By: Flores, Raymond H.B. No. 2519
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of bingo; imposing a tax.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2001.002, Occupations Code, is amended
by amending Subdivision (5) and adding Subdivision (29) to read as
follows:
(5) "Bingo equipment" means equipment used, made, or
sold for the purpose of use in bingo. The term:
(A) includes:
(i) a machine or other device from which
balls or other items are withdrawn to determine the letters and
numbers or other symbols to be called;
(ii) an electronic or mechanical
cardminding device;
(iii) a pull-tab dispenser;
(iv) a bingo card; [and]
(v) a bingo ball; and
(vi) any other device commonly used in the
direct operation of a bingo game; and
(B) does not include:
(i) a bingo game set commonly manufactured
and sold as a child's game for a retail price of $20 or less unless
the set or a part of the set is used in bingo subject to regulation
under this chapter; or
(ii) a commonly available component part of
bingo equipment such as a light bulb or[,] fuse[, or bingo ball].
(29) "Sale" shall only refer to the transfer of title
to equipment or other items from a seller to a buyer.
SECTION 2. Section 2001.051(b), Occupations Code, is
amended to read as follows:
(b) The commission has broad authority and shall exercise
strict control and close supervision over all bingo conducted in
this state so that bingo is fairly conducted and the proceeds
derived from bingo are used for an authorized purpose. The
commission does not have regulatory authority over:
(1) any matter relating to the premises, personnel, or
activities of an authorized commercial lessor or authorized
organization unless the authority is expressly granted by this
chapter or is necessary to administer this chapter; or
(2) any person engaged in a business that is not
subject to this chapter or to Chapter 466 or 467, Government Code.
SECTION 3. Section 2001.053, Occupations Code, is amended
to read as follows:
Sec. 2001.053. OFFICERS AND INVESTIGATORS. (a) The
commission may employ officers or investigators the commission
considers necessary to administer this chapter.
(b) An officer or investigator employed by the commission
may not carry a firearm or badge and may not wear a hat, uniform, or
other clothing with any type of insignia indicating the officer's
or investigator's official position, while conducting a routine
inspection of bingo premises or a business office of a licensed
authorized organization.
SECTION 4. Section 2001.055, Occupations Code, is amended
to read as follows:
Sec. 2001.055. REGULATION OF GAMES. (a) The commission by
rule may establish the number and type of bingo games that may be
played during a bingo occasion.
(b) The commission, to the extent consistent with this
chapter, shall support the efforts of licensed authorized
organizations to develop and offer new types of bingo games and to
apply new technology to bingo games.
SECTION 5. Subchapter B, Chapter 2001, Occupations Code, is
amended by adding Section 2001.059 to read as follows:
Sec. 2001.059. ADVISORY OPINIONS. (a) A person may request
from the director of the bingo division an advisory opinion
regarding compliance with this chapter and the rules of the policy
board.
(b) The director of the bingo division shall respond to a
request under Subsection (a) not later than the 30th day after the
date a request is received, unless the director determines that the
request does not contain sufficient facts to provide an answer on
which the requestor may rely. In that event, the director shall
request additional information from the requestor not later than
the 10th day after the date the request is received. If the
director requests additional information, the director shall
respond to the request not later than the 30th day after the date
additional information is received pursuant to the request for
additional information.
(c) A person who requests an advisory opinion under
Subsection (a) may act in reliance on the opinion in the conduct of
any activity under any license issued under this chapter if the
conduct is substantially consistent with the opinion and the facts
stated in the request.
SECTION 6. Section 2001.103, Occupations Code, is amended
by adding Subsections (e)-(h) to read as follows:
(e) Notwithstanding Subsection (c), an authorized
organization that holds a regular license to conduct bingo may
receive not more than 12 temporary licenses during the 12-month
period following the issuance or renewal of the license.
(f) An authorized organization that holds a regular license
to conduct bingo may apply for all or any portion of the total
number of temporary licenses to which the organization is entitled
under Subsection (e) in one application without stating the days or
times for which the organization will use the temporary licenses.
(g) An organization that has been issued a temporary license
under Subsection (f) shall notify the commission of the specific
date and time of the bingo occasion for which the temporary license
will be used before using the license. If the commission receives
the notification by noon of the day before the day the temporary
license will be used, the commission shall verify receipt of the
notice before the end of the business day on which the notice is
received. If the commission does not receive the notification by
noon of the day before the day the temporary license will be used,
the commission shall verify receipt of the notice before noon of the
business day that follows the day the commission received the
notice.
(h) A verification under Subsection (g) may be delivered by
facsimile, e-mail, or any other means reasonably contemplated to
arrive before the time the temporary license will be used.
SECTION 7. Section 2001.104, Occupations Code, is amended
by adding Subsection (d) to read as follows:
(d) An applicant shall pay the fees established under
Subsection (a) annually. An applicant for a license or renewal of a
license may obtain a license that is effective for two years by
paying an amount equal to two times the amount of the annual license
fee plus $25.
SECTION 8. Section 2001.105, Occupations Code, is amended
by adding Subsection (c) to read as follows:
(c) Except as provided by Section 2001.104(d), a license
issued under this subchapter is effective for one year.
