BILL NUMBER: SB 126 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 31, 2009
AMENDED IN ASSEMBLY AUGUST 24, 2009
AMENDED IN ASSEMBLY JULY 1, 2009
AMENDED IN ASSEMBLY JUNE 18, 2009
AMENDED IN SENATE APRIL 16, 2009
AMENDED IN SENATE MARCH 25, 2009
INTRODUCED BY Senator Cedillo
FEBRUARY 5, 2009
An act to amend Section 19850.6 of the Business and Professions
Code, and to amend Sections 326.3, 326.45, and 326.5 of the Penal
Code, relating to bingo, and declaring the urgency thereof, to take
effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 126, as amended, Cedillo. Bingo: remote caller bingo.
(1) The California Constitution allows the Legislature, by
statute, to authorize cities and counties to provide for bingo games
for charitable purposes. The California Remote Caller Bingo Act
permits cities and counties to allow bingo games and remote caller
bingo games, as defined, to be conducted by specified organizations
for charitable purposes pursuant to an ordinance that allows those
games to be conducted only in accordance with specified requirements.
Existing law includes school districts among the organizations
authorized to conduct bingo games, and includes charitable
organizations affiliated with a school district among the
organizations authorized to conduct remote caller bingo games.
This bill would delete the reference to school districts in the
provisions specifying the organizations that may conduct bingo games
and would instead authorize charitable organizations affiliated with
a school district to conduct bingo games. The bill would set forth a
model ordinance to authorize remote caller bingo. The bill would make
other conforming changes.
(2) The act requires the California Gambling Control Commission,
by May 1, 2009, to adopt emergency regulations concerning remote
caller bingo and card-minding devices, effective for an initial
period of 180 days, and permits one readoption of those emergency
regulations for an additional period of 180 days. The commission is
directed to complete the normal public notice and comment process,
giving careful consideration to the comments of all interested
parties.
This bill, instead, would provide that all emergency regulations
adopted by the commission pursuant to these provisions before July 1,
2009, shall remain in effect until December 31, 2011, except to the
extent that the commission exercises its power to adopt, amend, or
repeal those regulations in whole or part. The bill would delete the
requirement that the commission complete the normal public notice and
comment process.
(3) The act provides that an organization authorized to conduct a
remote caller bingo game shall not have overhead costs, as defined,
exceeding 20% of gross sales.
This bill would provide that fees paid to financial institutions
for the use and processing of credit card sales shall not be
included as overhead costs for purposes of that provision. The bill
would require credit card fees to be recorded separately from other
expenses in the accounting of the organization. may be
deducted from the amount of gross revenues awarded for prizes and
not included in overhead costs, as provided.
(4) The act requires an organization that conducts a remote caller
bingo game to have the records pertaining to those games audited at
least annually by an independent California certified public
accountant and for copies of the audit report to be provided to the
California Gambling Control Commission.
This bill would provide that the audit report shall account for
the annual amount of fees paid to financial institutions for the use
and processing of credit card sales and the amount redirected from
overhead costs, as provided.
(4)
(5) The act requires the California Gambling Control
Commission to establish reasonable criteria regulating, and to
require the licensure and registration of, specified persons,
including any person who provides services or equipment designed for
use in the playing of remote caller bingo games by any nonprofit
organization registered to conduct those bingo games.
This bill would delete the requirement that the commission
establish criteria for the registration of the persons described
above.
(5)
(6) The act requires the commission to establish
reasonable criteria for, and to require the licensure and
registration of, any person who provides card-minding devices or
other equipment or services designed for use in the playing of bingo
games by any nonprofit organization registered to conduct bingo
games.
This bill would delete the requirement that the commission
establish criteria for the registration of the persons described
above.
(6)
(7) This bill would make various technical,
nonsubstantive changes to the provisions governing remote caller
bingo games.
(7)
(8) This bill would declare that it is to take effect
immediately as an urgency statute.
Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 19850.6 of the Business and Professions Code is
amended to read:
19850.6. (a) In order to avoid delays in implementing the
California Remote Caller Bingo Act, including implementing remote
caller bingo, testing and certifying card-minding devices, and to
avoid disruption of fundraising efforts by nonprofit organizations,
the Legislature finds and declares that it is necessary to provide
the commission with a limited exemption from normal rulemaking
procedural requirements. The commission is directed to adopt
appropriate emergency regulations as soon as possible, the initial
regulatory action to be filed with the Office of Administrative Law
no later than May 1, 2009. It is the intent of the Legislature to
provide the commission with full authority and sufficient flexibility
to adopt all needed regulations. These regulations may be adopted in
a series of regulatory actions. Subsequent regulatory actions may
amend or repeal earlier regulatory actions, as necessary, to reflect
program experience and concerns of the regulated public.
