1-1 By: Lucio S.B. No. 432
1-2 (In the Senate - Filed February 4, 1997; February 6, 1997,
1-3 read first time and referred to Committee on State Affairs;
1-4 March 26, 1997, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 9, Nays 0; March 26, 1997,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 432 By: Gallegos
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 amending Subdivision
1-14 (20) and adding Subdivisions (26) through (29) to read as follows:
1-15 (20) "Commission" means the Texas Department of
1-16 Licensing and Regulation [Lottery Commission].
1-17 (26) "Instant bingo," "pull-tab bingo," and
1-18 "break-open bingo" means a form of bingo played using tickets with
1-19 perforated break-open tabs, made of paper or paper products, the
1-20 face of which is covered or otherwise hidden from view to conceal
1-21 numbers, letters, or symbols, some of which have been designated in
1-22 advance as prize winners.
1-23 (27) "Licensed authorized organization" means an
1-24 authorized organization that holds a license to conduct bingo games
1-25 as provided by this Act and the rules adopted by the commission.
1-26 (28) "Primary business office" means the location at
1-27 which all records relating to the primary purpose of a licensed
1-28 authorized organization are maintained in the ordinary course of
1-29 business.
1-30 (29) "Location," "place," or "premises" means the area
1-31 subject to the direct control of, and to actual use by, a licensed
1-32 authorized organization or group of licensed authorized
1-33 organizations for the purpose of conducting a game of bingo.
1-34 SECTION 2. Subsections (g), (k), (p), (q), (u), and (v),
1-35 Section 11, Bingo Enabling Act (Article 179d, Vernon's Texas Civil
1-36 Statutes), are amended to read as follows:
1-37 (g) A [person other than a] bona fide member of a licensed
1-38 authorized organization may [not] conduct, promote, or administer,
1-39 or assist in conducting, promoting, or administering, a bingo game.
1-40 (k) A game of chance other than bingo or a raffle conducted
1-41 under the Charitable Raffle Enabling Act (Article 179f, Revised
1-42 Statutes, as added by Chapter 957, Acts of the 71st Legislature,
1-43 Regular Session, 1989) may not be conducted or allowed during an
1-44 occasion when bingo is played. This subsection does not prohibit
1-45 the exhibition and play of an amusement machine that is not a
1-46 gambling device as defined by Section 47.01, Penal Code.
1-47 (p) No one other than a licensed authorized organization may
1-48 advertise [or promote] bingo. A licensed authorized organization
1-49 may [not] include in an advertisement or promotion the amount of a
1-50 prize or series of prizes offered at a bingo occasion.
1-51 (q) A licensed authorized organization or other person may
1-52 not award or offer to award a door prize or other prize having a
1-53 value of more than $250 [to persons present at a bingo occasion or
1-54 participating in a bingo occasion in addition to the prizes awarded
1-55 for winning the individual bingo games].
1-56 (u) Bingo may be played using a pull-tab bingo game, a
1-57 break-open bingo ticket, or an instant bingo ticket subject to the
1-58 rules of the commission. The commission by rule shall prohibit the
1-59 playing of bingo by use of a uniform product code bar coding device
1-60 or symbol.
1-61 (v) A person may not use a card-minding device:
1-62 (1) to generate or determine the random letters,
1-63 numbers, or other symbols used in playing the bingo card played
1-64 with the device's assistance;
2-1 (2) as a receptacle for the deposit of tokens or
2-2 money, including coins or paper currency, in payment for playing
2-3 the bingo card played with the device's assistance; or
2-4 (3) as a dispenser for the payment of a bingo prize,
2-5 including coins, paper currency, or any thing of value for the
2-6 bingo card played with the device's assistance. No more than 40
2-7 [30] percent of the individuals attending a [gross bingo game sales
2-8 at each] bingo occasion, based on the average of two previously
2-9 submitted quarterly reports, may use [can be on] electronic or
2-10 mechanical card-minding devices. This provision does not
2-11 include[,] pull-tabs, instant bingo tickets, or break-open bingo
2-12 games.
