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SB-891 California State Lottery: revenue allocation.(2019-2020)

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Date Published: 03/02/2020 09:00 PM
SB891:v98#DOCUMENT

Amended  IN  Senate  March 02, 2020

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Senate Bill
No. 891


Introduced by Senator Chang

January 28, 2020


An act to amend Section 108 of the Business and Professions Code, relating to professions and vocations. An act to amend Section 8880.4 of the Government Code, relating to the California State Lottery, and making an appropriation therefor.


LEGISLATIVE COUNSEL'S DIGEST


SB 891, as amended, Chang. Department of Consumer Affairs. California State Lottery: revenue allocation.
(1) The California State Lottery Act of 1984, an initiative measure approved by the voters at the November 6, 1984, statewide general election, 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 act establishes the State Lottery Fund as a continuously appropriated fund for carrying out the purposes of the act. The act requires that revenues of the California State Lottery be allocated so as to maximize the amount of funding allocated to public education.
This bill would express legislative findings and declarations that the California State Lottery failed to provide certain funding to public education that was required by law, and would express legislative intent to appropriate that funding.
This bill would amend the California State Lottery Act to specify that revenues of the California State Lottery are to be allocated so as to ensure that the relationship between increases in the net revenue of the California State Lottery and increases in funding allocated to public education is directly proportional.
The bill would appropriate $36,000,000 from the State Lottery Fund to the Controller for allocation to public education in order to cover the shortfall in allocations from the State Lottery Fund for this purpose for the 2017–18 fiscal year.
(2) The California State Lottery Act of 1984 provides that its provisions may not 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.
This bill would declare that its provisions further the purposes of the act.

Existing law establishes the Department of Consumer Affairs, which is comprised of various boards that license and regulate various professions and vocations. Under existing law, each board within the department exists as a separate unit with specified functions.

This bill would make a nonsubstantive change to these provisions.

Vote: MAJORITY2/3   Appropriation: NOYES   Fiscal Committee: NOYES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 (a) The Legislature finds and declares that the California State Auditor, in a report dated February 25, 2020, determined, among other things, both of the following:
(1) The California State Lottery did not adhere to a requirement to increase its funding for education proportionately to its increases in net revenue.
(2) As a result, the California State Lottery failed to provide required funding of $36,000,000 to public education in the 2017–18 fiscal year.
(b) Therefore, it is the intent of the Legislature to enact legislation to make the proportionality requirement referenced above more explicit and to appropriate the funding that is owed to public education.

SEC. 2.

 Section 8880.4 of the Government Code, as amended by Section 1 of Chapter 56 of the Statutes of 2011, 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, education and to ensure that the relationship between increases in the net revenue of the state lottery and increases in funding allocated to public education is directly proportional, 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 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 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 of the following shall 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 amount shall be allocated for the benefit of public education education, as specified in Section 8880.5.
(e) This section shall become inoperative on April 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, and as of the following January 1 is repealed, unless a later enacted statute, that is enacted before January 1 of that following year, deletes or extends the dates on which it becomes inoperative and is repealed.

SEC. 3.

 Section 8880.4 of the Government Code, as amended by Section 2 of Chapter 56 of the Statutes of 2011, is amended to read:

8880.4.
 Revenues of the state lottery shall be allocated so as to maximize the amount allocated to public education and to ensure that the relationship between increases in the net revenue of the state lottery and increases in funding allocated to public education is directly proportional, 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 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 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 of the following shall 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 amount shall be allocated for the benefit of public education as specified in Section 8880.5.
(e) This section shall become operative on April 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. 4.

 The sum of thirty-six million dollars ($36,000,000) is hereby appropriated from the State Lottery Fund to the Controller for allocation to public education in accordance with Section 8880.5 of the Government Code in order to cover the shortfall in allocations from the State Lottery Fund for this purpose for the 2017–18 fiscal year.

SEC. 5.

 The Legislature finds and declares that this act furthers the purpose of the California State Lottery Act of 1984, enacted by Proposition 37 at the November 6, 1984, statewide general election.
SECTION 1.Section 108 of the Business and Professions Code is amended to read:
108.

Each board within the department exists as a separate unit, and has the functions of setting standards, holding meetings, and setting dates thereof, preparing and conducting examinations, passing upon applicants, conducting investigations of violations of laws under its jurisdiction, issuing citations and holding hearings for the revocation of licenses, and the imposing of penalties following those hearings, insofar as these powers are given by statute to each respective board.