(b) The commission shall adopt emergency regulations concerning
remote caller bingo and concerning card-minding devices no later than
May 1, 2009. The adoption, amendment, repeal, or readoption of a
regulation authorized by this section is deemed to address an
emergency, for purposes of Sections 11346.1 and 11349.6 of the
Government Code, and the commission is hereby exempted for this
purpose from the requirements of subdivision (b) of Section 11346.1
of the Government Code, but shall otherwise be subject to the review
and approval of the Office of Administrative Law.
(c) Notwithstanding any other law, all emergency regulations
adopted by the commission pursuant to this section before July 1,
2009, shall remain in effect until December 31, 2011, except to the
extent that the commission exercises its power to adopt, amend, or
repeal these regulations in whole or part.
SEC. 2. Section 326.3 of the Penal Code is amended to read:
326.3. (a) The Legislature finds and declares all of the
following:
(1) Nonprofit organizations provide important and essential
educational, philanthropic, and social services to the people of the
State of California.
(2) One of the great strengths of California is a vibrant
nonprofit sector.
(3) Nonprofit and philanthropic organizations touch the lives of
every Californian through service and employment.
(4) Many of these services would not be available if nonprofit
organizations did not provide them.
(5) There is a need to provide methods of fundraising to nonprofit
organizations to enable them to provide these essential services.
(6) Historically, many nonprofit organizations have used
charitable bingo as one of their key fundraising strategies to
promote the mission of the charity.
(7) Legislation is needed to provide greater revenues for
nonprofit organizations to enable them to fulfill their charitable
purposes, and especially to meet their increasing social service
obligations.
(8) Legislation is also needed to clarify that existing law
requires that all charitable bingo must be played using a tangible
card and that the only permissible electronic devices to be used by
charitable bingo players are card-minding devices.
(b) Neither the prohibition on gambling in this chapter nor in
Chapter 10 (commencing with Section 330) applies to any remote caller
bingo game that is played or conducted in a city, county, or city
and county pursuant to an ordinance enacted under Section 19 of
Article IV of the California Constitution, if the ordinance allows a
remote caller bingo game to be played or conducted only in accordance
with the requirements of this section, including the following
requirements:
(1) The game may be conducted only by the following organizations:
(A) An organization that is exempted from the payment of the bank
and corporation tax by Section 23701a, 23701b, 23701d, 23701e,
23701f, 23701g, 23701k, 23701w, or 23701 of the Revenue and Taxation
Code.
(B) A mobilehome park association.
(C) A senior citizens organization.
(D) Charitable organizations affiliated with a school district.
(2) The organization conducting the game shall have been
incorporated or in existence for three years or more.
(3) The organization conducting the game shall be licensed
pursuant to subdivision (l) of Section 326.5.
(4) The receipts of the game shall be used only for charitable
purposes. The organization conducting the game shall determine the
disbursement of the net receipts of the game.
(5) The operation of bingo may not be the primary purpose for
which the organization is organized.
(c) (1) A city, county, or city and county may adopt an ordinance
in substantially the following form to authorize remote caller bingo
in accordance with the requirements of subdivision (b):
Sec. _.01. Legislative Authorization.
This chapter is adopted pursuant to Section 19 of Article IV of
the California Constitution, as implemented by Sections 326.3 and
326.4 of the Penal Code.
Sec. _.02. Remote Caller Bingo Authorized.
Remote Caller Bingo may be lawfully played in the [City, County,
or City and County] pursuant to the provisions of Sections 326.3 and
326.4 of the Penal Code, and this chapter, and not otherwise.
Sec. _.03. Qualified Applicants: Applicants for Licensure.
(a) The following organizations are qualified to apply to the
License Official for a license to operate a bingo game if the
receipts of those games are used only for charitable purposes:
(1) An organization exempt from the payment of the Bank and
Corporation Tax by Section 23701, 23701a, 23701b, 23701d, 23701e,
23701f, 23701g, 23701k, or 23701w of the Revenue and Taxation Code.
(2) A mobile home park association of a mobile home park that is
situated in the [City, County, or City and County].
(3) Senior citizen organizations.
(4) Charitable organizations affiliated with a school district.
(b) The application shall be in a form prescribed by the License
Official and shall be accompanied by a nonrefundable filing fee in an
amount determined by resolution of the [Governing Body of the City,
County, or City and County] from time to time. The following
documentation shall be attached to the application, as applicable:
(1) A certificate issued by the Franchise Tax Board certifying
that the applicant is exempt from the payment of the Bank and
Corporation Tax pursuant to Section 23701d of the Revenue and
Taxation Code.
(2) Other evidence as the License Official determines is necessary
to verify that the applicant is a duly organized mobile home park
association of a mobile home park situated in the [City, County, or
City and County].
Sec. _.04. License Application: Verification.
The license shall not be issued until the License Official has
verified the facts stated in the application and determined that the
applicant is qualified.
Sec. _.05. Annual Licenses.
