BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 1090
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          Date of Hearing:   June 16, 2010

                   ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
                                   Joe Coto, Chair
                    SB 1090 (Cedillo) - As Amended:  April 6, 2010

           SENATE VOTE  :   32-0
           
          SUBJECT  :  Bingo: remote caller bingo

           SUMMARY  :   Modifies the model ordinance language contained in  
          the Remote Caller Bingo Act of 2008 (Act).  Specifically,  this  
          bill  :  

          1)Allows an organization to file, along with its application to  
            the local licensing official to operate a bingo game,  
            "appropriate documentation" instead of "a certificate issued  
            by the Franchise Tax Board (FTB)" to demonstrate that the  
            applicant is an eligible tax exempt organization authorized to  
            operate a remote caller bingo game.

           EXISTING LAW  :

          1)Provides, in the California Constitution, Article IV, Section  
            19 (c) that the Legislature, by statute, may authorize cities  
            and counties to allow for the play of bingo games, but only  
            for charitable purposes.

          2)Permits cities, counties, and cities and counties to allow  
            remote caller bingo games to be conducted by specified tax  
            exempt and non-profit organizations for charitable purposes,  
            subject to provisions of law which, if violated, constitute a  
            crime.

          3)Authorizes specified tax-exempt and non-profit organizations  
            that have been incorporated or in existence for three years or  
            more and that are not organized for the primary purpose of  
            operating bingo to conduct remote caller bingo games no more  
            than one day per week.

          4)Defines a "remote caller bingo game" as a game of bingo in  
            which numbers or symbols on randomly drawn plastic balls are  
            announced by a person present at the site at which the live  
            game is conducted, and audio and video technology links  
            in-state facilities for the purpose of transmitting the remote  








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            calling of a live bingo game from a single location to  
            multiple locations.

          5)Requires remote caller bingo games to 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.

          6)Requires an authorized organization to provide the California  
            Gambling Control Commission (CGCC) with at least 30 days  
            advanced written notice of its intent to conduct remote caller  
            bingo games, and submit specified information about the  
            organizations, locations, vendors, and licensees involved in  
            the operation of the games, as well as, a copy of the local  
            ordinance for the counties in which the games will be played.

          7)Contains "permissive model ordinance" language which local  
            jurisdictions may adopt to authorize remote caller bingo.  

           FISCAL EFFECT  :   This bill is keyed non-fiscal.

           COMMENTS  :   In 2008, the Legislature passed, and the Governor  
          signed into law, the Act (SB 1369, Cedillo and Battin, Chapter  
          748, Statutes of 2008), which allows qualified non-profits to  
          operate "remote caller" bingo games.
           
          Once the Act was chaptered, technical errors and omissions were  
          identified by the CGCC.   Charities have also raised issues as  
          they organize themselves to apply and conduct the game.

          According to the author, this bill is intended to clean-up  
          language and fine-tune implementation issues that have arisen as  
          charities and local governments take steps toward authorizing  
          and conducting the games.

           Background .  Primarily, the Act banned the use of electronic  
          bingo (E-bingo) machines, authorized the play of remote caller  
          bingo in jurisdictions that have a remote caller bingo  
          ordinance, and created a mitigation fund to minimize the impacts  
          to the charities that previously operated E-bingo machines.   
          Arguably, remote caller bingo was authorized to create an  
          alternative or substitute revenue source to compensate charities  
          for the loss of revenues that they previously realized from the  
          operation of E-bingo machines.  Additionally, other charities  
          which did not operate E-bingo machines viewed remote caller  








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          bingo as a new opportunity to raise much needed funds to support  
          their charitable work and were eager to begin the operation of  
          remote caller bingo.
           
          Last year, charities indicated that their ability to operate  
          remote caller bingo games has been delayed due to local  
          governments not adopting remote caller bingo ordinances.  The  
          charities solution was to place a permissive model ordinance in  
          law that the locals could use as a template to adopt their own  
          remote caller bingo ordinances.  In response, amendments were  
          taken in the Assembly to SB 126 (Cedillo, Chapter 562, Statutes  
          of 2009) which added a permissive model ordinance to the Act.
           
          This year, the charities raise concern with respect to the  
          permissive model ordinance in law.  Specifically, the charities  
          argue that it is difficult and time consuming to receive a  
          certificate issued by the FTB to demonstrate that they are a tax  
          exempt organization.  The charities recommended solution, which  
          is contained in this bill, is to modify the language in the  
          permissive model ordinance to require a charity to provide  
          "appropriate documentation" certifying that it is a tax exempt  
          organization rather than "a certificate issued by FTB" as  
          certification of its tax exempt status.
           
          A document that may be useful and is easily accessible to verify  
          the tax-exempt status of an organization is found on FTB's  
          Website through the link, 

           http://www.ftb.ca.gov/businesses/Exempt_organizations/Entity_list 
          .shtml  .  

          Through this link, FTB provides a published list of all  
          tax-exempt organizations that have tax-exempt or revoked status.  
           The list is updated monthly.

           In support  .  California Association of Nonprofits (CAN) supports  
          this bill.  CAN says the technical clarification proscribed in  
          this bill "cleans up the accountability requirements of current  
          law, thus protecting the public, at the same time as it helps  
          nonprofits to generate new revenue to meet community needs in  
          the face of a struggling economy and diminished government  
          funding."
           
          Related legislation  .   SB 1484 (Governmental Organization),  
          2009-2010 Legislative Session  .   Corrects an inadvertent  








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          drafting error made to the permissive model code contained in  
          the California Remote Caller Bingo Act relative to the number of  
          days in a week that an eligible nonprofit organization may  
          conduct a remote caller bingo game.  The change will bring the  
          model code in line with statute, which provides that eligible  
          organizations may not operate remote caller bingo more than one  
          day a week.   (Pending in Assembly Governmental Organization  
          Committee).

           Prior legislation  .   SB 126 (Cedillo), Chapter 562, Statutes of  
          2009  .   Deletes reference to school districts in the provisions  
          specifying the organizations that may conduct remote caller  
          bingo      games and instead authorizes "charitable  
          organizations affiliated with a school district" to conduct  
          remote caller bingo games.  Contains permissive model ordinance  
          language for local governing bodies to use.  Deletes requirement  
          that the California Gambling Control Commission establish  
          criteria for registering manufacturers and distributors.  Makes  
          other technical and conforming changes.
           
           AB 1036 (Niello), 2009-2010 Legislative Session  .  Would allow a  
          maximum of 100 unaffiliated organizations to enter into an  
          agreement to cosponsor a remote caller bingo game if the game  
          does not have more than 100 locations.  (Died in Assembly  
          Governmental Organization Committee pursuant to Joint Rule 56).
                      
           SB 1369 (Cedillo-Battin), Chapter 748, Statutes of 2008  .   
          Authorizes nonprofit organizations, mobile-home park  
          associations, senior citizens organizations, and organizations  
          affiliated with school districts that have been incorporated or  
          in existence for three years or more to conduct "remote caller  
          bingo".
           
           SB 1328 (Cedillo), 2007-2008 Legislative Session  .   Would have  
          permitted local jurisdictions to adopt an ordinance to allow  
          specified not for profit organizations to play remote caller  
          bingo, as defined.  (Held in Senate Governmental Organization  
          Committee).

           REGISTERED SUPPORT / OPPOSITION  :

           Support 
           
          California Association of Nonprofits
           








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           Opposition 
           
          None 

           Analysis Prepared by  :    Rod Brewer / G. O. / (916) 319-2531