BILL NUMBER: SB 939	INTRODUCED
	BILL TEXT


INTRODUCED BY   Committee on Governmental Organization (Senators
Wright (Chair), Anderson, Berryhill, Calderon, Cannella, Corbett, De
León, Evans, Hernandez, Padilla, Strickland, Wyland, and Yee)

                        MARCH 21, 2011

   An act to amend Sections 8880.4 and 12419.5 of the Government
Code, relating to the California State Lottery.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 939, as introduced, Committee on Governmental Organization.
California State Lottery.
   The California State Lottery Act of 1984, enacted by initiative,
authorizes the California State Lottery and provides for its
operation and administration by the California State Lottery
Commission and the Director of the California State Lottery, with
certain limitations. The act requires that not less than 84% of the
total annual revenues from the sale of state lottery tickets or
shares be returned to the public in the form of prizes and net
revenues to benefit public education, and that no more than 16% of
those revenues be used for expenses of the lottery. The act specifies
that none of its provisions may be changed except to further its
purpose by a bill passed by a 2/3 vote of each house of the
Legislature and signed by the Governor. A provision of the act
requires the commission to promulgate regulations to establish a
system of verifying the validity of prizes and to effect payment of
the prizes, as specified.
   This bill would amend the act, and a related provision, to correct
incorrect references to the provision of the act that requires the
commission to promulgate regulations, and would make other technical,
nonsubstantive changes to the act and the related provision.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 8880.4 of the Government Code, as amended by
Section 1 of Chapter 13 of the Statutes of 2010, is amended to read:
   8880.4.  Revenues of the state lottery shall be allocated so as to
maximize the amount of funding allocated to public education,
including from the first full fiscal year following enactment of the
act adding Section 8880.4.5, as follows:
   (a) Not less than 87 percent of the total annual revenues from the
sale of state lottery tickets or shares shall be returned to the
public in the form of prizes and net revenues to benefit public
education.
   (1) The commission shall determine the percentage of total annual
revenues that shall be returned to the public in the form of prizes
as described in this chapter, however the percentage shall not be
less than 50 percent of the total revenues.
   (2) (A) The percentage of the total annual revenues to be
allocated to the benefit of public education, as specified in Section
8880.5, shall be established by the commission at a level that
maximizes the total net revenues allocated to the benefit of public
education.
   (B)  However, for the 1998-99 fiscal year and each fiscal
year thereafter, 50   Fifty  percent of any
increase in the amount calculated pursuant to this paragraph from the
amount calculated in the 1997-98 fiscal year shall be allocated to
school districts and community college districts for the purchase of
instructional materials, on the basis of an equal amount per unit of
average daily attendance, as defined by law, and through a fair and
equitable distribution system across grade levels.
   (3) All unclaimed prize money shall revert to the benefit of
public education, as provided for in subdivision (e) of Section
 8880.32   8880.321  .
   (4) All of the interest earned upon funds held in the State
Lottery Fund shall be allocated to the benefit of public education,
as specified in Section 8880.5. This interest is in addition to, and
shall not be considered as any part of, the total annual revenues
that are required to be allocated for the benefit of public education
as specified in paragraph (2).
   (5) No more than 13 percent of the total annual revenues shall be
allocated for payment of expenses of the lottery as described in this
chapter. To the extent that expenses of the lottery are less than 13
percent of the total annual revenues, any surplus funds also shall
be allocated to the benefit of public education, as specified in this
section or in Section 8880.5.
   (b) Funds allocated for the benefit of public education pursuant
to subdivision (a) are in addition to other funds appropriated or
required under existing constitutional reservations for educational
purposes. No program shall have the amount appropriated to support
that program reduced as a result of funds allocated pursuant to
subdivision (a). Funds allocated for the benefit of public education
pursuant to subdivision (a) shall not supplant funds committed for
child development programs.
   (c)  None   All    of the
following shall  not  be considered revenues for the
purposes of this section:
   (1) Revenues recorded as a result of a nonmonetary exchange.
"Nonmonetary exchange" means a reciprocal transfer, in compliance
with generally accepted accounting principles, between the lottery
and another entity that results in the lottery acquiring assets or
services and the lottery providing assets or services.
   (2) Reimbursements received by the lottery for the cost of goods
or services provided by the lottery that are less than or equal to
the cost of the same goods or services provided by the lottery.
   (d) Reimbursements received in excess of the cost of the same
goods and services provided by the lottery, as specified in paragraph
(2) of subdivision (c), are not a part of the total annual revenues
required to be allocated for the benefit of public education, as
specified in paragraph (2) of subdivision (a).  However, this
  This  amount shall be allocated for the benefit
of public education as specified in Section 8880.5.
