BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1691
                                                                  Page  1

          Date of Hearing:   May 14, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                  AB 1691 (Jones-Sawyer) - As Amended:  May 6, 2014

          Policy Committee:                              Governmental  
          Organization Vote:                            11-2

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              No

           SUMMARY  

          This bill authorizes a private, nonprofit organization  
          established by, or affiliated with, one of the following  
          professional sports organizations to conduct a 50/50 raffle to  
          directly support charitable purposes in California: 

          1)A team from Major League Baseball, the National Hockey League,  
            the National Basketball Association, the National Football  
            League, the Women's National Basketball Association, or Major  
            League Soccer.

          2)The Professional Golfers Association, Ladies Professional  
            Golfers Association, or National Association for Stock Car  
            Auto Racing. 

          In summary, this bill places the following additional  
          restrictions on the raffles:

          1)50% of the gross receipts shall be used to benefit the  
            charitable organization, and in no event may any compensation  
            be paid to the persons operating the raffle from the proceeds  
            required to be dedicated to beneficial or charitable purposes.

          2)Only one raffle may be conducted per home game, and must be  
            conducted by manual draw.

          3)No raffle may be conducted nor may tickets for a raffle be  
            sold at a satellite wagering facility or racetrack, within a  
            gambling establishment, or over the internet, although the  
            organization may advertise its raffle tickets over the  
            internet.








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          4)Specifies the Department of Justice (DOJ) may require an  
            eligible organization to pay an annual registration fee of $10  
            to cover enforcement and administration costs, and allows the  
            DOJ to adjust the annual registration fee by regulation to  
            ensure that amounts collected fully offset actual costs.

          5)All organizations conducting the raffles must register with  
            the DOJ via a registration form available on the internet and  
            provide annual reports to the DOJ regarding the net receipts,  
            costs, and charitable uses of the proceeds from the raffles  
            conducted.

          The bill requires the DOJ to conduct a study on the effects of  
          this bill, including the number of raffles per year, amounts  
          raised for charities, a comparison of moneys raised under this  
          provision compared with other raffles, other impacts on  
          charitable giving, and consumer complaints, and report it to the  
          Assembly Committee on Governmental Organization prior to March  
          31, 2017.

          The bill sunsets on December 31, 2017.

          Because this bill amends the percentage of gross receipts from a  
          raffle required to be dedicated to beneficial or charitable  
          purposes, the California Constitution requires a 2/3 vote of  
          each house of the Legislature.

           FISCAL EFFECT  

          1)General Fund costs to the DOJ for Charitable Trusts Section  
            staffing, administration of the charitable organization  
            registry and annual reporting, and ongoing enforcement of  
            approximately $350,000 to $475,000 per year.  Those costs may  
            be recovered, at least in part, through annual registration  
            fees.

          2)Potentially significant GF costs to the DOJ to compile and  
            analyze the data, and produce the report on the effects of  
            this bill.

           COMMENTS  

          1)  Purpose.   According to the author, this bill would allow  
            professional sports franchises to operate game-day 50/50  








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            charitable raffles, in which 50% of the proceeds are awarded  
            to the winning ticket holder and 50% of the proceeds are  
            donated to local charities.  The author contends AB 1691 will  
            maintain current legal protections while making charitable  
            raffles more attractive to participants and raising additional  
            contribution money.  The author asserts the current 90/10  
            restriction limits charities' ability to attract  
            participation, reducing the overall amount of contributions.

            According to the author, advances in raffle technologies allow  
            for secure, real-time transactions and auditing.  This  
            technology has proven to be popular in several other states,  
            and has helped generate considerable interest in professional  
            sports charitable raffles of the type proposed in this bill.

          2)  Existing Law.   The California Constitution permits charitable  
            organizations to conduct raffles to raise contribution funding  
            if at least 90% of the gross receipts from the raffle go  
            directly to the beneficial or charitable purposes in  
            California.  The Constitution permits the Legislature to amend  
            the percentage of gross receipts required by statute exacted  
            with a 2/3 vote of each house.

          3)  50/50 Raffles.   According to the author, 50/50 raffles  
            conducted at sports teams in Arizona have been very  
            successful.  The Phoenix Coyotes, a professional hockey team,  
            conducted several 50/50 raffles during the 2013-14 season,  
            averaging around $18,000 in gross receipts per raffle with a  
            high of $38,000 on one occasion.  The Arizona Diamondbacks, a  
            professional baseball team with a considerably larger stadium  
            and greater number of attendees, received approximately  
            $100,000 in gross receipts on one occasion.


           Analysis Prepared by  :    Joel Tashjian / APPR. / (916) 319-2081