Austin, Texas
                    FISCAL NOTE, 76th Regular Session
                              April 20, 1999
          TO:  Honorable Ron Wilson, Chair, House Committee on Licensing
               & Administrative Procedures
        FROM:  John Keel, Director, Legislative Budget Board
       IN RE:  HB3688  by Flores (relating to the authorization of
               satellite bingo games), Committee Report 1st House,
*  Estimated Two-year Net Impact to General Revenue Related Funds for    *
*  HB3688, Committee Report 1st House, Substituted:  positive impact     *
*  of $0 through the biennium ending August 31, 2001.                    *
*                                                                        *
*  The bill would make no appropriation but could provide the legal      *
*  basis for an appropriation of funds to implement the provisions of    *
*  the bill.                                                             *
General Revenue-Related Funds, Five-Year Impact:
          *  Fiscal Year  Probable Net Positive/(Negative)   *
          *               Impact to General Revenue Related  *
          *                             Funds                *
          *       2000                                   $0  *
          *       2001                                    0  *
          *       2002                                    0  *
          *       2003                                    0  *
          *       2004                                    0  *
All Funds, Five-Year Impact:
*Fiscal      Probable        Probable        Probable       Change in     *
* Year       Revenue         Revenue      Savings/(Cost) Number of State  *
*          Gain/(Loss)     Gain/(Loss)     from General   Employees from  *
*          from General     from New -     Revenue Fund      FY 1999      *
*          Revenue Fund      Veterans          0001                       *
*              0001      Cemetery System                                  *
*                           Trust Fund                                    *
*  2000        $1,335,705      $2,017,995    $(1,335,705)            25.0 *
*  2001         1,091,955       2,317,395     (1,091,955)            25.0 *
*  2002         1,091,955       2,373,945     (1,091,955)            25.0 *
*  2003         1,218,205       2,305,145     (1,218,205)            25.0 *
*  2004         1,091,955       2,489,895     (1,091,955)            25.0 *
Technology Impact
Passage of the bill would necessitate purchasing personal computers and
related software upon implementation and their replacement in the fourth
Fiscal Analysis
The bill would amend the Bingo Enabling Act to allow satellite bingo
games, where two or more licensed organizations conduct bingo for a
common prize pool and with a common selection of numbers or symbols.
Satellite bingo would not be subject to the maximum prize per game of
$750, and the Texas Lottery Commission (commission) would be authorized
to exempt satellite bingo from any provision of the Act if the commission
determined that the exemption was necessary to facilitate the operation
and administration of satellite bingo.

A satellite bingo service provider's license would be required for
persons providing those services.  The fee for a license would be $5,000,
plus the cost incurred to conduct criminal background investigations.
The provider would also be required to be bonded.

The bill would require monthly allocations by licensees to charities
based on the ratio of satellite games conducted by each charity to the
total number of satellite games conducted at the facility.  Allocations
to charities could be no less than 17.5 percent of gross receipts from
satellite bingo games.

Satellite games would be exempt from the 5 percent bingo prize fee and
the allocation to local governments.  The prize fee would be 10 percent.
Revenue from the prize fee would be used by the commission to offset
costs of regulation.  Surplus revenue would be remitted to the
Comptroller to be used for a newly-created trust fund for the perpetual
support and maintenance of a veterans cemetery system.  Amounts in the
trust fund over $50 million would be transferred to the General Revenue

This bill would take effect October 1, 1999.
Based on the assumption that the novelty of the game would generate
interest in players and the organizations conducting bingo or eligible to
conduct bingo, there may be a positive impact from the potential
increase to gross receipts from sales.  This estimate presumes that the
10 percent prize fee would result in a 15 percent increase in bingo prize
fees to be used for administration and payable to the new trust fund.
In addition, there could be an increase in certain bingo license fees.

The Lottery Commission has estimated that in order to implement the
provisions of the bill, additional staff and computers will be required.
Local Government Impact
No significant fiscal implication to units of local government is
Source Agencies:   304   Comptroller of Public Accounts, 362   Texas
                   Lottery Commission
LBB Staff:         JK, TH, BR, WP