By Wilson H.B. No. 1587
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the operation of the state lottery; creating the State
1-3 Lottery Commission; providing penalties.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Sections 1.02(1) and (2), State Lottery Act
1-6 (Article 179g, Vernon's Texas Civil Statutes), are amended to read
1-7 as follows:
1-8 (1) "Commission" means the State Lottery Commission
1-9 <"Director" means the director of the division>.
1-10 (2) "Executive director" means the executive director
1-11 of the commission <"Division" means the lottery division
1-12 established in the office of the comptroller under this Act>.
1-13 SECTION 2. Sections 1.03 and 2.01, State Lottery Act
1-14 (Article 179g, Vernon's Texas Civil Statutes), are amended to read
1-15 as follows:
1-16 Sec. 1.03. Application of Sunset Act. <(a)> The commission
1-17 <lottery division> is subject to Chapter 325, Government Code
1-18 (Texas Sunset Act). Unless continued in existence as provided by
1-19 that chapter, the commission <division> is abolished and this Act
1-20 expires September 1, 2003.
1-21 <(b) A contract between the division and a lottery operator
1-22 under Section 2.02(g) of this Act must terminate on or before
1-23 September 1, 2004.>
1-24 Sec. 2.01. EXECUTIVE DIRECTOR <Lottery Division>. (a) <A
2-1 division to administer a state lottery is created in the office of
2-2 the comptroller. The division is administered by the director.>
2-3 <(b)> The governor <comptroller> shall appoint a person to
2-4 serve as executive director with the advice and consent of the
2-5 senate <and chief executive officer of the division subject to the
2-6 comptroller's direction>. The executive director holds office for
2-7 a term concurrent with that <at the will> of the governor
2-8 <comptroller> and is specifically exempted from the Position
2-9 Classification Act of 1961 (Article 6252-11, Vernon's Texas Civil
2-10 Statutes). The executive director is entitled to receive an annual
2-11 salary in an amount set by the commission <comptroller>. The
2-12 executive director also is entitled to reimbursement for expenses
2-13 actually and necessarily incurred in the performance of the
2-14 executive director's duties.
2-15 (b) <(c)> The executive director may create, abolish,
2-16 transfer, and consolidate bureaus and other units in the commission
2-17 <division> that are not expressly established by law as the
2-18 executive director determines to be necessary for the efficient
2-19 operation of the commission <division>.
2-20 (c) <(d)> Except as otherwise provided by law, the executive
2-21 director may appoint deputies, assistants, other officers and
2-22 employees, committees, and consultants and may prescribe their
2-23 powers and their expenses. Commission <Division> employees serve
2-24 at the will of the executive director. The executive director may
2-25 not employ any person who would be denied a license as a sales
2-26 agent under Section 3.02 of this Act. The executive director may
2-27 not employ or continue to employ any person who owns a financial
3-1 interest in a lottery sales agency or a lottery operator.
3-2 (d) <(e)> The executive director may employ or contract with
3-3 marketing representatives to promote the sale of tickets, to
3-4 encourage persons to apply to become sales agents, or to
3-5 investigate the qualifications of sales agent applicants. The
3-6 marketing representatives are exempted from the Position
3-7 Classification Act of 1961 (Article 6252-11, Vernon's Texas Civil
3-8 Statutes) and may be compensated based on a sales incentive system
3-9 to be established by the executive director.
3-10 (e) <(f)> The legislature intends that the commission
3-11 <division> be a self-supporting, revenue-raising agency of state
3-12 government. Except as provided by <Subsection (g) of this section
3-13 or by> Section 13, Chapter 6 <of H.B. No. 54>, Acts of the 72nd
3-14 Legislature, 1st Called Session, 1991, no appropriation, loan, or
3-15 other transfer of state funds may be made to the commission
3-16 <division>.
3-17 <(g) The comptroller may transfer to the division amounts
3-18 appropriated to the comptroller for purposes other than the
3-19 administration of this Act. If the comptroller proposes to
3-20 transfer amounts under this subsection, the comptroller shall
3-21 notify the Legislative Budget Board in writing of the amount of the
3-22 proposed transfer. The comptroller may not make the proposed
3-23 transfer unless the board approves it. If the board does not
3-24 approve or disapprove the proposed transfer before the 10th day
3-25 after the date that the comptroller notifies the board of the
3-26 proposed transfer, the board is considered to have approved the
3-27 transfer. If the board disapproves the proposed transfer, the
4-1 comptroller may request the governor to make a proposal for the
4-2 transfer of an appropriation as provided by Chapter 317, Government
4-3 Code.>
4-4 <(h) The comptroller shall reimburse any amount of an
4-5 appropriation transferred under Subsection (g) of this section to
4-6 the account or fund from which it was transferred. The
4-7 reimbursement must:>
4-8 <(1) be made from funds received by the comptroller
4-9 for license fees and ticket sales under this Act; and>
4-10 <(2) be made not later than the first anniversary of
4-11 the date of the transfer.>
4-12 <(i) The comptroller's authority to transfer funds to the
4-13 division under Subsection (g) of this section expires September 1,
4-14 1993. This subsection and Subsections (g) and (h) of this section
4-15 expire January 1, 1995.>
4-16 (f) <(j)> Commission <Division> employees are specifically
4-17 exempted from the Position Classification Act of 1961 (Article
4-18 6252-11, Vernon's Texas Civil Statutes). The salary of these
4-19 employees shall be set by the executive director.
4-20 (g) <(l)> The legislature intends that advertisements or
4-21 promotions sponsored by the commission <comptroller's office or the
4-22 division> for the lottery not be of a nature that unduly influences
4-23 any person to purchase a lottery ticket or number.
4-24 SECTION 3. Section 2.02, State Lottery Act (Article 179g,
4-25 Vernon's Texas Civil Statutes), is amended to read as follows:
4-26 Sec. 2.02. POWERS AND DUTIES OF EXECUTIVE <COMPTROLLER,>
4-27 DIRECTOR<,> AND COMMISSION <DIVISION>. (a) The commission
5-1 <comptroller> and executive director have broad authority and shall
5-2 exercise strict control and close supervision over all lottery
5-3 games conducted in this state to promote and ensure integrity,
5-4 security, honesty, and fairness in the operation and administration
5-5 of the lottery.
5-6 (b) The commission <comptroller> shall adopt all rules
5-7 necessary to administer this Act. The executive director may
5-8 propose rules to be adopted by the commission <comptroller>, but
5-9 the executive director's proposed rules have no effect until
5-10 adopted by the commission <comptroller>.
5-11 (c) The commission <comptroller> shall adopt rules to the
5-12 extent they are not inconsistent with the Open Meetings Act
5-13 (Article 6252-17, Vernon's Texas Civil Statutes) and the Open
5-14 Records Act (Article 6252-17a, Vernon's Texas Civil Statutes)
5-15 governing the:
5-16 (1) security for the lottery and the commission
5-17 <division>, including the development of an internal security plan;
5-18 (2) apportionment of the total revenues from the sale
5-19 of tickets and from all other sources in the amounts provided by
5-20 this Act;
5-21 (3) enforcement of prohibitions on the sale of tickets
5-22 to or by an individual younger than 18 years of age; and
5-23 (4) enforcement of prohibitions on a person playing a
5-24 lottery game or activity by telephone.
5-25 (d) The commission <comptroller> may adopt rules governing
5-26 the establishment and operation of the lottery, including rules
5-27 governing:
6-1 (1) the type of lottery games or activities to be
6-2 conducted;
6-3 (2) the price of each ticket;
6-4 (3) the number of winning tickets and amount of the
6-5 prize paid on each winning ticket;
6-6 (4) the frequency of the drawing or selection of a
6-7 winning ticket;
6-8 (5) the number and types of locations at which a
6-9 ticket may be sold;
6-10 (6) the method to be used in selling a ticket;
6-11 (7) the use of vending machines or electronic or
6-12 mechanical devices of any kind, other than machines or devices that
6-13 dispense currency or coins as prizes;
6-14 (8) the manner of paying a prize to the holder of a
6-15 winning ticket;
6-16 (9) the investigation of possible violations of this
6-17 Act or any rule adopted under this Act;
6-18 (10) the means of advertising to be used for the
6-19 lottery;
6-20 (11) the qualifications of vendors of lottery services
6-21 or equipment;
6-22 (12) the confidentiality of information relating to
6-23 the operation of the lottery, including:
6-24 (A) trade secrets;
6-25 (B) security measures, systems, or procedures;
6-26 (C) security reports;
6-27 (D) bids or other information regarding the
7-1 commission's <division's> contracts, if disclosure of the
7-2 information would impair the commission's <division's> ability to
7-3 contract for facilities, goods, or services on terms favorable to
7-4 the commission <division>;
7-5 (E) personnel information unrelated to
7-6 compensation, duties, qualifications, or responsibilities; and
7-7 (F) information obtained by commission
7-8 <division> security officers or investigators;
7-9 (13) the development and availability of a model
7-10 agreement governing the division of a prize among multiple
7-11 purchasers of a winning ticket purchased through a group purchase
7-12 or pooling arrangement;
7-13 (14) the criteria to be used in evaluating bids for
7-14 contracts for lottery facilities, goods, and services; or
7-15 (15) any other matter necessary or desirable as
7-16 determined by the commission <comptroller>, to promote and ensure:
7-17 (A) the integrity, security, honesty, and
7-18 fairness of the operation and administration of the lottery; and
7-19 (B) the convenience of players and holders of
7-20 winning tickets.
7-21 (e) If the executive director authorizes a person who is not
7-22 an employee of the commission <division> to sell tickets, the
7-23 person must be licensed as a sales agent by the commission
7-24 <division>. The executive director may establish a provisional
7-25 license or other classes of licenses necessary to regulate and
7-26 administer the quantity and type of lottery games or activities
7-27 provided at each licensed location. Each sales agent shall post a
8-1 cash bond, surety bond, letter of credit, certificate of deposit,
8-2 or other security approved by the executive director, including the
8-3 contribution of cash to a pooled bond fund established by the
8-4 executive director to protect the state from possible losses. The
8-5 amount of the security shall be determined by the executive
8-6 director and shall reflect the possible losses to the state from
8-7 the operation of the sales agent. The executive director may also
8-8 require a sales agent to maintain insurance if necessary to protect
8-9 the interests of the state. As prescribed by rule <division
8-10 rules>, each sales agent shall prominently display the license in
8-11 each place of business or activity at which the sales agent sells
8-12 tickets.
8-13 (f) The commission <comptroller> shall make an annual report
8-14 to the governor and the legislature that provides a summary of
8-15 lottery revenues, prize disbursements, and other expenses for the
8-16 fiscal year preceding the report. The report must be in the form
8-17 and reported in the time provided by the General Appropriations
8-18 Act.
8-19 (g) The executive director may contract with or employ a
8-20 person to perform a function, activity, or service in connection
8-21 with the operation of the lottery as prescribed by the executive
8-22 director. A person with whom the executive director contracts to
8-23 operate a lottery must be eligible for a sales agent license under
8-24 Section 3.02 of this Act.
8-25 (h) <A contract for independent consulting, management
8-26 services, or activities related to the establishment or
8-27 implementation of lottery operations is not subject to:>
9-1 <(1) the State Purchasing and General Services Act
9-2 (Article 601b, Vernon's Texas Civil Statutes);>
9-3 <(2) the Professional Services Procurement Act
9-4 (Article 664-4, Vernon's Texas Civil Statutes);>
9-5 <(3) Chapter 454, Acts of the 65th Legislature,
9-6 Regular Session, 1977 (Article 6252-11c, Vernon's Texas Civil
9-7 Statutes); or>
9-8 <(4) the Information Resources Management Act (Article
9-9 4413(32j), Revised Statutes).>
9-10 <(i) This subsection and Subsection (h) of this section
9-11 expire September 1, 1993.>
9-12 <(j)> Each lottery operator's and sales agent's records are
9-13 subject to audit by the commission <division, the comptroller,> and
9-14 the state auditor. For the purpose of carrying out this Act, the
9-15 executive director<, comptroller,> or state auditor may examine all
9-16 books, records, papers, or other objects that the executive
9-17 director<, comptroller,> or state auditor determines are necessary
9-18 for conducting a complete examination under this Act and may also
9-19 examine under oath any officer, director, or employee of a lottery
9-20 operator or sales agent. The executive director<, comptroller,> or
9-21 state auditor may conduct an examination at the principal office or
9-22 any other office of the lottery operator or sales agent or may
9-23 require the lottery operator or sales agent to produce the records
9-24 at the office of the commission <division, comptroller,> or state
9-25 auditor. If a sales agent refuses to permit an examination or to
9-26 answer any question authorized by this subsection, the executive
9-27 director <comptroller> may summarily suspend the license of the
10-1 sales agent under Section 3.03 of this Act until the examination is
10-2 completed as required. Section 321.013(h), Government Code, does
10-3 not apply to an audit of a lottery operator or sales agent.
