California State Lottery.

(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. The act 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. The act further specifies that, of that 84%, 50% of the total annual lottery revenues be returned to the public in the form of prizes, and that at least 34% of those revenues be allocated to the benefit of public education. The act establishes the State Lottery Fund, a continuously appropriated fund for carrying out the purposes of the act. This bill would require revenues of the state lottery to be allocated so as to maximize the amount of funding allocated to public education, and would require 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 further specify that, of that 87%, 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 require the commission to establish the percentage to be allocated to the benefit of public education at a level that maximizes the total net revenues allocated to the benefit of public education. By changing these allocations, the bill would change the purposes for which the funds of a continuously appropriated fund may be appropriated, and thereby would make an appropriation. The bill would make other conforming changes. This bill would require the lottery, following the end of each full fiscal year, to 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. The bill would require the Controller, if in any one of the first 5 full fiscal years after the enactment of this measure, the Controller determines that specified events occur, to notify the Legislature and the Governor, and post that notification on the Controller's Internet Web site. The bill would then provide for the repeal of the changes made by this measure on the following January 1, and the prior law to be restored. If those events do not occur, the bill would require the commission, when setting the percentage to be allocated to the benefit of public education, to ensure that net revenues allocated to public schools are at least as much as were allocated on average in the prior 5 fiscal years, and increased in proportion to any upward increases in lottery net revenues. The bill would require the Controller, at the end of the first 5 full fiscal years following enactment of this measure, to convene a lottery review group to report to the Legislature, no later than December 31 following the final fiscal year, on whether the amendments made by this measure have furthered the purposes of the California State Lottery Act of 1984 as intended. (2) 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. (3) This bill would declare that it is to take effect immediately as an urgency statute.