BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 363
                                                                  Page  1


          ASSEMBLY THIRD READING
          AB 363 (Hayashi)
          As Amended  April 14, 2011
          2/3 vote

           GOVERNMENTAL ORGANIZATION 15-0                                  
           
           ----------------------------------------------------------------- 
          |Ayes:|Hall, Nestande, Atkins,   |     |                          |
          |     |Block, Chesbro, Cook,     |     |                          |
          |     |Galgiani, Gatto, Hill,    |     |                          |
          |     |Olsen, Ma, Perea, V.      |     |                          |
          |     |Manuel Pérez, Silva,      |     |                          |
          |     |Allen                     |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           SUMMARY  :  Extends the due date from December 31 to April 1 for 
          each of the next five years, on specified reporting requirements 
          regarding the California State Lottery Commission's efforts to 
          boost income for public education, as defined.  Specifically, 
           this bill  :  

          1)Changes the reporting date for the California State Controller 
            (Controller) to make specific reports to the Legislature from 
            December 31 to April 1, for each of the next five years, 
            regarding the State Lottery's efforts to boost income for 
            public education. 

          2)Extends the operation of the change described above until 
            April 1 of the year following notification of the Legislature 
            and the Governor by the Controller that specified events 
            relating to the total net revenues allocated to the benefit of 
            public education have occurred, and the prior law will be 
            restored at that time.

           EXISTING LAW  :  
          
          1)Authorizes, under the California State Lottery Act (Act) of 
            1984, enacted by initiative, a California State Lottery and 
            provides for its operation and administration by the 
            California State Lottery Commission (Commission) and the 
            Director of the California State Lottery, with certain 
            limitations.








                                                                  AB 363
                                                                  Page  2



          2)Requires the Commission to establish the percentage of total 
            annual revenues of the state lottery to be allocated to the 
            benefit of public education at a level that maximizes the 
            total net revenues allocated for the benefit of public 
            education.  

          3)Requires the Controller, by September 1 of each fiscal year 
            for five years following the enactment of this provision, to 
            report to the Legislature whether specified events relating to 
            the total net revenues allocated to the benefit of public 
            education have occurred and, if so, to notify the Legislature 
            and the Governor. 

          4)Requires the Controller to convene a lottery review group to 
            report to the Legislature, no later than December 31 following 
            the final fiscal year of that five-year period, on whether 
            certain provisions have furthered the purposes of the Act.  

          5)States that those provisions shall remain in effect only until 
            December 31 of the year of notification from the Controller to 
            the Legislature and the Governor that those specified events 
            relating to the total net revenues allocated to the benefit of 
            public education have occurred, and the prior law will be 
            restored at that time.  

           FISCAL EFFECT  :  This bill has been keyed non-fiscal by 
          Legislative Counsel. 

           COMMENTS  :  

           Purpose of the bill  :  AB 363 would extend the amount of time (by 
          four months and two months, respectively) the Controller has to 
          complete reports as required by AB 142 (Hayashi), Chapter 13, 
          Statutes of 2010, which enhances the funding benefit for 
          education through the Act.

          The Act was passed by the voters in November 1984.  The passage 
          of the Act created the Commission to oversee the lottery, 
          ensuring the integrity, security and fairness of the lottery 
          system and its games in California.

          AB 142 (Hayashi), requires revenues of the state lottery to be 
          allocated to maximize the amount of funding allocated to the 








                                                                  AB 363
                                                                  Page  3


          public education system in California.  The bill also requires 
          the Controller to report to the Legislature whether specified 
          events relating to the total net revenues allocated to the 
          benefit of public education have occurred and whether certain 
          provisions have furthered the purpose of the Act by September 1 
          and December 31, respectively, following the final fiscal year 
          of that five-year period.

          However, completing the review by the dates required has been 
          problematic for the Controller's Office, as the Division of 
          Audits only receives the information necessary to conduct the 
          reports during the last week of August and the last week of 
          October, respectively.  This bill would give the Division of 
          Audits the necessary time to perform a quarterly review and to 
          determine if the Lottery complied with AB 142 (Hayashi) by 
          extending the reporting deadlines.
           
           Prior legislation  :  AB 142 (Hayashi) modifies the allocation 
          formula of the Act, also known as Proposition 37.  Repeals the 
          modifications to the allocation formula if it is determined by 
          the Controller that the amount of revenues allocated to the 
          benefit of public education by the Lottery is less than what 
          would have been allocated if the law were not changed, as 
          specified.  

           
          Analysis Prepared by  :    Eric Johnson / G. O. / (916) 319-2531 


                                                                FN: 0000624