BILL NUMBER: SB 472	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  AUGUST 26, 2013
	AMENDED IN ASSEMBLY  AUGUST 5, 2013
	AMENDED IN ASSEMBLY  JUNE 27, 2013

INTRODUCED BY   Senator Hill

                        FEBRUARY 21, 2013

   An act to amend Sections 19852.2, 19855, and 19858 of the Business
and Professions Code, relating to gaming.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 472, as amended, Hill. Gaming: licenses.
   The Gambling Control Act provides for the licensure of certain
individuals and establishments involved in various gambling
activities, and for the regulation of those activities, by the
California Gambling Control Commission. The act makes any person who
willfully violates any of the provisions of the act for which a
penalty is not expressly provided guilty of a misdemeanor.
   The act requires every person who is required to hold a state
license to obtain the license prior to engaging in the activity or
occupying the position with respect to which the license is required,
except as specified. Existing law requires every person who, by
order of the commission, is required to apply for a gambling license
or a finding of suitability to file an application within 30 calendar
days after receipt of the order.
   This bill would instead require the application described above to
be filed within 45 calendar days after receipt of an order of the
commission.
   The act also provides that, if the owner of a gambling enterprise
is not a person, the owner is not eligible for a gambling license
unless specified persons involved in the enterprise obtain a gambling
license. Existing law authorizes the commission to exempt specified
limited partners in limited partnerships from the licensing
requirements described above solely for the purpose of the licensure
of a card club located on the grounds of a racetrack that is owned by
a limited partnership that also owns the racetrack.
   This bill would instead authorize the commission to exempt
specified limited partners in limited partnerships from the licensing
requirements described above solely for the purpose of the licensure
of a card club located on any portion of, or contiguous to, the
grounds upon which a racetrack is or had been previously located and
horse race meetings were authorized to be conducted by the California
Horse Racing Board on or before January 1, 2012, that is owned by a
limited partnership that also owns or owned the racetrack.
   Existing law provides that a person is deemed unsuitable to hold a
state gambling license to own a gambling establishment if the
person, or any partner, officer, director, or shareholder of the
person, has any financial interest in any business or organization
that is engaged in a prohibited form of gambling, whether within or
without this state, except as specified.
   This bill would exempt from these provisions a person who is
licensed or had an application to be licensed on file with the
commission on or before February 1, 2013, has a financial interest in
a business or organization engaged in gambling prohibited by state
law that was closed and was not engaged in prohibited gambling at the
time the person was either licensed or had filed an application to
be licensed with the commission, and has a financial interest in a
gambling establishment that is located on any portion of, or
contiguous to, the grounds on which a racetrack is or had been
previously located and horse race meetings were authorized to be
conducted by the California Horse Racing Board on or before January
1, 2012, that is directly or indirectly owned by a racetrack limited
partnership owner, as defined. The bill would require an exempted
person described above, within 3 years of the date the closed
business or organization reopens and becomes engaged in any form of
prohibited gambling, as specified, to either divest that person's
interest in the business or organization, or divest that person's
interest in the gambling enterprise or gambling establishment for
which the person is licensed or had applied to be licensed by the
commission. The bill would also require an exempted person to inform
the commission within 30 days of the date on which a business or
organization in which the person has a financial interest begins to
engage in any form of prohibited gambling, as specified. The bill
would also make it unlawful, during the 3-year divestment period, for
any cross-promotion or marketing, as defined, to occur between the
business or organization that is engaged in any form of prohibited
gambling, as specified, and a gambling enterprise or gambling
establishment, as described. By creating a new crime, the bill would
impose a state-mandated local program.  The bill would prohibit,
during that 3-year divestment period, any funds used in connection
with the capital improvement of the gambling enterprise or gambling
establishment from being provided from the gaming revenues of either
the business or organization engaged in prohibited forms of gaming.
The bill would also provide that   if, at the end of the
3-year divestment period, a person has not divested his or her
interest in either the gambling enterprise or gambling establishment
or the business or organization that is engaged in the form of
prohibited gaming, the exemption would not apply to that person and
that person shall be deemed to be unsuitable to hold a state gambling
license to own a gambling establishment if the person, or any
partner, officer, director, or shareholder of the person, has any
financial interest in any business or organization that is engaged in
any form of prohibited gaming, whether within or without this state,
as specified. 
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 19852.2 of the Business and Professions Code is
amended to read:
   19852.2.  (a) Notwithstanding Section 19852 or any other provision
of law, and solely for the purpose of the licensure of a card club
located on any portion of, or contiguous to, the grounds upon which a
racetrack is or had been previously located and horserace meetings
were authorized to be conducted by the California Horse Racing Board
on or before January 1, 2012, that is owned by a limited partnership
that also owns or owned the racetrack, the commission may, at its