A license issued pursuant to this chapter shall be valid until the
end of the calendar year, at which time the license shall expire. A
new license shall only be obtained upon filing a new application and
payment of the license fee. The fact that a license has been issued
to an applicant creates no vested right on the part of the licensee
to continue to offer bingo for play. The [Governing Body of the City,
County, or City and County] expressly reserves the right to amend or
repeal this chapter at any time by resolution. If this chapter is
repealed, all licenses issued pursuant to this chapter shall cease to
be effective for any purpose on the effective date of the repealing
resolution.
Sec. _.06. Conditions of Licensure.
(a) Any license issued pursuant to this chapter shall be subject
to the conditions contained in Sections 326.3 and 326.4 of the Penal
Code, and each licensee shall comply with the requirements of those
provisions.
(b) Each license issued pursuant to this chapter shall be subject
to the following additional conditions:
(1) Bingo games shall not be conducted by any licensee on more
than two days during any week, except that a licensee may hold one
additional game, at its election, in each calendar quarter.
(2) The licensed organization is responsible for ensuring that the
conditions of this chapter and Sections 326.3 and 326.4 of the Penal
Code are complied with by the organization and its officers and
members. A violation of any one or more of those conditions or
provisions shall constitute cause for the revocation of the
organization's license. At the request of the organization, the
[Governing Body of the City, County, or City and County] shall hold a
public hearing before revoking any license issued pursuant to this
chapter.
(2) Nothing in this section shall require a city, county, or city
and county to use this model ordinance in order to authorize remote
caller bingo.
(d) It is a misdemeanor for any person to receive or pay a profit,
wage, or salary from any remote caller bingo game, provided that
administrative, managerial, technical, financial, and security
personnel employed by the organization conducting the bingo game may
be paid reasonable fees for services rendered from the revenues of
bingo games, as provided in subdivision (m), except that fees paid
under those agreements shall not be determined as a percentage of
receipts or other revenues from, or be dependant on the outcome of,
the game.
(e) A violation of subdivision (d) shall be punishable by a fine
not to exceed ten thousand dollars ($10,000), which fine shall be
deposited in the general fund of the city, county, or city and county
that enacted the ordinance authorizing the remote caller bingo game.
A violation of any provision of this section, other than subdivision
(d), is a misdemeanor.
(f) The city, county, or city and county that enacted the
ordinance authorizing the remote caller bingo game, or the Attorney
General, may bring an action to enjoin a violation of this section.
(g) No minors shall be allowed to participate in any remote caller
bingo game.
(h) A remote caller bingo game shall not include any site that is
not located within this state.
(i) An organization authorized to conduct a remote caller bingo
game pursuant to subdivision (b) shall conduct the game only on
property that is owned or leased by the organization, or the use of
which is donated to the organization. Nothing in this subdivision
shall be construed to require that the property that is owned or
leased by, or the use of which is donated to, the organization be
used or leased exclusively by, or donated exclusively to, that
organization.
(j) (1) All remote caller bingo games shall be open to the public,
not just to the members of the authorized organization.
(2) No more than 750 players may participate in a remote caller
bingo game in a single location.
(3) If the Governor of California or the President of the United
States declares a state of emergency in response to a natural
disaster or other public catastrophe occurring in California, an
organization authorized to conduct remote caller bingo games may,
while that declaration is in effect, conduct a remote caller bingo
game pursuant to this section with more than 750 participants in a
single venue if the net proceeds of the game, after deduction of
prizes and overhead expenses, are donated to or expended exclusively
for the relief of the victims of the disaster or catastrophe, and the
organization gives the California Gambling Control Commission at
least 10 days' written notice of the intent to conduct that game.
(4) An organization authorized to conduct remote caller bingo
games shall provide the commission with at least 30 days' advance
written notice of its intent to conduct a remote caller bingo game.
That notice shall include all of the following:
(A) The legal name of the organization and the address of record
of the agent upon whom legal notice may be served.
(B) The locations of the caller and remote players, whether the
property is owned by the organization or donated, and if donated, by
whom.
(C) The name of the licensed caller and site manager.
(D) The names of administrative, managerial, technical, financial,
and security personnel employed.
(E) The name of the vendor and any person or entity maintaining
the equipment used to operate and transmit the game.
(F) The name of the person designated as having a fiduciary
responsibility for the game pursuant to paragraph (2) of subdivision
(k).
(G) The license numbers of all persons specified in subparagraphs
(A) to (F), inclusive, who are required to be licensed.
(H) A copy of the local ordinance for any city, county, or city
and county in which the game will be played. The commission shall
post the ordinance on its Internet Web site.
(k) (1) A remote caller bingo game shall be operated and staffed
only by members of the authorized organization that organized it.
