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HomeMy WebLinkAbout2010-03-09 City Council Item No. 14CITY OF CC! LSINOBJE LAKE DR.E.AM. EXTREME. REPORT TO CITY COUNCIL TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: ROBERT A. BRADY CITY MANAGER DATE: MARCH 9, 2010 SUBJECT: AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, AMENDING CHAPTER 5.48, SECTIONS 5.48.010, 5.48.020, 5.48.030, 5.48.040, 5.48.110, AND 5.48.210 OF THE LAKE ELSINORE MUNICIPAL CODE REGARDING BINGO Background The California Association of Nonprofits (CAN), a statewide network of 1800 community-based organizations, has written the City to request consideration of a local ordinance enabling local nonprofits to engage in charitable fundraising through "remote caller bingo." Remote caller bingo is a traditional bingo game where numbers that are called at one bingo location are broadcast to additional locations that are playing the same game. This new game was authorized under Senate Bill 1369 which effect January 1, 2009. Proponents of remote call bingo believe that it has the potential to revive interest in bingo and raise money for many worthy causes. Because it allows charities to link up to combine their games and offer bigger prizes, remote caller bingo has the potential to appeal to more players and generate more revenues for community needs. Discussion California Penal Code Section 326.3 provides "model" provisions for a local ordinance' adopting remote caller bingo. Because the City has an existing bingo ordinance (Chapter 5.48 of the Municipal Code) that already covers many of the requirements set forth in the model, the additional applicable provisions allowing for remote caller bingo have been incorporated into the existing code by way of amendments. A copy of the proposed ordinance is attached and highlights the substantive changes to the existing code provisions. The key provisions to include in the City's Municipal Code are to require the interested nonprofits acknowledge the requirements to comply with Penal Code Sections 326.3 AGENDA ITEM NO. 14 Page 1 of 21 Ordinance re Bingo March 9, 2010 Page 2 of 2 relating to licensing requirements for remote caller bingo. That statute imposes a series of regulations on remote caller bingo operators including special licensing requirements and oversight by the California Gambling Control Commission. A copy of Penal Code Section 326.3 is also attached. There is also a limit on the number of remote caller bingo games. A licensee may not conduct remote caller bingo games on more than two days during any week, except that a licensee may hold one additional game, at its election, in each calendar quarter. During the course of reviewing the applicable law, the City Attorney's office noted that the Legislature has also granted an increase in the traditional bingo prize limits from $250 to $500. Given the goal of remote caller bingo in increasing interest through higher prizes, the attached amendment also includes an amendment increasing the cap from $250 to $500 on traditional bingo for the City Council's consideration. Fiscal Impact No negative fiscal impact. Recommendation Waive further reading and introduce by title only an ordinance amending Chapter 5.48, Sections 5.48.010, 5.48.020, 5.48.030, 5.48.040, 5.48.110, and 5.48.210 of the Lake Elsinore Municipal Code regarding bingo. Prepared by: Barbara Leibold City Attorney Approved by: Robert A. Brady City Manager Attachments: Ordinance Letter from California Association of Nonprofits Frequently Asked Questions re Remote Caller Bingo Penal Code Section 326.3 AGENDA ITEM NO. 14 Page 2 of 21 ORDINANCE NO. 1274 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, AMENDING CHAPTER 5.48, SECTIONS 5.48.010, 5.48.020, 5.48.030, 5.48.040, 5.48.110, AND 5.48.210 OF THE LAKE ELSINORE MUNICIPAL CODE REGARDING BINGO WHEREAS, nonprofit organizations provide important and essential educational, philanthropic, and social services to the community; and WHEREAS, many such services would not be available if nonprofit organizations did not provide them; and WHEREAS, there is a need to provide methods of fundraising to nonprofit organizations to enable them to provide these essential services; and WHEREAS, historically, many nonprofit organizations have used charitable bingo as one of their key fundraising strategies to promote the mission of the charity; and WHEREAS, the California Legislature has authorized local agencies to allow remote caller bingo games within that agency's jurisdiction so long as the agency adopts an ordinance under Section 19 of Article IV of the California Constitution allowing such remote caller bingo game be played and conducted only in accordance with applicable provisions of the Penal Code. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ORDAINS AS FOLLOWS: SECTION 1. That Section 5.48.010 of the Lake Elsinore Municipal Code is hereby amended and restated in its entirety as follows: 5.48.010 Permitted for certain organizations A. Pursuant to the conditions and restrictions of California Penal Code Section 326.5 and this Chapter, bingo shall be permitted to be played in the City for the benefit of organizations included by the provisions of Penal Code Section 326.5(a). B. AGENDA ITEM NO. 14 Page 3 of 21 SECTION 2. That Section 5.48.020 of the Lake Elsinore Municipal Code is hereby amended and restated in its entirety as follows: 5.48.020 Definitions "Bingo" means a game of chance in which prizes are awarded on the basis of designated numbers of symbols on a card which conform to numbers or symbols selected at random. It shall include cards having numbers or symbols which are concealed and preprinted in a manner providing for distribution of prizes. The winning cards shall not be known prior to the game by any person participating