1-1 By: Palmer (Senate Sponsor - Lucio) H.B. No. 2086
1-2 (In the Senate - Received from the House May 12, 1997;
1-3 May 13, 1997, read first time and referred to Committee on State
1-4 Affairs; May 18, 1997, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 12, Nays 0; May 18, 1997,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR H.B. No. 2086 By: Cain
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the regulation and operation of bingo.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. Section 2, Bingo Enabling Act (Article 179d,
1-13 Vernon's Texas Civil Statutes), is amended by adding Subdivisions
1-14 (26) through (29) to read as follows:
1-15 (26) "Instant bingo," "pull-tab bingo," and
1-16 "break-open bingo" mean a form of bingo played using tickets with
1-17 perforated break-open tabs, made of paper or paper products, the
1-18 face of which is covered or otherwise hidden from view to conceal
1-19 numbers, letters, or symbols, some of which have been designated in
1-20 advance as prize winners.
1-21 (27) "Licensed authorized organization" means an
1-22 authorized organization that holds a license to conduct bingo games
1-23 as provided by this Act and the rules adopted by the commission.
1-24 (28) "Primary business office" means the location at
1-25 which all records relating to the primary purpose of a licensed
1-26 authorized organization are maintained in the ordinary course of
1-27 business.
1-28 (29) "Location," "place," or "premises" means the area
1-29 subject to the direct control of, and to actual use by, a licensed
1-30 authorized organization or group of licensed authorized
1-31 organizations for the purpose of conducting a game of bingo.
1-32 SECTION 2. Subsections (e), (k), (p), (q), and (v), Section
1-33 11, Bingo Enabling Act (Article 179d, Vernon's Texas Civil
1-34 Statutes), are amended to read as follows:
1-35 (e) A prize may not exceed the sum or value of $750 [$500]
1-36 in any single game of bingo.
1-37 (k) A game of chance other than bingo or a raffle conducted
1-38 under the Charitable Raffle Enabling Act (Article 179f, Revised
1-39 Statutes, as added by Chapter 957, Acts of the 71st Legislature,
1-40 Regular Session, 1989) may not be conducted or allowed during an
1-41 occasion when bingo is played. A person authorized to conduct a
1-42 raffle under this section must be a bona fide member of a licensed
1-43 authorized organization as described in Subsection (g) of this
1-44 section. The commission shall adopt rules for the implementation
1-45 of this subsection. This subsection does not prohibit the
1-46 exhibition and play of an amusement machine that is not a gambling
1-47 device as defined by Section 47.01, Penal Code.
1-48 (p) No one other than a licensed authorized organization or
1-49 the commission may advertise [or promote] bingo. A licensed
1-50 authorized organization or the commission may [not] include in an
1-51 advertisement or promotion the amount of a prize or series of
1-52 prizes offered at a bingo occasion.
1-53 (q) A licensed authorized organization or other person may
1-54 not award or offer to award a door prize having a value of more
1-55 than $250 [or other prize to persons present at a bingo occasion or
1-56 participating in a bingo occasion in addition to the prizes awarded
1-57 for winning the individual bingo games].
1-58 (v) A person may not use a card-minding device:
1-59 (1) to generate or determine the random letters,
1-60 numbers, or other symbols used in playing the bingo card played
1-61 with the device's assistance;
1-62 (2) as a receptacle for the deposit of tokens or
1-63 money, including coins or paper currency, in payment for playing
1-64 the bingo card played with the device's assistance; or
2-1 (3) as a dispenser for the payment of a bingo prize,
2-2 including coins, paper currency, or any thing of value for the
2-3 bingo card played with the device's assistance. No more than 40
2-4 [30] percent of the individuals attending a [gross bingo game sales
2-5 at each] bingo occasion, based on the average of two previously
2-6 submitted quarterly reports, may use [can be on] electronic or
2-7 mechanical card-minding devices. This provision does not
2-8 include[,] pull-tabs, instant bingo tickets, or break-open bingo
2-9 games.
2-10 SECTION 3. Section 12, Bingo Enabling Act (Article 179d,
2-11 Vernon's Texas Civil Statutes), is amended by adding Subsection (g)
2-12 to read as follows:
2-13 (g) For purposes of Subsection (a)(1) of this section:
2-14 (1) a copy of the Internal Revenue Service letter that
2-15 grants approval of an organization's Section 501(c) exemption is
2-16 adequate evidence of the validity of the organization's tax exempt
2-17 status; and
2-18 (2) a letter of good standing from a parent
2-19 organization that holds a Section 501(c) exemption for both the
2-20 parent organization and its affiliate is adequate evidence of the
2-21 affiliate organization's Section 501(c) exemption.