Those members shall not receive a profit, wage, or salary from any
remote caller bingo game. Only the organization authorized to conduct
a remote caller bingo game shall operate that game, or participate
in the promotion, supervision, or any other phase of a remote caller
bingo game. Subject to the provisions of subdivision (m), this
subdivision shall not preclude the employment of administrative,
managerial, technical, financial, or security personnel who are not
members of the authorized organization at a location participating in
the remote caller bingo game by the organization conducting the
game. Notwithstanding any other provisions of law, exclusive or other
agreements between the authorized organization and other entities or
persons to provide services in the administration, management, or
conduct of the game shall not be considered a violation of the
prohibition against holding a legally cognizable financial interest
in the conduct of the remote caller bingo game by persons or entities
other than the charitable organization, or other entity authorized
to conduct the remote caller bingo games, provided that those persons
or entities obtain the gambling licenses, the key employee licenses,
or the work permits required by, and otherwise comply with, Chapter
5 (commencing with Section 19800) of Division 8 of the Business and
Professions Code. Fees to be paid under any such agreements shall be
reasonable and shall not be determined as a percentage of receipts or
other revenues from, or be dependent on the outcome of, the game.
(2) An organization that conducts a remote caller bingo game shall
designate a person as having fiduciary responsibility for the game.
(l) No individual, corporation, partnership, or other legal
entity, except the organization authorized to conduct or participate
in a remote caller bingo game, shall hold a legally cognizable
financial interest in the conduct of such a game.
(m) An organization authorized to conduct a remote caller bingo
game pursuant to this section shall not have overhead costs exceeding
20 percent of gross sales, except that the limitations of this
section shall not apply to one-time, nonrecurring capital
acquisitions. For purposes of this subdivision, "overhead costs"
includes, but is not limited to, amounts paid for rent and equipment
leasing and the reasonable fees authorized to be paid to
administrative, managerial, technical, financial, and security
personnel employed by the organization pursuant to subdivision (d).
"Overhead costs" shall not include fees paid to financial
institutions for the use and processing of credit card sales. Credit
card fees shall be recorded separately from other expenses in the
accounting of the organization. For the purpose of
keeping its overhead costs below 20 percent of gross sales, an
authorized organization may elect to deduct all or a portion of the
fees paid to financial institutions for the use and processing of
credit card sales from the amount of gross revenues awarded for
prizes. In that case, the redirected fees for the use and processing
of credit card sales shall not be included in "overhead costs" as
defined in the California Remote Caller Bingo Act. Additionally, fees
paid to financial institutions for the use and processing of credit
card sales shall not be deducted from the proceeds retained by the
charitable organization.
(n) No person shall be allowed to participate in a remote caller
bingo game unless the person is physically present at the time and
place where the remote caller bingo game is being conducted. A person
shall be deemed to be physically present at the place where the
remote caller bingo game is being conducted if he or she is present
at any of the locations participating in the remote caller bingo game
in accordance with this section.
(o) (1) An organization shall not cosponsor a remote caller bingo
game with one or more other organizations unless one of the following
is true:
(A) All of the cosponsors are affiliated under the master charter
or articles and bylaws of a single organization.
(B) All of the cosponsors are affiliated through an organization
described in paragraph (1) of subdivision (b), and have the same
Internal Revenue Service activity code.
(2) Notwithstanding paragraph (1), a maximum of 10 unaffiliated
organizations described in paragraph (1) of subdivision (b) may enter
into an agreement to cosponsor a remote caller game, provided the
game shall have not more than 10 locations.
(3) An organization shall not conduct remote caller bingo more
than one day per week.
(4) Before sponsoring or operating any game authorized under
paragraph (1) or (2), each of the cosponsoring organizations shall
have entered into a written agreement, a copy of which shall be
provided to the commission, setting forth how the expenses and
proceeds of the game are to be allocated among the participating
organizations, the bank accounts into which all receipts are to be
deposited and from which all prizes are to be paid, and how game
records are to be maintained and subjected to annual audit.
(p) The value of prizes awarded during the conduct of any remote
caller bingo game shall not exceed 37 percent of the gross receipts
for that game. When an authorized organization elects to deduct
fees paid for the use and processing of credit card sales from the
amount of gross revenues for that game awarded for prizes, the
maximum amount of gross revenues that may be awarded for prizes shall
not exceed 37 percent of the gross receipts for that game, less the
amount of redirected fees paid for the use and processing of credit
card sales. Every remote caller bingo game shall be played
until a winner is declared. Progressive prizes are prohibited. The
declared winner of a remote caller bingo game shall provide his or
her identifying information and a mailing address to the onsite
manager of the remote caller bingo game. Prizes shall be paid only by
check; no cash prizes shall be paid. The organization conducting the
remote caller bingo game may issue a check to the winner at the time
of the game, or may send a check to the declared winner by United
States Postal Service certified mail, return receipt requested. All
prize money exceeding state and federal exemption limits on prize
money shall be subject to income tax reporting and withholding
requirements under applicable state and federal laws and regulations
and those reports and withholding shall be forwarded, within 10
business days, to the appropriate state or federal agency on behalf
of the winner. A report shall accompany the amount withheld
identifying the person on whose behalf the money is being sent. Any
game interrupted by a transmission failure, electrical outage, or act
of God shall be considered void in the location that was affected. A
refund for a canceled game or games shall be provided to the
purchasers.
