LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session May 18, 1997 TO: Honorable Kenneth Armbrister, Chair IN RE: House Bill No. 2086, Committee Report 2nd House, Substituted Committee on State Affairs By: Palmer Senate Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on HB2086 ( relating to the regulation and operation of bingo.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by HB2086-Committee Report 2nd House, Substituted Implementing the provisions of the bill would result in a net negative impact of $(315,217) to General Revenue Related Funds through the biennium ending August 31, 1999. Fiscal Analysis The bill would amend the Bingo Enabling Act as it applies to the operation of a bingo game, the award of prizes, the disbursement of funds for a charitable purpose or other action taken on or after October 1, 1997. The revised provisions would take effect September 1, 1997. The bill would add a system service provider as a member of the bingo advisory committee currently authorized under the Act and would require the Texas Lottery Commission to adopt rules not later than July 1, 1997 governing both the operation of bingo and distribution of bingo proceeds for charitable purposes as revised by the bill. The bill would allow the advertising of bingo sessions and prizes by bingo licensees or by the commission. Licensed operators could conduct a charitable raffle under the Charitable Raffle Enabling Act at a bingo session. The bill raises the allowable limit for a prize from $500 to $750 for any single game of bingo. Also, licensed operators could award a door prize, provided that the value of the door prize was no greater than $250. The bill would increase the percentage of persons who could use a card minding device to 40 percent from 30 percent. Methodolgy The Comptroller of Public Accounts estimates the bill would have no significant fiscal effect on the state's revenue or cash flow. However, the Texas Lottery Commission estimates that three (3) new staff positions would be needed to implement the provisions of the bill. Additional costs for start-up of the training program and refinement of the required new rules would be included. Other support costs associated with the new staff are also included. Initial costs of developing rules by the July 1997 directive would be absorbed with current appropriated funds. Should the commission decide to contract out for training services for licensees, there could be a reduced fiscal impact of implementing that section of the bill. The probable fiscal implications of implementing the provisions of the bill during each of the first five years following passage is estimated as follows: Five Year Impact: Fiscal Year Probable Change in Number Savings/(Cost) of State from General Employees from Revenue Fund FY 1997 0001 1998 ($155,730) 3.0 1998 (159,487) 3.0 2000 (163,378) 3.0 2001 (167,435) 3.0 2002 (171,582) 3.0 Net Impact on General Revenue Related Funds: The probable fiscal implication to General Revenue related funds during each of the first five years is estimated as follows: Fiscal Year Probable Net Postive/(Negative) General Revenue Related Funds Funds 1998 ($155,730) 1999 (159,487) 2000 (163,378) 2001 (167,435) 2002 (171,582) Source: Agencies: 362 Texas Lottery Commission LBB Staff: JK ,JD ,PH