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