10-4 (i) <(k)> The commission <comptroller> shall adopt rules
10-5 prohibiting the operation of any game using a video lottery machine
10-6 or machine. As used in this subsection "video lottery machine" or
10-7 "machine" means any electronic video game machine that, upon
10-8 insertion of cash, is available to play or simulate the play of a
10-9 video game, including but not limited to video poker, keno, and
10-10 blackjack, utilizing a video display and microprocessors in which
10-11 the player may receive free games or credits that can be redeemed
10-12 for cash, coins or tokens, or that directly dispenses cash, coins,
10-13 or tokens.
10-14 SECTION 4. Article 2, State Lottery Act (Article 179g,
10-15 Vernon's Texas Civil Statutes), is amended by adding Section 2.021
10-16 to read as follows:
10-17 Sec. 2.021. REVIEW BY COMPTROLLER. The comptroller shall
10-18 perform an annual review of the management and operations of the
10-19 lottery and may examine such books, records, documents, things, or
10-20 persons as may be necessary for that purpose. The comptroller
10-21 shall report the results of his review to the governor, lieutenant
10-22 governor, and speaker of the house of representatives.
10-23 SECTION 5. Article 2, State Lottery Act (Article 179g,
10-24 Vernon's Texas Civil Statutes), is amended by adding Section 2.022
10-25 to read as follows:
10-26 Sec. 2.022. COMPTROLLER POWERS OVER MANAGEMENT. Nothing in
10-27 this Act empowers the comptroller to be involved in the day-to-day
11-1 management and operations of the commission. The comptroller has
11-2 no authority beyond that expressly provided by this Act or by
11-3 general law in relation to state agencies generally.
11-4 SECTION 6. Section 2.03(a), State Lottery Act (Article 179g,
11-5 Vernon's Texas Civil Statutes), is amended to read as follows:
11-6 (a) The executive director or a lottery operator may not
11-7 establish or operate a lottery game or activity in which the winner
11-8 is chosen on the basis of the outcome of a sports event.
11-9 SECTION 7. Sections 2.04(a)-(f), (h), and (k), State Lottery
11-10 Act (Article 179g, Vernon's Texas Civil Statutes), are amended to
11-11 read as follows:
11-12 (a) The executive director may establish procedures for the
11-13 purchase or lease of facilities, goods, and services and make any
11-14 purchases, leases, or contracts that are necessary for carrying out
11-15 the purposes of this Act. The procedures shall, as determined
11-16 feasible and appropriate by the executive director, promote
11-17 competition to the maximum extent possible. In all procurement
11-18 decisions, the executive director shall take into account the
11-19 particularly sensitive nature of the lottery and shall act to
11-20 promote and ensure integrity, security, honesty, and fairness in
11-21 the operation and administration of the lottery and the objective
11-22 of producing revenues for the state treasury.
11-23 (b) The executive director may not award a contract for the
11-24 purchase or lease of facilities, goods, or services related to
11-25 lottery operations to a person who would be denied a license as a
11-26 sales agent under Section 3.02 of this Act.
11-27 (c) The procurement procedures adopted by the executive
12-1 director shall, as determined feasible and appropriate by the
12-2 executive director, afford any party who is aggrieved by the terms
12-3 of a solicitation or the award of a contract an opportunity to
12-4 protest the executive director's action to the commission
12-5 <comptroller>. The protest procedures shall provide for an
12-6 expedient resolution of the protest in order to avoid substantially
12-7 delaying a solicitation or contract award that is necessary for the
12-8 timely implementation of a lottery game. A protest must be in
12-9 writing and be filed with the commission <comptroller> not later
12-10 than 72 hours after receipt of notice of the executive director's
12-11 action.
12-12 (d) A party who is aggrieved by the commission's
12-13 <comptroller's> resolution of a protest under Subsection (c) of
12-14 this section may file an action in the district court of Travis
12-15 County. The court shall give preference to hearings and trials of
12-16 actions under this section. If the party filing the action seeks
12-17 to enjoin the implementation of a solicitation or contract, the
12-18 party shall post a bond that is payable to the state if the party
12-19 does not prevail in the appeal, and is in an amount sufficient to
12-20 compensate the state for the revenue that would be lost due to the
12-21 delay in lottery operations.
12-22 (e) A contract for the acquisition or provision of
12-23 facilities, supplies, equipment, materials, or services related to
12-24 the operation of the lottery shall provide for liquidated damages
12-25 and a performance bond in an amount equal to the executive
12-26 director's best available estimate of the revenue that would be
12-27 lost if the contractor fails to meet deadlines specified in the
13-1 contract.
13-2 (f) On request of the executive director, the <State
13-3 Purchasing and> General Services Commission shall assist the
13-4 executive director in:
13-5 (1) acquiring facilities, supplies, materials,
13-6 equipment, and services under the State Purchasing and General
13-7 Services Act (Article 601b, Vernon's Texas Civil Statutes); or
13-8 (2) establishing procedures for the executive
13-9 director's accelerated acquisition of facilities, supplies,
13-10 materials, equipment, and services for the operation of the
13-11 lottery.
13-12 (h) Notwithstanding the provisions of the Public Utility
13-13 Regulatory Act (Article 1446c, Vernon's Texas Civil Statutes), the
13-14 executive director <comptroller> may negotiate rates and execute
13-15 contracts with telecommunications service providers for the
13-16 interexchange services necessary for the operation of the lottery.
13-17 The executive director <comptroller> may acquire transmission
13-18 facilities by lease, purchase, or lease-purchase. The acquisition
13-19 of transmission facilities shall be done on a competitive bid basis
13-20 if possible.
13-21 (k) The commission <comptroller> shall require any person
13-22 seeking to contract for goods or services relating to the
13-23 implementation and administration of this Act to submit to
13-24 competitive bidding procedures in accordance with rules established
13-25 by the commission <comptroller>. Such procedures shall be for the
13-26 purpose of insuring fairness and integrity.
13-27 SECTION 8. Section 2.05(a), State Lottery Act (Article 179g,
14-1 Vernon's Texas Civil Statutes), is amended to read as follows:
14-2 (a) In all contracts for lottery equipment, supplies,
14-3 services, and advertising, the commission <division> and each
14-4 lottery operator shall give preference to equipment or supplies
14-5 produced in this state or services or advertising offered by
14-6 bidders from this state, the cost to the state and quality being
14-7 equal.
14-8 SECTION 9. Sections 2.06(a) and (c), State Lottery Act
14-9 (Article 179g, Vernon's Texas Civil Statutes), are amended to read
14-10 as follows:
14-11 (a) The executive director<, the division,> and each lottery
14-12 operator shall take positive steps to:
14-13 (1) inform minority businesses of opportunities to:
14-14 (A) provide lottery equipment and supplies to
14-15 the commission <division>;
14-16 (B) provide services, including advertising, to
14-17 the commission <division> for the operation of the lottery; or
14-18 (C) obtain a license to sell lottery tickets;
14-19 (2) waive or modify bond requirements, if feasible;
14-20 (3) award contracts for lottery equipment or supplies
14-21 to minority businesses when possible;
14-22 (4) award contracts for lottery services, including
14-23 advertising, to minority businesses when possible;
14-24 (5) license minority businesses as sales agents;
14-25 (6) monitor the effectiveness of the efforts to
14-26 increase the ability of minority businesses to do business with the
14-27 commission <division>; and
15-1 (7) require all bidders or contractors, when
15-2 appropriate, to include specific plans or arrangements to utilize
15-3 subcontracts with minority businesses.
15-4 (c) The commission <comptroller> shall annually report to
15-5 the legislature and the governor on the level of minority business
15-6 participation as pertains to both the commission's <division's>
15-7 contracts and the licensure of sales agents. The report shall
15-8 include recommendations for the improvement of minority business
15-9 opportunities in lottery-related business.
15-10 SECTION 10. Sections 2.07-2.11, State Lottery Act (Article
15-11 179g, Vernon's Texas Civil Statutes), are amended to read as
15-12 follows:
15-13 Sec. 2.07. Television Contracts. If the drawing or
15-14 selection of winning tickets is televised under a contract with the
15-15 commission <division>, the contract must be awarded by competitive
15-16 bid. The commission <comptroller> shall adopt rules governing the
15-17 competitive bidding process. Money received under the contract
15-18 shall be deposited in the state lottery account established under
15-19 Section 5.02 of this Act.
15-20 Sec. 2.08. Publicity of Individuals Prohibited. A state
15-21 officer <or employee>, including a commission member or <the
15-22 comptroller,> the executive director, or an officer or employee of
15-23 the commission <comptroller's office or the division,> may not
15-24 appear in a paid <an> advertisement <or promotion> for the lottery
15-25 that is sponsored by the commission <comptroller's office or the
15-26 division> or in a televised lottery drawing. A paid <An>
15-27 advertisement <or promotion> for the lottery may not contain the
16-1 likeness or name of a state officer <or employee>, including a
16-2 commission member or <the comptroller,> the executive director, or
16-3 an officer or employee of the commission <comptroller's office or
16-4 the division>. In connection with providing security for the
16-5 lottery, this section shall not prohibit a security officer or
16-6 investigator employed by the commission <division> from appearing
16-7 in a televised lottery drawing <or other promotion> for the lottery
16-8 that is sponsored by the commission <comptroller's office or the
16-9 division>. Notwithstanding the provisions of this section, the
16-10 executive director may designate an employee of the commission
16-11 <division> to participate in a promotional event<, the purpose of
16-12 which is to award a prize>.
16-13 Sec. 2.09. Audit. The executive director shall provide for
16-14 a certified public accountant to conduct an independent audit for
16-15 each fiscal year of all accounts and transactions of the lottery.
16-16 The certified public accountant may not have, as determined by the
16-17 executive director, a significant financial interest in a sales
16-18 agent, lottery vendor, or lottery operator. The certified public
16-19 accountant shall present an audit report to the executive director,
16-20 the commission <comptroller>, the governor, and the legislature not
16-21 later than April 1 of the year following the fiscal year for which
16-22 the audit was performed. The report must contain recommendations
16-23 to enhance the earnings capability of the lottery and improve the
16-24 efficiency of lottery operations. The state auditor may review the
16-25 results of and working papers related to the audit.
16-26 Sec. 2.10. Investigations. The attorney general, the
16-27 district attorney for Travis County, or the district attorney,
17-1 criminal district attorney, or county attorney performing the
17-2 duties of district attorney for the county in which the violation
17-3 or alleged violation occurred may investigate a violation or
17-4 alleged violation of this Act and of the penal laws of this state
17-5 by the commission <division> or its employees, a sales agent, a
17-6 lottery vendor, or a lottery operator.
17-7 Sec. 2.11. Enforcement. (a) The executive director
17-8 <comptroller> or designated personnel of the commission <division>
17-9 may investigate violations of this Act and violations of the rules
17-10 adopted under this Act. After conducting investigations, the
17-11 executive director <comptroller>, a person designated by the
17-12 commission <comptroller>, or any law enforcement agency may file a
17-13 complaint with the district attorney of Travis County or with the
17-14 district attorney of the county in which a violation is alleged to
17-15 have occurred.
17-16 (b) The executive director <comptroller> has the
17-17 administrative, enforcement, and collection powers provided by
17-18 Subtitle B, Title 2, Tax Code, in regard to the lottery. For
17-19 purposes of the application of Title 2 of the Tax Code:
17-20 (1)<,> the state's share of proceeds from the sale of
17-21 lottery tickets is treated as if it were a tax; and
17-22 (2) a power granted to the comptroller may be
17-23 exercised by the commission.