2-13 SECTION 3. Subsection (a), Section 11a, Bingo Enabling Act
2-14 (Article 179d, Vernon's Texas Civil Statutes), is amended to read
2-15 as follows:
2-16 (a) The rent charged by a licensed authorized commercial
2-17 lessor to a licensed authorized organization to conduct bingo may
2-18 not exceed $450 [$600] for each bingo occasion conducted on the
2-19 premises, unless the lessee licensed authorized organization
2-20 subleases the premises to one or more other licensed authorized
2-21 organizations to conduct bingo, in which event the rent charged by
2-22 the authorized commercial lessor may not exceed $450 [$600] for
2-23 each day.
2-24 SECTION 4. Section 12, Bingo Enabling Act (Article 179d,
2-25 Vernon's Texas Civil Statutes), is amended by amending Subsection
2-26 (d) and adding Subsection (g) to read as follows:
2-27 (d) In addition to the bingo occasions otherwise authorized
2-28 by this Act, a licensed [An] authorized organization may [receive a
2-29 temporary license for the] conduct [of] bingo games for special
2-30 events at its licensed location on 12 bingo occasions during a
2-31 calendar year after [on] filing with the commission a written
2-32 notice. The notice may be transmitted to the agency by facsimile.
2-33 The licensed authorized organization shall transmit the notice to
2-34 the commission before the third day preceding the date of the
2-35 special event. The approval to conduct bingo during the special
2-36 event is a ministerial act by the commission [an application, on a
2-37 form prescribed by the commission, accompanied by a $25 license
2-38 fee]. A special event authorization [temporary license] is valid
2-39 for four hours during any one day. [An organization may receive no
2-40 more than six temporary licenses in a calendar year.] An
2-41 organization operating under a special event authorization
2-42 [temporary license] is subject to the taxes and fees authorized or
2-43 imposed by this Act and the other provisions of this Act to the
2-44 extent they can be made applicable.
2-45 (g) For purposes of Subsection (a)(1) of this section:
2-46 (1) a copy of the Internal Revenue Service letter that
2-47 grants approval of an organization's Section 501(c) exemption is
2-48 adequate evidence of the validity of the organization's tax exempt
2-49 status; and
2-50 (2) a letter of good standing from a parent
2-51 organization that holds a Section 501(c) exemption for both the
2-52 parent organization and its affiliate is adequate evidence of the
2-53 affiliate organization's Section 501(c) exemption.
2-54 SECTION 5. Section 13, Bingo Enabling Act (Article 179d,
2-55 Vernon's Texas Civil Statutes), is amended by amending Subsections
2-56 (f) and (j) and adding Subsections (p) and (v) to read as follows:
2-57 (f) A person who leases premises on which bingo is conducted
2-58 is [not] required to be a licensed commercial lessor if [unless]
2-59 the person leases directly to a licensed authorized organization.
2-60 An authorized organization that holds a commercial license to lease
2-61 premises on which bingo is conducted must be licensed to conduct
2-62 bingo at the same premises.
2-63 (j) A license may not be transferred by a licensee[,] except
2-64 as provided by this subsection.
2-65 (1) A commercial license to lease bingo premises may
2-66 be transferred to another person with the prior approval of the
2-67 commission.
2-68 (2) A [that a] licensed commercial lessor may transfer
2-69 a license held by the licensee to a corporation formed by the
3-1 licensee or from one corporation owned by the licensee to another
3-2 corporation owned by the licensee.
3-3 (3) Subject to Subdivisions (4) and (5) of this
3-4 subsection, if an individual who holds a commercial license to
3-5 lease bingo premises dies, or becomes incapacitated as determined
3-6 by a court of this state, the individual's license is part of the
3-7 individual's estate and is subject to the laws governing the
3-8 disposition and control of property under the circumstances. Under
3-9 such circumstances, the license is not considered to have been
3-10 transferred, subject to compliance with Subdivision (6) of this
3-11 subsection. The individual's estate may take any action with
3-12 respect to the individual's license that the individual could have
3-13 taken while the individual was alive.
