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TO BE PUBLISHED IN THE OFFICIAL REPORTS
 

OFFICE OF THE ATTORNEY GENERAL
 

State of California
 

JOHN K. VAN DE KAMP
 

Attorney General
 

:
 

OPINION : No. 86-703
 

:
 

of : MAY 19, 1987 

:
 

JOHN K. VAN DE KAMP :
 

Attorney General :
 

:
 

RONALD M. WEISKOPF :
 

Deputy Attorney General :
 

:
 

THE HONORABLE STEVEN L. KABOT, City Prosecutor, City of 

Visalia, has requested an opinion on the following subject: 

Is a community college district, being exempt from the payment of state 

income or franchise taxes pursuant to the California Constitution, an organization which 

is authorized to conduct legal bingo games under the provisions of Penal Code section 

326.5 and a local ordinance adopted pursuant thereto? 

CONCLUSION 

A community college district is not an entity which may be authorized by 

local ordinance to conduct bingo games pursuant to the provisions of Penal Code section 

326.5. 

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ANALYSIS
 

A lottery is defined as "any scheme for the disposal or distribution of 

property by chance, among persons who have paid . . . any valuable consideration for the 

chance of obtaining such property or a portion of it. . . ." (Pen. Code, § 319.) Bingo is a 

game in which chance determines the possibility of winning, and consequently "when the 

elements of a prize and consideration are also present, a bingo game constitutes a lottery. 

[Citation.]" (60 Ops.Cal.Atty.Gen. 130, 131 (1977).) 

Until recently lotteries had generally been prohibited in California both 

constitutionally and statutorily (Cal. Const., art. IV, § 19, subd. (a); Pen. Code, pt. 1, tit. 

9, ch. 9, § 319, et seq.)1

, and bingo as a gambling game was prohibited as such. (City of 

Pomona v. Christian Fellowship Center (1981) 125 Cal.App.3d 250, 252.) In 1976, the 

voters approved a constitutional amendment to article IV, section 19 of the state 

constitution to permit the Legislature to "authorize cities and counties to provide for 

bingo games . . . for charitable purposes." (Cal. Const., art. IV, § 19, subd. (c)), and the 

Legislature has done so in Penal Code section 326.5. (See Live and Learn v. City of Los 

Angeles (1986) 188 Cal.App.3d 407, 415, fn. 4; People v. 8,000 Punchboard Card 

Devices (1983) 142 Cal.App.3d 618, 620; City of Pomona v. Christian Fellowship 

Center, supra; 60 Ops.Cal.Atty.Gen. 130, 131 supra.) Basically the section allows certain 

organizations that are exempt from the payment of the bank and corporations tax under 

specified sections of the Revenue and Taxation Code to conduct bingo games for 

charitable purposes pursuant to local ordinance.2 Community college districts do not fall 

1 A state lottery of course now exists (Cal. Const., art. IV, § 19, subd. (d); Gov. Code, 

tit. 2, div. 1, ch. 12.5, § 8880, et seq., the California State Lottery Act of 1984.) 

In 67 Ops.Cal.Atty.Gen. 528, 528-529 (1984) we summarized the relevant 

provisions of section 326.5 as follows: "Bingo must be authorized by a local ordinance 

which allows games to be conducted only by certain tax-exempt organizations, mobile 

home park associations and senior citizens organizations. The receipts are to be used 

only for charitable purposes. No person except security personnel employed by the 

organization conducting the games may receive a wage. No minors may participate in 

the games. The bingo games must be conducted on property owned or leased by the 

organization or on certain donated property. The games shall be open to the public and 

operated, staffed, promoted and supervised only by members of the organization, except 

for hired security personnel. No individual, corporation, partnership or other legal entity 

except the organization shall hold a financial interest in the conduct of the games. Profits 

and proceeds must be kept in special accounts and not commingled with other accounts. 

Except in the case of an organization exempt from tax under Revenue and Taxation Code 

section 23701d, the lesser of 20% or $1,000 per month of the proceeds may be used for 

rental of property and for overhead. Proceeds may be used for prizes, not exceeding 

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within any of the stated sections that are referred to in section 326.5, but they are exempt 

from taxation generally under the Constitution. (Cf., Cal. Const., art. XIII, § 26, subd. 

(c); (nonprofit educational institutions); The Housing Authority v. Dockweiler (1939) 14 

Cal.2d 437, 453, 455; and see, Cal. Const., art. III, § 3, subds. (b) and (d); San Marcos 

Water District v. San Marino Unified School District (1986) 42 Cal.3d 154, 160-162.) 

