SB 570

Bill Subjects

Abstract

(1) 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. Existing law establishes the State Lottery Fund, as a special fund that is continuously appropriated for the purposes of the California State Lottery. Existing law 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. Existing law requires that all unclaimed prize money revert to the benefit of public education, and that all of the interest earned upon funds held in the State Lottery Fund be allocated to the benefit of public education. Existing law defines net revenues for the purposes of the act. This bill would require instead, commencing with the 2009–10 fiscal year, that not less than 87% of the total annual revenues of the state lottery be returned to the public, and no more than 13% be used for lottery expenses. The bill would define total revenues of the state lottery to include revenue from the sale of tickets or shares, merchandising revenue, advertising revenue, interest earnings on moneys in the State Lottery Fund, and unclaimed prizes. The bill would modify the definition of net revenues, as specified. (2) Existing law requires that 50% of the total annual lottery revenues be returned to the public in the form of prizes, and that 34% of those revenues be used to benefit public education. This bill would require, instead, that not less than 50% of the total annual lottery revenues, in an amount to be determined by the commission, be returned to the public in the form of prizes. The bill would also require the commission to establish the percentage to be allocated for specified public education purposes to maximize the total net revenues for public education, provided that total net revenues for public education during any fiscal year after the 2010–11 fiscal year would be prohibited from being less than $1,280,000,000. The bill would also require the commission, each fiscal year, to allocate $1,000,000 to the Office of Problem and Pathological Gambling within the State Department of Alcohol and Drug Programs for problem gambling awareness and treatment programs, and would require the director of that office to report to the commission on the effectiveness of problem gambling awareness and treatment efforts. (3) Existing law requires that, to the extent that expenses of the lottery are less than 16% of the total annual revenues, any surplus funds be allocated to the benefit of public education. This bill would provide, instead, that, to the extent that expenses of the lottery are less than 13% of the total annual revenues, any surplus funds may be carried over from year to year upon a determination by the commission that the carryover furthers the purpose of the act, provided that the annual total revenues for any year allocated for payment, plus carried over revenues, shall not exceed 16% of the annual total revenues for the year in which carried over revenues are available. Excess carried over revenue would be returned to the public pursuant to the provisions above. (4) Existing law requires that all unclaimed prize money revert to the benefit of public education, and that all of the interest earned upon funds held in the State Lottery Fund be allocated to the benefit of public education. Existing law requires at least 34% of the total annual revenues to be allocated to the benefit of public education, as specified. Existing law excludes specified reimbursements from that 34% of total annual revenues. However, existing law requires those reimbursements to be allocated for the benefit of public education, as specified. This bill would delete those provisions. (5) Existing law authorizes the Director of the California State Lottery to purchase or lease goods and services as necessary for effectuating the purposes of the act, as specified. This bill would instead grant the director express authority, subject only to commission approval, to make any and all expenditures that are necessary or reasonable for effectuating the purposes of the act, as specified. (6) Existing law requires the commission to adopt and publish competitive bidding procedures for the award of any procurement or contract involving an expenditure of more than $100,000. This bill would instead require the commission to adopt and publish those procedures for any procurement or contract involving an expenditure of more than $500,000. (7) The California State Lottery 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 23 vote of each house of the Legislature and signed by the Governor. This bill would declare that it furthers the purpose of the act and would require a 23 vote as an amendment of that act. This bill would declare that it is to take effect immediately as an urgency statute.