BILL NUMBER: SB 200 CHAPTERED
BILL TEXT
CHAPTER 38
FILED WITH SECRETARY OF STATE AUGUST 6, 2009
APPROVED BY GOVERNOR AUGUST 5, 2009
PASSED THE SENATE JULY 16, 2009
PASSED THE ASSEMBLY JULY 13, 2009
AMENDED IN ASSEMBLY JULY 7, 2009
AMENDED IN SENATE APRIL 16, 2009
INTRODUCED BY Senator Correa
(Coauthors: Senators Harman, Walters, and Wyland)
(Coauthors: Assembly Members Chesbro, Coto, Hall, Harkey, Hill,
Mendoza, Silva, Torrico, and Tran)
FEBRUARY 23, 2009
An act to amend Section 320.5 of the Penal Code, relating to
raffles.
LEGISLATIVE COUNSEL'S DIGEST
SB 200, Correa. Raffles: Internet advertisement.
The California Constitution prohibits the Legislature from
authorizing lotteries, but allows the Legislature to authorize
private, nonprofit, eligible organizations to conduct raffles, as
specified. Existing statutory law generally regulates raffles
conducted by eligible organizations for beneficial or charitable
purposes. Existing law prohibits a raffle from being advertised over
the Internet.
This bill would delete the prohibition on advertising a raffle
over the Internet and would set forth specified information regarding
a raffle that may be included on an Internet Web site.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 320.5 of the Penal Code is amended to read:
320.5. (a) Nothing in this chapter applies to any raffle
conducted by an eligible organization as defined in subdivision (c)
for the purpose of directly supporting beneficial or charitable
purposes or financially supporting another private, nonprofit,
eligible organization that performs beneficial or charitable purposes
if the raffle is conducted in accordance with this section.
(b) For purposes of this section, "raffle" means a scheme for the
distribution of prizes by chance among persons who have paid money
for paper tickets that provide the opportunity to win these prizes,
where all of the following are true:
(1) Each ticket is sold with a detachable coupon or stub, and both
the ticket and its associated coupon or stub are marked with a
unique and matching identifier.
(2) Winners of the prizes are determined by draw from among the
coupons or stubs described in paragraph (1) that have been detached
from all tickets sold for entry in the draw.
(3) The draw is conducted in California under the supervision of a
natural person who is 18 years of age or older.
(4) (A) At least 90 percent of the gross receipts generated from
the sale of raffle tickets for any given draw are used by the
eligible organization conducting the raffle to benefit or provide
support for beneficial or charitable purposes, or it may use those
revenues to benefit another private, nonprofit organization, provided
that an organization receiving these funds is itself an eligible
organization as defined in subdivision (c). As used in this section,
"beneficial purposes" excludes purposes that are intended to benefit
officers, directors, or members, as defined by Section 5056 of the
Corporations Code, of the eligible organization. In no event shall
funds raised by raffles conducted pursuant to this section be used to
fund any beneficial, charitable, or other purpose outside of
California. This section does not preclude an eligible organization
from using funds from sources other than the sale of raffle tickets
to pay for the administration or other costs of conducting a raffle.
(B) An employee of an eligible organization who is a direct seller
of raffle tickets shall not be treated as an employee for purposes
of workers' compensation under Section 3351 of the Labor Code if the
following conditions are satisfied:
(i) Substantially all of the remuneration (whether or not paid in
cash) for the performance of the service of selling raffle tickets is
directly related to sales rather than to the number of hours worked.
(ii) The services performed by the person are performed pursuant
to a written contract between the seller and the eligible
organization and the contract provides that the person will not be
treated as an employee with respect to the selling of raffle tickets
for workers' compensation purposes.
(C) For purposes of this section, employees selling raffle tickets
shall be deemed to be direct sellers as described in Section 650 of
the Unemployment Insurance Code as long as they meet the requirements
of that section.
(c) For purposes of this section, "eligible organization" means a
private, nonprofit organization that has been qualified to conduct
business in California for at least one year prior to conducting a
raffle and is exempt from taxation pursuant to Sections 23701a,
23701b, 23701d, 23701e, 23701f, 23701g, 23701k, 23701 l ,
23701t, or 23701w of the Revenue and Taxation Code.
(d) Any person who receives compensation in connection with the
operation of the raffle shall be an employee of the eligible
organization that is conducting the raffle, and in no event may
compensation be paid from revenues required to be dedicated to
beneficial or charitable purposes.
(e) No raffle otherwise permitted under this section may be
conducted by means of, or otherwise utilize, any gaming machine,
apparatus, or device, whether or not that machine, apparatus, or
device meets the definition of slot machine contained in Section
330a, 330b, or 330.1.
(f) (1) No raffle otherwise permitted under this section may be
conducted, nor may tickets for a raffle be sold, within an operating
satellite wagering facility or racetrack inclosure licensed pursuant
to the Horse Racing Law (Chapter 4 (commencing with Section 19400) of
Division 8 of the Business and Professions Code) or within a
gambling establishment licensed pursuant to the Gambling Control Act
(Chapter 5 (commencing with Section 19800) of Division 8 of the
Business and Professions Code).
