BILL ANALYSIS Ó
AB 1428
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Date of Hearing: April 22, 2015
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Adam Gray, Chair
AB 1428
(Gray) - As Introduced February 27, 2015
SUBJECT: California State Lottery: education finance
SUMMARY: Would require California State Lottery Commission
(Commission) to collect, and make publicly available on the
commission's Internet web site, information related to the
separate lottery education accounts of each school district and
county superintendent of schools.
EXISTING LAW:
1) The California State Lottery Act of 1984, enacted by
initiative, authorizes a California State Lottery (Lottery) and
provides for its operation and administration by the Commission
and the Director of the California State Lottery, with certain
limitations.
2) Requires each school district and county superintendent of
schools, as condition of receiving any moneys from the Lottery,
to establish a separate account for the receipt and expenditure
of those moneys, which is required to be clearly identified as a
lottery education account.
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3) The California State Lottery Act (Act) of 1984, an
initiative measure, 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.
FISCAL EFFECT: Unknown
COMMENTS:
Background : 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, with certain limitations.
The California Lottery saw its sales rise by 13% in Fiscal Year
2013-14. In all, the Lottery had its best year on record, seeing
sales eclipse $5 billion for the first time in our history.
When Lottery sales are up, funds to education increase. Last
fiscal year, the Lottery was able to send $1.35 billion in
supplemental funding to schools. While this contribution
currently represents only about 1% of the state's public school
annual budget, Lottery funds are meant only to supplement public
education, not to replace state and local funding. Since 1985,
Lottery players have contributed approximately $28 billion to
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help create more educational opportunities for California's
students.
The Lottery's mandate, as defined in the Act, is to provide
supplemental funding to California public education at all
levels. K-12 education, Community Colleges, the California State
University, the University of California and other educational
entities all benefit from Lottery proceeds.
All segments of public schools receive the same per pupil
funding level from the Lottery based on the average daily
attendance of students in each school district.
Once a quarter, the Lottery sends its educational supplemental
dollars to the State Controller's Office (SCO) who then audits
those contributions. The SCO in turn distributes them to County
Treasurers who then send the money to County Offices of
Education, School Districts and the administrators of higher
education. Those entities determine how Lottery funds are
distributed and spent within their systems. The Lottery is not
involved in this decision-making process.
The Lottery publishes on their Internet web site a report
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compiled from information provided by the State Controller's
Office that summarizes disbursements from the Lottery Education
Fund to public education institutions by county. The report
reflects all districts that have ever received funds from the
Lottery.
The Act requires each school district and county superintendent
of schools, as condition of receiving any moneys from the
California State Lottery, to establish a separate account for
the receipt and expenditure of those moneys, which is required
to be clearly identified as a lottery education account.
Purpose of the bill : According to the author, this bill is
intended to provide further accountability and transparency of
supplemental funding to California public education and to offer
detailed accuracy in financial reporting to the public. AB 1428
would require the Lottery to collect, and make publicly
available on its Internet Web site, information related to the
separate lottery education accounts of each school district and
county superintendent of schools.
AB 1428 will allow the public to know how the Lottery funds were
distributed and spent by designated school districts.
Double referral : This bill has been double referred and should
it pass will be sent to the Assembly Committee on Education.
Prior legislation : AB 363 (Hayashi), Chapter 56, Statutes of
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2011. Extended 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 Lottery Commission's efforts to boost income
for public education.
AB 142 (Hayashi), Chapter 13, Statutes 2010. 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.
AB 1654 (Budget), Chapter 764, Statutes of 2008. Would have
implemented a number of changes to the Lottery Act to
"modernize" the Lottery if the voters would have approved
Proposition 1C (which was placed on the ballot by SCA 12
(Resolution Chapter 143 of 2008) in May 2009. (The voters did
not approve Proposition 1C)
SB 1011 (Florez), 2006-2007 Legislative Session. Would have
required, among other things that at least 50 percent of
multistate lottery revenues to be allocated to the public in the
form of prizes, at least 42 percent must benefit public
education, and no more than eight percent to be allocated for
lottery expenses. (Died on the Assembly Floor)
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AB 1453 (Cardenas), Chapter 800, Statutes of 1998. Provides
that 50% of any increase beyond the 34% of Lottery revenues as
calculated for the 1997/98 fiscal year, and currently given to
K-12 school districts and community college districts, will be
allocated to the schools for the sole purchase of instructional
materials. Provides that its provisions take effect only upon
approval by the voters. The Cardenas Textbook Act of 2000
(Proposition 20) was approved by the voters on March 7, 2000.
AB 3032 (V. Brown), Chapter 581, Statutes of 1994. Amends the
Lottery Act to make the Department of Mental Health eligible for
lottery payments for clients enrolled in state hospital
education programs.
AB 2425 (Baca), Chapter 1236, Statutes of 1994. Requires all
interest earned upon funds held in the State Lottery Fund to be
allocated to public education. The interest is in addition to
the 34% of lottery revenues otherwise required to go to public
education and are not to supplant Proposition 98 funds or funds
committed for child development programs.
AB 3824 (Floyd), Chapter 500, Statutes of 1992. Deletes the
requirement that 50% of the projected revenue for each lottery
game be apportioned for payment of prizes, and instead, provides
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that 50% of the projected revenues for prizes be computed on a
year-round basis.
SB 312 (Dills), Chapter 56, Statutes of 1991. Codifies existing
Lottery Commission policy of reverting unclaimed prizes from all
"on-line" games, including "lotto," "decco," and "topper," to
the Lottery Education Fund.
SB 906 (Dills), Chapter 917, Statutes of 1989. Among other
things, requires unclaimed Lotto winnings to revert back for
support of education. Provides that the Lottery Commission,
upon a finding that it will generate more net revenue for
education may, as a valid promotional expense, supplement the
prize pool.
SB 1327 (Eastin), Chapter 425, Statutes of 1988. Provide that
payments from the Lottery also be made to the Department of
Developmental Services based on average daily attendance (ADA)
for clients with developmental or mental disabilities enrolled
in hospital or developmental center education programs.
SB 116 (Dills), Chapter 426, Statutes of 1987. Requires the
State Lottery to adopt and publish competitive bidding
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procedures for the award of procurements or contracts, which
involve expenditures in excess of $100,000. The bill also
requires the CSL director to determine whether goods and
services subject to these bidding procedures are available
through the Department of General Services.
AB 3145 (Vasconcellos), Chapter 1362, Statutes of 1986.
Requires the Controller to make quarterly distributions of funds
from the California State Lottery Education Fund to the
Department of the Youth Authority.
SB 333 (Dills), Chapter 1517, Statutes of 1985. Among other
things, adds Hastings College of Law and the California Maritime
Academy as recipients of lottery funds.
REGISTERED SUPPORT / OPPOSITION:
Support
None on file
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Opposition
None on file
Analysis Prepared by:Eric Johnson / G.O. / (916) 319-2531