By Haywood                                              S.B. No. 76

      75R1453 MWV-F                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the dedication of certain lottery revenue for the use

 1-3     of local governments.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Section 466.002, Government Code, is amended to

 1-6     read as follows:

 1-7           Sec. 466.002.  Definitions.  In this chapter:

 1-8                 (1)  "Commission" means the Texas Lottery Commission.

 1-9                 (2)  "Director" means the director of the division.

1-10                 (3)  "Division" means the lottery division established

1-11     by the commission under Chapter 467.

1-12                 (4)  "Executive director" means the executive director

1-13     of the commission.

1-14                 (5)  "Local government" means a county or a

1-15     municipality.

1-16                 (6)  "Lottery" means the procedures operated by the

1-17     state under this chapter through which prizes are awarded or

1-18     distributed by chance among persons who have paid, or

1-19     unconditionally agreed to pay, for a chance or other opportunity to

1-20     receive a prize.

1-21                 (7) [(6)]  "Lottery game" includes a lottery activity.

1-22                 (8) [(7)]  "Lottery operator" means a person selected

1-23     under Section 466.014(b) to operate a lottery.

1-24                 (9)  "Lottery revenue area" means:

 2-1                       (A)  for a county, all the area of the county

 2-2     except the area within the boundaries of a municipality; and

 2-3                       (B)  for a municipality, the area within the

 2-4     boundaries of the municipality, and does not include any area in

 2-5     the municipality's extraterritorial jurisdiction.

 2-6                 (10) [(8)]  "Player" means a person who contributes any

 2-7     part of the consideration for a ticket.

 2-8                 (11) [(9)]  "Sales agent" or "sales agency" means a

 2-9     person licensed under this chapter to sell tickets.

2-10                 (12) [(10)]  "Ticket" means any tangible evidence

2-11     issued to provide participation in a lottery game authorized by

2-12     this chapter.

2-13           SECTION 2.  Section 466.004, Government Code, is amended by

2-14     adding Subsection (c) to read as follows:

2-15           (c)  Revenue received by a local government as provided by

2-16     Section 466.351 is not tax revenue.

2-17           SECTION 3.  Section 466.351, Government Code, is amended to

2-18     read as follows:

2-19           Sec. 466.351.  Delivery of Funds.  (a)  Except as provided by

2-20     Subsection (d) and Section 466.3515, all revenue received from the

2-21     sale of tickets and all money credited to the state lottery account

2-22     from any other source shall be deposited in the state treasury

2-23     through approved state depositories on the settlement day or days

2-24     established by the director.

2-25           (b)  [The director may require sales agents to establish

2-26     separate electronic funds transfer accounts for the purposes of

2-27     depositing money from ticket sales, making payments to the

 3-1     division, and receiving payments from the division.]  The

 3-2     commission by rule shall establish the procedures for depositing

 3-3     money from ticket sales into electronic funds transfer accounts, as

 3-4     well as other procedures regarding the handling of money from

 3-5     ticket sales.  The director may require sales agents to establish

 3-6     separate electronic funds transfer accounts for the purposes of:

 3-7                 (1)  depositing gross revenue from ticket sales as

 3-8     required by Section 466.3515;

 3-9                 (2)  depositing other money from ticket sales;

3-10                 (3)  making payments to the division; and

3-11                 (4)  receiving payments from the division.

3-12           (c)  The director may not permit a sales agent to make

3-13     payments to the division or a lottery operator in cash.

3-14           (d)  The director may provide for a sales agent to retain

3-15     from the money received from the sale of tickets the amount of

3-16     prizes paid by the agent or the agent's commission, if any, and may

3-17     establish how often the agent will make settlement payments to the

3-18     treasury.  Money retained by a sales agent does not reduce the

3-19     money received by a local government under Section 466.3515.

3-20           (e)  The director may provide for a sales agent to pay

3-21     amounts received for the sale of tickets directly to an officer or

3-22     employee of the division for immediate deposit in the state

3-23     treasury.

