Code Section Group

Government Code - GOV

TITLE 2. GOVERNMENT OF THE STATE OF CALIFORNIA [8000 - 22980]

  ( Title 2 enacted by Stats. 1943, Ch. 134. )

DIVISION 1. GENERAL [8000 - 8899.72]

  ( Division 1 enacted by Stats. 1943, Ch. 134. )

CHAPTER 12.5. [California State Lottery Act of 1984] [8880 - 8880.72]

  ( Chapter 12.5 added November 6, 1984, by initiative Proposition 37, Sec. 3. )

ARTICLE 1. General Provisions and Definitions [8880 - 8880.14]
  ( Article 1 added November 6, 1984, by initiative Proposition 37. )

8880.
  

Citation of Chapter

This Chapter shall be known and may be cited as the California State Lottery Act of 1984.

(Added November 6, 1984, by initiative Proposition 37.)

8880.1.
  

Purpose and Intent

The People of the State of California declare that the purpose of this Act is support for preservation of the rights, liberties and welfare of the people by providing additional monies to benefit education without the imposition of additional or increased taxes.

The People of the State of California further declare that it is their intent that the net revenues of the California State Lottery shall not be used as substitute funds but rather shall supplement the total amount of money allocated for public education in California.

(Added November 6, 1984, by initiative Proposition 37.)

8880.2.
  

Activities Not Affected

Except for the state-operated lottery established by this Chapter, nothing in this Chapter shall be construed to repeal or modify existing State law with respect to the prohibition of casino gambling, punch boards, slot machines, dog racing, video poker or blackjack machines paying prizes, or any other forms of gambling.

(Added November 6, 1984, by initiative Proposition 37.)

8880.3.
  

Prohibition on Use of State Funds

No appropriations, loans, or other transfer of State funds shall be made to the California State Lottery Commission except for a temporary line of credit for initial start-up costs as provided in this Act.

(Added November 6, 1984, by initiative Proposition 37.)

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 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 and for housing assistance and food assistance for community college students 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 8880.321.

(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 of the following shall be considered revenues for 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, 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.

(Amended (as amended by Stats. 2011, Ch. 56, Sec. 1) by Stats. 2020, Ch. 294, Sec. 2. (AB 2884) Effective September 29, 2020. Conditionally inoperative, on date prescribed in subd. (e). Repealed, by its own provisions, on January 1 following inoperative date. See later operative version, as amended by Sec. 2 of Stats. 2020, Ch. 294. Note: This section was added on Nov. 6, 1984, by initiative Prop. 37.)

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) (A) At least 34 percent of the total annual revenues shall be allocated to the benefit of public education, as specified in Section 8880.5.

(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 and for housing assistance and food assistance for community college students 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 8880.321.

(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 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.

(Amended (as amended by Stats. 2011, Ch. 56, Sec. 2) by Stats. 2020, Ch. 294, Sec. 3. (AB 2884) Effective September 29, 2020. Section is conditionally operative, on date prescribed in subd. (e). Note: Before the repeal and addition by Stats. 2010, Ch. 13, Section 8880.4 originally was added on Nov. 6, 1984, by initiative Prop. 37.)

8880.4.1.
  

(a) The Legislature finds and declares that this section is clarifying of, and consistent with, the intent of Proposition 20, as approved by the voters at the March 7, 2000, statewide primary election and is not authorizing any new use of moneys expended pursuant to subparagraph (B) of paragraph (2) of subdivision (a) of Section 8880.4, as amended by Section 1 of Chapter 56 of the Statutes of 2011, and paragraph (2) of subdivision (a) of Section 8880.4, as amended by Section 2 of Chapter 56 of the Statutes of 2011.

(b) For purposes of subparagraph (B) of paragraph (2) of subdivision (a) of Section 8880.4, as amended by Section 1 of Chapter 56 of the Statutes of 2011, and paragraph (2) of subdivision (a) of Section 8880.4, as amended by Section 2 of Chapter 56 of the Statutes of 2011, “instructional materials” include, but are not limited to, laptop computers and devices that provide internet access for use by pupils, students, teachers, and faculty as learning resources.

(Added by Stats. 2020, Ch. 110, Sec. 33. (SB 820) Effective September 18, 2020.)

8880.4.5.
  

(a) Following the end of each full fiscal year, the commission shall calculate and report to the Controller and to the Legislature the amount of total net revenues allocated to the benefit of public education from the California State Lottery Education Fund for that fiscal year.

