BILL ANALYSIS SB 1090 Page 1 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 SB 1090 Page 2 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 SB 1090 Page 3 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 SB 1090 Page 4 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 SB 1090 Page 5 Opposition None Analysis Prepared by : Rod Brewer / G. O. / (916) 319-2531