Since Penal Code section 326.5 does not limit the other anti-lottery provisions of the 

Penal Code (60 Ops.Cal.Atty.Gen., supra at 132), we are asked whether a community 

college district is thus nevertheless embraced thereunder so as to permit it to conduct 

bingo games pursuant to local ordinance. We conclude it is not. Penal Code section 

326.5, subdivision (a) provides: 

"(a) Neither this chapter nor Chapter 10 (commencing with Section 

330) applies to any bingo game which is conducted in a city, county, or city 

and county pursuant to an ordinance enacted under Section 19 of Article IV 

of the State Constitution, provided that such ordinance allows games to be 

conducted only by organizations exempted from the payment of the bank 

and corporation tax by Sections 23701a, 23701b, 23701d, 23701e, 23701f, 

23701g, and 23701l of the Revenue and Taxation Code and by mobile 

home park associations and senior citizens organizations; and provided that 

the receipts of such games are used only for charitable purposes." 

Part 11 of Division 2 of the Revenue and Taxation Code, the Bank and 

Corporation Tax Law, imposes an income/franchise tax on corporations doing business in 

this state. (Id., § 23151.) Sections 23701 through 23710 of that code exempt certain 

organizations therefrom. Among them are certain labor, agricultural or horticultural 

organizations (§ 23701a), certain fraternal beneficial societies, orders, or organizations 

(§ 23701b), certain religious, charitable, scientific, literary, educational, amateur sports 

or humanitarian corporations (§ 23701d), certain business leagues, chambers of 

commerce, real estate boards and boards of trade (§ 23701e), certain civic leagues, social 

welfare and employees' organizations (§ 23701f), certain nonprofit pleasure and 

recreation clubs (§ 23701g), and certain domestic fraternal societies, orders or 

associations (§ 23701l). 

A community college district does not fall within any of the sections 

offering exemptions from income tax exemption that are specifically mentioned in Penal 

Code section 326.5. If it were to be pigeon-holed in one of them it would be section 

23701d which provides an exemption for certain "[c]orporations . . . organized and 

operated exclusively for . . . educational purposes. . . ." But that section is not so 

accommodating. While community college districts (Ed. Code, tit. 3, div. 7), as school 

$250 in value for each separate game, and for fees." 

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districts, have been described as "corporation[s] organized for educational purposes" (see 

Barber v. Mulford (1897) 117 Cal. 356, 358; 57 Ops.Cal.Atty.Gen. 155, 158 (1974); cf. 

Turlock Irr. Dist. v. White (1921) 186 Cal. 183, 187, 190), they are not corporations in 

the strict sense. (Id., at 187, 189, 190) Rather, they are essentially agencies of the state 

for the local operation of the state school system (Hall v. City of Taft (1956) 47 Cal.2d 

177, 181; Butler v. Compton Junior College Dist. (1947) 77 Cal.App.2d 719, 728) and 

their sometimes being denominated as (public or municipal) corporations is nothing more 

than a way of recognizing that essential. (Butler v. Compton Junior College Dist., supra; 

cf. Turlock Irr. Dist. v. White, supra, at 190.) That being so, not only would a community 

college district not be an educational corporation within the meaning of section 23701d, 

but it would not be one which would be subject to the Bank and Corporations Law at all. 

That law imposes a tax on 

— "every corporation doing business within the limits of the state 

and not expressly exempted from taxation by the provisions of the 

constitution . . . for the privilege of exercising its corporate franchises. . . ." 

(Rev. & Tax. Code, § 23157, subd. (a).) 

Since "doing business" is defined as "actively engaging in any transaction for the purpose 

of financial or pecuniary gain or profit (§ 23101), which community college districts do 

not, they would not be subject to the Law's embrace and so they would not be 

"corporations" to be excepted from it. 

But perhaps more important, going to their essential, is the fact that public 

entities or agencies such as community college districts, although sometimes classified as 

"public corporations," have long been held to be exempt from taxation or special 

assessment. (San Marcos Water District v. San Marcos Unified School District, supra, 

42 Cal.3d at 160-161; cf., The Housing Authority v. Dockweiler, supra, 14 Cal.2d at 453-

454; Turlock Irr. Dist. v. White, supra, 186 Cal. at 190; Water District v. County of 

Orange (1939) 30 Cal.App.2d 740, 742-743.) As the court said in Water District v. 

County of Orange, ". . . [I]t has always been the policy of the law in California, since the 

adoption of the present Constitution, to exempt from taxation property of the state and 

state agencies generally classified as public corporations. . . ." (30 Cal.App.2d at 742.)3 

We note that the constitution expressly exempts property owned by the state, 

property owned by local governments, and building land and equipment used exclusively 

for community colleges from property taxation (Cal. Const., art. XIII, § 3, subds. (a), (b) 

and (d)) respectively), and income of nonprofit educational institutions of collegiate 

grade that is used for educational purposes, from income tax. (Cal. Const., art XIII, § 26, 

subd. (c).) A community college district maintains one or more community colleges. 