17-24 SECTION 11. Article 2, State Lottery Act (Article 179g,
17-25 Vernon's Texas Civil Statutes), is amended by adding Section 2.091
17-26 to read as follows:
17-27 Sec. 2.091. FINANCIAL REPORT. (a) Not later than April 15,
18-1 1994, the commission and the state auditor jointly shall prepare a
18-2 financial report covering lottery operations for the period
18-3 beginning on the date that the commission begins administering this
18-4 Act and ending on February 28, 1994.
18-5 (b) Not later than October 15, 1994, the commission and the
18-6 state auditor jointly shall prepare a financial report covering
18-7 lottery operations for the period beginning on March 1, 1994, and
18-8 ending on August 31, 1994.
18-9 (c) Not later than April 15, 1995, the commission and the
18-10 state auditor jointly shall prepare a financial report covering
18-11 lottery operations for the period beginning on September 1, 1994,
18-12 and ending on February 28, 1995.
18-13 (d) Not later than October 15, 1995, the commission and the
18-14 state auditor jointly shall prepare a financial report covering
18-15 lottery operations for the period beginning on March 1, 1995, and
18-16 ending on August 31, 1995.
18-17 (e) The commission shall deliver a report prepared under
18-18 this section to the governor, the lieutenant governor, and each
18-19 member of the legislature.
18-20 (f) This section expires January 1, 1996.
18-21 SECTION 12. Article 2, State Lottery Act (Article 179g,
18-22 Vernon's Texas Civil Statutes), is amended by adding Section 2.111
18-23 to read as follows:
18-24 Sec. 2.111. VENUE. Venue is proper in Travis County or any
18-25 county in which venue is proper under Chapter 13, Code of Criminal
18-26 Procedure, and its subsequent amendments for:
18-27 (1) an offense under this Act;
19-1 (2) an offense under the Penal Code, if the accused:
19-2 (A) is a lottery operator, lottery vendor, sales
19-3 agent, or employee of the division; and
19-4 (B) is alleged to have committed the offense
19-5 while engaged in lottery activities; or
19-6 (3) an offense that involves property consisting of or
19-7 including lottery tickets under Title 7 or 11, Penal Code, and its
19-8 subsequent amendments.
19-9 SECTION 13. Sections 2.12(a)-(f), State Lottery Act (Article
19-10 179g, Vernon's Texas Civil Statutes), are amended to read as
19-11 follows:
19-12 (a) The executive director shall maintain a department of
19-13 security in the commission <division>. The executive director
19-14 shall appoint a deputy to administer the department. The deputy
19-15 must be qualified by training and experience in law enforcement or
19-16 security to supervise, direct, and administer the activities of the
19-17 department.
19-18 (b) The executive director may employ security officers or
19-19 investigators as the executive director considers necessary and may
19-20 commission security officers or investigators as peace officers.
19-21 The deputy and all investigators employed by the department of
19-22 security as peace officers must meet the requirements under Chapter
19-23 415, Government Code, for employment and commission as peace
19-24 officers.
19-25 (c) A security officer or investigator employed by the
19-26 department of security or a peace officer who is working in
19-27 conjunction with the commission <comptroller> or the Department of
20-1 Public Safety in the enforcement of this Act, without a search
20-2 warrant, may search and seize a lottery vending machine, lottery
20-3 computer terminal, or other lottery equipment that is located on
20-4 premises for which a person holds a sales agent license issued
20-5 under this Act.
20-6 (d) The Department of Public Safety, at the commission's
20-7 <comptroller's> request, shall perform a full criminal background
20-8 investigation of a prospective deputy or investigator of the
20-9 department of security. The commission <comptroller> shall
20-10 reimburse the Department of Public Safety for the actual costs of
20-11 an investigation.
20-12 (e) At least once every two years, the executive director
20-13 shall employ an independent firm that is experienced in security,
20-14 including computer security and systems security, to conduct a
20-15 comprehensive study of all aspects of lottery security, including:
20-16 (1) lottery personnel security;
20-17 (2) sales agent security;
20-18 (3) lottery operator and vendor security;
20-19 (4) security against ticket counterfeiting and
20-20 alteration and other means of fraudulent winning;
20-21 (5) security of lottery drawings;
20-22 (6) lottery computer, data communications, database,
20-23 and systems security;
20-24 (7) lottery premises and warehouse security;
20-25 (8) security of distribution of tickets;
20-26 (9) security of validation and payment procedures;
20-27 (10) security involving unclaimed prizes;
21-1 (11) security aspects of each lottery game;
21-2 (12) security against the deliberate placement of
21-3 winning tickets in lottery games that involve preprinted winning
21-4 tickets by persons involved in the production, storage,
21-5 transportation, or distribution of tickets; and
21-6 (13) other security aspects of lottery operations.
21-7 (f) The executive director shall provide the commission
21-8 <comptroller> with a complete report of the security study
21-9 conducted under Subsection (e) of this section. The commission
21-10 <comptroller> shall provide the governor and the legislature,
21-11 before the convening of each regular legislative session, with a
21-12 summary of the security study that shows the overall evaluation of
21-13 the lottery's security.
21-14 SECTION 14. Sections 2.13 and 2.14, State Lottery Act
21-15 (Article 179g, Vernon's Texas Civil Statutes), are amended to read
21-16 as follows:
21-17 Sec. 2.13. DEMOGRAPHIC STUDIES. (a) The executive director
21-18 shall, every two years, employ an independent firm experienced in
21-19 demographic analysis to conduct a demographic study of lottery
21-20 players. The study shall include the income, age, sex, race,
21-21 education, and frequency of participation of players.
21-22 (b) The executive director shall report the results of the
21-23 demographic study conducted under Subsection (a) of this section to
21-24 the commission <comptroller>, the governor, and the legislature
21-25 before the convening of each regular legislative session.
21-26 Sec. 2.14. Confidential Information. The following
21-27 information is confidential and is exempt from disclosure under the
22-1 open records law, Chapter 424, Acts of the 63rd Legislature,
22-2 Regular Session, 1973 (Article 6252-17a, Vernon's Texas Civil
22-3 Statutes):
22-4 (1) security plans and procedures of the commission
22-5 <division or the office of the comptroller> designed to ensure the
22-6 integrity and security of the operation of the lottery;
22-7 (2) information of a nature that is designed to ensure
22-8 the integrity and security of the selection of winning tickets or
22-9 numbers in the lottery, other than information describing the
22-10 general procedures for selecting winning tickets or numbers; and
22-11 (3) the name, street address, and telephone number of
22-12 a prize winner, if the prize winner has not consented to the
22-13 release of the information.
22-14 SECTION 15. Section 2.15(b), State Lottery Act (Article
22-15 179g, Vernon's Texas Civil Statutes), is amended to read as
22-16 follows:
22-17 (b) An investigation report or other document submitted by
22-18 the Department of Public Safety to the commission <division>
22-19 becomes part of the investigative files of the commission
22-20 <division> and is subject to discovery by a person that is the
22-21 subject of the investigation report or other document.
22-22 SECTION 16. The State Lottery Act (Article 179g, Vernon's
22-23 Texas Civil Statutes) is amended by adding Article 2A to read as
22-24 follows:
22-25 ARTICLE 2A. STATE LOTTERY COMMISSION
22-26 Sec. 2A.01. MEMBERSHIP. (a) The State Lottery Commission
22-27 is composed of six members appointed by the governor with the
23-1 advice and consent of the senate.
23-2 (b) In making appointments to the commission, the governor
23-3 shall strive to achieve representation by all the population groups
23-4 of the state with regard to economic status, sex, race, and
23-5 ethnicity. The governor shall appoint one member from each of the
23-6 following regions of this state:
23-7 (1) North Texas;
23-8 (2) East Texas;
23-9 (3) South Texas;
23-10 (4) West Texas;
23-11 (5) Central Texas; and
23-12 (6) any area of Texas.
23-13 Sec. 2A.02. TERM OF OFFICE. Members hold office for
23-14 staggered terms of six years with two members' terms expiring
23-15 February 1 of each odd-numbered year.
23-16 Sec. 2A.03. RESIDENCE REQUIREMENT. An individual is not
23-17 eligible to be a member of the commission unless the individual has
23-18 been a resident of this state for at least 10 consecutive years
23-19 immediately before appointment.
23-20 Sec. 2A.04. ELIGIBILITY. (a) An individual is not eligible
23-21 to be an appointed member of the commission if the individual:
23-22 (1) owns or controls, directly or indirectly, more
23-23 than a 10 percent interest in a business entity or other
23-24 organization regulated by the commission or receiving funds from
23-25 the commission;
23-26 (2) is employed by or participates in the management
23-27 of a business entity or other organization regulated by the
24-1 commission or receiving funds from the commission;
24-2 (3) uses or receives a substantial amount of tangible
24-3 goods, services, or funds from the commission, other than
24-4 compensation or reimbursement authorized by law for commission
24-5 membership, attendance, or expenses;
24-6 (4) is an officer, employee, or paid consultant of a
24-7 Texas trade association in the lottery business;
24-8 (5) is required to register as a lobbyist under
24-9 Chapter 305, Government Code, and its subsequent amendments because
24-10 of the person's activities for compensation on behalf of a
24-11 profession related to the operation of the commission;
24-12 (6) is married to an individual described by
24-13 Subdivisions (1)-(5);
24-14 (7) has been convicted of a felony or of any crime
24-15 involving moral turpitude; or
24-16 (8) is not a citizen of the United States.
24-17 (b) The governor shall conduct a complete personal,
24-18 financial, and business background check of a prospective
24-19 commission member.
24-20 (c) In this section, "Texas trade association" means a
24-21 nonprofit, cooperative, and voluntarily joined association of
24-22 business or professional competitors in this state designed to
24-23 assist its members and its industry or profession in dealing with
24-24 mutual business or professional problems and in promoting their
24-25 common interest.
24-26 Sec. 2A.05. PROHIBITED CONDUCT. (a) A commission member
24-27 may not:
25-1 (1) accept any employment or remuneration from a
25-2 person that has a significant financial interest in the lottery;
25-3 (2) play any lottery game conducted in this state;
25-4 (3) accept or be entitled to accept any part of the
25-5 winnings to be paid from a lottery game conducted in this state;
25-6 (4) use the member's official authority to affect the
25-7 result of an election or nomination for public office; or
25-8 (5) directly or indirectly coerce, attempt to coerce,
25-9 command, or advise a person to pay, lend, or contribute anything of
25-10 value to another person for political purposes.
25-11 (b) A commission member or former commission member or the
25-12 spouse of a commission member or former commission member may not
25-13 solicit or accept employment from a person regulated by the
25-14 commission before the second anniversary of the date on which the
25-15 commission member's service on the commission ends.
25-16 (c) In this section, "person that has a significant
25-17 financial interest in the lottery" has the meaning assigned by
25-18 Section 4.06 of this Act.
25-19 Sec. 2A.06. REMOVAL OF COMMISSION MEMBER. (a) The governor
25-20 may remove a commission member if the member:
25-21 (1) does not have at the time of appointment the
25-22 qualifications required for appointment to the commission;
25-23 (2) does not maintain during service on the commission
25-24 the qualifications required for appointment to the commission;
25-25 (3) violates a prohibition established by Section
25-26 2A.05 of this Act;
25-27 (4) cannot discharge the member's duties for a
26-1 substantial part of the term for which the member is appointed
26-2 because of illness or disability; or
26-3 (5) is absent from more than half of the regularly
26-4 scheduled commission meetings that the member is eligible to attend
26-5 during a calendar year unless the absence is excused by majority
26-6 vote of the commission.
26-7 (b) The validity of an action of the commission is not
26-8 affected by the fact that it is taken when a ground for removal of
26-9 a commission member exists.
26-10 (c) If the presiding officer has knowledge that a potential
26-11 ground for removal exists, the presiding officer shall notify the
26-12 governor.
26-13 Sec. 2A.07. COMPENSATION AND EXPENSES. (a) A commission
26-14 member is not entitled to compensation for serving on the
26-15 commission.
26-16 (b) A commission member is entitled to reimbursement for
26-17 actual and necessary expenses incurred in performing the member's
26-18 duties, subject to any applicable limitation in the General
26-19 Appropriations Act.
