NDT H.B. 2086 75(R) BILL ANALYSIS


LICENSING & ADMINISTRATIVE PROCEDURES
H.B. 2086
By: Palmer
4-28-97
Committee Report (Amended)



BACKGROUND 

Charitable bingo in Texas currently faces serious impediments to
competition and productivity. Charities with commercial lessor licenses
for bingo are losing ground competing with their grandfathered, commercial
counterparts because of some discrepancies in state law and the rules
adopted by the Lottery Commission.  In addition, charitable operators are
struggling to meet their charitable distribution rates because of ever
increasing expenses on paper and pull tab games. 

PURPOSE

This bill will:  1) grant the Lottery Commission more flexibility in
setting guidelines for the relationship between the commercial lessor and
charitable operator;  2) remove the consideration of rental income from
the calculation of adjusted gross receipts;  3) exclude the purchase of
paper and pull tabs from operating expenses and establish them as the cost
of goods sold; and 4) prohibit an organization conducting charitable bingo
from holding more than one commercial lessor's license and requires that
bingo be conducted at only the licensed site. 


RULEMAKING AUTHORITY

This bill expressly grants rulemaking authority to the Texas Lottery
Commission under Section 19a of the Bingo Enabling Act (Article 179d,
V.T.C.S.) for setting a maximum deduction for the cost of goods sold.  

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 19(d) of the Bingo Enabling Act (Article 179,
V.T.C.S.) by changing "may" to "shall." 

SECTION 2. Amends Section 19a of the Bingo Enabling Act by amending
Subsection (k) and adding Subsection (l). 

Subsection (k) Removes any consideration of income received from the
rental of bingo premises from the calculation of adjusted gross receipts
for charitable distribution.  Also establishes cost of goods sold (cost of
bingo paper, instant bingo tickets, or pull tab bingo games) as an
allowable deduction in the calculation of adjusted gross receipts, and
grants the Lottery Commission authority to establish rules governing the
maximum deduction for cost of goods sold. 

Subsection (l) Prohibits an organization conducting charitable bingo from
holding more than one commercial lessor's license and requires that bingo
be conducted at only the licensed site. 

SECTION 3. Effective date.

SECTION 4. Extended emergency clause.



 
EXPLANATION OF AMENDMENTS

The amendment reduces the amount of application paperwork for persons who
have held a license for five years or more.