in the playing or operation of the bingo game. All such preprinted cards shall bear the legend: "For sale or use only in a bingo game authorized under California law and pursuant to local ordinance." bingo game from a single location to multiple locations owned leased or rented by that organization. SECTION 3. That Section 5.48.030 of the Lake Elsinore Municipal Code is hereby amended and restated in its entirety as follows: 5.48.030 License - Required A. No bingo shall be played without a valid and unexpired license. B. Only those organizations set forth in Penal Code Sections 326.3 and 326.5 are eligible to apply for a bingo license. Eligible organizations shall file a written application for a bingo license with the City on a form provided thereby. C. The license issued shall be for a term of one year from the date of issuance, subject to renewal and annual fee. D. -2- AGENDA ITEM NO. 14 Page 4 of 21 1. Bingo games shall not be conducted by anv licensee on more than two days during any week, except that a licensee may hold one additional game at its election, in each calendar quarter. SECTION 4. That Section 5.48.040(A)(5) of the Lake Elsinore Municipal Code is hereby amended and restated in its entirety as follows: a. A statement that the applicant agrees to conduct bingo in strict accordance with the provisions of California Penal Code Sections 326.5 and this Chapter, as either may be amended from time to time. SECTION 5. That Section 5.48.110 of the Lake Elsinore Municipal Code is hereby amended and restated in its entirety as follows: 5.48.110 Maximum amount of prize Except as may be provided pursuant to Section 5.48.010(B) herein, the total value of prizes awarded during the conduct of any bingo games shall not exceed $500.00 in cash or kind, or both, for each separate game which is held. SECTION 6. That Section 5.48.210 of the Lake Elsinore Municipal Code is hereby amended and restated in its entirety as follows: 5.48.210 Participant must be present. No person shall be allowed to participate in a bingo game unless the person is physically present at the time and place where the remote caller bingo game is being conducted. A person shall be deemed to be physically present at the place Chapter. SECTION 7. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 8. This Ordinance shall take effect thirty (30) days after the date of its final passage or such later date as may be designated by the City Council. The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. -3- AGENDA ITEM NO. 14 Page 5 of 21 C. A statement that the applicant agrees that the license may be revoked by the City upon violation of any such provisions 5.48.030 License - Required. PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Lake Elsinore, California, on this _ day of 2010. MELISSA MELENDEZ, MAYOR CITY OF LAKE ELSINORE ATTEST: CAROL COWLEY INTERIM CITY CLERK APPROVED AS TO FORM: BARBARA ZEID LEIBOLD CITY ATTORNEY -4- AGENDA ITEM NO. 14 Page 6 of 21 STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE )ss. CITY OF LAKE ELSINORE ) I, Carol Cowley, Interim City Clerk of the City of Lake Elsinore, California, hereby certify that the foregoing Ordinance No. 1274 was introduced at a regular meeting of the City Council of the City of Lake Elsinore on the gth day of March 2010, and was finally passed at a regular meeting of the City Council of the City of Lake Elsinore held on the day of , 2010 by the following roll call vote: AYES: NOES: ABSENT: ABSTAIN: CAROL COWLEY INTERIM CITY CLERK -5- AGENDA ITEM NO. 14 Page 7 of 21 AGENDA ITEM NO. 14 Page 8 of 21 California Association of Nonprofits =c i o Protecting, Strtmgtbening & Promoting Nonprogis December 4, 2009 California o To California's Local Government Officials: Association a D Z of Nonprofits a 4 The California Association of Nonprofits (CAN), a statewide network of STATE HEADQUARTERS 1800 community-based organizations, urges you to swiftly adopt a local 520 S. Grand Ave., Suite 695 ordinance enabling your local nonprofits to engage in charitable Los Angeles, CA 90071 fundraising through Remote Caller Bingo. A model for that ordinance can (213) 347-2070 be found for your consideration in SB 126, which was approved by the www.CAnonprofits.org Governor on October 11, 2009 and filed with the Secretary of State SACRAMENTO October 11, 2009. PUBLIC POLICY OFFICE P.O. Box 188947 Remote Caller Bingo is a traditional paper and dauber bingo game where Sacramento, CA 95818-8947 (916) 402-1335 numbers that are called at one bingo location are broadcast to additional locations that are playing the same game. This new game was authorized CAN INSURANCE SERVICES 1500 41 st Ave., Suite 280 by legislation passed last year (SB 1369) and took effect January 1, 2009. Capitola, CA 95010 CAN, American Legion, California Catholic Conference of Bishops, (831) 462-7415 Catholic Charities of Los Angeles, and California Narcotic Officers (888) 427-5222 Association supported the legislation. www.caninsurance.com MEMBERSHIP Remote Caller Bingo has the potential to revive interest in a game that has CAN Insurance Services raised hundreds of millions of dollars for many worthy causes in the CAN Alert Newsletter Discounts on Goods & Services decades since the voters, through an amendment to the California Managers' Helpline Constitution, authorized chanty bingo. In a time when nonprofits are Free Web Postings & Listservs struggling to secure the revenues to keep up with demand for their EVENTS services, Remote Caller Bingo allows charities to link up to combine their Annual CAN Conference games and offer bigger prizes, adding excitement and appeal that will Nonprofit Finance Conference draw more players and generate more revenues for community needs. Nonprofit Policy Days Fundraising Workshops Integrity Workshops SB 