BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 156
                                                                  Page  1

          Date of Hearing:   May 18, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                     AB 156 (Lara) - As Amended:  March 14, 2011 

          Policy Committee:                              Governmental 
          Organization Vote:                            17 - 0 

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              

           SUMMARY  

          This bill amends the Gambling Control Act by adding a "hold 
          harmless" provision if a controlled game that had previously 
          been found to be lawful is subsequently determined to be 
          unlawful. In addition, in circumstances where the sale or lease 
          of property requires the approval of the Gambling Control 
          Commission (GCC), this bill permits the contract to have a 
          closing date of less than 90 days if both parties agree and GCC 
          has approved the contract. 

           FISCAL EFFECT  

          There are no significant costs associated with this legislation.

           COMMENTS  

           1)Rationale  . According to the bill's sponsor, Commerce Club 
            Casino, this bill will provide that if a card club is playing 
            a controlled game approved by the Bureau of Gambling Control 
            within the Department of Justice in the manner in which it was 
            approved, the approval by DOJ shall be an absolute defense to 
            any action that is brought through the criminal courts, 
            administrative courts, or civil courts if the game being 
            played is later ruled to be deemed unlawful. 

            In at least one situation, a game approved by DOJ was 
            subsequently found to be unlawful by the Court of Appeal. The 
            Attorney General then brought administrative action against 
            numerous card clubs for playing a game which they had 
            approved.  This bill seeks to insulate a club from criminal, 
            civil and administrative action if a game has been approved by 








                                                                  AB 156
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            DOJ and is played in the manner in which it was approved.

           2)Related Legislation  . In 2010, SB 1125 (Florez), contained the 
            same "absolute defense" language that is contained in this 
            bill. That bill was vetoed. In his veto message, Governor 
            Schwarzenegger wrote, "This past legislative session, my 
            Administration sponsored several bills to address the issue of 
            tort reform.  Similar to this measure, one of these measures 
            provided for limited immunity for businesses that engaged in 
            conduct that was approved by a federal or state agency.  
            However, even this modest reform contained a provision that 
            prevented an absolute defense if the business in question 
            intentionally misrepresented material information or defrauded 
            the public entity that gave its approval. 

            "I am unable to sign this bill because, unlike the measure 
            previously mentioned, this bill does not take into account 
            possible misconduct by a gambling establishment that may have 
            induced the Bureau to erroneously approve a controlled game.  
            In addition, there may be other instances where a gambling 
            establishment may be playing a controlled game in bad faith 
            and in violation of other provisions of existing law.  
            Notwithstanding the fact that the Bureau may have approved 
            such conduct, that approval alone should not constitute an 
            absolute defense to all civil, criminal, or administration 
            actions." 

           Analysis Prepared by  :    Julie Salley-Gray / APPR. / (916) 
          319-2081