(q) (1) The California Gambling Control Commission shall regulate
remote caller bingo, including, but not limited to, licensure and
operation. The commission shall establish reasonable criteria
regulating, and shall require the licensure of, the following:
(A) Any person who conducts a remote caller bingo game pursuant to
this section, including, but not limited to, an employee, a person
having fiduciary responsibility for a remote caller bingo game, a
site manager, and a bingo caller.
(B) Any person who directly or indirectly manufactures,
distributes, supplies, vends, leases, or otherwise provides supplies,
devices, services, or other equipment designed for use in the
playing of a remote caller bingo game by any nonprofit organization.
(C) Beginning January 31, 2009, or a later date as may be
established by the commission, all persons described in subparagraph
(A) or (B) may submit to the commission a letter of intent to submit
an application for licensure. The letter shall clearly identify the
principal applicant, all categories under which the application will
be filed, and the names of all those particular individuals who are
applying. Each charitable organization shall provide an estimate of
the frequency with which it plans to conduct remote caller bingo
operations, including the number of locations. The letter of intent
may be withdrawn or updated at any time.
(2) (A) The Department of Justice shall conduct background
investigations and conduct field enforcement as it relates to remote
caller bingo consistent with the Gambling Control Act (Chapter 5
(commencing with Section 19800) of Division 8 of the Business and
Professions Code) and as specified in regulations promulgated by the
commission.
(B) Fees to cover background investigation costs shall be paid and
accounted for in accordance with Section 19867 of the Business and
Professions Code.
(3) (A) Every application for a license or approval shall be
accompanied by a nonrefundable fee, the amount of which shall be
adopted by the commission by regulation.
(B) Fees and revenue collected pursuant to this paragraph shall be
deposited in the California Bingo Fund, which is hereby created in
the State Treasury. The funds deposited in the California Bingo Fund
shall be available, upon appropriation by the Legislature, for
expenditure by the commission and the department exclusively for the
support of the commission and department in carrying out their duties
and responsibilities under this section and Section 326.5.
(C) A loan is hereby authorized from the Gambling Control Fund to
the California Bingo Fund on or after January 1, 2009, in an amount
of up to five hundred thousand dollars ($500,000) to fund operating,
personnel, and other startup costs incurred by the commission
relating to this act. Funds from the California Bingo Fund shall be
available to the commission upon appropriation by the Legislature in
the annual Budget Act. The loan shall be subject to all of the
following conditions:
(i) The loan shall be repaid to the Gambling Control Fund as soon
as there is sufficient money in the California Bingo Fund to repay
the amount loaned, but no later than five years after the date of the
loan.
(ii) Interest on the loan shall be paid from the California Bingo
Fund at the rate accruing to moneys in the Pooled Money Investment
Account.
(iii) The terms and conditions of the loan are approved, prior to
the transfer of funds, by the Department of Finance pursuant to
appropriate fiscal standards.
The commission may assess and collect reasonable fees and deposits
as necessary to defray the costs of regulation and oversight.
(r) The administrative, managerial, technical, financial, and
security personnel employed by an organization that conducts remote
caller bingo games shall apply for, obtain, and thereafter maintain
valid work permits, as defined in Section 19805 of the Business and
Professions Code.
(s) An organization that conducts remote caller bingo games shall
retain records in connection with the remote caller bingo game for
five years.
(t) (1) All equipment used for remote caller bingo shall be
approved in advance by the California Gambling Control Commission
pursuant to regulations adopted pursuant to subdivision (r) of
Section 19841 of the Business and Professions Code.
(2) The California Gambling Control Commission shall monitor
operation of the transmission and other equipment used for remote
caller bingo, and monitor the game.
(u) (1) As used in this section, "remote caller bingo game" means
a game of bingo, as defined in subdivision (o) of Section 326.5, in
which the numbers or symbols on randomly drawn plastic balls are
announced by a natural person present at the site at which the live
game is conducted, and the organization conducting the bingo game
uses audio and video technology to link any of its in-state
facilities for the purpose of transmitting the remote calling of a
live bingo game from a single location to multiple locations owned,
leased, or rented by that organization, or as described in
subdivision (o) of this section. The audio or video technology used
to link the facilities may include cable, Internet, satellite,
broadband, or telephone technology, or any other means of electronic
transmission that ensures the secure, accurate, and simultaneous
transmission of the announcement of numbers or symbols in the game
from the location at which the game is called by a natural person to
the remote location or locations at which players may participate in
the game. The drawing of each ball bearing a number or symbol by the
natural person calling the game shall be visible to all players as
the ball is drawn, including through a simultaneous live video feed
at remote locations at which players may participate in the game.