2-22 SECTION 4. Section 13, Bingo Enabling Act (Article 179d,
2-23 Vernon's Texas Civil Statutes), is amended by amending Subsections
2-24 (f) and (j) and adding Subsection (p) to read as follows:
2-25 (f) A person who leases premises on which bingo is conducted
2-26 is [not] required to be a licensed commercial lessor if [unless]
2-27 the person leases directly to a licensed authorized organization.
2-28 An authorized organization that holds a commercial license to lease
2-29 premises on which bingo is conducted must be licensed to conduct
2-30 bingo at the same premises.
2-31 (j) A license may not be transferred by a licensee[,] except
2-32 as provided by this subsection.
2-33 (1) A commercial license to lease bingo premises may
2-34 be transferred to another person with the prior approval of the
2-35 commission.
2-36 (2) A [that a] licensed commercial lessor may transfer
2-37 a license held by the licensee to a corporation formed by the
2-38 licensee or from one corporation owned by the licensee to another
2-39 corporation owned by the licensee.
2-40 (3) Subject to Subdivisions (4) and (5) of this
2-41 subsection, if an individual who holds a commercial license to
2-42 lease bingo premises dies, or becomes incapacitated as determined
2-43 by a court of this state, the individual's license is part of the
2-44 individual's estate and is subject to the laws governing the
2-45 disposition and control of property under the circumstances. Under
2-46 such circumstances, the license is not considered to have been
2-47 transferred, subject to compliance with Subdivision (6) of this
2-48 subsection. The individual's estate may take any action with
2-49 respect to the individual's license that the individual could have
2-50 taken while the individual was alive.
2-51 (4) Unless an injunction is issued under this section,
2-52 a licensed authorized organization that conducts bingo lawfully at
2-53 any location that is the subject of a license to which Subdivision
2-54 (3) of this subsection applies may continue conducting bingo at the
2-55 location following the death or incapacity of the individual
2-56 license holder.
2-57 (5) On a showing of good cause by the commission, a
2-58 district court having jurisdiction in the county for which a
2-59 commercial lessor license was issued may temporarily or permanently
2-60 enjoin the conduct of bingo at any location that is the subject of
2-61 a license to which Subdivision (3) of this subsection applies. For
2-62 purposes of this section, "good cause" means any cause that would
2-63 be sufficient for the commission to obtain a suspension under
2-64 Section 16(e) of this Act.
2-65 (6) The estate or guardian of an individual to whom
2-66 Subdivision (3) of this subsection applies shall notify the
2-67 commission within one year of the date the individual dies or is
2-68 determined to be incapacitated by a court of this state. The
2-69 estate or guardian and the heir or heirs or other appropriate
3-1 person under the circumstances shall promptly take all necessary
3-2 steps to complete a transfer of the license to the heir or heirs or
3-3 other appropriate person under the circumstances. A transfer of a
3-4 license under this subsection requires the prior approval of the
3-5 commission. The commission shall approve the transfer if the
3-6 person to whom the license will be transferred otherwise meets the
3-7 requirements for the license.
3-8 (p)(1) Notwithstanding Subsection (n) of this section, the
3-9 commission may not issue a commercial license to lease a bingo
3-10 premises to any person unless the commission receives evidence that
3-11 the commission considers adequate that any funds used by the person
3-12 seeking the license to obtain the premises, provide the premises
3-13 with furniture, fixtures, or equipment, renovate the premises, or
3-14 provide utilities to the premises are:
3-15 (A) the person's own funds; or
3-16 (B) the funds of another person, including the
3-17 proceeds of a loan, obtained in an arms-length transaction that was
3-18 commercially reasonable under the circumstances and the funds were
3-19 not obtained under an expectation or obligation that the person
3-20 from whom the funds were obtained would directly participate in, or
3-21 have any legal interest in, any rents obtained under the license or
3-22 revenues or profits from the conduct of bingo on the premises.
3-23 (2) This subsection does not prohibit a group of
3-24 licensed authorized organizations from combining the organizations'
3-25 funds or combining or jointly obtaining funds described by
3-26 Subsection (p)(1)(B) of this section.