26-20 Sec. 2A.08. OFFICES. The commission shall maintain its
26-21 general office in the city of Austin. The commission may also
26-22 establish branch offices.
26-23 Sec. 2A.09. PRESIDING OFFICER. The governor shall designate
26-24 one member of the commission as presiding officer of the commission
26-25 to serve in that capacity at the pleasure of the governor.
26-26 Sec. 2A.10. MEETINGS. The commission shall hold at least
26-27 six regular meetings each year on dates fixed by the commission.
27-1 The commission may meet at other times at the call of the presiding
27-2 officer or as provided by commission rule.
27-3 Sec. 2A.11. POWERS AND DUTIES OF COMMISSION. The commission
27-4 shall:
27-5 (1) oversee the executive director's administration of
27-6 this Act;
27-7 (2) approve the operating budget of the commission and
27-8 the commission's request for appropriations; and
27-9 (3) appoint the members of any advisory committees to
27-10 the commission.
27-11 SECTION 17. Sections 3.01(a)-(c), (f), and (g), State
27-12 Lottery Act (Article 179g, Vernon's Texas Civil Statutes), are
27-13 amended to read as follows:
27-14 (a) The executive director shall attempt to license minority
27-15 businesses as sales agents in at least 20 percent of the licenses
27-16 issued. Implementation of this subsection must be consistent with
27-17 the rest of this section.
27-18 (b) The executive director may license as a sales agent each
27-19 person the executive director believes will best serve the public
27-20 convenience. The executive director may not issue a license to a
27-21 person to engage in business exclusively as a sales agent. A
27-22 license may not be transferred or assigned to any other person or
27-23 location.
27-24 (c) An applicant for a license under this section must apply
27-25 to the commission <division> under rules prescribed by the
27-26 commission <comptroller>, provide information necessary to
27-27 determine the applicant's eligibility for a license under Section
28-1 3.02 of this Act, and provide other information considered
28-2 necessary by the executive director <comptroller>. The applicant
28-3 must include an application fee with each application. The
28-4 executive director shall set the application fee in an amount that
28-5 is at least sufficient to cover the costs incurred by the
28-6 commission <division> and by the Department of Public Safety to
28-7 process the application. The executive director shall determine
28-8 from information provided by the Department of Public Safety the
28-9 amount required for costs incurred by the department and shall
28-10 allocate those amounts to the department at least monthly. If the
28-11 executive director denies an application for a license based on a
28-12 factor listed in Subsection (f) of this section, the executive
28-13 director shall refund one-half of the application fee to the
28-14 applicant. If the executive director denies an application based
28-15 on another factor, the executive director may not refund any part
28-16 of the application fee. Applications for licenses must be
28-17 available for public inspection during regular office hours.
28-18 (f) The commission <comptroller> shall adopt rules under
28-19 which, before issuing a license to an applicant, the executive
28-20 director shall consider:
28-21 (1) the financial responsibility and security of the
28-22 applicant and the business or activity in which the applicant is
28-23 engaged;
28-24 (2) the public accessibility of the applicant's place
28-25 of business or activity;
28-26 (3) the sufficiency of existing sales agents to serve
28-27 the public convenience;
29-1 (4) whether individuals under 18 years of age
29-2 constitute a majority of the applicant's customers or as customers
29-3 provide a majority of the applicant's sales volume;
29-4 (5) the volume of expected sales; and
29-5 (6) any other factor that the executive director
29-6 considers appropriate.
29-7 (g) The executive director may issue a license to a person
29-8 only if the executive director finds that the person's experience,
29-9 character, and general fitness are such that the person's
29-10 participation as a sales agent will not detract from the integrity,
29-11 security, honesty, and fairness of the operation of the lottery.
29-12 SECTION 18. Sections 3.02(a)-(d) and (f)-(i), State Lottery
29-13 Act (Article 179g, Vernon's Texas Civil Statutes), are amended to
29-14 read as follows:
29-15 (a) After a hearing, the executive director shall deny an
29-16 application for a license or the commission <comptroller> shall
29-17 suspend or revoke a license if the executive director or commission
29-18 <comptroller>, as applicable, finds that the applicant or sales
29-19 agent:
29-20 (1) is an individual who:
29-21 (A) has been convicted of a felony, criminal
29-22 fraud, gambling or a gambling-related offense, or a misdemeanor
29-23 involving moral turpitude, if less than 10 years has elapsed since
29-24 the termination of the sentence, parole, mandatory supervision, or
29-25 probation served for the offense;
29-26 (B) is or has been a professional gambler; <or>
29-27 (C) is married to <or related in the first
30-1 degree of consanguinity or affinity to> an individual:
30-2 (i) described in Paragraph (A) or (B) of
30-3 this subdivision; or
30-4 (ii) who is currently delinquent in the
30-5 payment of any state tax; or
30-6 (D) is an officer or employee of the commission
30-7 or a lottery operator; or
30-8 (E) is a spouse, child, brother, sister, or
30-9 parent residing as a member of the same household in the principal
30-10 place of residence of a person described by Paragraph (D) of this
30-11 subdivision;
30-12 (2) is not an individual, and an individual described
30-13 in Subdivision (1) of this subsection:
30-14 (A) is an officer or director of the applicant
30-15 or sales agent;
30-16 (B) holds more than 10 percent of the stock in
30-17 the applicant or sales agent;
30-18 (C) holds an equitable interest greater than 10
30-19 percent in the applicant or sales agent;
30-20 (D) is a creditor of the applicant or sales
30-21 agent who holds more than 10 percent of the applicant's or sales
30-22 agent's outstanding debt;
30-23 (E) is the owner or lessee of a business that
30-24 the applicant or sales agent conducts or through which the
30-25 applicant will conduct a ticket sales agency;
30-26 (F) shares or will share in the profits, other
30-27 than stock dividends, of the applicant or sales agent;
31-1 (G) participates in managing the affairs of the
31-2 applicant or sales agent; or
31-3 (H) is an employee of the applicant or sales
31-4 agent who is or will be involved in:
31-5 (i) selling tickets; or
31-6 (ii) handling money from the sale of
31-7 tickets;
31-8 (3) is currently delinquent in the payment of any
31-9 state tax;
31-10 (4) is a person whose location for the sales agency
31-11 is:
31-12 (A) <a racetrack at which wagering is authorized
31-13 under the Texas Racing Act (Article 179e, Vernon's Texas Civil
31-14 Statutes);>
31-15 <(B)> a location licensed for games of bingo
31-16 under the Bingo Enabling Act (Article 179d, Vernon's Texas Civil
31-17 Statutes); or
31-18 (B) <(C)> on land that is owned by:
31-19 (i) this state; or
31-20 (ii) a political subdivision of this
31-21 state, other than land used as a mass transportation facility that
31-22 is used by commercial carriers; or
31-23 <(D) a location for which a person holds a wine
31-24 and beer retailer's permit, mixed beverage permit, mixed beverage
31-25 late hours permit, private club registration permit, or private
31-26 club late hours permit issued under Chapter 25, 28, 29, 32, or 33,
31-27 Alcoholic Beverage Code;>
32-1 (5) has violated this Act or a rule adopted under this
32-2 Act.
32-3 (b) Except as provided by Subsection (c) of this section, an
32-4 applicant or sales agent shall notify the executive director of any
32-5 change in the information in the applicant's or sales agent's most
32-6 recent application for a license or renewal of a license. The
32-7 applicant or sales agent shall notify the executive director of the
32-8 change in the information not later than the 10th day after the
32-9 date of the change.
32-10 (c) A corporate applicant or sales agent is not required to
32-11 notify the executive director under Subsection (b) of this section
32-12 of a transfer of less than 10 percent of the corporate stock unless
32-13 the transfer results in a shareholder who previously held 10
32-14 percent or less of the stock holding more than 10 percent of the
32-15 stock.
32-16 (d) If the executive director proposes to deny an
32-17 application for a license or the commission <comptroller> proposes
32-18 to suspend or revoke a license under this section, the applicant or
32-19 sales agent is entitled to written notice of the time and place of
32-20 the hearing. A notice may be served on an applicant or sales agent
32-21 personally or sent by certified or registered mail, return receipt
32-22 requested, to the person's mailing address as it appears on the
32-23 commission's <division's> records. A notice must be served or
32-24 mailed not later than the 20th day before the date of the hearing.
32-25 (f) The Administrative Procedure and Texas Register Act
32-26 (Article 6252-13a, Vernon's Texas Civil Statutes) applies to a
32-27 hearing under this section. An administrative law judge of the
33-1 State Office of Administrative Hearings shall conduct the hearing
33-2 as provided by Chapter 591, Acts of the 72nd Legislature, Regular
33-3 Session, 1991 (Article 6252-13f, Vernon's Texas Civil Statutes).
33-4 The commission may review the decision of an administrative law
33-5 judge as provided by the Administrative Procedure and Texas
33-6 Register Act (Article 6252-13a, Vernon's Texas Civil Statutes).
33-7 (g) The executive director shall give an applicant or sales
33-8 agent written notice of a denial of an application or a suspension
33-9 or revocation of a license.
33-10 (h) The executive director may not issue a license to a
33-11 person who has previously had a license under this Act revoked
33-12 unless the executive director is satisfied the person will comply
33-13 with this Act and the rules adopted under this Act. The executive
33-14 director may prescribe the terms under which a suspended license
33-15 will be reissued.
33-16 (i) The executive director shall not issue a license to sell
33-17 lottery tickets to applicants who fail to certify to the executive
33-18 director the applicant's compliance with the federal Americans With
33-19 Disabilities Act.
33-20 SECTION 19. Section 3.03, State Lottery Act (Article 179g,
33-21 Vernon's Texas Civil Statutes), is amended to read as follows:
33-22 Sec. 3.03. Summary Suspension of License. (a) The
33-23 commission <comptroller> may suspend a sales agent's license
33-24 summarily without notice or hearing if the commission <comptroller>
33-25 finds that the action is necessary to maintain the integrity,
33-26 security, honesty, or fairness of the operation or administration
33-27 of the lottery or to prevent financial loss to the state and:
34-1 (1) the sales agent fails to deposit money received
34-2 from ticket sales under Section 5.01 of this Act;
34-3 (2) an event occurs that would render the sales agent
34-4 ineligible for a license under Section 3.02 of this Act;
34-5 (3) the sales agent refuses to permit the executive
34-6 director, the commission <comptroller>, or the state auditor to
34-7 examine the agent's books, records, papers, or other objects under
34-8 Section 2.02(h) <2.02(j)> of this Act; or
34-9 (4) the executive director learns the sales agent has
34-10 failed to disclose information that would, if disclosed, render the
34-11 sales agent ineligible for a license under Section 3.02 of this
34-12 Act.
34-13 (b) The commission <comptroller> may summarily suspend a
34-14 sales agent's license if proceedings for a preliminary hearing
34-15 before an administrative law judge of the State Office of
34-16 Administrative Hearings <the comptroller or the comptroller's
34-17 representative> are initiated simultaneously with the summary
34-18 suspension. The preliminary hearing shall be set for a date not
34-19 later than 10 days after the date of the summary suspension, unless
34-20 the parties agree to a later date.
34-21 (c) At the preliminary hearing, the sales agent must show
34-22 cause why the license should not remain suspended pending a final
34-23 hearing on suspension or revocation. The Administrative Procedure
34-24 and Texas Register Act (Article 6252-13a, Vernon's Texas Civil
34-25 Statutes) does not apply <to the comptroller> in the administration
34-26 and enforcement of the summary suspension of a license under this
34-27 section. The rules governing a hearing on any other license
35-1 suspension or revocation under this Act govern a final
35-2 administrative hearing under this subsection.
