2005 California Government Code Sections 8880.61-8880.67 Article 7. State Lottery Fund

8880.61.  State Lottery Fund
   (a) A special fund to be known as the "State Lottery Fund" is
created within the State Treasury which is continuously appropriated
for carrying out the purposes of this chapter.  The fund shall
receive all proceeds from the sales of lottery tickets or shares, the
temporary line of credit for initial startup costs, and all other
moneys credited to the Lottery from any other source.  The Treasurer
shall designate a depository to receive lottery proceeds for
transmission to the State Treasury and for deposit in the State
Lottery Fund.
   (b) Except as provided by this chapter, moneys in the General Fund
or any other state fund shall not be transferred to the State
Lottery Fund or otherwise used to support the California State
Lottery or the Lottery Commission or to pay the debts, obligations,
or encumbrances of the State Lottery Fund or the Commission.
8880.62.  Types of Disbursements from the State Lottery Fund
   Funds shall be disbursed from the State Lottery Fund by the State
Controller for any of the following purposes:
   (a) the payment of prizes to the holders of valid lottery tickets
or shares,
   (b) expenses of the Lottery,
   (c) repayment of any funds advanced from the temporary line of
credit to the Commission from the State General Fund for initial
start-up costs and the interest on any such funds advanced,
   (d) transfer of funds from the State Lottery Fund to the benefit
of the public purpose established in this Chapter.
8880.63.  As nearly as practical, 50 percent of the total projected
revenue, computed on a fiscal-year basis, accruing from the sales of
all lottery tickets or shares shall be apportioned for payment of
prizes.
8880.64.  (a) Expenses of the lottery shall include all costs
incurred in the operation and administration of the lottery and all
costs resulting from any contracts entered into for the purchase or
lease of goods and services required by the lottery, including, but
not limited to, the costs of supplies, materials, tickets,
independent audit services, independent studies, data transmission,
advertising, promotion, incentives, public relations, communications,
compensation paid to the lottery game retailers, bonding for lottery
game retailers, printing, distribution of tickets or shares,
reimbursement of costs of services provided to the lottery by other
governmental entities, and for the costs for any other  goods and
services necessary for effectuating the purposes of this chapter.  As
a promotional expense, the commission may supplement the prize pool
of a game or games upon its determination that a supplement will
benefit the public purpose of this chapter.
   (b)  (1) Not more than 16 percent of the total annual revenues
accruing from the sale of all lottery tickets and shares from all
lottery games shall be expended for the payment of the expenses of
the lottery.
   (2) Expenses recorded as a result of a nonmonetary exchange shall
not be considered an expense for the purposes of Section 8880.4 and
this section.  "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.
8880.65.  Transfer of Net Revenues
   The funds remaining in the State Lottery Fund after accrual of all
revenues to the State Lottery Fund, and after accrual of all
obligations of the Lottery for prizes, expenses, and the repayment of
any funds advanced from the temporary line of credit for initial
startup costs and interest thereon shall be deemed to be the net
revenues of the Lottery.  The net revenues of the Lottery shall be
transferred from the State Lottery Fund not less than quarterly to
the California State Lottery Education Fund.
8880.66.  Intergovernmental Reimbursements for Services
   The Commission shall reimburse all other governmental entities for
any and all services necessary to effectuate the purpose of this
Chapter provided by such governmental entities to the State Lottery
Commission.
8880.67.  State Controller Audits
   The State Controller shall conduct quarterly and annual
post-audits of all accounts and transactions of the Commission and
other special post-audits as the State Controller deems necessary.
The Controller or his agents conducting an audit under this Chapter
shall have access and authority to examine any and all records of the
Commission, its distributing agencies, Lottery Contractors, and
Lottery Game Retailers.