3-27 SECTION 5. Section 13e, Bingo Enabling Act (Article 179d,
3-28 Vernon's Texas Civil Statutes), is amended by adding Subsections
3-29 (i)-(k) to read as follows:
3-30 (i) A system service provider may use bar codes on bingo
3-31 paper as a means of providing accurate tracking, registering, and
3-32 accounting.
3-33 (j) A system service provider may purchase goods or services
3-34 from a licensed manufacturer.
3-35 (k) The commission shall include a system service provider
3-36 as a member of a bingo advisory committee appointed under Section
3-37 43 of this Act.
3-38 SECTION 6. Section 14, Bingo Enabling Act (Article 179d,
3-39 Vernon's Texas Civil Statutes), is amended by amending Subsection
3-40 (b) and adding Subsections (d) and (e) to read as follows:
3-41 (b) A license issued under this Act may be amended on
3-42 application to the commission, and on payment of a $10 [$25] fee,
3-43 if the subject matter of the proposed amendment could lawfully and
3-44 properly have been included in the original license. A licensee
3-45 may not change the location [or times] of its bingo games until it
3-46 has surrendered its original license and received an amended
3-47 license from the commission.
3-48 (d) A licensee shall notify the commission before changing
3-49 the time or date of a bingo game. A licensee may provide notice to
3-50 the commission regarding the change of the time or date of a bingo
3-51 game by use of telephone or facsimile.
3-52 (e) The commission by rule shall provide a method by which a
3-53 licensee may pay the amendment fee required by this section.
3-54 SECTION 7. Section 16, Bingo Enabling Act (Article 179d,
3-55 Vernon's Texas Civil Statutes), is amended to read as follows:
3-56 Sec. 16. CONTROL AND SUPERVISION; SUSPENSION OF LICENSES;
3-57 INSPECTION OF PREMISES. (a) The commission shall administer this
3-58 Act. The commission has broad authority and shall exercise strict
3-59 control and close supervision over all games of bingo conducted in
3-60 this state to the end that the games are fairly conducted and the
3-61 proceeds derived from the games are used for the purposes
3-62 authorized in this Act. The commission's authority under this Act
3-63 is executed through a division established by the [administrator of
3-64 the] commission to administer this Act. The commission
3-65 [administrator] shall employ a director of bingo operations to
3-66 administer the division under the direction of the commission [and
3-67 administrator]. The commission may adopt rules for the enforcement
3-68 and administration of this Act.
3-69 (b) The commission shall provide to any person on request a
4-1 printed copy of this Act and any rules applicable to the
4-2 enforcement of this Act. The commission may impose a reasonable
4-3 charge for a copy of an item provided under this subsection.
4-4 (c) [(d)] The commission by rule shall provide procedures
4-5 for the approval of bingo cards. A licensee may not use or
4-6 distribute a bingo card unless it has been approved by the
4-7 commission. The commission may set the price or adopt one or more
4-8 schedules of prices at which bingo cards may be sold or otherwise
4-9 furnished by a licensed authorized organization. A licensed
4-10 authorized organization may not sell or otherwise furnish a bingo
4-11 card at a price other than a price authorized by the commission
4-12 under this subsection or by a schedule adopted under this
4-13 subsection. The commission may establish procedures requiring a
4-14 licensed authorized organization to notify the commission of the
4-15 price or price schedule for bingo cards the organization will use
4-16 for one or more reporting periods.
4-17 (d) [(e)] After a hearing, the commission may suspend or
4-18 revoke any license issued under this Act for failure to comply with
4-19 this Act or a rule adopted by the commission under this Act, or for
4-20 any reason that would allow or require the commission to refuse to
4-21 issue or renew a license of the same class.
4-22 (e) The commission may temporarily [summarily] suspend a
4-23 license issued under this Act for failure to comply with this Act
4-24 or a rule adopted by the commission under this Act. Before
4-25 temporarily suspending a license issued under this Act, the
4-26 director of bingo operations must follow any prehearing rules
4-27 adopted by [if] the commission to determine if [determines that]
4-28 the licensee's continued operation may constitute an immediate
4-29 threat to the health, safety, morals, or welfare of the public.
4-30 Chapter 2001, Government Code, [The Administrative Procedure and
4-31 Texas Register Act (Article 6252-13a, Vernon's Texas Civil
4-32 Statutes)] does not apply to the director of bingo operations or to
4-33 the commission in the enforcement and administration of a temporary
4-34 [summary] suspension under this section.
