BILL ANALYSIS Ó
SB 777
Page 1
SENATE THIRD READING
SB
777 (Lara)
As Amended April 6, 2015
Majority vote
SENATE VOTE: 36-0
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Governmental |18-0 |Gray, Linder, | |
|Organization | |Achadjian, Alejo, | |
| | |Bigelow, Campos, | |
| | |Cooley, Cooper, Daly, | |
| | |Eduardo Garcia, | |
| | |Jones-Sawyer, Levine, | |
| | |Mayes, Perea, Salas, | |
| | |Steinorth, Waldron, | |
| | |Wilk | |
| | | | |
| | | | |
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SUMMARY: Makes various changes to laws regarding corporate
ownership of a gambling establishment. Specifically, this bill:
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1)Specifies that, in order to be eligible to receive a gambling
license as the owner of a gambling enterprise, a corporation shall
supply information with the initial application to Department of
Justice (DOJ) on bonuses paid as compensation for services to all
officers, directors, and underwriters.
2)Requires that applicants must report the amount of remuneration to
persons other than directors and officers in excess of $95,000 per
year.
3)Requires the corporation to supply a copy of its annual federal
income tax return within 30 business days after that return is
filed.
EXISTING LAW:
1)Provides, under the Gambling Control Act (Act), for the licensure
and regulation of various legalized gambling activities and
establishments by the California Gambling Control Commission
(CGCC) and the investigation and enforcement of those activities
and establishments by DOJ.
2)Requires a corporation to comply with specified requirements in
order to obtain a gambling license, including a requirement that
the corporation register as a corporation with DOJ and supply
specified supplemental information to DOJ with the initial
application and upon request of DOJ, such as remuneration as
compensation for services to specified individuals and the amount
of remuneration to persons other than directors and officers in
excess of $100,000.
3)Requires that information provided by a corporation to include a
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copy of the corporation's annual federal income tax return, within
30 calendar days after that return is filed with the Internal
Revenue Service.
FISCAL EFFECT: Unknown. This bill is keyed non-fiscal by the
Legislative Counsel.
COMMENTS:
Purpose of this bill: According to the author, this bill makes
small technical changes to ensure that corporations supply accurate
information when requested by DOJ. In addition, the author argues
that this bill would permit annual profit-and-loss statements,
annual balance sheets, and copies of annual federal income tax
returns to be filed within 30 business days, rather than calendar
days, after the federal income tax return is filed with the Internal
Revenue Service. This bill provides corporations with more workdays
to prepare financial statements and documents to ensure accuracy.
Finally, the author argues that by requiring information of those
that earn more than $95,000 and those that get paid bonuses to be
included in the initial application and thereafter by request, we
are ensuring that DOJ has additional important financial
documentation to ensure that corporations are suitable to hold a
gambling license.
The Gambling Control Act: The Act, established in 1998, created a
comprehensive scheme for statewide regulation of legal gambling
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under a bifurcated system of administration involving the Bureau of
Gambling Control (Bureau) within the Attorney General's Office and
the five-member CGCC appointed by the Governor. The CGCC is
authorized to establish minimum regulatory standards for the
gambling industry and to ensure that the state gambling licenses are
not issued to or held by unsuitable or unqualified individuals.
The Bureau monitors the conduct of gaming operations to ensure
compliance with state gambling laws and conducts extensive
background investigations of applicants seeking a state gambling
license. The Bureau also conducts background checks for all key
employees and state gambling license and vendor applications.
The Bureau inspects premises where gambling is conducted, examines
gambling equipment, audits papers, books, and records of the
gambling establishment, investigates suspected violations of
gambling laws, and is ultimately responsible for enforcing
compliance with all state laws pertaining to gambling.
In support: Supporters state that this bill would include "bonus"
compensation among the information to be supplied by corporate
licensees to DOJ and which further allows the filing of corporate
financial information within 30 "business" days rather than
"calendar" days following the filing of a corporation's annual
income tax return with the Internal Revenue Service. This bill
provides DOJ with the ability to request important information and
allows corporations an adequate time within which to file necessary
documents with DOJ.
In opposition: None on file.
Prior legislation: AB 293 (Mendoza), Chapter 233, Statutes of 2009.
Allowed limited liability companies and its officers, managers,
members, or owners to be eligible for a state gambling license.
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SB 289 (Vincent), Chapter 294, Statutes of 2007. Authorized the
CGCC to deem a person suitable to hold a state gambling license even
if the person has a specified financial interest in a business that
conducts gambling activities outside the state that would violate
California law if conducted within the state.
Analysis Prepared by:
Kenton Stanhope / G.O. / (916) 319-2531 FN: 0001197