35-3 (d) To initiate a proceeding to summarily suspend a sales
35-4 agent's license, the commission <comptroller> must serve notice to
35-5 the sales agent informing the agent of the right to a preliminary
35-6 hearing <before the comptroller or the comptroller's
35-7 representative> and of the time and place of the preliminary
35-8 hearing. The notice must be personally served on the sales agent
35-9 or an officer, employee, or agent of the sales agent or sent by
35-10 certified or registered mail, return receipt requested, to the
35-11 sales agent's mailing address as it appears on the commission's
35-12 <division's> records. The notice must state the alleged violations
35-13 that constitute grounds for summary suspension. The suspension is
35-14 effective at the time the notice is served. If notice is served in
35-15 person, the sales agent shall immediately surrender the license to
35-16 the commission <comptroller or to the comptroller's
35-17 representative>. If notice is served by mail, the sales agent
35-18 shall immediately return the license to the commission
35-19 <comptroller>. If the sales agent uses an on-line electronic
35-20 terminal to sell tickets, the executive director or a lottery
35-21 operator on the instructions of the executive director may
35-22 terminate the connection of the terminal to the commission's
35-23 <division's> lottery computer at the time:
35-24 (1) the proceeding to summarily suspend the license is
35-25 initiated; or
35-26 (2) the commission discovers the sales agent has
35-27 failed to deposit money received from ticket sales, if the sales
36-1 agent's license is being summarily suspended under Subsection
36-2 (a)(1) of this section.
36-3 SECTION 20. Section 3.05(b), State Lottery Act (Article
36-4 179g, Vernon's Texas Civil Statutes), is amended to read as
36-5 follows:
36-6 (b) If a license expires under Subsection (a) of this
36-7 section and the sales agent's successor in interest desires to
36-8 operate the sales agency, the successor shall file an application
36-9 for an extended license not later than the 30th day after the date
36-10 the license expired. The application must state the basis for the
36-11 applicant's claim to be the successor in interest to the sales
36-12 agent and must contain a certification that the applicant would be
36-13 eligible for a license under Section 3.02 of this Act. The
36-14 executive director shall permit a qualified applicant to operate
36-15 under an extended license for not more than one year or until a new
36-16 license is issued to the applicant, whichever occurs first.
36-17 SECTION 21. Section 3.06, State Lottery Act (Article 179g,
36-18 Vernon's Texas Civil Statutes), is amended to read as follows:
36-19 Sec. 3.06. ACCESS TO CRIMINAL HISTORY AND FEDERAL TAX
36-20 INFORMATION. (a) The commission <comptroller> is entitled to
36-21 conduct an investigation of and is entitled to obtain criminal
36-22 history record information maintained by the Department of Public
36-23 Safety, the Federal Bureau of Investigation Identification
36-24 Division, or another law enforcement agency to assist in the
36-25 investigation of:
36-26 (1) a sales agent or an applicant for a sales agent
36-27 license;
37-1 (2) a person required to be named in a license
37-2 application;
37-3 (3) a lottery operator or prospective lottery
37-4 operator;
37-5 (4) an employee of a lottery operator or prospective
37-6 lottery operator, if the employee is or will be directly involved
37-7 in lottery operations;
37-8 (5) a person who manufactures or distributes lottery
37-9 equipment or supplies, or a representative of a person who
37-10 manufactures or distributes lottery equipment or supplies offered
37-11 to the lottery;
37-12 (6) a person who has submitted a written bid or
37-13 proposal to the commission <division> in connection with the
37-14 procurement of goods or services by the commission <division>, if
37-15 the amount of the bid or proposal exceeds $500;
37-16 (7) an employee or other person who works for or will
37-17 work for a sales agent or an applicant for a sales agent license;
37-18 (8) a person who proposes to enter into or who has a
37-19 contract with the commission <division> to supply goods or services
37-20 to the commission <division>; or
37-21 (9) if a person described in Subdivisions (1) through
37-22 (8) of this subsection is not an individual, an individual who:
37-23 (A) is an officer or director of the person;
37-24 (B) holds more than 10 percent of the stock in
37-25 the person;
37-26 (C) holds an equitable interest greater than 10
37-27 percent in the person;
38-1 (D) is a creditor of the person who holds more
38-2 than 10 percent of the person's outstanding debt;
38-3 (E) is the owner or lessee of a business that
38-4 the person conducts or through which the person will conduct
38-5 lottery-related activities;
38-6 (F) shares or will share in the profits, other
38-7 than stock dividends, of the person;
38-8 (G) participates in managing the affairs of the
38-9 person; or
38-10 (H) is an employee of the person who is or will
38-11 be involved in:
38-12 (i) selling tickets; or
38-13 (ii) handling money from the sale of
38-14 tickets.
38-15 (b) The commission <comptroller> shall conduct an
38-16 investigation of and obtain criminal history record information
38-17 maintained by the Department of Public Safety, the Federal Bureau
38-18 of Investigation Identification Division, or another law
38-19 enforcement agency to assist in the investigation of<:>
38-20 <(1) the director or a prospective director of the
38-21 division; or>
38-22 <(2)> an employee or prospective employee of the
38-23 commission <division>.
38-24 (c) Not later than one year after the date of each renewal,
38-25 the commission <comptroller> shall obtain criminal history record
38-26 information maintained by the Department of Public Safety on a
38-27 sales agent whose license is renewed under Section 3.01(h) of this
39-1 Act.
39-2 (d) The executive director may discharge from employment an
39-3 employee of the commission <division> who fails to provide a
39-4 complete legible set of fingerprints on request. The executive
39-5 director may refuse to consider a prospective employee of the
39-6 commission <division> who fails to provide a complete legible set
39-7 of fingerprints on request.
39-8 (e) The executive director may deny an application for a
39-9 license or the commission <comptroller> may suspend or revoke a
39-10 license if the applicant or sales agent fails on request to provide
39-11 a complete legible set of fingerprints of:
39-12 (1) a person required to be named in a license
39-13 application; or
39-14 (2) an employee or other person who works or will work
39-15 for the applicant or sales agent, if the person:
39-16 (A) is or will be involved in the sale of
39-17 tickets; or
39-18 (B) handles or will handle money from the sale
39-19 of tickets.
39-20 (f) All criminal history record information received by the
39-21 executive director is privileged information and is for the
39-22 exclusive use of the executive director and employees of the
39-23 commission <division> designated by the executive director. Except
39-24 on court order or as provided by Subsection (h) of this section,
39-25 the information may not be released or otherwise disclosed to any
39-26 other person or agency.
39-27 (g) All information received by the executive director from
40-1 the Internal Revenue Service is confidential and may only be used
40-2 as provided by the contract between the comptroller and the
40-3 Internal Revenue Service under which the information was obtained.
40-4 (h) The executive director or an employee of the commission
40-5 <division> may not provide any person being investigated under this
40-6 section with a copy of the person's criminal history record
40-7 obtained from the Department of Public Safety, the Federal Bureau
40-8 of Investigation Identification Division, or another law
40-9 enforcement agency. This subsection does not prevent the executive
40-10 director from disclosing to the person the dates and places of
40-11 arrests, offenses, and dispositions contained in the criminal
40-12 history records.
40-13 (i) A person commits an offense if the person releases or
40-14 discloses information received by the commission <comptroller>
40-15 under this section except on court order or as provided by
40-16 Subsection (h) of this section. An offense under this subsection
40-17 is a Class A misdemeanor.
40-18 (j) The executive director may request the cooperation of
40-19 the Department of Public Safety to perform a background
40-20 investigation of a person listed in Subsection (a) or (b) of this
40-21 section. The executive director shall reimburse the Department of
40-22 Public Safety for the actual cost of an investigation. The
40-23 executive director may require a person who is subject to
40-24 investigation to pay all costs of the investigation and to provide
40-25 any information, including fingerprints, necessary to carry out the
40-26 investigation or facilitate access to state or federal criminal
40-27 history record information. Payments made to the executive
41-1 director under this subsection shall be deposited in the general
41-2 revenue fund and may be used to reimburse the Department of Public
41-3 Safety for the actual costs of an investigation.
41-4 (k) Unless otherwise prohibited by law, the Department of
41-5 Public Safety may retain any record or information submitted to it
41-6 under this section. The Department of Public Safety shall notify
41-7 the executive director of any change in information provided to the
41-8 executive director when the Department of Public Safety learns of
41-9 the change.
41-10 (l) The commission shall adopt rules governing the custody
41-11 and use of criminal history record information obtained under this
41-12 section. The comptroller shall adopt necessary rules governing the
41-13 custody and use of information obtained from the Internal Revenue
41-14 Service under this section.
41-15 (m) The executive director may obtain information relating
41-16 to a person's qualification for licensing, employment, or
41-17 contracting under this Act from the Internal Revenue Service under
41-18 a contract between the comptroller and the Internal Revenue Service
41-19 on:
41-20 (1) a sales agent or an applicant for a sales agent
41-21 license;
41-22 (2) an employee or prospective employee of the
41-23 commission <division>;
41-24 (3) a person required to be named in a license
41-25 application;
41-26 (4) a lottery operator or prospective lottery
41-27 operator;
42-1 (5) an employee of a lottery operator or prospective
42-2 lottery operator, if the employee is or will be directly involved
42-3 in lottery operations;
42-4 (6) a person who manufactures or distributes lottery
42-5 equipment or supplies, or a representative of a person who
42-6 manufactures or distributes lottery equipment or supplies offered
42-7 to the lottery;
42-8 (7) a person who has submitted a written bid or
42-9 proposal to the commission <division> in connection with the
42-10 procurement of goods or services by the commission <division>;
42-11 (8) an employee or other person who works for or will
42-12 work for a sales agent or an applicant for a sales agent license;
42-13 or
42-14 (9) a person who proposes to enter into or who has a
42-15 contract with the commission <division> to supply goods or services
42-16 to the commission <division>.
42-17 (n) The executive director may award a contract for lottery
42-18 supplies or services, including a contract under Section 2.02(g) of
42-19 this Act, pending the completion of any investigation authorized by
42-20 this Act. A contract awarded under this subsection must include a
42-21 provision permitting the executive director to terminate the
42-22 contract without penalty if the investigation reveals that the
42-23 person to whom the contract is awarded would not be eligible for a
42-24 sales agent license under Section 3.02 of this Act. <The
42-25 director's authority to award a contract under this subsection
42-26 expires September 1, 1993. This subsection expires January 1,
42-27 1995.>
43-1 (o) The governor shall conduct an investigation of and
43-2 obtain criminal history record information maintained by the
43-3 Department of Public Safety, the Federal Bureau of Investigation
43-4 Identification Division, or another law enforcement agency to
43-5 assist in the investigation of a commission member, a prospective
43-6 commission member, the executive director, or a prospective
43-7 executive director <The comptroller shall obtain criminal history
43-8 record information maintained by the Department of Public Safety on
43-9 any person receiving a temporary license under Section 3.04 of this
43-10 Act not later than one year after the date of issuance of the
43-11 temporary license. This subsection expires September 1, 1993>.
43-12 (p) All fingerprints submitted to the Department of Public
43-13 Safety must be on a form prescribed by the Department of Public
43-14 Safety.
43-15 SECTION 22. Section 4.01, State Lottery Act (Article 179g,
43-16 Vernon's Texas Civil Statutes), is amended to read as follows:
43-17 Sec. 4.01. Tickets. (a) The executive director shall
43-18 prescribe the form of tickets. The toll-free "800" telephone
43-19 number established by the Texas Commission on Alcohol and Drug
43-20 Abuse under Section 461.018, Health and Safety Code, must be
43-21 printed on each ticket. The overall estimated odds of winning a
43-22 prize in a given game or activity must be printed on each ticket
43-23 and prominently displayed in association with the sale of lottery
43-24 products. The estimate must be based on reasonable projections and
43-25 past experience.
43-26 (b) By purchasing a ticket in a particular lottery game or
43-27 activity, a player agrees to abide by and be bound by the
44-1 commission's <division's> rules, including the rules applicable to
44-2 the particular lottery game or activity involved. The player also
44-3 acknowledges that the determination of whether the player is a
44-4 valid winner is subject to the commission's <division's> rules and
44-5 claims procedures, including those developed for the particular
44-6 lottery game or activity involved, and subject to any validation
44-7 tests established by the commission <division> for the particular
44-8 lottery game or activity involved. If the lottery uses tickets, an
44-9 abbreviated form of the rules or a reference to the rules may
44-10 appear on the tickets.
44-11 (c) A person claiming or attempting to claim a lottery prize
44-12 or a share of a lottery prize represents that the ticket or other
44-13 item showing that the person is entitled to the prize or share was
44-14 lawfully obtained, is not stolen, forged, or altered, and has not
44-15 previously been redeemed.
