Scholarship Program, Arkansas Code § 6-85-301 et seq.;
3. (3) The Arkansas Concurrent Challenge Scholarship Program, Arkansas Code § 6-85-401 et seq.; and
4. (4) Any other scholarship program.

(i) Arkansas Code § 23-115-802(b) and (c), concerning the amount deposited into the Scholarship Shortfall Reserve Trust Account and loans made to the division for the Arkansas Academic Challenge Scholarship Program, shall be administered as follows pursuant to the office’s operational rules:

1. (1)

   1. (A) An amount equal to four percent (4%) of the total amount of net proceeds disbursed during the preceding fiscal year in the form of scholarships and grants for higher education shall be deposited from lottery proceeds each year until the amount in the account equals twenty million dollars ($20,000,000).
   2. (B) Thereafter, only the amount necessary to maintain the account in an amount equal to twenty million dollars ($20,000,000) shall be deposited into the account.
   3. (C) Any amount in the account exceeding twenty million dollars ($20,000,000) shall be considered net proceeds and shall be deposited annually into one (1) or more trust accounts at one (1) or more financial institutions by July 1 of each year; and
2. (2) If net proceeds in any year are not sufficient to meet the amount allocated for scholarships under the Arkansas Academic Challenge Scholarship Program, Arkansas Code § 6-85-201 et seq., the account may be drawn upon to meet the deficiency.