BILL NUMBER: SB 829 CHAPTERED 09/07/99 CHAPTER 351 FILED WITH SECRETARY OF STATE SEPTEMBER 7, 1999 APPROVED BY GOVERNOR SEPTEMBER 7, 1999 PASSED THE ASSEMBLY AUGUST 23, 1999 PASSED THE SENATE MAY 13, 1999 AMENDED IN SENATE APRIL 7, 1999 INTRODUCED BY Senator Figueroa FEBRUARY 25, 1999 An act to amend Section 19853.5 of, and to amend and renumber Section 19846A of, the Business and Professions Code, and to amend Section 62 of Chapter 867 of the Statutes of 1997, relating to gambling, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST SB 829, Figueroa. Gambling establishments: provisional licenses. (1) Existing law provides that every person who is required by statute or regulation 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. This bill would provide that, except as otherwise provided by statute or regulation, every person who is required by statute or regulation to hold a state gambling license shall obtain the license prior to engaging in the activity or occupying the position with respect to which the license is required. (2) Existing law requires applicants for state gambling licenses, approvals, and permits to make various disclosures, and provides that the division shall furnish applicants with supplemental forms for the purpose of providing information on the applicant's personal history, habits, character, criminal record, financial affairs, and other matter. This bill would require applicants to additionally submit 2 sets of fingerprints on forms supplied by the division, and would authorize the division to submit one fingerprint card to the United States Federal Bureau of Investigation. (3) Existing law generally provides that the California Gambling Control Commission, in consultation and cooperation with the Division of Gambling Control, is vested with the authority to approve or deny gambling licenses on specified grounds. Existing law also provides, however, that persons who had held or applied for a valid registration issued pursuant to the law in effect prior to the effective date of the act shall be deemed to hold a provisional license, as defined, until summoned by the division to apply for a gambling license under the act. Existing law also provides that if the division does not so summon a person holding a provisional license prior to December 31, 1998, it shall, upon the request of the holder of the provisional license, and upon the payment of specified fees, extend the provisional license until December 31, 1999. This bill would authorize the division to extend a provisional license, if, prior to the expiration of that license, the holder requests an extension, all applicable fees are paid, and the provisional licensee's gambling establishment is located in a jurisdiction with a gambling ordinance that complies with the Gambling Control Act. (4) This bill would declare that it is to take effect immediately as an urgency statute. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 19846A of the Business and Professions Code is amended and renumbered to read: 19846. 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 30 calendar days after receipt of the order. SEC. 2. Section 19853.5 of the Business and Professions Code is amended to read: 19853.5. The division shall furnish to the applicant supplemental forms, which the applicant shall complete and file with the division. These supplemental forms shall require, but shall not be limited to requiring, complete information and details with respect to the applicant's personal history, habits, character, criminal record, business activities, financial affairs, and business associates, covering at least a 10-year period immediately preceding the date of filing of the application. Each applicant shall submit two sets of fingerprints on forms provided by the division. The division may submit one fingerprint card to the United States Federal Bureau of Investigation. SEC. 3. Section 62 of Chapter 867 of the Statutes of 1997 is amended to read: Sec. 62. (a) For the purposes of this section, "provisional license" means a license that is either granted by operation of law pursuant to this section, or is issued by the Director of the Division of Gambling Control pursuant to this section, and authorizes the holder to own and operate a gambling establishment, as defined by the Gambling Control Act (Chapter 5 (commencing with Section 19800) of Division 8 of the Business and Professions Code), as enacted by this act. The issuance of a provisional license creates no vested right to the issuance of a state gambling license. A provisional license is held subject to all terms and conditions under which a state gambling license is held pursuant to the Gambling Control Act (Chapter 5 (commencing with Section 19800) of Division 8 of the Business and Professions Code), as enacted by this act. (b) (1) Every person possessing a valid registration, issued pursuant to former Chapter 5 (commencing with Section 19800) of Division 8 of the Business and Professions Code, as it read immediately prior to its repeal by this act, and which expires as of January 1, 1998, shall be deemed, as of January 1, 1998, to hold a provisional license to conduct those activities authorized by the registration. (2) (A) Every owner of a gaming club who possesses a valid registration issued pursuant to former Chapter 5 (commencing with Section 19800) of Division 8 of the Business and Professions Code, as it read immediately prior to its repeal by this act, if the license has expired as of January 1, 1998, shall be deemed to hold a provisional license to own, manage, or operate all or a part of another gambling establishment, or of other gambling establishments, if all of the following conditions are satisfied with respect to the other gambling establishment or establishments: (i) The gambling establishment, on January 1, 1998, was owned by a person holding a provisional license pursuant to this subdivision. (ii) Acquisition of the ownership interest is completed no later than June 30, 1998. (iii) The applicant has deposited all moneys as required pursuant to Section 19855 of the Business and