44-16 SECTION 23. Section 4.02, State Lottery Act (Article 179g,
44-17 Vernon's Texas Civil Statutes), is amended to read as follows:
44-18 Sec. 4.02. Certain Sales of Tickets Prohibited. (a) A
44-19 person commits an offense if the person intentionally or knowingly
44-20 sells a ticket at a price the person knows is greater than that
44-21 fixed by the commission <division> or by the lottery operator
44-22 authorized to set that price. An offense under this subsection is
44-23 a Class A misdemeanor.
44-24 (b) Except as provided by this subsection, a person who is
44-25 not a sales agent or an employee of a sales agent commits an
44-26 offense if the person intentionally or knowingly sells a ticket.
44-27 An offense under this subsection is a felony of the third degree.
45-1 A lottery operator may sell tickets to a licensed sales agent. A
45-2 person who is not a sales agent may distribute tickets as premiums
45-3 to customers, employees, or other persons who deal with the person
45-4 if no purchase <or service> is required to entitle the recipient to
45-5 the ticket.
45-6 (c) A person commits an offense if the person sells a ticket
45-7 at a location other than the location of a sales agency. An
45-8 offense under this subsection is a Class A misdemeanor.
45-9 (d) A sales agent or an employee of a sales agent commits an
45-10 offense if the person <may not> intentionally or knowingly sells or
45-11 offers <sell or offer> to sell a ticket to an individual that the
45-12 person knows is younger than 18 years of age. An offense under
45-13 this subsection is a Class C misdemeanor.
45-14 (e) A person may not purchase <sell> a ticket or claim,
45-15 collect, or receive <pay> a lottery prize or a share of a lottery
45-16 prize if <to another person that> the person <knows> is:
45-17 (1) a member, officer, or employee of a person that
45-18 has a contract with the commission <division> to sell or lease
45-19 goods or services used in the lottery;
45-20 (2) a member, officer, or employee of a lottery
45-21 operator;
45-22 (3) an officer or employee of the commission
45-23 <comptroller>; or
45-24 (4) a spouse, child, brother, sister, or parent
45-25 residing as a member of the same household in the principal place
45-26 of residence of a person described by Subdivision (1), (2), or (3)
45-27 of this subsection.
46-1 (f) A person 18 years of age or older may purchase a ticket
46-2 to give as a gift to another person, including an individual
46-3 younger than 18 years of age.
46-4 (g) If an individual listed in Subsection (e) of this
46-5 section purchases a ticket or claims or otherwise attempts to
46-6 collect or receive a lottery prize or a share of a lottery prize or
46-7 an individual younger than 18 years of age directly purchases a
46-8 ticket, the individual is not eligible to receive a prize or share
46-9 of a prize, and the prize or share of a prize otherwise payable on
46-10 the ticket is treated as an unclaimed prize as provided by Section
46-11 5.05 of this Act.
46-12 (h) <(g)> A sales agent or an employee of a sales agent
46-13 commits an offense if the person intentionally or knowingly sells a
46-14 ticket to another person by extending credit or lending money to
46-15 the person to enable the person to purchase the ticket. An offense
46-16 under this subsection is a Class C misdemeanor.
46-17 (i) <(h)> A person commits an offense if the person
46-18 intentionally or knowingly sells <may not purchase> a ticket and:
46-19 (1) accepts <with> a food stamp coupon issued under
46-20 the food stamp program administered under Chapter 33, Human
46-21 Resources Code, as payment;
46-22 (2) accepts <with> a credit card or a debit card as a
46-23 source of payment;
46-24 (3) the sale is made over the telephone; or
46-25 (4) the sale is made by mail-order sales.
46-26 (j) <(i)> A person commits an offense if the person
46-27 intentionally or knowingly purchases <may not pay for> a ticket
47-1 with:
47-2 (1) a food stamp coupon issued under the food stamp
47-3 program administered under Chapter 33, Human Resources Code; or
47-4 (2) the proceeds of a check issued as a payment under
47-5 the Aid to Families with Dependent Children program administered
47-6 under Chapter 31, Human Resources Code.
47-7 (k) An offense under Subsection (i) or (j) of this section
47-8 is a Class C misdemeanor.
47-9 (l) A person commits an offense if, for financial gain, the
47-10 person establishes or promotes a group purchase or pooling
47-11 arrangement under which tickets are purchased on behalf of the
47-12 group or pool and any prize is divided among the members of the
47-13 group or pool, and the person intentionally or knowingly:
47-14 (1) uses any part of the funds solicited or accepted
47-15 for a purpose other than purchasing tickets on behalf of the group
47-16 or pool; or
47-17 (2) retains a share of any prize awarded as
47-18 compensation for establishing or promoting the group purchase or
47-19 pooling arrangement.
47-20 (m) An offense under Subsection (l) of this section is a
47-21 felony of the third degree.
47-22 SECTION 24. Section 4.03, State Lottery Act (Article 179g,
47-23 Vernon's Texas Civil Statutes), is amended by amending Subsection
47-24 (d) and adding Subsection (h) to read as follows:
47-25 (d) An offense under Subsection (c) of this section is a
47-26 Class A misdemeanor unless it is shown on the trial of the offense
47-27 that:
48-1 (1) the amount claimed <or attempted to be claimed> is
48-2 greater than $200 but not more than $10,000, in which event the
48-3 offense is a felony of the third degree;
48-4 (2) the amount claimed <or attempted to be claimed> is
48-5 greater than $10,000, in which event the offense is a felony of the
48-6 second degree; or
48-7 (3) the person has previously been convicted of an
48-8 offense under this section, in which event the offense is a felony
48-9 of the third degree, unless the offense is designated as a felony
48-10 of the second degree under Subdivision (2) of this subsection.
48-11 (h) In this section, "claim" includes an attempt to claim,
48-12 without regard to whether the attempt is successful.
48-13 SECTION 25. Section 4.04(b), State Lottery Act (Article
48-14 179g, Vernon's Texas Civil Statutes), is amended to read as
48-15 follows:
48-16 (b) A person commits an offense if the person knowingly
48-17 refuses to produce for inspection by the executive director,
48-18 commission <comptroller>, or state auditor a book, record, or
48-19 document required to be maintained or made by this Act or a rule
48-20 adopted under this Act.
48-21 SECTION 26. Section 4.045(a), State Lottery Act (Article
48-22 179g, Vernon's Texas Civil Statutes), is amended to read as
48-23 follows:
48-24 (a) A person commits an offense if the person intentionally
48-25 or<,> knowingly<, recklessly, or with criminal negligence> makes a
48-26 material and false, incorrect, or deceptive statement to a person
48-27 conducting an investigation or exercising discretion under this Act
49-1 or a rule adopted under this Act.
49-2 SECTION 27. Sections 4.06(a)-(e), State Lottery Act (Article
49-3 179g, Vernon's Texas Civil Statutes), are amended to read as
49-4 follows:
49-5 (a) A commission member <The comptroller, the state
49-6 treasurer>, the executive director, or an employee of the
49-7 commission <division> may not knowingly accept a gift or political
49-8 contribution from:
49-9 (1) a person that has a significant financial interest
49-10 in the lottery;
49-11 (2) a person related in the first degree of
49-12 consanguinity or affinity to a person that has a significant
49-13 financial interest in the lottery;
49-14 (3) a person that owns more than a 10 percent interest
49-15 in an entity that has a significant financial interest in the
49-16 lottery;
49-17 (4) a political committee that is directly
49-18 established, administered, or controlled, in whole or in part, by a
49-19 person that has a significant financial interest in the lottery; or
49-20 (5) a person who, within the two years preceding the
49-21 date of the gift or contribution, won a lottery prize exceeding
49-22 $600 in amount or value.
49-23 (b) A former commission member <comptroller, former state
49-24 treasurer,> or former executive director may not:
49-25 (1) for compensation, represent a person that has made
49-26 or intends to make a bid to operate the lottery before the
49-27 commission <comptroller> before the second anniversary of the date
50-1 that the person's service in office or employment with the
50-2 commission <division> ceases;
50-3 (2) represent any person or receive compensation for
50-4 services rendered on behalf of any person regarding a particular
50-5 matter in which the former officer or employee participated during
50-6 the period of service or employment with the commission <division>,
50-7 either through personal involvement or because the matter was
50-8 within the scope of the officer's or employee's official
50-9 responsibility; or
50-10 (3) for compensation, communicate directly with a
50-11 member of the legislative branch to influence legislation on behalf
50-12 of a person that has a significant financial interest in the
50-13 lottery, before the second anniversary of the date that the
50-14 person's service in office or employment with the commission
50-15 <division> ceases.
50-16 (c) A former commission member <comptroller, former state
50-17 treasurer>, former executive director, or former employee of the
50-18 commission <division> may not, before the second anniversary of the
50-19 date that the person's service in office or employment with the
50-20 commission <division> ceases, knowingly accept a gift or political
50-21 contribution from:
50-22 (1) a person that has a significant financial interest
50-23 in the lottery;
50-24 (2) a person related in the first degree of
50-25 consanguinity or affinity to a person that has a significant
50-26 financial interest in the lottery;
50-27 (3) a person that owns more than a 10 percent interest
51-1 in an entity that has a significant financial interest in the
51-2 lottery;
51-3 (4) a political committee that is directly
51-4 established, administered, or controlled, in whole or in part, by a
51-5 person that has a significant financial interest in the lottery; or
51-6 (5) a person who, within the two years preceding the
51-7 date of the gift or contribution, won a lottery prize exceeding
51-8 $600 in amount or value.
51-9 (d) A person may not knowingly make a gift or political
51-10 contribution to a commission member <the comptroller, the state
51-11 treasurer>, the executive director, or an employee of the
51-12 commission <division> if the person:
51-13 (1) has a significant financial interest in the
51-14 lottery;
51-15 (2) is related in the first degree of consanguinity or
51-16 affinity to a person that has a significant financial interest in
51-17 the lottery;
51-18 (3) owns more than a 10 percent interest in an entity
51-19 that has a significant financial interest in the lottery;
51-20 (4) is a political committee that is directly
51-21 established, administered, or controlled, in whole or in part, by a
51-22 person that has a significant financial interest in the lottery; or
51-23 (5) within the two years preceding the date of the
51-24 gift or contribution, won a lottery prize exceeding $600 in amount
51-25 or value.
51-26 (e) A person may not knowingly make a gift or political
51-27 contribution to a former commission member <comptroller, former
52-1 state treasurer>, former executive director, or former employee of
52-2 the commission <division> before the second anniversary of the date
52-3 that the person's service in office or employment with the
52-4 commission <division> ceases, if the person:
52-5 (1) has a significant financial interest in the
52-6 lottery;
52-7 (2) is related in the first degree of consanguinity or
52-8 affinity to a person that has a significant financial interest in
52-9 the lottery;
52-10 (3) owns more than a 10 percent interest in an entity
52-11 that has a significant financial interest in the lottery;
52-12 (4) is a political committee that is directly
52-13 established, administered, or controlled, in whole or in part, by a
52-14 person that has a significant financial interest in the lottery; or
52-15 (5) within the two years preceding the date of the
52-16 gift or contribution, won a lottery prize exceeding $600 in amount
52-17 or value.
52-18 SECTION 28. Article 4, State Lottery Act (Article 179g,
52-19 Vernon's Texas Civil Statutes), is amended by adding Section 4.07
52-20 to read as follows:
52-21 Sec. 4.07. AGGREGATION OF AMOUNTS INVOLVED. When amounts
52-22 are claimed, attempted to be claimed, or obtained in violation of
52-23 this Act pursuant to one scheme or continuing course of conduct,
52-24 whether from the same or several sources, the conduct may be
52-25 considered as one offense and the amounts aggregated in determining
52-26 the grade of the offense.
52-27 SECTION 29. Section 5.01, State Lottery Act (Article 179g,
53-1 Vernon's Texas Civil Statutes), is amended to read as follows:
53-2 Sec. 5.01. Delivery of Funds. (a) Except as provided by
53-3 Subsection (e) of this section, all revenue received from the sale
53-4 of tickets and all money credited to the state lottery account from
53-5 any other source shall be deposited in the state treasury through
53-6 approved state depositories on the settlement day or days
53-7 established by the executive director.