1369 guarantees that nonprofits receive at least 43% of bingo revenue, ADVOCACY the highest rate in the nation. The no-limit prizes for Remote Caller Bingo Sacramento Presence are intended make the game more appealing to more and younger players. Statewide Collaborations CAN Policy Update The nonprofit organizations offering Remote Caller Bingo games ACCOUNTABILRY Must have been in existence for three years or more CAN Financial Services Must be licensed by their local jurisdictions Ensuring Nonprofit Integrity Must use receipts of the game, except for a small allowance for National Nonprofit Financial Reporting Initiative overhead costs, only for charitable purposes Unified Chart of Accounts Must not be organized for the primary purpose of operating bingo RESOURCES games CAN Classifieds Career Center Media Center Nonprofit Neighborhood PARTNERSHIPS AND AGENDA ITEM NO. 14 Page 9 of 21 Remote Caller Bingo October 15, 2009 Page 2 of 2 • Must conduct the games in locations owned, leased, or rented by the nonprofits offering the games or the use of which has been donated to the organization Helpful websites: • California Gambling Control Commission: www.cgcc.ca.gov/bingo.asp • Legislative Information: www.leginfo.ca.gov • SB 1369 (2008): http://www.leginfo.ca.gov/pub/07-08/bill/sen/sb_1351- 1400/sb_1369_bill_20080930_chaptered.html • SB 126 (2009) This bill includes a model ordinance: http://www.leginfo.ca.gov/pub/09-10/bill/sen/sb-0101- 0150/sb - 126 bill 20091011 chaptered.pdf • Additional Information: www.remotecallerbingo.com (Please note that CAN does not endorse or recommend products or services and this link is provided for purposes of information only.) Please supply us with contact information, including an email address, for the person responsible for managing a proposed ordinance, so that we may inform interested nonprofits who wish to pursue Remote Caller Bingo in your jurisdiction. My contact information is below. Remote Caller Bingo helps nonprofits to generate new revenue to meet urgent demands in the face of a struggling economy and diminished government funding. CAN would be happy to assist you any way to move forward with opening the door for your local nonprofits to meet community needs with the help of new revenues generated by Remote Caller Bingo. Sincerely, Kenneth Larsen, Director of Public Policy California Association of Nonprofits (916) 402-1335 klarsen@canonprofits.org www.CAnonprofits.org AGENDA ITEM NO. 14 Page 10 of 21 REMOTE CALLER BINGO Frequently Asked Questions What is remote caller bingo? A remote caller bingo game means a game of bingo in which the numbers or symbols on randomly drawn plastic balls are announced by a natural person present at the site at which the live game is conducted, and the organization conducting the bingo game uses audio and video technology to link any of its in-state facilities for the purpose of transmitting the remote calling of a live bingo game from a single location to multiple locations owned, leased, or rented by that organization. Which nonprofit organizations are eligible to conduct remote caller bingo? The types of nonprofit organizations which may conduct remote caller bingo are described in detail in Penal Code section 326.3(b)(1) (effective 1-1-09), which should be reviewed for specific information. The following is a partial summary of these legal provisions: • a mobile home park association • a senior citizens organization • a charitable organization affiliated with a school district • An organization that is exempted from the payment of the bank and corporation tax by the Revenue and Taxation (R&T) Code: o a labor, agricultural or horticultural organization (R&T Code sec. 23701 a) o a fraternal order (R&T Code sec. 23701 b) o a corporation, community chest or trust, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educations purposes, or to foster national or international amateur sports competition, etc. (R&T Code sec. 23701 d) o a business league, chamber of commerce, real estate board, or board of trade (R&T Code sec. 23701e) o a social organization (R&T Code sec. 23701g) o religious or apostolic corporations (R&T Code sec. 23701 k) o a domestic fraternal society (R&T Code sec. 237011) o a veteran's organization (R&T Code 23701w) Nonprofit organizations falling into one of the above types must, in addition, satisfy the following requirements (Penal Code section 326.3(b)(2)-(4) (effective 1-1-09)): • Have been in existence for three years or more; • Be licensed by the local jurisdiction (city or county); • Receipts of the game used only for charitable purposes; and AGENDA ITEM NO. 14 Page 11 of 21 • Operation of bingo may not be the primary purpose for which the organization is formed. What is the process for applying to participate in remote caller bingo? See the Join a Game section of this web site (www.remotecallerbino.com/ioin) Can my organization join any remote caller bingo games? No. Organizations must of the same affiliation i.e. Catholic Church, American Legion, Elks or Knights of Columbus to connect and join a remote caller bingo game. For example, a Catholic Church and an Elks Lodge cannot participate in the same game. How much does it cost to join a game? The State of California requires a small application fee to participate in a remote caller bingo. Bingo Innovations, Inc. (BII) offers organizations all the requisite infrastructure and supplies to participate in a game for a small management fee. However, BII does not charge any upfront fees. Once 1 join a game, am I always required to play? No. It's up to each individual church, post, lodge or chapter to determine whether they will participate or not. Additionally, each organization can decide to carry on with their ordinary bingo games on nights that remote caller games are not offered. What is the length of the contract? 