Professions Code, as enacted by this act. (iv) The applicant has deposited with the division a license fee calculated as the amount specified for the appropriate level of operation in subdivision (a) of Section 19941 of the Business and Professions Code, as enacted by this act. (B) A provisional license granted in respect to a gambling establishment by operation of subparagraph (A) shall expire on July 30, 1998, unless, on or before that date, the holder of the provisional license files an application for a gambling license with respect to that gambling establishment under the Gambling Control Act (Chapter 5 (commencing with Section 19800) of Division 8 of the Business and Professions Code), as enacted by this act. (3) Until a provisional licensee is summoned pursuant to subdivision (e), no other state gambling license and no key employee license shall be required in connection with the operation that is owned, managed, or operated by a person holding a provisional license. Nothing in this paragraph shall relieve any person who, on or after the effective date of this act, acquires an ownership interest in a gambling establishment, from the provisions of Section 19840 of the Business and Professions Code, as enacted by this act. Upon payment of the fees described in this section, the provisional license shall be valid until the earlier of the following events: (A) December 31, 1998. (B) The granting or denial of an application for a gambling license. (c) Until July 1, 1998, the Director of the Division of Gambling Control may issue a provisional license to any person who submitted a completed application for registration pursuant to former Chapter 5 (commencing with Section 19800) of Division 8 of the Business and Professions Code, as it read immediately prior to its repeal by this act, if all of the following are true: (1) The director determines that the applicant is not disqualified based on any of the reasons for which an application for registration could have been denied or revoked under former Section 19809 or 19810 of the Business and Professions Code as those sections read immediately prior to repeal by this act. (2) The applicant has paid all fees required pursuant to Section 19855 of the Business and Professions Code, as enacted by this act, less any fees paid pursuant to Section 19808 of the Business and Professions Code, as that section read immediately prior to its repeal by this act. (3) The applicant has deposited with the division a license fee calculated as the amount specified for each level of operation in subdivision (b) of Section 19941 of the Business and Professions Code, as enacted by this act. (d) Every person holding a provisional license pursuant to subdivision (b), who desires that the provisional license be converted to a gambling license under the Gambling Control Act enacted by this act shall, no later than January 31, 1998, deposit with the Division of Gambling Control a license fee calculated as the amount specified for the appropriate level of operation in subdivision (b) of Section 19941 of the Business and Professions Code, as enacted by this act. (e) (1) Commencing July 1, 1998, the Division of Gambling Control shall summon persons holding provisional licenses for the purpose of applying for gambling licenses under the Gambling Control Act enacted by this act. Thereafter, except as otherwise provided herein, the license application process shall proceed as an initial application for licensure in accordance with the provisions of the Gambling Control Act, including the advance deposit of fees for investigation of the application or applications, if any. (2) The division shall not require an applicant who holds a provisional license pursuant to subdivision (b) to furnish, in connection with an application for licensure, information or documentation that is presently in the possession of the Department of Justice by virtue of having conducted a prior investigation of the applicant pursuant to former Chapter 5 (commencing with Section 19800) of Division 8 of the Business and Professions Code, as it read immediately prior to its repeal by this act. (f) If an application for a gambling license is granted, and upon payment of the fees specified in the Gambling Control Act, a gambling license may be issued to the owner of a gambling enterprise, to expire not later than 12 months thereafter. If this license is issued prior to December 31, 1998, the licensee shall be entitled to a credit, if any, for the fee paid pursuant to subdivision (d). (g) Notwithstanding subdivision (a) of Section 19847, there shall be a rebuttable presumption that every natural person who, on December 31, 1997, holds a valid and unexpired registration issued pursuant to former Chapter 5 (commencing with Section 19800) of Division 8 of the Business and Professions Code, as it read immediately prior to its repeal by this act, is suitable for licensure pursuant to this act. (h) If an application for a gambling license is denied, the applicant shall be entitled to a pro rata refund of the fee paid pursuant to subdivision (d), and any unused deposit of investigative fees. (i) The Division of Gambling Control may extend a provisional license if, prior to the expiration of the license, the holder of the license requests an extension, pays all applicable fees, and the provisional licensee's gambling establishment is located in a city, county, or city and county that has a gambling ordinance that complies with the Gambling Control Act. Thereafter, the process described in subdivisions (e), (f), and (g) shall apply in similar fashion. (j) No application for a state gambling license may be submitted to the Division of Gambling Control prior to July 1, 1998. It is the intent of the Legislature that the division and the Gambling Control Board shall be fully operative by July 1, 1998. SEC. 4. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order to provide continuity in the regulation and oversight of provisional licensees by the Division of Gambling Control at the earliest possible time, it is necessary that this act take effect immediately.