53-8 (b) The executive director may require sales agents to
53-9 establish separate electronic funds transfer accounts for the
53-10 purposes of depositing money from ticket sales, making payments to
53-11 the commission <division>, and receiving payments from the
53-12 commission <division>. The commission <comptroller> by rule shall
53-13 establish the procedures for depositing money from ticket sales
53-14 into electronic funds transfer accounts, as well as other
53-15 procedures regarding the handling of money from ticket sales. The
53-16 executive director may not permit a sales agent to make payments to
53-17 the commission <division> or a lottery operator in cash.
53-18 (c) The state treasurer, in consultation with the executive
53-19 director, shall establish procedures for the efficient
53-20 implementation and operation of an electronic funds transfer system
53-21 to meet the needs of the executive director under this Act.
53-22 (d) The executive director may require a sales agent to file
53-23 with the commission <division> reports of receipts and transactions
53-24 relating to the sale of tickets in the form and containing the
53-25 information that the executive director requires. Each sales agent
53-26 shall maintain records adequate to establish the disposition of
53-27 each ticket provided to the sales agent, the amounts of money
54-1 received for the sale of those tickets, and any prizes awarded by
54-2 the sales agent.
54-3 (e) The executive director may provide for a sales agent to
54-4 retain from the money received from the sale of tickets the amount
54-5 of prizes paid by the agent or the agent's commission, if any, and
54-6 may establish how often the agent will make settlement payments to
54-7 the treasury.
54-8 (f) The executive director may provide for a sales agent to
54-9 pay amounts received for the sale of tickets directly to an officer
54-10 or employee of the commission <division> for immediate deposit in
54-11 the state treasury.
54-12 (g) A sales agent is liable to the commission <division> for
54-13 all tickets accepted or generated by the sales agent or any
54-14 employee or agent of the sales agent, and tickets shall be deemed
54-15 to have been purchased by the sales agent unless returned to the
54-16 commission <division> within the time and manner prescribed by the
54-17 commission <division>. Money received by a sales agent from the
54-18 sales of tickets, less the amount retained for prizes paid by the
54-19 sales agent or for the agent's commission, if any, together with
54-20 any unsold tickets, shall be held in trust for the benefit of the
54-21 state before delivery to a lottery operator or the commission
54-22 <division> or electronic transfer to the state treasury, and the
54-23 sales agent is liable to the commission <division> for the full
54-24 amount of the money or unsold tickets so held. If the sales agent
54-25 is not an individual, each officer, director, or owner of the sales
54-26 agent is personally liable to the commission <division> for the
54-27 full amount of the money or unsold tickets held in trust for the
55-1 benefit of the state.
55-2 SECTION 30. Section 5.02, State Lottery Act (Article 179g,
55-3 Vernon's Texas Civil Statutes), is amended by amending Subsections
55-4 (b) and (f) to read as follows:
55-5 (b) Money in the state lottery account shall be used only
55-6 for the following purposes and shall be distributed as follows:
55-7 (1) the payment of prizes to the holders of winning
55-8 tickets;
55-9 (2) the payment of costs incurred in the operation and
55-10 administration of the lottery, including any fees received by a
55-11 lottery operator, provided that the costs incurred in a fiscal
55-12 biennium may not exceed an amount equal to 15 percent of the gross
55-13 revenue accruing from the sale of tickets in that biennium;
55-14 (3) the establishment of a pooled bond fund, lottery
55-15 prize reserve fund, unclaimed prize fund, and prize payment account
55-16 <the transfer of amounts to the state lottery stabilization fund as
55-17 provided by Subsections (c), (d), and (e) of this section>; and
55-18 (4) the balance, after creation of a reserve
55-19 sufficient to pay the amounts needed or estimated to be needed
55-20 under <provided by> Subdivisions (1) and (2) of this subsection, to
55-21 be transferred to the unobligated portion of the general revenue
55-22 fund, on or before the 15th day of each month.
55-23 (f) The state treasurer periodically shall file reports with
55-24 the executive director providing information regarding the revenue
55-25 credited to the state lottery account, the investments of the money
55-26 in the account, and the distributions made from the account.
55-27 SECTION 31. Sections 5.03(c)-(f) and (h)-(l), State Lottery
56-1 Act (Article 179g, Vernon's Texas Civil Statutes), are amended to
56-2 read as follows:
56-3 (c) An employee of the commission <division> and the
56-4 independent certified public accountant witnessing the drawing
56-5 shall inspect any equipment used in the drawing. The equipment
56-6 must be inspected immediately before and after the drawing. The
56-7 drawing and inspections must be recorded on video and audio tape.
56-8 (d) The executive director may authorize prizes to be paid
56-9 by warrants to be drawn on the state lottery account. If the
56-10 executive director determines that prize money is to be paid in
56-11 installments, the state treasurer shall invest funds from the state
56-12 lottery account as necessary to ensure the payment of the
56-13 installments. The investments may be in securities, annuities, or
56-14 other instruments as determined by the treasurer.
56-15 (e) Payment of a prize in an amount of $600 or more shall be
56-16 made by the executive director.
56-17 (f) The executive director may authorize a sales agent to
56-18 pay a prize in an amount less than $600 after performing procedures
56-19 to validate the winning ticket as required by the executive
56-20 director. A prize paid under this subsection is not required to be
56-21 paid by warrant on the state lottery account.
56-22 (h) A specific prize as set forth by the prize structure of
56-23 a specific lottery game or activity may not be paid more than once.
56-24 If the executive director determines that more than one claimant
56-25 has been awarded a specific unpaid prize in a specific lottery game
56-26 or activity, each claimant is entitled only to an equal share of
56-27 the prize.
57-1 (i) The executive director shall pay the cash equivalent of
57-2 a prize other than prize money if more than one person is entitled
57-3 to share the prize as provided by Subsection (h) of this section.
57-4 (j) The executive director shall deduct the amount of a
57-5 delinquent tax or other money from the winnings of a person who has
57-6 been finally determined to be:
57-7 (1) delinquent in the payment of a tax or other money
57-8 collected by the comptroller, the state treasurer, or the Texas
57-9 Alcoholic Beverage Commission;
57-10 (2) delinquent in making child support payments
57-11 administered or collected by the attorney general; <or>
57-12 (3) in default on a loan made under Chapter 52,
57-13 Education Code; or
57-14 (4) in default on a loan guaranteed under Chapter 57,
57-15 Education Code.
57-16 (k) If a person's winnings exceed a delinquency under
57-17 Subsection (j) of this section, the executive director shall pay
57-18 the balance to the person. The executive director shall transfer
57-19 the amount deducted to the appropriate agency.
57-20 (l) The attorney general, comptroller, state treasurer,
57-21 Texas Alcoholic Beverage Commission, Texas Higher Education
57-22 Coordinating Board, and Texas Guaranteed Student Loan Corporation
57-23 shall each provide the executive director with a report of persons
57-24 who have been finally determined to be delinquent in the payment of
57-25 a tax or other money collected by the agency. The commission
57-26 <comptroller> shall adopt rules regarding the form and frequency of
57-27 reports under this subsection.
58-1 SECTION 32. Sections 5.04(a)-(c), State Lottery Act (Article
58-2 179g, Vernon's Texas Civil Statutes), are amended to read as
58-3 follows:
58-4 (a) If a minor is entitled to prize money on a winning
58-5 ticket in an amount less than $600, the executive director may make
58-6 payment by delivery to an adult member of the minor's family, or to
58-7 the minor's guardian, of a warrant payable to the order of the
58-8 minor.
58-9 (b) If a minor is entitled to prize money on a winning
58-10 ticket in an amount of $600 or more, the executive director may
58-11 direct payment to the minor by depositing the amount of the prize
58-12 in any bank to the credit of an adult member of the minor's family
58-13 or of the minor's guardian as custodian for the minor.
58-14 (c) The executive director shall pay the cash equivalent of
58-15 a prize other than prize money if the person entitled to claim the
58-16 prize is a minor. Payment of the cash equivalent of a prize other
58-17 than prize money to a minor shall be made as provided by
58-18 Subsections (a) and (b) of this section.
58-19 SECTION 33. Sections 5.05(a), (b), and (d), State Lottery
58-20 Act (Article 179g, Vernon's Texas Civil Statutes), are amended to
58-21 read as follows:
58-22 (a) The commission <division> shall retain an unclaimed
58-23 prize on a winning ticket for payment or delivery to the person
58-24 entitled to the prize for 180 days after the date on which the
58-25 winner was selected. If a claim is not made for prize money on or
58-26 before the 180th day after the date on which the winner was
58-27 selected, the prize money shall be used to provide additional money
59-1 to the state lottery account for the purposes prescribed by Section
59-2 5.02(b)(1) of this Act.
59-3 (b) If a claim is not made for a prize other than prize
59-4 money on or before the 180th day after the date on which the winner
59-5 was selected, the prize shall revert to the commission <division>
59-6 for use in subsequent games.
59-7 (d) For each lottery game, after the last date on which a
59-8 prize may be claimed under Subsection (c) of this section, the
59-9 executive director shall prepare a report that shows the total
59-10 number of tickets sold and the number and amounts of prizes awarded
59-11 in the game. The report must be available for public inspection.
59-12 SECTION 34. Sections 5.06(a) and (b), State Lottery Act
59-13 (Article 179g, Vernon's Texas Civil Statutes), are amended to read
59-14 as follows:
59-15 (a) The executive director and each lottery operator shall
59-16 determine the compensation to be paid to sales agents for the sale
59-17 of tickets as provided by this section. The compensation paid to a
59-18 sales agent may not be an amount less than five percent of the
59-19 retail price of the tickets sold plus, at the discretion of the
59-20 executive director or lottery operator supervising the game or
59-21 activity involved, an incentive bonus based on attainment of sales
59-22 volume, the redemption of winning tickets, or other objectives
59-23 specified by the executive director or lottery operator for each
59-24 type of lottery.
59-25 (b) The commission <division> or a lottery operator may run
59-26 sales agent incentive games for sales agents using the incentive
59-27 bonus amount or other amounts allocated by the executive director
60-1 as compensation for sales agents.
60-2 SECTION 35. Section 47.06(g), Penal Code, is amended to read
60-3 as follows:
60-4 (g) It is a defense to prosecution for an offense under this
60-5 section <chapter> that the conduct was authorized, directly or
60-6 indirectly, by the State Lottery Act, the Texas Lottery Commission
60-7 <lottery division in the office of the comptroller, the
60-8 comptroller>, or the executive director of the Texas Lottery
60-9 Commission <lottery division>.
60-10 SECTION 36. Section 47.14, Penal Code, is amended to read as
60-11 follows:
60-12 Sec. 47.14. State Lottery. It is a defense to prosecution
60-13 for an offense under this chapter that the conduct:
60-14 (1) consisted entirely of participation in the state
60-15 lottery authorized by the State Lottery Act; or
60-16 (2) was a necessary incident to the operation of the
60-17 state lottery and was authorized, directly or indirectly, by the
60-18 State Lottery Act<, the lottery division in the office of the
60-19 comptroller>, the Texas Lottery Commission <comptroller>, or the
60-20 executive director of the Texas Lottery Commission <lottery
60-21 division>.
60-22 SECTION 37. Section 111.0047(a), Tax Code, is amended to
60-23 read as follows:
60-24 (a) If a person fails to comply with any provision of this
60-25 title<, with any provision of the State Lottery Act,> or with a
60-26 rule of the comptroller adopted under this title <or the State
60-27 Lottery Act>, the comptroller, after a hearing, may revoke or
61-1 suspend any permit or license issued to the person.
61-2 SECTION 38. Section 111.0048(a), Tax Code, is amended to
61-3 read as follows:
61-4 (a) A new permit or license may not be issued to a former
61-5 holder of a revoked permit or license unless the comptroller is
61-6 satisfied that the person will comply with the provisions of this
61-7 title <and the State Lottery Act> and the rules of the comptroller
61-8 relating to this title <and the State Lottery Act>.
61-9 SECTION 39. Section 26(a), Information Resources Management
61-10 Act (Article 4413(32j), Revised Statutes), is amended to read as
61-11 follows:
61-12 (a) The Texas Lottery Commission <lottery division in the
61-13 office of the comptroller is not included in the agency strategic
61-14 plan, initial operating plan, or final operating plan of the
61-15 comptroller. The lottery division> is not subject to the planning
61-16 and procurement requirements of this Act.
