GOVERNOR'S RECOMMENDATION

1. Page 1, enrolled, the first line of subsection D of § 58.1-4022, after D.

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Appropriation of lottery revenues shall be made only upon actual and audited collections as transferred to the general fund and shall in no event be predicated upon an estimation of such revenues. No later than ten days after receipt of the audit report required by § 58.1-4023, the Comptroller shall transfer to the general fund, less the special reserve fund, the audited balances of the State Lottery Fund.

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D. 1. The Comptroller shall transfer from the State Lottery Fund any actual and audited balances available after deducting the amounts in the special reserve fund, as required by Subsection B of this section, according to the provisions of the appropriation act.

2. The appropriation of lottery revenues shall not exceed the transfers established in the appropriation act. Of the amounts available for appropriation, the following percentages shall not be paid into the general fund but shall be distributed directly to local governments in accordance with the provisions of the appropriation act.

Fiscal Year Percentage

1996-1997 10%

1997-1998 15%

1998-1999 35%

1999-2000 65%

2000-2001 and thereafter 100%

Lottery revenues received by a local government shall be expended for public education, law enforcement, or local tax relief. Any lottery revenues available for appropriation that are not distributed to local governments shall be paid into the general fund and may be appropriated for any purpose for which general fund revenues may be appropriated.

2. Page 1, enrolled, the fifth line of subsection D of § 58.1-4022, after State Lottery Fund.

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3. In addition to such other funds as may be appropriated, 100 percent of the "lottery matching funds" shall be appropriated entirely and solely for the purpose of public education in the Commonwealth, which purposes shall include, but not be limited to, those programs specified in § 22.1-199.1.

4. "Lottery matching funds" shall be an amount of the general fund equal to the audited balances of the State Lottery Fund less the amounts in the special reserve fund required by Subsection B of this section.