                                 CODE OF VIRGINIA

VIRGINIA LOTTERY FUND (§ 58.1-4022)

A. All moneys received from the sale of lottery tickets or shares, less payment
for prizes and compensation of agents as authorized by regulation and any other
revenues received under this chapter, shall be placed in a special fund known as
the &#8220;Virginia Lottery Fund.&#8221; Notwithstanding any other provisions of
law, interest earned from moneys in the Virginia Lottery Fund shall accrue to
the benefit of such Fund.

B. The total costs for the operation and administration of the lottery shall be
funded from the Virginia Lottery Fund and shall be in such amount as provided in
the general appropriation act. Appropriations to the Department during any
fiscal year beginning on and after July 1, 1989, exclusive of agent
compensation, shall at no time exceed 10 percent of the total annual estimated
gross revenues to be generated from lottery sales. However, should it be
anticipated at any time by the Director that such operational and administrative
costs for a fiscal year will exceed the limitation provided herein, the Director
shall immediately report such information to the Board, the Governor and the
Chairmen of the Senate Committee on Finance and Appropriations and the House
Committee on Appropriations. From the moneys in the Fund, the Comptroller shall
establish a special reserve fund in such amount as shall be provided by
regulation of the Department for (i) operation of the lottery, (ii) use if the
game&#8217;s pay-out liabilities exceed its cash on hand, or (iii) enhancement
of the prize pool with income derived from lending securities held for payment
of prize installments, which lending of securities shall be conducted in
accordance with lending programs approved by the Department of the Treasury.

C. The Comptroller shall transfer to the Lottery Proceeds Fund established
pursuant to &#xA7; 58.1-4022.1, less the special reserve fund, the audited
balances of the Virginia Lottery Fund at the close of each fiscal year. The
transfer for each year shall be made in two parts: (i) on or before June 30, the
Comptroller shall transfer balances of the Virginia Lottery Fund for the fiscal
year, based on an estimate determined by the Virginia Lottery, and (ii) no later
than 10 days after receipt of the annual audit report required by &#xA7;
58.1-4023, the Comptroller shall transfer to the Lottery Proceeds Fund the
remaining audited balances of the Virginia Lottery Fund for the fiscal year. If
such annual audit discloses that the actual revenue is less than the estimate on
which the transfer was based, the State Comptroller shall transfer the
difference between the actual revenue and the estimate from the Lottery Proceeds
Fund to the Virginia Lottery Fund.

D. In addition to such other funds as may be appropriated, 100 percent of the
lottery revenues transferred to the Lottery Proceeds Fund shall be appropriated
entirely and solely for the purpose of public education in the Commonwealth
unless otherwise redirected pursuant to Article X, Section 7-A of the
Constitution of Virginia. The additional appropriation of lottery revenues to
local school divisions for public education purposes consistent with this
provision shall be used for operating, capital outlay, or debt service expenses,
as determined by the appropriation act. The additional appropriation of lottery
revenues shall not be used by any local school division to reduce its total
local expenditures for public education in accordance with the provisions of the
general appropriation act.

E. As a function of the administration of this chapter, funds may be expended
for the purposes of reasonably informing the public concerning (i) the facts
embraced in the subjects contained in subdivisions A 1 through 7 of &#xA7;
58.1-4007 and (ii) the fact that the net proceeds are paid into the Lottery
Proceeds Fund of the Commonwealth, but no funds shall be expended for the
primary purpose of inducing persons to participate in the lottery.

HISTORY: 1987, c. 531; 1989, c. 478; 1995, cc. 831, 852; 2002, cc. 829, 866;
2014, c. 225.