discretion, exempt all of the following from the licensing
requirements of this chapter:
   (1) The limited partners in a limited partnership that holds
interest in a holding company if all of the following criteria are
met:
   (A) The limited partners of the limited partnership in the
aggregate directly hold at least 95 percent of the interest in the
holding company.
   (B) The limited partner is one of the following:
   (i) An "institutional investor" as defined in subdivision (w) of
Section 19805.
   (ii) An "employee benefit plan" as defined in Section 1002(3) of
Title 29 of the United States Code.
   (iii) An investment company that manages a state university
endowment.
   (2) Other limited partners in a limited partnership described in
paragraph (1), if the partners do not number more than five and each
partner indirectly owns 1 percent or less of the shares of the
interest in the holding company.
   (3) A limited partner in a limited partnership that holds in the
aggregate less than 5 percent of the interest in a holding company.
   (b) Nothing in this section shall be construed to limit the
licensure requirements for a general partner of a limited partnership
or a limited partner that is not specifically described in this
section.
  SEC. 2.  Section 19855 of the Business and Professions Code is
amended to read:
   19855.  Except as otherwise provided by statute or regulation,
every person who, by statute or regulation, is required to hold a
state license shall obtain the license prior to engaging in the
activity or occupying the position with respect to which the license
is required. Every person who, by order of the commission, is
required to apply for a gambling license or a finding of suitability
shall file the application within 45 calendar days after receipt of
the order.
  SEC. 3.  Section 19858 of the Business and Professions Code is
amended to read:
   19858.  (a) Except as provided in subdivisions (b) and (c), a
person shall be deemed to be unsuitable to hold a state gambling
license to own a gambling establishment if the person, or any
partner, officer, director, or shareholder of the person, has any
financial interest in any business or organization that is engaged in
any form of gambling prohibited by Section 330 of the Penal Code,
whether within or without this state.
   (b) Subdivision (a) shall not apply to a publicly traded racing
association, a qualified racing association, or any person who is
licensed pursuant to subdivision (b) or (c) of Section 19852.
   (c) Subdivision (a) shall not apply to a person who meets all of
the following criteria:
   (1) The person is licensed or had an application to be licensed on
file with the commission on or before February 1, 2013.
   (2) The person has a financial interest in a business or
organization engaged in gambling prohibited by Section 330 of the
Penal Code that was closed and was not engaged in prohibited gambling
at the time the person was either licensed or had filed an
application to be licensed with the commission.
   (3) The person has a financial interest in a gambling
establishment that is located on any portion of, or contiguous to,
the grounds on which a racetrack is or had been previously located
and horserace meetings were authorized to be conducted by the
California Horse Racing Board on or before January 1, 2012.
   (4) The grounds upon which the gambling establishment described in
paragraph (3) is located are directly or indirectly owned by a
racetrack limited partnership owner. For purposes of this paragraph,
a "racetrack limited partnership owner" is defined as a limited
partnership, or a number of related limited partnerships, that is or
are at least 80 percent capitalized by limited partners that are an
"institutional investor" as defined in subdivision (w) of Section
19805, an "employee benefit plan" as defined in Section 1002(3) of
Title 29 of the United States Code, or an investment company that
manages a state university endowment.
   (d) Within three years of the date the closed business or
organization reopens or becomes engaged in any form of gambling
prohibited by Section 330 of the Penal Code, a person described in
subdivision (c) shall either divest that person's interest in the
business or organization, or divest that person's interest in the
gambling enterprise or gambling establishment for which the person is
licensed or has applied to be licensed by the commission.
   (e) A person described in subdivision (c) shall inform the
commission within 30 days of the date on which a business or
organization in which the person has a financial interest begins to
engage in any form of gambling prohibited by Section 330 of the Penal
Code.
   (f) During the three-year divestment period described in
subdivision (d), it is unlawful for any cross-promotion or marketing
to occur between the business or organization that is engaged in any
form of gambling prohibited by Section 330 of the Penal Code and the
gambling enterprise or gambling establishment described in paragraph
(3) of subdivision (c). For purposes of this subdivision,
"cross-promotion or marketing" means the offering to any customers of
the gambling enterprise or gambling establishment anything of value
related to visiting or gambling at the business or organization
engaged in any form of gambling prohibited by Section 330 of the
Penal Code. 
   (g) During the three-year divestment period described in
subdivision (d), any funds used in connection with the capital
improvement of the gambling enterprise or gambling establishment
described in paragraph (3) of subdivision (c) shall not be provided
from the gaming revenues of either the business or organization
engaged in gaming prohibited under Section 330 of the Penal Code.
 
   (h) If, at the end of the three-year divestment period described
in subdivision (d), any person described in subdivision (c) has not
divested his or her interest in either the gambling enterprise or
gambling establishment or the business or organization engaged in any
form of gaming prohibited under Section 330 of the Penal Code, the
prohibitions of Section 19858 as it read on January 1, 2013, apply.

  SEC. 4.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.