(b) To ensure increases in lottery net revenues allocated to public education, if in any one of the first five full fiscal years after the enactment of the act adding this section, the Controller determines that both of the events described in paragraphs (1) and (2) of subdivision (c) occur, then the Controller shall notify the Legislature and the Governor, and post that notification on the Controller’s Internet Web site, and on January 1 of the following year, both of the following shall occur:

(1) The amendments made to Sections 8880.4, 8880.63, and 8880.64 by the act adding this section shall become inoperative.

(2) Sections 8880.4, 8880.63, and 8880.64, as they existed prior to the effective date of the act adding this section shall become operative.

(c) No later than December 31 following each of the first five fiscal years in which the amendments made by the act adding this section are in effect, the Controller shall report to the Legislature whether either of the following occurred in the prior fiscal year:

(1) The total net revenues allocated to the benefit of public education from the California State Lottery Education Fund are less than the total net revenues allocated to the benefit of public education in the last full fiscal year prior to the enactment of the act adding this section.

(2) The annual average of total net revenues allocated to the benefit of public education from the California State Lottery Education Fund after the enactment of the act adding this section is less than the total net revenues allocated to the benefit of public education in the last full fiscal year prior to the enactment of the act adding this section, adjusted for an annual growth rate of 1.8 percent or the actual growth rate of lottery revenues since enactment of the act adding this section, whichever is greater.

(d) If the conditions specified in subdivision (c) do not occur, then in subsequent fiscal years, to ensure continued growth in lottery net revenues allocated to public education, the commission, when setting the percentage required in subparagraph (A) of paragraph (2) of subdivision (a) of Section 8880.4, shall ensure that net revenues allocated to public schools are at least as much as were allocated on average in the prior five fiscal years, and increased in proportion to any upward increases in lottery net revenues.

(e) At the end of the first five full fiscal years following enactment of the act adding this section, the Controller shall convene a lottery review group to consist of the Controller, the Superintendent of Public Instruction, and the chairperson of the commission. The review group shall report to the Legislature, no later than March 31 following the final fiscal year, on whether the amendments made by the act adding this section have furthered the purposes of the California State Lottery Act of 1984 as intended.

(f) 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) 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.

(Amended by Stats. 2011, Ch. 56, Sec. 3. (AB 363) Effective January 1, 2012. Conditionally inoperative, on date prescribed in subd. (f). Repealed, by its own provisions, on January 1 following inoperative date.)

8880.5.
  

Allocations for education:

The California State Lottery Education Fund is created within the State Treasury, and is continuously appropriated for carrying out the purposes of this chapter. The Controller shall draw warrants on this fund and distribute them quarterly in the following manner, provided that the payments specified in subdivisions (a) to (g), inclusive, shall be equal per capita amounts.

(a) (1) Payments shall be made directly to public school districts, including county superintendents of schools, serving kindergarten and grades 1 to 12, inclusive, or any part thereof, on the basis of an equal amount for each unit of average daily attendance, as defined by law and adjusted pursuant to subdivision (l).

(2) For purposes of this paragraph, in each of the 2008–09, 2009–10, 2010–11, 2011–12, 2012–13, 2013–14, and 2014–15 fiscal years, the number of units of average daily attendance in each of those fiscal years for programs for public school districts, including county superintendents of schools, serving kindergarten and grades 1 to 12, inclusive, shall include the same amount of average daily attendance for classes for adults and regional occupational centers and programs used in the calculation made pursuant to this subdivision for the 2007–08 fiscal year.

(b) Payments shall also be made directly to public school districts serving community colleges, on the basis of an equal amount for each unit of average daily attendance, as defined by law.

(c) Payments shall also be made directly to the Board of Trustees of the California State University on the basis of an amount for each unit of equivalent full-time enrollment. Funds received by the trustees shall be deposited in and expended from the California State University Trust Fund or, at the discretion of the trustees, deposited in local trust accounts in accordance with subdivision (j) of Section 89721 of the Education Code.

(d) Payments shall also be made directly to the Regents of the University of California on the basis of an amount for each unit of equivalent full-time enrollment.

(e) Payments shall also be made directly to the Board of Directors of the Hastings College of the Law on the basis of an amount for each unit of equivalent full-time enrollment.

(f) Payments shall also be made directly to the Department of the Youth Authority for educational programs serving kindergarten and grades 1 to 12, inclusive, or any part thereof, on the basis of an equal amount for each unit of average daily attendance, as defined by law.

(g) Payments shall also be made directly to the two California Schools for the Deaf, the California School for the Blind, and the three Diagnostic Schools for Neurologically Handicapped Children, on the basis of an amount for each unit of equivalent full-time enrollment.

