BILL ANALYSIS                                                                                                                                                                                                    Ó






                                                       Bill No:  AB 
          363
          
                 SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
                       Senator Roderick D. Wright, Chair
                           2011-2012 Regular Session
                                 Bill Analysis


          AB 363  Author:  Hayashi
          As Amended:  April 14, 2011
          Hearing Date:  June 14, 2011
          Consultant:  Paul Donahue


           SUBJECT  :  California State Lottery; Reports

           SUMMARY  :  Extends the due date from December 31 to April 1 
          for each of the next five years on the State Controller's 
          reporting requirements on the California State Lottery 
          Commission's efforts to boost income for public education.

           Existing law  :

          1)  The California State Lottery Act of 1984, enacted by 
          initiative, authorizes a California State Lottery and 
          provides for its operation and administration by the 
          California State Lottery Commission and the Director of the 
          California State Lottery.

          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 5 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 5-year period, 




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          on whether certain provisions have furthered the purposes 
          of the Lottery Act.  

          5)  Under existing law, 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.
           
          This bill  :

          1)  Changes the reporting date for the California State 
          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.

           COMMENTS  :
                    
          1)  Purpose of the bill  :  This measure would extend the time 
          within which the Controller may complete reports required 
          by recent statutory changes to the Lottery Act that 
          enhanced the funding for education.

          In support of the bill, the Controller states that this 
          bill would provide his office with additional time to 
          review and report on the State Lottery's allocations to 
          public education by extending the deadline to determine 
          whether total net revenues allocated by the State Lottery 
          has increased or decreased for the next 5 years, beginning 
          in 2010.  

          2)  Background  :  AB 142 (Hayashi) of 2010 required the State 
          Lottery to allocate revenues to maximize the amount of 
          funding allocated to the public education system in 
          California.  The bill also required the Controller to 
          report to the Legislature whether specified events relating 
          to the total net revenues allocated to the benefit of 




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          public education have occurred, and whether certain actions 
          have furthered the purpose of the California State Lottery 
          Act.  The reports are due September 1 and December 31, 
          respectively, following the final fiscal year of that 
          5-year period.

          The State Controller's office reports that completing the 
          review by the dates required by law has been problematic 
          because 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.  By extending these deadlines a few months, 
          this bill would provide the Division of Audits with the 
          necessary time to perform a quarterly review and to 
          determine if the Lottery is in compliance with AB 142.

          3)  Related legislation  :  

          AB 142 (Hayashi, Stats. 2010, ch. 13) modified the 
          allocation formula of the Act of 1984, also known as 
          Proposition 37.  Repeals the modifications to the 
          allocation formula if the Controller determines that 
          revenues allocated to the benefit of public education by 
          the Lottery are less than what would have been allocated if 
          the law were not changed.  

           SUPPORT:  

          John Chiang, California State Controller (source)

           OPPOSE:   None on file

           FISCAL COMMITTEE:   No

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