3-14 (4) Unless an injunction is issued under this section,
3-15 a licensed authorized organization that conducts bingo lawfully at
3-16 any location that is the subject of a license to which Subdivision
3-17 (3) of this subsection applies may continue conducting bingo at the
3-18 location following the death or incapacity of the individual
3-19 license holder.
3-20 (5) On a showing of good cause by the commission, a
3-21 district court having jurisdiction in the county for which a
3-22 commercial lessor license was issued may temporarily or permanently
3-23 enjoin the conduct of bingo at any location that is the subject of
3-24 a license to which Subdivision (3) of this subsection applies. For
3-25 purposes of this section, "good cause" means any cause that would
3-26 be sufficient for the commission to obtain a suspension under
3-27 Section 16(e) of this Act.
3-28 (6) The estate or guardian of an individual to whom
3-29 Subdivision (3) of this section applies shall notify the commission
3-30 within one year of the date the individual dies or is determined to
3-31 be incapacitated by a court of this state. The estate or guardian
3-32 and the heir or heirs or other appropriate person under the
3-33 circumstances shall promptly take all necessary steps to complete a
3-34 transfer of the license to the heir or heirs or other appropriate
3-35 person under the circumstances. A transfer of a license under this
3-36 subsection requires the prior approval of the commission. The
3-37 commission shall approve the transfer if the person to whom the
3-38 license will be transferred otherwise meets the requirements for
3-39 the license.
3-40 (p) Notwithstanding Subsection (n) of this section, the
3-41 commission may not issue a commercial license to lease bingo
3-42 premises to a licensed authorized organization unless the
3-43 commission receives evidence that the commission considers to be
3-44 adequate indicating that the licensed authorized organization is
3-45 able to:
3-46 (1) furnish the premises with furniture, fixtures, and
3-47 equipment as provided by rules adopted by the commission;
3-48 (2) provide utilities to the premises as provided by
3-49 rules adopted by the commission; and
3-50 (3) purchase the premises or renovate the premises as
3-51 provided by rules adopted by the commission.
3-52 (v)(1) Except as provided by this subsection, no more than
3-53 one bingo location may exist under a common roof or over a common
3-54 foundation.
3-55 (2) Subdivision (1) of this subsection does not apply
3-56 where more than one bingo location lawfully existed under a common
3-57 roof or over a common foundation as of January 1, 1997, and the
3-58 commission shall renew any license at such location that is
3-59 otherwise in compliance with this Act.
3-60 (3) Subdivision (2) of this subsection applies if one
3-61 or more of the bingo locations under a common roof or over a common
3-62 foundation ceases to lawfully exist.
3-63 SECTION 6. Subsection (i), Section 13c, Bingo Enabling Act
3-64 (Article 179d, Vernon's Texas Civil Statutes), is amended to read
3-65 as follows:
3-66 (i) All sales of bingo cards, supplies, devices, or
3-67 equipment to licensees must be on terms of immediate payment or on
3-68 terms requiring payment not later than the 30th day following the
3-69 date of actual delivery. If any payment is not made when due, the
4-1 seller shall notify the commission immediately and the commission
4-2 shall notify all manufacturers and distributors licensed in the
4-3 state of the default. In that event, another licensed distributor
4-4 [a person] may not sell or transfer any bingo equipment, devices,
4-5 or supplies to the purchaser in default on any terms other than
4-6 [immediate] payment on delivery and [until otherwise authorized by]
4-7 the commission may not issue a license amendment or license renewal
4-8 to the purchaser in default until the delinquent charges have been
4-9 paid. A licensed distributor shall notify the commission of a
4-10 payment received from a purchaser in default not later than the
4-11 second day after the date the payment for the delinquent amount is
4-12 received. The commission shall allow the purchaser to purchase
4-13 products from any licensed distributor after the payment of all
4-14 delinquent amounts by a purchaser in default.