(2) The caller in the live game must be licensed by the California
Gambling Control Commission. A game may be called by a nonlicensed
caller if the drawing of balls and calling of numbers or symbols by
that person is observed and personally supervised by a licensed
caller.
(3) Remote caller bingo games shall be played using traditional
paper or other tangible bingo cards and daubers, and shall not be
played by using electronic devices, except card-minding devices, as
described in paragraph (1) of subdivision (p) of Section 326.5.
(4) Prior to conducting a remote caller bingo game, the
organization that conducts remote caller bingo shall submit to the
commission the controls, methodology, and standards of game play,
which shall include, but not be limited to, the equipment used to
select bingo numbers and create or originate cards,
control or maintenance, distribution to
participating locations, and distribution to players. Those controls,
methodologies, and standards shall be subject to prior approval by
the commission, provided that the controls shall be deemed approved
by the commission after 90 days from the date of submission unless
disapproved.
(v) A location shall not be eligible to participate in a remote
caller bingo game if bingo games are conducted at that location in
violation of Section 326.5 or any regulation adopted by the
commission pursuant to Section 19841 of the Business and Professions
Code, including, but not limited to, a location at which unlawful
electronic devices are used.
(w) (1) The vendor of the equipment used in a remote caller bingo
game shall have its books and records audited at least annually by an
independent California certified public accountant and shall submit
the results of that audit to the California Gambling Control
Commission within 120 days after the close of the vendor's fiscal
year. In addition, the California Gambling Control Commission
shall may audit the books and records
of the vendor at any time.
(2) An authorized organization that conducts remote
caller bingo games shall provide copies of the records pertaining to
those games to the California Gambling Control Commission within 30
days after the end of each calendar quarter. In addition, those
records shall be audited by an independent California certified
public accountant at least annually and copies of the audit reports
shall be provided to the California Gambling Control Commission
within 120 days after the close of the organization's fiscal year.
The audit report shall account for the annual amount of fees
paid to financial institutions for the use and processing of credit
card sales by the authorized organization and the amount of fees for
the use and processing of credit card sales redirected from "overhead
costs" and deducted from the amount of gross revenues awarded for
prizes.
(3) The costs of the licensing and audits required by this section
shall be borne by the person or entity required to be licensed or
audited. The audit shall enumerate the receipts for remote caller
bingo, the prizes disbursed, the overhead costs, and the amount
retained by the nonprofit organization. The commission may audit the
books and records of an organization that conducts remote caller
bingo games at any time.
(4) If, during an audit, the commission identifies practices in
violation of this section, the license for the audited entity may be
suspended pending review and hearing before the commission for a
final determination.
(5) No audit required to be conducted by the commission shall
commence before January 1, 2010.
(x) (1) The provisions of this section are severable. If any
provision of this section or its application is held invalid, that
invalidity shall not affect other provisions or applications that can
be given effect without the invalid provision or application.
(2) Notwithstanding paragraph (1), if paragraph (1) or (3) of
subdivision (u), or the application of either of those provisions, is
held invalid, this entire section shall be invalid.
(y) The commission shall submit a report to the Legislature, on or
before January 1, 2012, on the fundraising effectiveness and
regulation of remote caller bingo, and other matters that are
relevant to the public interest regarding remote caller bingo.
(z) The following definitions apply for purposes of this section:
(1) "Commission" means the California Gambling Control Commission.
(2) "Person" includes a natural person, corporation, limited
liability company, partnership, trust, joint venture, association, or
any other business organization.
SEC. 3. Section 326.45 of the Penal Code is amended to read:
326.45. Up to five hundred thousand dollars ($500,000), as
determined by order of the Director of Finance, is hereby
appropriated from the California Bingo Fund to the California
Gambling Control Commission for use in the 2008-09 fiscal year for
the purposes described in subparagraph (C) of paragraph (3) of
subdivision (q) of Section 326.3.
SEC. 4. Section 326.5 of the Penal Code is amended to read:
326.5. (a) Neither the prohibition on gambling in this chapter
nor in Chapter 10 (commencing with Section 330) applies to any bingo
game that is conducted in a city, county, or city and county pursuant
to an ordinance enacted under Section 19 of Article IV of the State
Constitution, if the ordinance allows games to be conducted only in
accordance with this section and only by organizations exempted from
the payment of the bank and corporation tax by Sections 23701a,
23701b, 23701d, 23701e, 23701f, 23701g, 23701k, 23701w, and 23701 of
the Revenue and Taxation Code and by mobilehome park associations,
senior citizens organizations, and charitable organizations
affiliated with a school district; and if the receipts of those games
are used only for charitable purposes.
(b) It is a misdemeanor for any person to receive or pay a profit,
wage, or salary from any bingo game authorized by Section 19 of
Article IV of the State Constitution. Security personnel employed by
the organization conducting the bingo game may be paid from the
revenues of bingo games, as provided in subdivisions (j) and (k).
