By:  Nixon                                             S.B. No. 237

                                A BILL TO BE ENTITLED

                                       AN ACT

 1-1     relating to competitive bids for state lottery contracts.

 1-2           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-3           SECTION 1.  Section 466.355, Government Code, is amended by

 1-4     amending Subsection (b) and adding Subsection (c) to read as

 1-5     follows:

 1-6           (b)  Money in the state lottery account may be used only for

 1-7     the following purposes and shall be distributed as follows:

 1-8                 (1)  the payment of prizes to the holders of winning

 1-9     tickets;

1-10                 (2)  the payment of costs incurred in the operation and

1-11     administration of the lottery, including any fees received by a

1-12     lottery operator, provided that the costs incurred in a fiscal

1-13     biennium may not exceed an amount equal to 15 percent of the gross

1-14     revenue accruing from the sale of tickets in that biennium;

1-15                 (3)  the establishment of a pooled bond fund, lottery

1-16     prize reserve fund, unclaimed prize fund, and prize payment

1-17     account; [and]

1-18                 (4)  the transfer to the foundation school fund of an

1-19     amount equal to 95 percent of the savings resulting from any

1-20     competitive bidding of contracts awarded under Section 466.014(b);

1-21                 (5)  the transfer to the Texas Workforce Commission for

1-22     community-based adult literacy programs of an amount equal to five

1-23     percent of the savings resulting from any competitive bidding of

 2-1     contracts awarded under Section 466.014(b); and

 2-2                 (6)  the balance, after creation of a reserve

 2-3     sufficient to pay the amounts needed or estimated to be needed

 2-4     under Subdivisions (1) through (5) [(3)], to be transferred to the

 2-5     unobligated portion of the general revenue fund, on or before the

 2-6     15th day of each month.

 2-7           (c)  For the purposes of Subsection (b), the savings

 2-8     resulting from competitive bidding of a contract is the difference

 2-9     between the amount contracted to be paid for the functions,

2-10     activities, or services to be provided under the contract and if

2-11     the functions, activities, or services have been previously

2-12     obtained, the amount that would have been paid for the same

2-13     functions, activities, or services during the period covered by the

2-14     contract if those functions, activities, or services had been

2-15     obtained in the manner they were obtained immediately before the

2-16     contract goes into effect.

2-17           SECTION 2.  This Act takes effect September 1, 1997.

2-18           SECTION 3.  The importance of this legislation and the

2-19     crowded condition of the calendars in both houses create an

2-20     emergency and an imperative public necessity that the

2-21     constitutional rule requiring bills to be read on three several

2-22     days in each house be suspended, and this rule is hereby suspended.