5 years; however, an organization can decide not to play. They just cannot hire a competing facilitator during that 5-year period. This is largely due to enormous investment BII is making on behalf of your organization. Can we still sell pull-tabs? Yes. BII allows individual locations to continue to raise funds through food & beverage and pull tab sales. What is the pace of play? Due to the nature of remote caller bingo and the large number of players, individual bingo games will move at a pretty quick pace. Final time has yet to be determined but will balls will be called generally between every 10 and 20 seconds. 8 games of bingo (1-session) will generally take about 1 hour to play. Bll plans on offering organizations 3-sessions per night. How does my organization benefit from remote caller bingo? By linking multiple locations of an organization remote caller bingo allows larger participation and larger prize pools ($100's of thousands of dollars). Additionally, by offering larger prize pools, each individual location should maximize occupancy due to the draw of large prizes. AGENDA ITEM NO. 14 Page 12 of 21 326.3. (a) The Legislature finds and declares all of the following: (1) Nonprofit organizations provide important and essential educational, philanthropic, and social services to the people of the State of California. (2) One of the great strengths of California is a vibrant nonprofit sector. (3) Nonprofit and philanthropic organizations touch the lives of every Californian through service and employment. (4) Many of these services would not be available if nonprofit organizations did not provide them. (5) There is a need to provide methods of fundraising to nonprofit organizations to enable them to provide these essential services. (6) Historically, many nonprofit organizations have used charitable bingo as one of their key fundraising strategies to promote the mission of the charity. (7) Legislation is needed to provide greater revenues for nonprofit organizations to enable them to fulfill their charitable purposes, and especially to meet their increasing social service obligations. (8) Legislation is also needed to clarify that existing law requires that all charitable bingo must be played using a tangible card and that the only permissible electronic devices to be used by charitable bingo players are card-minding devices. (b) Neither the prohibition on gambling in this chapter nor in Chapter 10 (commencing with Section 330) applies to any remote caller bingo game that is played or conducted in a city, county, or city and county pursuant to an ordinance enacted under Section 19 of Article IV of the California Constitution, if the ordinance allows a remote caller bingo game to be played or conducted only in accordance with the requirements of this section, including the following requirements: (1) The game may be conducted only by the following organizations: (A) An organization that is exempted from the payment of the bank and corporation tax by Section 23701a, 23701b, 23701d, 2370le, 23701f, 23701g, 23701k, 23701w, or 237011 of the Revenue and Taxation Code. (B) A mobilehome park association. (C) A senior citizens organization. (D) Charitable organizations affiliated with a school district. (2) The organization conducting the game shall have been incorporated or in existence for three years or more. (3) The organization conducting the game shall be licensed pursuant to subdivision (1) of Section 326.5. (4) The receipts of the game shall be used only for charitable purposes. The organization conducting the game shall determine the disbursement of the net receipts of the game. (5) The operation of bingo may not be the primary purpose for which the organization is organized. (c) (1) A city, county, or city and county may adopt an ordinance in substantially the following form to authorize remote caller bingo in accordance with the requirements of subdivision (b): Sec. _.01. Legislative Authorization. This chapter is adopted pursuant to Section 19 of Article IV of the California Constitution, as implemented by Sections 326.3 and 326.4 of the Penal Code. Sec. _.02. Remote Caller Bingo Authorized. AGENDA ITEM NO. 14 Page 13 of 21 Remote Caller Bingo may be lawfully played in the [City, County, or City and County] pursuant to the provisions of Sections 326.3 and 326.4 of the Penal Code, and this chapter, and not otherwise. Sec. - .03. Qualified Applicants: Applicants for Licensure. (a) The following organizations are qualified to apply to the License Official for a license to operate a bingo game if the receipts of those games are used only for charitable purposes: (1) An organization exempt from the payment of the Bank and Corporation Tax by Section 23701, 23701a, 23701b, 23701d, 2370le, 23701£, 23701g, 23701k, or 23701w of the Revenue and Taxation Code. (2) A mobile home park association of a mobile home park that is situated in the [City, County, or City and County]. (3) Senior citizen organizations. (4) Charitable organizations affiliated with a school district. (b) The application shall be in a form prescribed by the License Official and shall be accompanied by a nonrefundable filing fee in an amount determined by resolution of the [Governing Body of the City, County, or City and County] from time to time. The following documentation shall be attached to the application, as applicable: (1) A certificate issued by the Franchise Tax Board certifying that the applicant is exempt from the payment of the Bank and Corporation Tax pursuant to Section 23701d of the Revenue and Taxation Code. (2) Other evidence as the License Official determines is necessary to verify that the applicant is a duly organized mobile home park association of a mobile home park situated in the [City, County, or City and County]. Sec. .04. License Application: Verification.. The license shall not be issued until the License Official has verified the facts stated in the application and determined that the applicant is qualified. Sec. _.05. Annual Licensee. A license issued pursuant to this chapter shall be valid until the end of the calendar year, at which time the license shall expire. A new license shall only be obtained upon filing a new application and payment of the license fee. The fact that a license has been issued to an applicant creates no vested right on the part of the licensee to continue to offer bingo for play. The [Governing Body of the City, County, or City and County] expressly reserves the right to amend or repeal this chapter at any time by resolution. If this chapter is repealed, all licenses issued pursuant to this chapter shall cease to be effective for any purpose on the effective date of the repealing resolution. Sec. _.06. Conditions of Licensurs. (a) Any license issued pursuant to this chapter shall be subject to the conditions contained in Sections 326.3 and 326.4 of the Penal Code, and each licensee shall comply with the requirements of those provisions. (b) Each license issued pursuant to this chapter shall be subject to the following additional conditions: (1) Bingo games shall not be conducted by any licensee on more than two days during any week, except that a licensee may hold one additional game, at its election, in each calendar quarter. (2) The licensed organization is responsible for ensuring that the conditions of this chapter and Sections 326.3 and 326.4 of the Penal Code are complied with by the organization and its officers and members. A violation of any one or more of those conditions or AGENDA ITEM NO. 14 Page 14 of 21 provisions shall constitute cause for the revocation of the organization's license. At the request of the organization, the [Governing Body of the City, County, or City and County] shall hold a public hearing before revoking any license issued pursuant to this chapter. (2) Nothing in this section shall require a city, county, or city and county to use this model ordinance in order to :authorize remote caller bingo. (d) It is a misdemeanor for any person to receive or pay a profit, wage, or salary from any remote caller bingo game, provided that administrative, managerial, technical, financial, and security personnel employed by the organization conducting the bingo game may be paid reasonable fees for services rendered from the revenues of bingo games, as provided in subdivision (m), except that fees paid under those agreements shall not be determined an a percentage of receipts or other revenues from, or be dependant on the outcome of, the game. (e) A violation of subdivision (d) shall be punishable by a fine not to exceed ten thousand dollars ($10,000), which fine shall be deposited in the general fund of the city, county, or city and county that enacted the ordinance authorizing the remote caller bingo game. A violation of any provision of this section, other than subdivision -(d), is a misdemeanor. The city, county, or city and county that enacted the ordinance authorizing the remote caller bingo game, or the Attorney General, may bring an action to enjoin a violation of this section. (g) No minors shall be allowed to participate in any remote caller bingo game. (h) A remote caller bingo game shall not include any site that is not located within this state. (i) An organization authorized to conduct a remote caller bingo game pursuant to subdivision (b) shall conduct the game only on property that is owned or leased by the organization, or the use of which is donated to the organization. Nothing in this subdivision shall be construed to require that the property that is owned or leased by, or the use of which is donated to, the organization be used or leased exclusively by, or donated exclusively to, that organization. (j) (1) All remote caller bingo games shall be open to the public, not just to the members of the authorized organization. (2) No more than 750 players may participate in a remote caller bingo game in a single location. (3) If the Governor of California or the President of the United States declares a state of emergency in response to a natural disaster or other public catastrophe occurring in California, an organization authorized to conduct remote caller bingo games may, while that declaration is in effect, conduct a remote caller bingo game pursuant to this section with more than 750 participants in a single venue if the net proceeds of the game, after deduction of prizes and overhead expenses, are donated to or expended exclusively for the relief of the victims of the disaster or catastrophe, and the organization gives the California Gambling Control Commission at least 10 days' written notice of the intent to conduct that game. (4) An organization authorized to conduct remote caller bingo games shall provide the commission with at least 30 days' advance written notice of its intent to conduct a remote caller bingo game. AGENDA ITEM NO. 14 Page 15 of 21 That notice shall include all of the following: (A) The legal name of the organization and the address of record of the agent upon whom legal notice may be served. (B) The locations of the caller and remote players, whether the property is owned by the organization or donated, and if donated, by whom. (C) The name of the licensed caller and site manager. (D) The names of administrative, managerial, technical, financial, and security personnel employed. (E) The name of the vendor and any person or entity maintaining the equipment used to operate and transmit the game. (F) The name of the person designated as having a fiduciary responsibility for the game pursuant to paragraph (2) of