   (e) This section shall remain in effect only until December 31 of
the year of notification from the Controller to the Legislature and
the Governor that the events described in paragraphs (1) and (2) of
subdivision (c) of Section 8880.4.5 have occurred, and as of that
date is repealed, unless a later enacted statute, that is enacted
before December 31 of that year, deletes or extends that date.
  SEC. 2.  Section 8880.4 of the Government Code, as added by Section
2 of Chapter 13 of the Statutes of 2010, is amended to read:
   8880.4.  Revenues of the state lottery shall be allocated as
follows:
   (a) Not less than 84 percent of the total annual revenues from the
sale of state lottery tickets or shares shall be returned to the
public in the form of prizes and net revenues to benefit public
education.
   (1) Fifty percent of the total annual revenues shall be returned
to the public in the form of prizes as described in this chapter.
   (2) At least 34 percent of the total annual revenues shall be
allocated to the benefit of public education, as specified in Section
8880.5.  However, for the 1998-99 fiscal year and each
fiscal year thereafter, 50   Fifty percent of any
increase in the amount calculated pursuant to this paragraph from the
amount calculated in the 1997-98 fiscal year shall be allocated to
school districts and community college districts for the purchase of
instructional materials, on the basis of an equal amount per unit of
average daily attendance, as defined by law, and through a fair and
equitable distribution system across grade levels.
   (3) All unclaimed prize money shall revert to the benefit of
public education, as provided for in subdivision (e) of Section
 8880.32   8880.321  .
   (4) All of the interest earned upon funds held in the State
Lottery Fund shall be allocated to the benefit of public education,
as specified in Section 8880.5. This interest is in addition to, and
shall not be considered as any part of, the 34 percent of the total
annual revenues that is required to be allocated for the benefit of
public education as specified in paragraph (2).
   (5) No more than 16 percent of the total annual revenues shall be
allocated for payment of expenses of the lottery as described in this
chapter. To the extent that expenses of the lottery are less than 16
percent of the total annual revenues, any surplus funds also shall
be allocated to the benefit of public education, as specified in this
section or in Section 8880.5.
   (b) Funds allocated for the benefit of public education pursuant
to subdivision (a) are in addition to other funds appropriated or
required under existing constitutional reservations for educational
purposes. No program shall have the amount appropriated to support
that program reduced as a result of funds allocated pursuant to
subdivision (a). Funds allocated for the benefit of public education
pursuant to subdivision (a) shall not supplant funds committed for
child development programs.
   (c)  None   All  of the following shall
 not  be considered revenues for the purposes of this
section:
   (1) Revenues recorded as a result of a nonmonetary exchange.
"Nonmonetary exchange" means a reciprocal transfer, in compliance
with generally accepted accounting principles, between the lottery
and another entity that results in the lottery acquiring assets or
services and the lottery providing assets or services.
   (2) Reimbursements received by the lottery for the cost of goods
or services provided by the lottery that are less than or equal to
the cost of the same goods or services provided by the lottery.
   (d) Reimbursements received in excess of the cost of the same
goods and services provided by the lottery, as specified in paragraph
(2) of subdivision (c), are not a part of the 34 percent of total
annual revenues required to be allocated for the benefit of public
education, as specified in paragraph (2) of subdivision (a). 
However, this   This  amount shall be allocated
for the benefit of public education as specified in Section 8880.5.
   (e) This section shall become operative on January 1 of the year
following notification from the Controller to the Legislature and the
Governor that the events described in paragraphs (1) and (2) of
subdivision (c) of Section 8880.4.5 have occurred.
  SEC. 3.  Section 12419.5 of the Government Code is amended to read:

   12419.5.  The Controller may, in his or her discretion, offset any
amount due a state agency from a person or entity, against any
amount owing that person or entity by any state agency. The
Controller may deduct from the claim, and draw his or her warrants
for the amounts offset in favor of the respective state agencies to
which due, and, for any balance, in favor of the claimant. Whenever
insufficient to offset all amounts due state agencies, the amount
available shall be applied in such manner as the Controller, in his
or her discretion, shall determine. If, in the discretion of the
Controller, the person or entity refuses or neglects to file his or
her claim within a reasonable time, the head of the state agency
owing the amount shall file the claim on behalf of that person or
entity. If approved by the Controller, the claim shall have the same
force and effect as though filed by that person or entity. The amount
due any person or entity from the state or any agency thereof is the
net amount otherwise owing that person or entity after any offset as
provided in this section.
   For purposes of this section, an amount owing to a person or
entity by any state agency shall include any tax refund.
   This section shall not apply to payment of  on-line
  online  game prizes of  ninty-nine
  ninety-nine  dollars ($99) or lower by California
State Lottery Retailers pursuant to subdivision (a) of Section
 8880.32   8880.321  .