(2) A raffle may not be operated or conducted in any manner over
the Internet, nor may raffle tickets be sold, traded, or redeemed
over the Internet. For purposes of this paragraph, an eligible
organization shall not be deemed to operate or conduct a raffle over
the Internet, or sell raffle tickets over the Internet, if the
eligible organization advertises its raffle on the Internet or
permits others to do so. Information that may be conveyed on an
Internet Web site pursuant to this paragraph includes, but is not
limited to, all of the following:
(A) Lists, descriptions, photographs, or videos of the raffle
prizes.
(B) Lists of the prize winners.
(C) The rules of the raffle.
(D) Frequently asked questions and their answers.
(E) Raffle entry forms, which may be downloaded from the Internet
Web site for manual completion by raffle ticket purchasers, but shall
not be submitted to the eligible organization through the Internet.
(F) Raffle contact information, including the eligible
organization's name, address, telephone number, facsimile number, or
e-mail address.
(g) No individual, corporation, partnership, or other legal entity
shall hold a financial interest in the conduct of a raffle, except
the eligible organization that is itself authorized to conduct that
raffle, and any private, nonprofit, eligible organizations receiving
financial support from that charitable organization pursuant to
subdivisions (a) and (b).
(h) (1) An eligible organization may not conduct a raffle
authorized under this section, unless it registers annually with the
Department of Justice. The department shall furnish a registration
form via the Internet or upon request to eligible nonprofit
organizations. The department shall, by regulation, collect only the
information necessary to carry out the provisions of this section on
this form. This information shall include, but is not limited to, the
following:
(A) The name and address of the eligible organization.
(B) The federal tax identification number, the corporate number
issued by the Secretary of State, the organization number issued by
the Franchise Tax Board, or the California charitable trust
identification number of the eligible organization.
(C) The name and title of a responsible fiduciary of the
organization.
(2) The department may require an eligible organization to pay an
annual registration fee of ten dollars ($10) to cover the actual
costs of the department to administer and enforce this section. The
department may, by regulation, adjust the annual registration fee as
needed to ensure that revenues willfully offset, but do not exceed,
the actual costs incurred by the department pursuant to this section.
The fee shall be deposited by the department into the General Fund.
(3) The department shall receive General Fund moneys for the costs
incurred pursuant to this section subject to an appropriation by the
Legislature.
(4) The department shall adopt regulations necessary to effectuate
this section, including emergency regulations, pursuant to the
Administrative Procedure Act (Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code).
(5) The department shall maintain an automated database of all
registrants. Each local law enforcement agency shall notify the
department of any arrests or investigation that may result in an
administrative or criminal action against a registrant. The
department may audit the records and other documents of a registrant
to ensure compliance with this section.
(6) Once registered, an eligible organization must file annually
thereafter with the department a report that includes the following:
(A) The aggregate gross receipts from the operation of raffles.
(B) The aggregate direct costs incurred by the eligible
organization from the operation of raffles.
(C) The charitable or beneficial purposes for which proceeds of
the raffles were used, or identify the eligible recipient
organization to which proceeds were directed, and the amount of those
proceeds.
(7) The department shall annually furnish to registrants a form to
collect this information.
(8) The registration and reporting provisions of this section do
not apply to any religious corporation sole or other religious
corporation or organization that holds property for religious
purposes, to a cemetery corporation regulated under Chapter 19 of
Division 3 of the Business and Professions Code, or to any committee
as defined in Section 82013 that is required to and does file any
statement pursuant to the provisions of Article 2 (commencing with
Section 84200) of Chapter 4 of Title 9, or to a charitable
corporation organized and operated primarily as a religious
organization, educational institution, hospital, or a health care
service plan licensed pursuant to Section 1349 of the Health and
Safety Code.
(i) The department may take legal action against a registrant if
it determines that the registrant has violated this section or any
regulation adopted pursuant to this section, or that the registrant
has engaged in any conduct that is not in the best interests of the
public's health, safety, or general welfare. Any action taken
pursuant to this subdivision does not prohibit the commencement of an
administrative or criminal action by the Attorney General, a
district attorney, city attorney, or county counsel.
(j) Each action and hearing conducted to deny, revoke, or suspend
a registry, or other administrative action taken against a registrant
shall be conducted pursuant to the Administrative Procedure Act
(Chapters 4.5 (commencing with Section 11400) and 5 (commencing with
Section 11500) of Part 1 of Division 3 of Title 2 of the Government
Code). The department may seek recovery of the costs incurred in
investigating or prosecuting an action against a registrant or
applicant in accordance with those procedures specified in Section
125.3 of the Business and Professions Code. A proceeding conducted
under this subdivision is subject to judicial review pursuant to
Section 1094.5 of the Code of Civil Procedure.
(k) The Department of Justice shall conduct a study and report to
the Legislature by December 31, 2003, on the impact of this section
on raffle practices in California. Specifically, the study shall
include, but not be limited to, information on whether the number of
raffles has increased, the amount of money raised through raffles and
whether this amount has increased, whether there are consumer
complaints, and whether there is increased fraud in the operation of
raffles.
( l ) This section shall become operative on July 1,
2001.
(m) A raffle shall be exempt from this section if it satisfies all
of the following requirements:
(1) It involves a general and indiscriminate distribution of the
tickets.
(2) The tickets are offered on the same terms and conditions as
the tickets for which a donation is given.
(3) The scheme does not require any of the participants to pay for
a chance to win.