(Ed. Code, § 72011.) 

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The rationale for such exemption "is to prevent one tax-supported entity from siphoning 

tax money from another such entity . . . [with] no actual gain in tax revenues." (San 

Marcos Water District v. San Marcos Unified School District, supra, at 161.) 

Community college districts thus are not covered by the Bank and 

Corporation Law, and it is therefore not unexpected that the sections of that law which 

offer exemption from its coverage do not include them. Nevertheless, it is suggested that 

inasmuch as community college districts are "exempted from the payment of the bank 

and corporations tax," albeit for reasons other than being included in the particular 

sections of the Bank and corporations law that are mentioned in Penal Code section 

326.5, that they may thus still qualify to be authorized to conduct bingo games. We 

believe that not to be the case, their exemption from taxation notwithstanding. 

By section 326.5 the Legislature has authorized cities and counties to 

provide for bingo games by local ordinance, pursuant to a specially enacted constitutional 

amendment that was necessary for it to do so. (Compare, art. IV, § 19, subd. (c) with id., 

subd. (a).) In that authorization, however, the Legislature "provided that such ordinance 

allow games to be conducted only by organizations exempted from the payment of the 

bank and corporation tax by [certain] Sections of the Revenue and Taxation Code." (Pen. 

Code, § 326.5, subd. (a); emphasis added.) That proviso limits the basic authorization for 

cities and counties to provide for bingo games and deprives it of any force inconsistent 

with it. (Cf. McAlpine v. Baumgartner (1937) 10 Cal.2d 409, 417; Livermore v. Waite 

(1894) 102 Cal. 113, 120 (provisos).) The proviso restricting the authorization of section 

326.5 is quite specific as to which organizations are meant to be eligible to conduct bingo 

games pursuant to local ordinance. It does not speak in general terms of organizations or 

entities which may be exempt from taxation for whatever reason, but rather specifically 

designates only those so exempt by reason of certain sections of the Revenue and 

Taxation Code's Bank and Corporations Law. Community college districts, as well as 

other entities which may enjoy other-derived exemption from the bank and corporations 

tax, are not included in those specific references. It is a general tenet of statutory 

construction that a specification of certain things as coming within the operation or 

exception of a statute will preclude the inclusion of other things not mentioned (Collins v. 

City & Co. of S.F. (1952) 112 Cal.App.2d 719, 731; Rick v. State Board of Optometry 

(1965) 235 Cal.App.2d 591, 607), as it is to be inferred that they were intentionally 

excluded by the specific enumeration. (Wildlife Alive v. Chickering (1976) 18 Cal.3d 

190, 196; De Weese v. Unick (1980) 102 Cal.App.3d 100, 106.) That tenet has particular 

force here because the Legislature has preceded the specific enumeration with the word 

"only", which is itself a word "'of restriction as to that which it qualifies and of exclusion 

as to other things.'" (White Stores v. Atkins (Tenn. 1957) 303 S.W.2d 720, 726; see also, 

People v. Fair (1972) 43 Cal. 137, 146-147.) Further, we are also taught that exceptions 

are usually strictly construed (City of National City v. Fritz (1949) 33 Cal.2d 635, 636; 

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Pardee Construction Co. v. California Coastal Com. (1979) 95 Cal.App.3d 471, 478), 

and section 326.5 and its constitutional base (art. IV, § 19, subd. (c)) constitute but a 

narrow exception to the public policy of this state against gambling. (Cf., In re Goddard 

(1937) 24 Cal.App.2d 132, 140-141; 66 Ops.Cal.Atty.Gen. 94, 101 (1983).) "Since bingo 

[games] exist and operate only by virtue of a special constitutional and statutory 

permission, . . . in allowing such games to operate within the [a locality], [a local agency] 

may give that permission only on the terms of the legislative permit." (City of Pomona v. 

Christian Fellowship Center, supra, 125 Cal.App.3d 250, 253; accord, 60 

Ops.Cal.Atty.Gen. 130, 132, supra.) Community college districts are not included in the 

terms of that permit and we therefore conclude that they are not organizations which may 

be authorized by local ordinance to conduct bingo games pursuant to it, their general 

exemption from bank and corporation taxation notwithstanding. Needless to say, without 

such authorization they may not legally conduct bingo games. (Pen. Code, § 319 et seq.; 

60 Ops.Cal.Atty.Gen. 130, 132, supra.) 

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