(c) A violation of subdivision (b) shall be punishable by a fine
not to exceed ten thousand dollars ($10,000), which fine is deposited
in the general fund of the city, county, or city and county that
enacted the ordinance authorizing the bingo game. A violation of any
provision of this section, other than subdivision (b), is a
misdemeanor.
(d) The city, county, or city and county that enacted the
ordinance authorizing the bingo game may bring an action to enjoin a
violation of this section.
(e) No minors shall be allowed to participate in any bingo game.
(f) An organization authorized to conduct bingo games pursuant to
subdivision (a) shall conduct a bingo game only on property owned or
leased by it, or property whose use is donated to the organization,
and which property is used by that organization for an office or for
performance of the purposes for which the organization is organized.
Nothing in this subdivision shall be construed to require that the
property owned or leased by, or whose use is donated to, the
organization be used or leased exclusively by, or donated exclusively
to, that organization.
(g) All bingo games shall be open to the public, not just to the
members of the authorized organization.
(h) A bingo game shall be operated and staffed only by members of
the authorized organization that organized it. Those members shall
not receive a profit, wage, or salary from any bingo game. Only the
organization authorized to conduct a bingo game shall operate such a
game, or participate in the promotion, supervision, or any other
phase of a bingo game. This subdivision does not preclude the
employment of security personnel who are not members of the
authorized organization at a bingo game by the organization
conducting the game.
(i) No individual, corporation, partnership, or other legal
entity, except the organization authorized to conduct a bingo game,
shall hold a financial interest in the conduct of a bingo game.
(j) With respect to organizations exempt from payment of the bank
and corporation tax by Section 23701d of the Revenue and Taxation
Code, all profits derived from a bingo game shall be kept in a
special fund or account and shall not be commingled with any other
fund or account. Those profits shall be used only for charitable
purposes.
(k) With respect to other organizations authorized to conduct
bingo games pursuant to this section, all proceeds derived from a
bingo game shall be kept in a special fund or account and shall not
be commingled with any other fund or account. Proceeds are the
receipts of bingo games conducted by organizations not within
subdivision (j). Those proceeds shall be used only for charitable
purposes, except as follows:
(1) The proceeds may be used for prizes.
(2) (A) Except as provided in subparagraph (B), a portion of the
proceeds, not to exceed 20 percent of the proceeds before the
deduction for prizes, or two thousand dollars ($2,000) per month,
whichever is less, may be used for the rental of property and for
overhead, including the purchase of bingo equipment, administrative
expenses, security equipment, and security personnel.
(B) For the purposes of bingo games conducted by the Lake Elsinore
Elks Lodge, a portion of the proceeds, not to exceed 20 percent of
the proceeds before the deduction for prizes, or three thousand
dollars ($3,000) per month, whichever is less, may be used for the
rental of property and for overhead, including the purchase of bingo
equipment, administrative expenses, security equipment, and security
personnel. Any amount of the proceeds that is additional to that
permitted under subparagraph (A), up to one thousand dollars
($1,000), shall be used for the purpose of financing the rebuilding
of the facility and the replacement of equipment that was destroyed
by fire in 2007. The exception to subparagraph (A) that is provided
by this subparagraph shall remain in effect only until the cost of
rebuilding the facility is repaid, or January 1, 2019, whichever
occurs first.
(3) The proceeds may be used to pay license fees.
(4) A city, county, or city and county that enacts an ordinance
permitting bingo games may specify in the ordinance that if the
monthly gross receipts from bingo games of an organization within
this subdivision exceed five thousand dollars ($5,000), a minimum
percentage of the proceeds shall be used only for charitable purposes
not relating to the conducting of bingo games and that the balance
shall be used for prizes, rental of property, overhead,
administrative expenses, and payment of license fees. The amount of
proceeds used for rental of property, overhead, and administrative
expenses is subject to the limitations specified in paragraph (2).
(l) (1) A city, county, or city and county may impose a license
fee on each organization that it authorizes to conduct bingo games.
The fee, whether for the initial license or renewal, shall not exceed
fifty dollars ($50) annually, except as provided in paragraph (2).
If an application for a license is denied, one-half of any license
fee paid shall be refunded to the organization.
(2) In lieu of the license fee permitted under paragraph (1), a
city, county, or city and county may impose a license fee of fifty
dollars ($50) paid upon application. If an application for a license
is denied, one-half of the application fee shall be refunded to the
organization. An additional fee for law enforcement and public safety
costs incurred by the city, county, or city and county that are
directly related to bingo activities may be imposed and shall be
collected monthly by the city, county, or city and county issuing the
license; however, the fee shall not exceed the actual costs incurred
in providing the service.
(m) No person shall be allowed to participate in a bingo game,
unless the person is physically present at the time and place where
the bingo game is being conducted.
(n) The total value of prizes available to be awarded during the
conduct of any bingo games shall not exceed five hundred dollars
($500) in cash or kind, or both, for each separate game which is
held.