4-15 SECTION 7. Section 14, Bingo Enabling Act (Article 179d,
4-16 Vernon's Texas Civil Statutes), is amended by amending Subsection
4-17 (b) and adding Subsections (d) and (e) to read as follows:
4-18 (b) A license issued under this Act may be amended on
4-19 application to the commission, and on payment of a $10 [$25] fee,
4-20 if the subject matter of the proposed amendment could lawfully and
4-21 properly have been included in the original license. A licensee
4-22 may not change the location [or times] of its bingo games until it
4-23 has surrendered its original license and received an amended
4-24 license from the commission.
4-25 (d) A licensee shall notify the commission before changing
4-26 the time or date of a bingo game. A licensee may provide notice to
4-27 the commission regarding the change of the time or date of a bingo
4-28 game by use of telephone or facsimile.
4-29 (e) The commission by rule shall provide a method by which a
4-30 licensee may pay the amendment fee required by this section.
4-31 SECTION 8. Section 16, Bingo Enabling Act (Article 179d,
4-32 Vernon's Texas Civil Statutes), is amended to read as follows:
4-33 Sec. 16. CONTROL AND SUPERVISION; SUSPENSION OF LICENSES;
4-34 INSPECTION OF PREMISES. (a) The commission shall administer this
4-35 Act. The commission has broad authority and shall exercise strict
4-36 control and close supervision over all games of bingo conducted in
4-37 this state to the end that the games are fairly conducted and the
4-38 proceeds derived from the games are used for the purposes
4-39 authorized in this Act. The commission's authority under this Act
4-40 is executed through a division established by the [administrator of
4-41 the] commission to administer this Act. The commission
4-42 [administrator] shall employ a director of bingo operations to
4-43 administer the division under the direction of the commission [and
4-44 administrator]. The commission may adopt rules for the enforcement
4-45 and administration of this Act.
4-46 (b) The commission shall provide to any person on request a
4-47 printed copy of this Act and any rules applicable to the
4-48 enforcement of this Act. The commission may impose a reasonable
4-49 charge for a copy of an item provided under this subsection.
4-50 (c) [(d)] The commission by rule shall provide procedures
4-51 for the approval of bingo cards. A licensee may not use or
4-52 distribute a bingo card unless it has been approved by the
4-53 commission. The commission may set the price or adopt one or more
4-54 schedules of prices at which bingo cards may be sold or otherwise
4-55 furnished by a licensed authorized organization. A licensed
4-56 authorized organization may not sell or otherwise furnish a bingo
4-57 card at a price other than a price authorized by the commission
4-58 under this subsection or by a schedule adopted under this
4-59 subsection. The commission may establish procedures requiring a
4-60 licensed authorized organization to notify the commission of the
4-61 price or price schedule for bingo cards the organization will use
4-62 for one or more reporting periods. The commission shall issue a
4-63 temporary approval to a manufacturer for distribution of instant
4-64 bingo tickets not later than the fifth day after the date the
4-65 manufacturer submits acceptable instant bingo tickets to the
4-66 commission or not later than the seventh day, if the only change to
4-67 a previously approved ticket is the amount of any prize or the
4-68 number of winning tickets. The commission shall issue a temporary
4-69 approval to a manufacturer for distribution of a bingo product
5-1 other than instant bingo tickets not later than the 30th day after
5-2 the date that the manufacturer submitted the bingo product to the
5-3 commission. If the commission has not completed testing the
5-4 instant bingo tickets or other bingo product within the time as
5-5 provided by this section, the commission shall issue to the
5-6 manufacturer of the product a temporary license to sell the
5-7 untested instant bingo tickets or other bingo product in this
5-8 state. If the commission disapproves any bingo product issued
5-9 temporary approval under this section, the manufacturer of the
5-10 product shall remove, at the manufacturer's expense, the product
5-11 from the premises of any license holder not later than the seventh
5-12 day after the date the manufacturer is notified of the product's
5-13 disapproval.