4-35 (f) A proceeding to temporarily [summarily] suspend a
4-36 license issued under this Act is initiated by the director of bingo
4-37 operations [commission] by serving notice to the licensee informing
4-38 the licensee of the rules adopted by the commission regarding the
4-39 prehearing temporary suspension process and [it] of the licensee's
4-40 right to a hearing before the commission. The notice must be
4-41 personally served on an officer, operator, or agent of the licensee
4-42 or sent by certified or registered mail, return receipt requested,
4-43 to the licensee's mailing address as it appears on the commission's
4-44 records. The notice must state the alleged violations that
4-45 constitute grounds for temporary [summary] suspension.
4-46 (g) If a notice of temporary [summary] suspension is served
4-47 on a licensee, the director of bingo operations [commission] shall
4-48 simultaneously serve notice of a hearing, to be held within 10 days
4-49 after the date the notice is served, at which the licensee shall
4-50 show cause why the license should not be temporarily [summarily]
4-51 suspended on the 10th day after the date the notice is served. A
4-52 final hearing on the suspension or revocation of the license shall
4-53 be held, if requested by the licensee, within 30 days after the
4-54 date the commission receives written notice of the request. A
4-55 final hearing on suspension or revocation is governed by the same
4-56 rules as a hearing on any other suspension or revocation under this
4-57 Act.
4-58 (h) The commission may employ officers or investigators as
4-59 the commission considers necessary to administer this Act.
4-60 (i) The commission or the commission's officers or agents
4-61 and state, city, or county peace officers may enter and inspect the
4-62 contents of premises where a game of bingo is being conducted or
4-63 where it is intended that a game is to be conducted, or where any
4-64 equipment used or intended for use in the conduct of a game is
4-65 found.
4-66 (j) The commission by rule may establish the number and type
4-67 of bingo games that may be played during an occasion.
4-68 SECTION 8. Section 19a, Bingo Enabling Act (Article 179d,
4-69 Vernon's Texas Civil Statutes), is amended by amending Subsection
5-1 (k) and by adding Subsection (l) to read as follows:
5-2 (k) Before the end of each quarter, each licensed authorized
5-3 organization shall disburse for charitable purposes an amount not
5-4 less than 35 percent of the organization's adjusted gross receipts
5-5 from the last preceding quarter, less the amount of authorized
5-6 expenses not to exceed six percent of the gross receipts. For
5-7 purposes of this subsection, adjusted gross receipts means gross
5-8 receipts [plus any consideration received from the rental of
5-9 premises for bingo by the authorized organization,] less the
5-10 amount of cost of goods sold by an organization and prizes paid in
5-11 the preceding quarter. For purposes of this subsection, cost of
5-12 goods sold by an organization is the cost of bingo paper, instant
5-13 bingo tickets, or pull-tab bingo games purchased by the
5-14 organization. If a licensed authorized organization fails to meet
5-15 the requirements of this subsection for a quarter, the commission
5-16 in applying appropriate sanctions may consider whether, taking into
5-17 account the amount required to be distributed during that quarter
5-18 and the three preceding quarters and the charitable distributions
5-19 for each of those quarters, the organization has distributed a
5-20 total amount sufficient to have met the 35 percent requirement for
5-21 that quarter and the three preceding quarters combined.
5-22 (l) A licensed authorized organization may obtain only one
5-23 commercial lessor license. The license to lease bingo premises may
5-24 only be issued for the same premise, place, or location where the
5-25 authorized organization is licensed to conduct its bingo games.
5-26 SECTION 9. Section 20, Bingo Enabling Act (Article 179d,
5-27 Vernon's Texas Civil Statutes), is amended to read as follows:
5-28 Sec. 20. REPORTING AND DUE DATE OF TAXES AND FEES. (a) The
5-29 taxes and fees authorized or imposed by this Act are due and
5-30 payable by the licensee or any person conducting bingo games
5-31 without a license to the commission [state treasurer] quarterly on
5-32 or before the 15th day of the month succeeding each calendar
5-33 quarter. The report must be filed under oath on forms prescribed
5-34 by the commission.
5-35 (b) The commission shall adopt rules regarding payment of
5-36 taxes and fees.