3-24           SECTION 4.  Subchapter H, Chapter 466, Government Code, is

3-25     amended by adding Section 466.3515 to read as follows:

3-26           Sec. 466.3515.  LOTTERY REVENUE AREA.  (a)  The director

3-27     shall transfer to a local government five percent of the money

 4-1     collected from the sale of tickets by an agency located in the

 4-2     lottery revenue area of the local government if the local

 4-3     government has taken the necessary actions under Section 140.008,

 4-4     Local Government Code, to enable the local government to receive

 4-5     the money.

 4-6           (b)  The director shall determine the lottery revenue area in

 4-7     which each sales agency is located.

 4-8           (c)  A sales agent shall report to the director a change of

 4-9     location of the sales agency or a change of boundaries of a local

4-10     government that may cause the sales agency to change its location

4-11     from the lottery revenue area of one local government to the

4-12     lottery revenue area of a different local government.

4-13           (d)  A local government shall notify the director regarding a

4-14     boundary change of the local government that may cause the lottery

4-15     revenue area of any local government to change.

4-16           (e)  The director may transfer to the state lottery account

4-17     any revenue from tickets sold in a lottery revenue area of a local

4-18     government during a period in which the local government fails to

4-19     comply with the requirements of this chapter or a commission rule.

4-20           (f)  The commission shall adopt rules necessary for the

4-21     proper accounting and safeguarding of revenue transferred under

4-22     this section.

4-23           SECTION 5.  Section 466.355(a), Government Code, is amended

4-24     to read as follows:

4-25           (a)  The state lottery account is a special account in the

4-26     general revenue fund.  The account consists of all revenue received

4-27     from the sale of tickets less the amount transferred to local

 5-1     governments as provided by Section 466.3515, license and

 5-2     application fees under this chapter, and all money credited to the

 5-3     account from any other fund or source under law.  Interest earned

 5-4     by the state lottery account shall be deposited in the unobligated

 5-5     portion of the general revenue fund.

 5-6           SECTION 6.  Chapter 140, Local Government Code, is amended by

 5-7     adding Section 140.008 to read as follows:

 5-8           Sec. 140.008.  LOTTERY REVENUE OF A LOCAL GOVERNMENT.  (a)

 5-9     Before a county or municipality may receive lottery revenue as

5-10     provided by Section 466.3515, Government Code, the commissioners

5-11     court of the county or the governing body of the municipality must:

5-12                 (1)  provide written notice to the lottery director to

5-13     deposit, by use of electronic funds transfer, the appropriate

5-14     amount of lottery revenue into an account of the county or

5-15     municipality;

5-16                 (2)  establish an electronic funds transfer account

5-17     into which the lottery director may deposit the lottery revenue;

5-18     and

5-19                 (3)  comply with any rule established by the Texas

5-20     Lottery Commission relating to the collection or receipt of lottery

5-21     revenue.

5-22           (b)  A municipality may use lottery revenue provided under

5-23     Section 466.3515, Government Code, for any public purpose.

5-24           (c)  A county may use lottery revenue provided under Section

5-25     466.3515, Government Code, for any public purpose for which the

5-26     general funds of the county may be used.

5-27           SECTION 7.  (a)  This Act takes effect September 1, 1997, and

 6-1     applies to a lottery ticket that is purchased on or after January

 6-2     1, 1998.  A lottery ticket that is purchased on or after September

 6-3     1, 1997, and before January 1, 1998, is governed by the law as it

 6-4     existed immediately before September 1, 1997, and that law is

 6-5     continued in effect for that purpose.

 6-6           (b)  The Texas Lottery Commission shall establish rules

 6-7     relating to the collection and distribution of lottery revenue to

 6-8     local governments, as required by this Act, not later than November

 6-9     1, 1997.

6-10           SECTION 8.  The importance of this legislation and the

6-11     crowded condition of the calendars in both houses create an

6-12     emergency and an imperative public necessity that the

6-13     constitutional rule requiring bills to be read on three several

6-14     days in each house be suspended, and this rule is hereby suspended.