5-14 (d) [(e)] After a hearing, the commission may suspend or
5-15 revoke any license issued under this Act for failure to comply with
5-16 this Act or a rule adopted by the commission under this Act, or for
5-17 any reason that would allow or require the commission to refuse to
5-18 issue or renew a license of the same class.
5-19 (e) The commission may temporarily [summarily] suspend a
5-20 license issued under this Act for failure to comply with this Act
5-21 or a rule adopted by the commission under this Act. Before
5-22 temporarily suspending a license issued under this Act, the
5-23 director of bingo operations must follow any prehearing rules
5-24 adopted by [if] the commission to determine if [determines that]
5-25 the licensee's continued operation may constitute an immediate
5-26 threat to the health, safety, morals, or welfare of the public.
5-27 Chapter 2001, Government Code, [The Administrative Procedure and
5-28 Texas Register Act (Article 6252-13a, Vernon's Texas Civil
5-29 Statutes)] does not apply to the director of bingo operations or to
5-30 the commission in the enforcement and administration of a temporary
5-31 [summary] suspension under this section.
5-32 (f) A proceeding to temporarily [summarily] suspend a
5-33 license issued under this Act is initiated by the director of bingo
5-34 operations [commission] by serving notice to the licensee informing
5-35 the licensee of the rules adopted by the commission regarding the
5-36 prehearing temporary suspension process and [it] of the licensee's
5-37 right to a hearing before the commission. The notice must be
5-38 personally served on an officer, operator, or agent of the licensee
5-39 or sent by certified or registered mail, return receipt requested,
5-40 to the licensee's mailing address as it appears on the commission's
5-41 records. The notice must state the alleged violations that
5-42 constitute grounds for temporary [summary] suspension.
5-43 (g) If a notice of temporary [summary] suspension is served
5-44 on a licensee, the director of bingo operations [commission] shall
5-45 simultaneously serve notice of a hearing, to be held within 10 days
5-46 after the date the notice is served, at which the licensee shall
5-47 show cause why the license should not be temporarily [summarily]
5-48 suspended on the 10th day after the date the notice is served. A
5-49 final hearing on the suspension or revocation of the license shall
5-50 be held, if requested by the licensee, within 30 days after the
5-51 date the commission receives written notice of the request. A
5-52 final hearing on suspension or revocation is governed by the same
5-53 rules as a hearing on any other suspension or revocation under this
5-54 Act.
5-55 (h) The commission may employ officers or investigators as
5-56 the commission considers necessary to administer this Act.
5-57 (i) The commission or the commission's officers or agents
5-58 and state, city, or county peace officers may enter and inspect the
5-59 contents of premises where a game of bingo is being conducted or
5-60 where it is intended that a game is to be conducted, or where any
5-61 equipment used or intended for use in the conduct of a game is
5-62 found.
5-63 (j) The commission by rule may establish the number and type
5-64 of bingo games that may be played during an occasion.
5-65 SECTION 9. Subsection (a), Section 19b, Bingo Enabling Act
5-66 (Article 179d, Vernon's Texas Civil Statutes), is amended to read
5-67 as follows:
5-68 (a) An authorized organization licensed to conduct bingo
5-69 shall collect a fee from each person who wins a prize having a
6-1 value of more than $250 in a bingo game.
6-2 SECTION 10. Section 20, Bingo Enabling Act (Article 179d,
6-3 Vernon's Texas Civil Statutes), is amended to read as follows:
6-4 Sec. 20. REPORTING AND DUE DATE OF TAXES AND FEES. (a) A
6-5 [The taxes and fees authorized or imposed by this Act are due and
6-6 payable by the] licensee shall report [or any person conducting
6-7 bingo games without a license] to the comptroller [state treasurer]
6-8 quarterly on or before the 15th day of the month succeeding each
6-9 calendar quarter the taxes and fees authorized or imposed by this
6-10 Act. The report must be filed under oath on forms prescribed by
6-11 the commission.