5-37 SECTION 10. Section 39(b), Bingo Enabling Act (Article 179d,
5-38 Vernon's Texas Civil Statutes), is amended to read as follows:
5-39 (b) Any person conducting, promoting, or administering a
5-40 game commits a felony of the third degree unless the person is
5-41 conducting, promoting, or administering a game:
5-42 (1) in accordance with a valid license issued under
5-43 this Act;
5-44 (2) within the confines of a home for purposes of
5-45 amusement or recreation when:
5-46 (A) no player or other person furnishes anything
5-47 of more than nominal value for the opportunity to participate;
5-48 (B) participation in the game does not exceed 15
5-49 players; and
5-50 (C) the prizes awarded or to be awarded are
5-51 nominal;
5-52 (3) on behalf of an organization of persons 60 years
5-53 of age or over, a senior citizens' association, a senior citizens'
5-54 community center program operated or funded by a governmental
5-55 entity, [or] the patients in a hospital or nursing home or
5-56 residents of a retirement home, or the patients in a Veterans
5-57 Administration medical center or a military hospital solely for the
5-58 purpose of amusement and recreation of its members, residents, or
5-59 patients, when:
5-60 (A) no player or other person furnishes anything
5-61 of more than nominal value for the opportunity to participate; and
5-62 (B) the prizes awarded or to be awarded are
5-63 nominal; or
5-64 (4) on behalf of a business conducting the game for
5-65 promotional or advertising purposes if:
5-66 (A) the game is conducted by or through a
5-67 newspaper or a radio or television station;
5-68 (B) participation in the game is open to the
5-69 general public and is not limited to customers of the business;
6-1 (C) playing materials are furnished without
6-2 charge to any person on request; and
6-3 (D) no player is required to furnish anything of
6-4 value for the opportunity to participate.
6-5 SECTION 11. The Bingo Enabling Act (Article 179d, Vernon's
6-6 Texas Civil Statutes) is amended by adding Sections 44, 45, and 46
6-7 to read as follows:
6-8 Sec. 44. TRAINING PROGRAM. (a) The person designated by
6-9 the licensed authorized organization under Section 12(a)(7) of this
6-10 Act shall complete eight hours of training as provided by the rules
6-11 of the commission.
6-12 (b) A program approved by the commission must include
6-13 training on:
6-14 (1) conducting a bingo game;
6-15 (2) administering and operating a bingo game; and
6-16 (3) promoting a bingo game.
6-17 (c) The commission by rule shall establish:
6-18 (1) the content of training courses under this
6-19 section;
6-20 (2) information concerning training to be reported to
6-21 the commission; and
6-22 (3) other training program requirements that the
6-23 commission determines to be necessary to promote the fair conduct
6-24 of bingo games and compliance with this Act.
6-25 Sec. 45. APPLICATION FORMS. The commission may not require
6-26 a person who has held a license for five or more years to complete
6-27 an application for the renewal of the license that is more than two
6-28 pages in length. The commission shall adopt renewal forms that
6-29 have reasonably sized pages and reasonably sized print.
6-30 Sec. 46. PAPERWORK REDUCTION. The commission may not
6-31 require a person who has held a license for five or more years to
6-32 complete an application for the renewal of the license that is more
6-33 than two pages in length. The commission shall adopt renewal forms
6-34 that have pages and print of reasonable size.
6-35 SECTION 12. (a) Except as provided by Subsection (b) of
6-36 this section, this Act applies to the operation of a bingo game,
6-37 the award of prizes, the disbursement of funds for a charitable
6-38 purpose, or other action taken on or after October 1, 1997. The
6-39 law in effect before October 1, 1997, is continued in effect for
6-40 the purposes of the calculation and distribution of funds and the
6-41 operation of a bingo game by a licensed authorized organization
6-42 before October 1, 1997.
6-43 (b) Not later than July 1, 1997, the Texas Lottery
6-44 Commission shall adopt rules under Section 19a, Bingo Enabling Act
6-45 (Article 179d, Vernon's Texas Civil Statutes), as amended by this
6-46 Act, relating to the operation of bingo by bingo license holders
6-47 and the distribution of proceeds for charitable purposes.
6-48 SECTION 13. The Texas Legislative Council shall prepare a
6-49 nonsubstantive revision of the Bingo Enabling Act (Article 179d,
6-50 Vernon's Texas Civil Statutes) for consideration by the 76th
6-51 Legislature at its regular session in 1999.
6-52 SECTION 14. The importance of this legislation and the
6-53 crowded condition of the calendars in both houses create an
6-54 emergency and an imperative public necessity that the
6-55 constitutional rule requiring bills to be read on three several
6-56 days in each house be suspended, and this rule is hereby suspended,
6-57 and that this Act take effect and be in force according to its
6-58 terms, and it is so enacted.
6-59 * * * * *