BILL ANALYSIS Ó
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Isadore Hall, III
Chair
2015 - 2016 Regular
Bill No: AB 2215 Hearing Date: 6/14/2016
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|Author: |Medina |
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|Version: |2/18/2016 Introduced |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Felipe Lopez |
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SUBJECT: California State Lottery Act: California State
University Lottery Education Fund: California State University
Trust Fund
DIGEST: This bill requires the Board of Trustees of the
California State University (CSU) to deposit funds received from
the California State Lottery Education Fund in the California
State University Trust Fund instead of the California State
University Lottery Education Fund.
ANALYSIS:
Existing law:
1)Authorizes, under the California State Lottery Act of 1984,
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.
2)Establishes the California State Lottery Education Fund and
provides for direct payments from the fund to various
entities, including the Board of Trustees of the CSU.
3)Requires funds received by the CSU Board of Trustees to be
deposited in, and expended from, the CSU Lottery Education
Fund or, at the discretion of the trustees, deposited in local
trust accounts.
AB 2215 (Medina) Page 2 of ?
4)Establishes the CSU Trust Fund and specifies its sources of
revenue.
5)Provides that all money received by the CSU Trust Fund shall
augment the support appropriation to the CSU for the fiscal
year to which the collections apply.
This bill requires the CSU Board of Trustees to deposit funds
received from the California State Lottery Education Fund in the
CSU Trust Fund instead of the CSU Lottery Education Fund.
Background
Purpose of the bill. The author argues that, "this bill will
allow the State Controller's Office (SCO) to directly deposit
lottery funds into the CSU Trust Fund, in order to streamline
the accounting processes associated with utilizing the funds.
The SCO has already approved this change, this bill is necessary
for statutory conformity."
California State University Lottery Education Fund. Under
current law, funds from the CSU Education Fund are distributed
quarterly by the SCO into the CSU Lottery Education Fund, which
serves as the depository account for CSU lottery funds. CSU
accounting staff then must submit quarterly transfer requests to
move these funds into the CSU Trust Fund. They must also submit
similar quarterly forms to move the associated interest accrued
from lottery revenues.
According to the CSU Chancellor's Office, in recent years,
annual CSU Lottery Fund receipts have averaged around $45
million per year. Approximately 80% of funds are allocated
directly to campuses for instructionally related programs and
activities. The remaining funds are allocated for CSU programs
that assist student education, such as the Summer Arts,
Pre-Doctoral, and Doctoral Incentive programs. Approximately
1.2 percent of lottery resources are used by the CSU
Chancellor's Office to administer lottery fund operations and
reporting requirements. The CSU sets aside $5 million for
reserves, to prepare for cash-flow variations and other
year-to-year economic uncertainties that could impact future
fund receipts.
Prior/Related Legislation
AB 2215 (Medina) Page 3 of ?
AB 142 (Hayashi Chapter 13, Statutes of 2010) modified the
allocation formula of the California State Lottery Act of 1984.
SB 1679 (Florez, 2008) would have required that no less than 87%
of the total annual revenues from the sale of state lottery
tickets or shares be used for prizes and to benefit education,
and no more than 13% be used for lottery expenses. (Never heard
in the Senate.)
SB 1011 (Florez, 2006) would have required, among other things
that at least 50% of multistate lottery revenues to be allocated
to the public in the form of prizes, at least 42% must benefit
public education, and no more than 8% to be allocated for
Lottery expenses. (Died on the Assembly Floor).
FISCAL EFFECT: Appropriation: No Fiscal
Com.: Yes Local: No
SUPPORT:
California State University Board of Trustees (Source)
California State Controller, Betty T. Yee
OPPOSITION:
None received
ARGUMENTS IN SUPPORT: According to the CSU Board of Trustees,
"the CSU's lottery funds are currently deposited into the CSU's
Lottery Education Fund. In order for CSU to allocate those
funds to system and campus-based programs, staff must submit
quarterly paperwork to the SCO to request the transfer of those
funds to the CSU Trust Fund. This is permissible under existing
law, but presents the CSU with a process that is unique among
the three segments of public higher education in California."