61-17 SECTION 40. Section 2(5)(A), Chapter 421, Acts of the 63rd
61-18 Legislature, Regular Session, 1973 (Article 6252-9b, Vernon's Texas
61-19 Civil Statutes), is amended to read as follows:
61-20 (A) "Appointed officer of a major state agency"
61-21 means any of the following:
61-22 (i) a member of the Public Utility
61-23 Commission of Texas;
61-24 (ii) a member of the Texas Department of
61-25 Commerce;
61-26 (iii) a member of the Texas Board of
61-27 Aviation;
62-1 (iv) a member of the Texas Air Control
62-2 Board;
62-3 (v) a member of the Texas Alcoholic
62-4 Beverage Commission;
62-5 (vi) a member of the Finance Commission of
62-6 Texas;
62-7 (vii) a member of the <State Purchasing
62-8 and> General Services Commission;
62-9 (viii) a member of the Texas Board of
62-10 Criminal Justice;
62-11 (ix) a member of the Board of Trustees of
62-12 the Employees Retirement System of Texas;
62-13 (x) a member of the State Highway and
62-14 Public Transportation Commission;
62-15 (xi) a member of the Texas Workers'
62-16 Compensation Commission;
62-17 (xii) a member of the State Board of
62-18 Insurance;
62-19 (xiii) a member of the Parks and Wildlife
62-20 Commission;
62-21 (xiv) a member of the Public Safety
62-22 Commission;
62-23 (xv) the Secretary of State;
62-24 (xvi) a member of the State Securities
62-25 Board;
62-26 (xvii) a member of the Texas Amusement
62-27 Machine Commission;
63-1 (xviii) a member of the Texas Water
63-2 Development Board;
63-3 (xix) a member of the Texas Water
63-4 Commission;
63-5 (xx) a member of the governing board of a
63-6 state senior college or university as defined by Section 61.003,
63-7 Education Code, including The University of Texas at Arlington; The
63-8 University of Texas at Austin; The University of Texas at Dallas;
63-9 The University of Texas at El Paso; The University of Texas--Pan
63-10 American; The University of Texas--Pan American--Brownsville; The
63-11 University of Texas of the Permian Basin; The University of Texas
63-12 at San Antonio; The University of Texas at Tyler; The University of
63-13 Texas Southwestern Medical Center at Dallas; The University of
63-14 Texas Medical Branch at Galveston; The University of Texas Health
63-15 Science Center at Houston; The University of Texas Health Science
63-16 Center at San Antonio; The University of Texas System Cancer
63-17 Center; The University of Texas Health Science Center at Tyler;
63-18 Texas A&M University; Texas A&M University at Galveston; Prairie
63-19 View A&M University; Tarleton State University; Corpus Christi
63-20 State University; Texas A&I University; Laredo State University;
63-21 East Texas State University; East Texas State University at
63-22 Texarkana; University of Houston; University of Houston--Clear
63-23 Lake; University of Houston--Downtown; University of
63-24 Houston--Victoria; Lamar University at Beaumont; Lamar University
63-25 at Orange; Lamar University at Port Arthur; Midwestern State
63-26 University; University of North Texas; Texas College of Osteopathic
63-27 Medicine; Stephen F. Austin State University; Texas Southern
64-1 University; Texas Tech University; Texas Tech University Health
64-2 Sciences Center; Texas Woman's University; West Texas State
64-3 University; Angelo State University; Sam Houston State University;
64-4 Southwest Texas State University; Sul Ross State University; Sul
64-5 Ross State University--Uvalde Center; Texas State Technical
64-6 Institute--Amarillo; Texas State Technical Institute--Harlingen;
64-7 Texas State Technical Institute--Sweetwater; and Texas State
64-8 Technical Institute--Waco;
64-9 (xxi) a member of the Texas Higher
64-10 Education Coordinating Board;
64-11 (xxii) a member of the Texas Employment
64-12 Commission;
64-13 (xxiii) a member of the State Banking
64-14 Board;
64-15 (xxiv) a member of the board of trustees
64-16 of the Teachers Retirement System of Texas;
64-17 (xxv) a member of the Credit Union
64-18 Commission;
64-19 (xxvi) a member of the School Land Board;
64-20 (xxvii) a member of the board of the Texas
64-21 Department of Housing and Community Affairs;
64-22 (xxviii) a member of the Texas Racing
64-23 Commission;
64-24 (xxix) a member of the State Board of
64-25 Dental Examiners;
64-26 (xxx) a member of the Texas Board of
64-27 Licensure for Nursing Home Administrators;
65-1 (xxxi) a member of the Texas State Board
65-2 of Medical Examiners;
65-3 (xxxii) a member of the Board of Pardons
65-4 and Paroles;
65-5 (xxxiii) a member of the Texas State Board
65-6 of Pharmacy;
65-7 (xxxiv) the Banking Commissioner of the
65-8 Banking Department of Texas;
65-9 (xxxv) a member of the Department of
65-10 Information Resources Governing Board;
65-11 (xxxvi) the fire fighters' pension
65-12 commissioner;
65-13 (xxxvii) a member of the Texas Motor
65-14 Vehicle Commission;
65-15 (xxxviii) the director of the Office of
65-16 Court Administration of the Texas Judicial System;
65-17 (xxxix) the chief executive of the Office
65-18 of Public Utility Counsel;
65-19 (xl) a member of the Texas Real Estate
65-20 Commission;
65-21 (xli) a member of the board of directors
65-22 and the executive director of the State Bar of Texas;
65-23 (xlii) a member of the Bond Review Board;
65-24 (xliii) a member of the Texas Board of
65-25 Health;
65-26 (xliv) a member of the Texas Board of
65-27 Mental Health and Mental Retardation;
66-1 (xlv) a member of the Texas Board on
66-2 Aging;
66-3 (xlvi) a member of the Texas Board of
66-4 Human Services;
66-5 (xlvii) a member of the Texas Funeral
66-6 Service Commission;
66-7 (xlviii) a member of the board of
66-8 directors of a river authority created under the constitution or
66-9 laws of this state;
66-10 (xlix) the executive director of the Texas
66-11 Lottery Commission <lottery division in the office of the
66-12 comptroller>; <or>
66-13 (l) the deputy in charge of the department
66-14 of security in the Texas Lottery Commission; or <lottery division
66-15 in the office of the comptroller>
66-16 (li) a member of the Texas Lottery
66-17 Commission.
66-18 SECTION 41. Section 4.06(g), State Lottery Act (Article
66-19 179g, Vernon's Texas Civil Statutes), is repealed.
66-20 SECTION 42. This Act takes effect only if H.B. No. 2771,
66-21 73rd Legislature, Regular Session, 1993, or S.B. No. 768, 73rd
66-22 Legislature, Regular Session, 1993, is enacted and becomes law. If
66-23 neither H.B. No. 2771, 73rd Legislature, Regular Session, 1993, nor
66-24 S.B. No. 768, 73rd Legislature, Regular Session, 1993, is enacted
66-25 and becomes law, this Act has no effect.
66-26 SECTION 43. To the extent that Section 2.021, State Lottery
66-27 Act (Article 179g, Vernon's Texas Civil Statutes), as added by this
67-1 Act, conflicts with any other Act of the 73rd Legislature, Regular
67-2 Session, 1993, Section 2.021, State Lottery Act (Article 179g,
67-3 Vernon's Texas Civil Statutes), as added by this Act, prevails
67-4 without regard to the relative dates of enactment.
67-5 SECTION 44. (a) This Act takes effect July 1, 1993, if this
67-6 Act may take effect on that date under Article III, Section 39, of
67-7 the Texas Constitution.
67-8 (b) If this Act does not take effect as provided by
67-9 Subsection (a) of this section, this Act takes effect September 1,
67-10 1993.
67-11 (c) The Texas Lottery Commission is created on the effective
67-12 date of this Act. In making the initial appointments to the
67-13 commission, the governor shall designate two members for terms
67-14 expiring in 1995, two members for terms expiring in 1997, and two
67-15 members for terms expiring in 1999.
67-16 SECTION 45. (a) On the earliest date on which an executive
67-17 director and at least four members of the Texas Lottery Commission
67-18 have been appointed and hold office:
67-19 (1) all powers, duties, rights, and obligations of the
67-20 comptroller relating to the administration, operation, and
67-21 regulation of the state lottery are transferred to the Texas
67-22 Lottery Commission;
67-23 (2) except as provided by Subsection (b) of this
67-24 section, all assets, liabilities, personnel, equipment, data,
67-25 documents, facilities, and other items of the comptroller relating
67-26 to the administration, operation, and regulation of the state
67-27 lottery are transferred to the Texas Lottery Commission; and
68-1 (3) any appropriation to the comptroller relating to
68-2 the administration, operation, and regulation of the state lottery
68-3 is transferred to the Texas Lottery Commission.
68-4 (b) The comptroller may decide whether to transfer to the
68-5 Texas Lottery Commission:
68-6 (1) personnel who perform both duties that relate to
68-7 lottery operations and duties that do not relate to lottery
68-8 operations; and
68-9 (2) assets used both in lottery operations and
68-10 operations other than lottery operations.
68-11 (c) The officers and employees of the office of the
68-12 comptroller shall cooperate fully with the reorganization.
68-13 (d) Until at least four initial members of the Texas Lottery
68-14 Commission are appointed and hold office, the comptroller exercises
68-15 the powers and duties of the commission, but shall not be
68-16 considered a member of the commission.
68-17 (e) Until the initial executive director of the Texas
68-18 Lottery Commission is appointed and takes office, the director of
68-19 the lottery division in the office of the comptroller serves as the
68-20 executive director, and a reference in the State Lottery Act
68-21 (Article 179g, Vernon's Texas Civil Statutes) to the executive
68-22 director of the Texas Lottery Commission is considered to be a
68-23 reference to the director of the lottery division in the office of
68-24 the comptroller.
68-25 SECTION 46. (a) A change in law made by this Act does not
68-26 affect:
68-27 (1) the validity of any action taken by the
69-1 comptroller or the lottery division in the office of the
69-2 comptroller under the State Lottery Act (Article 179g, Vernon's
69-3 Texas Civil Statutes) before the effective date of the change in
69-4 law; or
69-5 (2) a civil, criminal, or administrative proceeding
69-6 completed before the effective date of this Act.
69-7 (b) A change in law made by this Act does not affect the
69-8 validity of a civil, criminal, or administrative proceeding,
69-9 including licensing or rulemaking, in progress on the effective
69-10 date of the change in law. A civil, criminal, or administrative
69-11 proceeding under the State Lottery Act (Article 179g, Vernon's
69-12 Texas Civil Statutes) that is in progress on the effective date of
69-13 this Act continues as if it had been initiated by the Texas Lottery
69-14 Commission under the law in effect on the effective date.
69-15 (c) All forms, rules, and procedures adopted by the
69-16 comptroller for the administration and enforcement of the State
69-17 Lottery Act (Article 179g, Vernon's Texas Civil Statutes) and in
69-18 effect on the effective date of this Act remain in effect on or
69-19 after that date as if adopted by the Texas Lottery Commission until
69-20 amended, repealed, withdrawn, or otherwise superseded by the Texas
69-21 Lottery Commission. A license issued under the State Lottery Act
69-22 (Article 179g, Vernon's Texas Civil Statutes) and in effect on the
69-23 effective date of this Act remains in effect according to its terms
69-24 as if issued by the Texas Lottery Commission until the license
69-25 expires or is revoked or surrendered.
69-26 (d) A change in law made by this Act applies only to an
69-27 offense committed on or after the effective date of this Act. For
70-1 the purposes of this subsection, an offense is committed before the
70-2 effective date if any element of the offense occurs before that
70-3 date.
70-4 (e) An offense committed before the effective date of this
70-5 Act is covered by the law in effect when the offense was committed,
70-6 and the former law is continued in effect for this purpose.
70-7 SECTION 47. The importance of this legislation and the
70-8 crowded condition of the calendars in both houses create an
70-9 emergency and an imperative public necessity that the
70-10 constitutional rule requiring bills to be read on three several
70-11 days in each house be suspended, and this rule is hereby suspended,
70-12 and that this Act take effect and be in force according to its
70-13 terms, and it is so enacted.