subdivision (k). (G) The license numbers of all persons specified in subparagraphs (A) to (F), inclusive, who are required to be licensed. (H) A copy of the local ordinance for any city, county, or city and county in which the game will be played. The commission shall post the ordinance on its Internet Web site. (k) (1) A remote caller bingo game shall be operated and staffed only by members of the authorized organization that organized it. Those members shall not receive a profit, wage, or salary from any remote caller bingo game. only the organization authorized to conduct a remote caller bingo game shall operate that game, or participate in the promotion, supervision, or any other phase of a remote caller bingo game. Subject to the provisions of subdivision (m), this subdivision shall not preclude the employment of administrative, managerial, technical, financial, or security personnel who are not members of the authorized organization at a location participating in the remote caller bingo game by the organization conducting the game. Notwithstanding any other provisions of law, exclusive or other agreements between the authorized organization and other entities or persona to provide services in the administration, management, or conduct of the game shall not be considered a violation of the prohibition against holding a legally cognizable financial interest in the conduct of the remote caller bingo game by persons or entities other than the charitable organization, or other entity authorized to conduct the remote caller bingo games, provided that those persons or entities obtain the gambling licenses, the key employee licenses, or the work permits required by, and otherwise comply with, Chapter 5 (commencing with Section 19800) of Division 8 of the Business and Professions Code. Fees to be paid under any such agreements shall be reasonable and shall not be determined as a percentage of receipts or other revenues from, or be dependent on the outcome of, the game. (2) An organization that conducts a remote caller bingo game shall designate a person as having fiduciary responsibility for the game. (1) No individual, corporation, partnership, or other legal entity, except the organization authorized to conduct or participate in a remote caller bingo game, shall hold a legally cognizable financial interest in the conduct of such a game. (m) An organization authorized to conduct a remote caller bingo game pursuant to this section shall not have overhead costs exceeding 20 percent of gross sales, except that the limitations of this section shall not apply to one-time, nonrecurring capital acquisitions. For purposes of this subdivision, "overhead costs" includes, but is not limited to, amounts paid for rent and equipment leasing and the reasonable fees authorized to be paid to AGENDA ITEM NO. 14 Page 16 of 21 administrative, managerial, technical, financial, and security personnel employed by the organization pursuant to subdivision (d). For the purpose of keeping its overhead costs below 20 percent of gross sales, an authorized organization may elect to deduct all or a portion of the fees paid to financial institutions for the use and processing of credit card sales from the amount of gross revenues awarded for prizes. In that case, the redirected fees for the use and processing of credit card sales shall not be included in "overhead costa" as defined in the California Remote Caller Bingo Act. Additionally, fees paid to financial institutions for the use and processing of credit card sales shall not be deducted from the proceeds retained by the charitable organization. (n) No person shall be allowed to participate in a remote caller bingo game unless the person is physically present at the time and place where the remote caller bingo game is being conducted. A person shall be deemed to be physically present at the place where the remote caller bingo game is being conducted if he or she is present at any of the locations participating in the remote caller bingo game in accordance with this section. (o) (1) An organization shall not cosponsor a remote caller bingo game with one or more other organizations unless one of the following is true. (A) All of the cosponsors are affiliated under the master charter or articles and bylaws of a single organization. (B) All of the cosponsors are affiliated through an organization described in paragraph (1) of subdivision (b), and have the same Internal Revenue Service activity code. (2) Notwithstanding paragraph (1), a maximum of 10 unaffiliated organizations described in paragraph (1) of subdivision (b) may enter into an agreement to cosponsor a remote caller game, provided the game shall have not more than 10 locations. (3) An organization shall not conduct remote caller bingo more than one day per week. (4) Before sponsoring or operating any game authorized under paragraph (1) or (2), each of the cosponsoring organizations shall have entered into a written agreement, a copy of which shall be provided to the commission, setting forth how the expenses and proceeds of the game are to be allocated among the participating organizations, the bank accounts into which all receipts are to be deposited and from which all prizes are to be paid, and how game records are to be maintained and subjected to annual audit. (p) The value of prizes awarded during the conduct of any remote caller bingo game shall not exceed 37 percent of the gross receipts for that game. When an authorized organization elects to deduct fees paid for the use and processing of credit card sales from the amount of gross revenues for that game awarded for prizes, the maximum amount of gross revenues that may be awarded for prizes shall not exceed 37 percent of the gross receipts for that game, less the amount of redirected fees