(o) As used in this section, "bingo" means a game of chance in
which prizes are awarded on the basis of designated numbers or
symbols that are marked or covered by the player on a tangible card
in the player's possession and that conform to numbers or symbols,
selected at random and announced by a live caller. Notwithstanding
Section 330c, as used in this section, the game of bingo includes
tangible cards having numbers or symbols that are concealed and
preprinted in a manner providing for distribution of prizes.
Electronics or video displays shall not be used in connection with
the game of bingo, except in connection with the caller's drawing of
numbers or symbols and the public display of that drawing, and except
as provided in subdivision (p). The winning cards shall not be known
prior to the game by any person participating in the playing or
operation of the bingo game. All preprinted cards shall bear the
legend, "for sale or use only in a bingo game authorized under
California law and pursuant to local ordinance." Only a covered or
marked tangible card possessed by a player and presented to an
attendant may be used to claim a prize. It is the intention of the
Legislature that bingo as defined in this subdivision applies
exclusively to this section and shall not be applied in the
construction or enforcement of any other provision of law.
(p) (1) Players who are physically present at a bingo game may use
hand-held, portable card-minding devices, as described in this
subdivision, to assist in monitoring the numbers or symbols announced
by a live caller as those numbers or symbols are called in a live
game. Card-minding devices may not be used in connection with any
game where a bingo card may be sold or distributed after the start of
the ball draw for that game. A card-minding device shall do all of
the following:
(A) Be capable of storing in the memory of the device bingo faces
of tangible cards purchased by a player.
(B) Provide a means for bingo players to input manually each
individual number or symbol announced by a live caller.
(C) Compare the numbers or symbols entered by the player to the
bingo faces previously stored in the memory of the device.
(D) Identify winning bingo patterns that exist on the stored bingo
faces.
(2) A card-minding device shall perform no functions involving the
play of the game other than those described in paragraph (1).
Card-minding devices shall not do any of the following:
(A) Be capable of accepting or dispensing any coins, currency, or
other representative of value or on which value has been encoded.
(B) Be capable of monitoring any bingo card face other than the
faces of the tangible bingo card or cards purchased by the player for
that game.
(C) Display or represent the game result through any means,
including, but not limited to, video or mechanical reels or other
slot machine or casino game themes, other than highlighting the
winning numbers or symbols marked or covered on the tangible bingo
cards or giving an audio alert that the player's card has a
prize-winning pattern.
(D) Determine the outcome of any game or be physically or
electronically connected to any component that determines the outcome
of a game or to any other bingo equipment, including, but not
limited to, the ball call station, or to any other card-minding
device. No other player-operated or player-activated electronic or
electromechanical device or equipment is permitted to be used in
connection with a bingo game.
(3) (A) A card-minding device shall be approved in advance by the
commission as meeting the requirements of this section and any
additional requirements stated in regulations adopted by the
commission. Any proposed material change to the device, including any
change to the software used by the device, shall be submitted to the
commission and approved by the commission prior to implementation.
(B) In accordance with Chapter 5 (commencing with Section 19800)
of Division 8 of the Business and Professions Code, the commission
shall establish reasonable criteria for, and require the licensure
of, any person that directly or indirectly manufactures, distributes,
supplies, vends, leases, or otherwise provides card-minding devices
or other supplies, equipment, or services related to card-minding
devices designed for use in the playing of bingo games by any
nonprofit organization.
(C) A person or entity that supplies or services any card-minding
device shall meet all licensing requirements established by the
commission in regulations.
(4) The costs of any testing, certification, license, or
determination required by this subdivision shall be borne by the
person or entity seeking it.
(5) On and after January 1, 2010, the commission and the
Department of Justice may inspect all card-minding devices at any
time without notice, and may immediately prohibit the use of any
device that does not comply with the requirements of subdivision (r)
of Section 19841 of the Business and Professions Code. The Department
of Justice may at any time, without notice, impound any device the
use of which has been prohibited by the commission.
(6) The California Gambling Control Commission shall issue
regulations to implement the requirements of this subdivision and may
issue regulations regarding the means by which the operator of a
bingo game, as required by applicable law, may offer assistance to a
player with disabilities in order to enable that player to
participate in a bingo game, provided that the means of providing
that assistance shall not be through any electronic,
electromechanical, or other device or equipment that accepts the
insertion of any coin, currency, token, credit card, or other means
of transmitting value, and does not constitute or is not a part of a
system that constitutes a video lottery terminal, slot machine, or
device prohibited by Chapter 10 (commencing with Section 330).
(7) The following definitions apply for purposes of this
subdivision:
(A) "Commission" means the California Gambling Control Commission.
(B) "Person" includes a natural person, corporation, limited
liability company, partnership, trust, joint venture, association, or
any other business organization.
SEC. 5. This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:
In order to ensure that bingo games are adequately regulated and
that appropriate charitable organizations may conduct fundraising
through bingo games at the earliest possible time, it is necessary
that this act take effect immediately.