(h) Payments shall also be made directly to the State Department of Developmental Services and the State Department of State Hospitals for clients with developmental or mental disabilities who are enrolled in state hospital education programs, including developmental centers, on the basis of an equal amount for each unit of average daily attendance, as defined by law.

(i) No Budget Act or other statutory provision shall direct that payments for public education made pursuant to this chapter be used for purposes and programs, including workload adjustments and maintenance of the level of service, authorized by Chapters 498, 565, and 1302 of the Statutes of 1983, Chapter 97 or 258 of the Statutes of 1984, or Chapter 1 of the Statutes of the 1983–84 Second Extraordinary Session.

(j) School districts and other agencies receiving funds distributed pursuant to this chapter may at their option utilize funds allocated by this chapter to provide additional funds for those purposes and programs prescribed by subdivision (i) for the purpose of enrichment or expansion.

(k) As a condition of receiving any moneys pursuant to subdivision (a) or (b), each school district and county superintendent of schools shall establish a separate account for the receipt and expenditure of those moneys, which account shall be clearly identified as a lottery education account.

(l) Commencing with the 1998–99 fiscal year, and each year thereafter, for purposes of subdivision (a), average daily attendance shall be increased by the statewide average rate of excused absences for the 1996–97 fiscal year as determined pursuant to the provisions of Chapter 855 of the Statutes of 1997. The statewide average excused absence rate, and the corresponding adjustment factor required for the operation of this subdivision, shall be certified to the Controller by the Superintendent of Public Instruction.

(m) It is the intent of this chapter that all funds allocated from the California State Lottery Education Fund shall be used exclusively for the education of pupils and students and no funds shall be spent for acquisition of real property, construction of facilities, financing of research, or any other noninstructional purpose.

(Amended by Stats. 2016, Ch. 227, Sec. 1. (AB 2215) Effective January 1, 2017. Note: This section was added on Nov. 6, 1984, by initiative Prop. 37 (the California State Lottery Act of 1984).)

8880.6.
  

Other Statutory Provisions

Sections 320, 321, 322, 323, 324, 325, 326, and 328 of the Penal Code do not apply to the California State Lottery or its operations. This exemption applies only to the operators of the Lottery and shall not be construed to change existing law relating to lotteries operated by persons or entities other than the Lottery.

(Amended by Stats. 1986, Ch. 848, Sec. 1. Effective September 17, 1986. Note: This section was added on Nov. 6, 1984, by initiative Prop. 37.)

8880.7.
  

Governing Definitions

The definitions contained in this Chapter shall govern the construction of this Chapter unless the context requires otherwise.

(Added November 6, 1984, by initiative Proposition 37.)

8880.8.
  

“Lottery” or “California State Lottery”

“Lottery” or “California State Lottery” means the California State Lottery created and operated pursuant to this Chapter.

(Added November 6, 1984, by initiative Proposition 37.)

8880.9.
  

“Commissioner”

“Commissioner” means one of the members of the Lottery Commission appointed by the Governor pursuant to this Chapter to oversee the California State Lottery.

(Added November 6, 1984, by initiative Proposition 37.)

8880.10.
  

“Director”

“Director” means the Director of the California State Lottery appointed by the Governor pursuant to this Chapter as the chief administrator of the California State Lottery.

(Added November 6, 1984, by initiative Proposition 37.)

8880.11.
  

“Lottery Commission” or “Commission”

“Lottery Commission” or “Commission” means the five members appointed by the Governor pursuant to this Chapter to oversee the Lottery and the Director.

(Added November 6, 1984, by initiative Proposition 37.)

8880.12.
  

“Lottery Game”

“Lottery Game” means any procedure authorized by the commission whereby prizes are distributed among persons who have paid, or who have unconditionally agreed to pay, for tickets or shares which provide the opportunity to win those prizes.

(Amended by Stats. 2000, Ch. 509, Sec. 1. Effective January 1, 2001. Note: This section was added on Nov. 6, 1984, by initiative Prop. 37.)

8880.13.
  

“Lottery Game Retailer”

“Lottery Game Retailer” means a person or organization with whom the Lottery Commission may contract for the purpose of selling tickets or shares in Lottery Games to the public.

(Amended by Stats. 1986, Ch. 55, Sec. 3. Effective April 16, 1986. Note: This section was added on Nov. 6, 1984, by initiative Prop. 37.)

8880.14.
  

“Lottery Contractor”

“Lottery Contractor” means a person or organization with whom the Lottery has contracted for the purpose of providing goods and services required by the Lottery.

(Amended by Stats. 1989, Ch. 917, Sec. 1. Note: This section was added on Nov. 6, 1984, by initiative Prop. 37.)

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