paid for the use and processing of credit card sales. Every remote caller bingo game shall be played until a winner is declared. Progressive prizes are prohibited. The declared winner of a remote caller bingo game shall provide his or her identifying information and a mailing address to the onsite manager of the remote caller bingo game. Prizes shall be paid only by check; no cash prizes shall be paid. The organization conducting the remote caller bingo game may issue a check to the winner at the time of the game, or may send a check to the declared winner by United States AGENDA ITEM NO. 14 Page 17 of 21 Postal Service certified mail, return receipt requested. All prize money exceeding state and federal exemption limits on prize money shall be subject to income tax reporting and withholding requirements under applicable state and federal laws and regulations and those reports and withholding shall be forwarded, within 10 business days, to the appropriate state or federal agency on behalf of the winner. A report shall accompany the amount withheld identifying the person on whose behalf the money is being sent. Any game interrupted by a transmission failure, electrical outage, or act of God shall be considered void in the location that was affected. A refund for a canceled game or games shall be provided to the purchasers. (q) (1) The California Gambling Control Commission shall regulate remote caller bingo, including, but not limited to, licensure and operation. The commission shall establish reasonable criteria regulating, and shall require the licensure of, the following: (A) Any person who conducts a remote caller bingo game pursuant to this section, including, but not limited to, an employee, a person having fiduciary responsibility for a remote caller bingo game, a site manager, and a bingo caller. (B) Any person who directly or indirectly manufactures, distributes, supplies, vends, leases, or otherwise provides supplies, devices, services, or other equipment designed for use in the playing of a remote caller bingo game by any nonprofit organization. (C) Beginning January 31, 2009, or a later date as may be established by the commission, all persons described in subparagraph (A) or (B) may submit to the commission a letter of intent to submit an application for licensure. The letter shall clearly identify the principal applicant, all categories under which the application will be filed, and the names of all those particular individuals who are applying. Each charitable organization shall provide an estimate of the frequency with which it plans to conduct remote caller bingo operations, including the number of locations. The letter of intent may be withdrawn or updated at any time. (2) (A) The Department of Justice shall conduct background investigations and conduct field enforcement as it relates to remote caller bingo consistent with the Gambling Control Act (Chapter 5 (commencing with Section 19800) of Division 8 of the Business and Professions Code) and as specified in regulations promulgated by the commission. (B) Fees to cover background investigation coats shall be paid and accounted for in accordance with Section 19867 of the Business and Professions Code. (3) (A) Every application for a license or approval shall be accompanied by a nonrefundable fee, the amount of which shall be adopted by the commission by regulation. (B) Fees and revenue collected pursuant to this paragraph shall be deposited in the California Bingo Fund, which is hereby created in the State Treasury. The funds deposited in the California Bingo Fund shall be available, upon appropriation by the Legislature, for expenditure by the commission and the department exclusively for the support of the commission and department in carrying out their duties and responsibilities under this section and Section 326.5. (C) A loan is hereby authorized from the Gambling Control Fund to the California Bingo Fund on or after January 1, 2009, in an amount of up to five hundred thousand dollars ($500,000) to fund operating, personnel, and other startup costs incurred by the commission relating to this act. Funds from the California Bingo Fund shall be AGENDA ITEM NO. 14 Page 18 of 21 available to the commission upon appropriation by the Legislature in the annual Budget Act. The loan shall be subject to all of the following conditions: (i) The loan shall be repaid to the Gambling Control Fund as soon as there is sufficient money in the California Bingo Fund to repay the amount loaned, but no later than five years after the date of the loan. (ii) Interest on the loan shall be paid from the California Bingo Fund at the rate accruing to moneys in the Pooled Money Investment Account. (iii) The terms and conditions of the loan are approved, prior to the transfer of funds, by the Department of Finance pursuant to appropriate fiscal standards. The commission may assess and collect reasonable fees and deposits as necessary to defray the costs of regulation and oversight. (r) The administrative, managerial, technical, financial, and security personnel employed by an organization that conducts remote caller bingo games shall apply for, obtain, and thereafter maintain valid work permits, as defined in Section 19805 of the Business and Professions Code. (a) An organization that conducts remote caller bingo games shall retain records in connection with the remote caller bingo game for five years. (t) (1) All equipment used for remote caller bingo shall be approved in advance by the California Gambling Control Commission pursuant to regulations adopted pursuant to subdivision (r) of Section 19841 of the Business and Professions code. (2) The California Gambling Control Commission shall monitor operation of the transmission and other equipment used for remote caller bingo, and