6-12 (b) The commission shall adopt rules regarding payment of
6-13 taxes and fees.
6-14 SECTION 11. The Bingo Enabling Act (Article 179d, Vernon's
6-15 Texas Civil Statutes) is amended by adding Sections 44 and 45 to
6-16 read as follows:
6-17 Sec. 44. TRAINING PROGRAM. (a) The person designated by
6-18 the licensed authorized organization under Section 12(a)(7) of this
6-19 Act shall annually complete eight hours of training as provided by
6-20 the rules of the commission.
6-21 (b) A program approved by the commission must include
6-22 training on:
6-23 (1) conducting a bingo game;
6-24 (2) administering and operating a bingo game; and
6-25 (3) promoting a bingo game.
6-26 (c) The commission by rule shall establish:
6-27 (1) the content of training courses under this
6-28 section;
6-29 (2) information concerning training to be reported to
6-30 the commission; and
6-31 (3) other training program requirements that the
6-32 commission determines to be necessary to promote the fair conduct
6-33 of bingo games and compliance with this Act.
6-34 Sec. 45. OTHER POWERS AND DUTIES OF COMMISSION. The powers
6-35 and duties of the commission under this Act are in addition to the
6-36 powers and duties of the commission under Article 9100, Revised
6-37 Statutes.
6-38 SECTION 12. Section 25, Bingo Enabling Act (Article 179d,
6-39 Vernon's Texas Civil Statutes) is repealed.
6-40 SECTION 13. (a) The powers and duties of the Texas Lottery
6-41 Commission with regard to regulation of the playing of bingo in
6-42 this state are transferred to the Texas Department of Licensing and
6-43 Regulation.
6-44 (b) The Texas Department of Licensing and Regulation assumes
6-45 the position of the Texas Lottery Commission in relation to any
6-46 liability, obligation, agreement, or contract of the Texas Lottery
6-47 Commission for the regulation of bingo.
6-48 (c) On the effective date of this Act:
6-49 (1) the Texas Lottery Commission shall transfer the
6-50 records and other property used for the regulation of bingo to the
6-51 Texas Department of Licensing and Regulation; and
6-52 (2) any unexpended and unobligated appropriation to
6-53 the Texas Lottery Commission for the regulation of bingo shall be
6-54 transferred to the Texas Department of Licensing and Regulation.
6-55 (d) A rule applicable to the regulation of bingo adopted by
6-56 the Texas Lottery Commission that is in effect immediately before
6-57 the effective date of this Act becomes a rule of the commissioner
6-58 of licensing and regulation and remains in effect until amended or
6-59 repealed.
6-60 (e) The validity of actions taken by the Texas Lottery
6-61 Commission, including the issuance of a license, is not affected by
6-62 this Act. To the extent those actions continue to have any effect
6-63 on or after September 1, 1997, they are considered to be the
6-64 actions of the Texas Department of Licensing and Regulation.
6-65 SECTION 14. This Act takes effect September 1, 1997, and
6-66 applies to a game played, bingo occasion conducted, prize awarded,
6-67 or other action taken on or after that date. A game played, bingo
6-68 occasion conducted, prize awarded, or other action taken before
6-69 that date is governed by the law in effect at the time the game was
7-1 played, bingo occasion was conducted, prize was awarded, or other
7-2 action was taken, and that law is continued in effect for that
7-3 purpose.
7-4 SECTION 15. The Texas Legislative Council shall prepare a
7-5 nonsubstantive revision of the Bingo Enabling Act (Article 179d,
7-6 Vernon's Texas Civil Statutes) for consideration by the 76th
7-7 Legislature at its regular session in 1999.
7-8 SECTION 16. The importance of this legislation and the
7-9 crowded condition of the calendars in both houses create an
7-10 emergency and an imperative public necessity that the
7-11 constitutional rule requiring bills to be read on three several
7-12 days in each house be suspended, and this rule is hereby suspended.
7-13 * * * * *