monitor the game. (u) (1) As used in this section, "remote caller bingo game" means a game of bingo, as defined in subdivision (o) of Section 326.5, in which the numbers or symbols on randomly drawn plastic balls are announced by a natural person present at the site at which the live game is conducted, and the organization conducting the bingo game uses audio and video technology to link any of its in-state facilities for the purpose of transmitting the remote calling of a live bingo game from a single location to multiple locations owned, leased, or rented by that organization, or as described in subdivision (o) of this section. The audio or video technology used to link the facilities may include cable, Internet, satellite, broadband, or telephone technology, or any other means of electronic transmission that ensures the secure, accurate, and simultaneous transmission of the announcement of numbers or symbols in the game from the location at which the game is called by a natural person to the remote location or locations at which players may participate in the game. The drawing of each ball bearing a number or symbol by the natural person calling the game shall be visible to all players as the ball is drawn, including through a simultaneous live video feed at remote locations at which players may participate in the game. (2) The caller in the live game must be licensed by the California Gambling Control Commission. A game may be called by a nonlicensed caller if the drawing of balls and calling of numbers or symbols by that person is observed and personally supervised by a licensed caller. (3) Remote caller bingo games shall be played using traditional paper or other tangible bingo cards and daubers, and shall not be AGENDA ITEM NO. 14 Page 19 of 21 played by using electronic devices, except card-minding devices, as described in paragraph (1) of subdivision (p) of Section 326.5. (4) Prior to conducting a remote caller bingo game, the organization that conducts remote caller bingo shall submit to the commission the controls, methodology, and standards of game play, which shall include, but not be limited to, the equipment used to select bingo numbers and create or originate cards, control or maintenance, distribution to participating locations, and distribution to players. Those controls, methodologies, and standards shall be subject to prior approval by the commission, provided that the controls shall be deemed approved by the commission after 90 days from the date of submission unless disapproved. (v) A location shall not be eligible to participate in a remote caller bingo game if bingo games are conducted at that location in violation of Section 326.5 or any regulation adopted by the commission pursuant to Section 19841 of the Business and Professions code, including, but not limited to, a location at which unlawful electronic devices are used. (w) (1) The vendor of the equipment used in a remote caller bingo game shall have its books and records audited at least annually by an independent California certified public accountant and shall submit the results of that audit to the California Gambling Control Commission within 120 days after the close of the vendor's fiscal year. In addition, the California Gambling Control Commission may audit the books and records of the vendor at any time. (2) An authorized organization that conducts remote caller bingo games shall provide copies of the records pertaining to those games to the California Gambling Control Commission within 30 days after the end of each calendar quarter. In addition, those records shall be audited by an independent California certified public accountant at least annually and copies of the audit reports shall be provided to the California Gambling Control Commission within 120 days after the close of the organization's fiscal year. The audit report shall account for the annual amount of fees paid to financial institutions for the use and processing of credit card sales by the authorized organization and the amount of fees for the use and processing of credit card sales redirected from "overhead costs,, and deducted from the amount of gross revenues awarded for prizes. (3) The costs of the licensing and audits required by this section shall be borne by the person or entity required to be licensed or audited. The audit shall enumerate the receipts for remote caller bingo, the prizes disbursed, the overhead costs, and the amount retained by the nonprofit organization. The commission may audit the books and records of an organization that conducts remote caller bingo games at any time. (4) If, during an audit, the commission identifies practices in violation of this section, the license for the audited entity may be suspended pending review and hearing before the commission for a final determination. (5) No audit required to be conducted by the commission shall commence before January 1, 2010. (x) (1) The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application. (2) Notwithstanding paragraph (1), if paragraph (1) or (3) of subdivision (u), or the application of either of those provisions, is AGENDA ITEM NO. 14 Page 20 of 21 held invalid, this entire section shall be invalid. (y) The commission shall submit a report to the Legislature, on ox before January 1, 2012, on the fundraising effectiveness and regulation of remote caller bingo, and other matters that are relevant to the public interest regarding remote caller bingo. (z) The following definitions apply for purposes of this section: (1) "Commission" means the California Gambling Control Commission. (2) "Person" includes a natural person, corporation, limited liability company, partnership, trust, joint venture, association, ox any other business organization. AGENDA ITEM NO. 14 Page 21 of 21