SECTION 9. Subchapter C, Chapter 2001, Occupations Code, is
amended by adding Section 2001.108 to read as follows:
Sec. 2001.108. LICENSE AMENDMENT FOR CHANGE OF BINGO
PREMISES OR OCCASIONS. (a) A licensed authorized organization and
the licensed commercial lessor at which the organization conducts
or will conduct bingo may file a joint application with the
commission to change the premises at which the organization may
conduct bingo or the times of the organization's bingo occasions to
allow the organization to conduct bingo at the same time and
premises that another licensed authorized organization is licensed
to conduct bingo, if the other organization has ceased, or will
cease, conducting bingo at that time and premises. The application
must state whether the other organization has ceased conducting
bingo at that time and premises because:
(1) the organization has abandoned or will abandon its
licensed time or premises; or
(2) the organization's lease has been or will be
terminated.
(b) If the other organization ceased or will cease
conducting bingo for the reason stated in Subsection (a)(1), the
commission must act on the joint application filed under Subsection
(a) not later than the 10th day after the date the application is
filed with the commission.
(c) If the other organization ceased or will cease
conducting bingo for the reason stated in Subsection (a)(2), the
commission must act on the joint application filed under Subsection
(a) not later than the 10th day after the date the application is
filed with the commission or the date on which the termination takes
effect, whichever is later.
(d) If the commission fails to act within the time provided
by Subsection (b) or (c), the licensed authorized organization may
act as if the change in premises or bingo occasions has been
approved by the commission and may conduct bingo at the new premises
or during the new bingo occasion until the commission acts on the
application.
(e) Notwithstanding Subsection (d), the commission may
issue temporary licenses to one or more licensed authorized
organizations that conduct bingo at the same location as an
organization that has ceased or will cease to conduct bingo, which
are in addition to the number of temporary licenses each
organization is entitled to under another provision of this
chapter. The commission is not required to act on a joint
application under Subsection (a) within the time provided by this
section for the additional temporary licenses if the number of
additional temporary licenses is sufficient to allow the other
organization to conduct bingo during the licensed times of the
organization that has ceased or will cease to conduct bingo.
SECTION 10. Section 2001.152, Occupations Code, is amended
by adding Subsection (c) to read as follows:
(c) Notwithstanding Subsection (a), the commission may
issue a commercial lessor license under Subsection (a)(2) or (3)
only if there is not a licensed commercial lessor whose premises is
located in the county in which an applicant for a license under
Subsection (a)(2) or (3) proposes to locate a bingo premises. This
subsection does not prohibit the renewal of an existing license.
This subsection expires September 1, 2005.
SECTION 11. Section 2001.158, Occupations Code, is amended
by adding Subsection (d) to read as follows:
(d) An applicant for a commercial lessor license shall pay
the fees established under Subsection (a) annually. An applicant
for a license or renewal of a license may obtain a license that is
effective for two years by paying an amount equal to two times the
amount of the annual license fee plus $25.
SECTION 12. Section 2001.159(c), Occupations Code, is
amended to read as follows:
(c) Except as provided by Section 2001.158(d), the [The]
period may not exceed one year.
SECTION 13. Section 2001.214, Occupations Code, is amended
to read as follows:
Sec. 2001.214. LICENSE TERM. (a) Except as provided by
Subsection (b), a [A] manufacturer's or distributor's license is
effective for one year unless revoked or suspended by the
commission.
(b) A manufacturer or distributor may obtain a license that
is effective for two years by paying an amount equal to two times
the amount of the annual license fee plus $1,000.
SECTION 14. Section 2001.218(a), Occupations Code, is
amended to read as follows:
(a) Each sale or lease of bingo supplies or equipment to a
license holder under this chapter must be on terms of immediate
payment or on terms requiring payment not later than the 30th day
after the date of actual delivery.
SECTION 15. Section 2001.307, Occupations Code, is amended
to read as follows:
Sec. 2001.307. MAXIMUM LICENSE TERM. Except as otherwise
provided by this chapter, a [A] license issued under this chapter
may not be effective for more than one year.
SECTION 16. Subchapter G, Chapter 2001, Occupations Code,
is amended by adding Sections 2001.313 and 2001.314 to read as
follows:
Sec. 2001.313. REGISTRY OF APPROVED BINGO WORKERS. (a) To
minimize duplicate criminal history background checks by the
commission and the costs incurred by organizations and individuals,
the commission shall maintain a registry of persons on whom the
commission has conducted a criminal history background check and
who are approved to be involved in the conduct of bingo or to act as
a bingo operator.
(b) A person listed in the registry may be involved in the
conduct of bingo or act as an operator at any location at which
bingo is lawfully conducted.
(c) The commission shall make the registry information
available to the public by publishing it on the commission's
website and by responding to telephone, e-mail, and facsimile
requests. This subsection does not require the commission to
disclose information that is confidential by law.
Sec. 2001.314. IDENTIFICATION CARD FOR APPROVED BINGO
WORKER. (a) The commission may require a person listed in the
registry maintained under Section 2001.313 to wear an
identification card to identify the person to license holders,
bingo players, and commission staff while the person is on duty
during the conduct of bingo. The commission by rule shall prescribe
the form and content of the card.
(b) The commission may provide the identification card or
may provide a form to be completed by a person that allows the
person to prepare the identification card. The commission may
collect a reasonable charge to cover the cost of providing the card
or form.
(c) A person is not required to obtain the identification
card or form from the commission, but may obtain a substantially
identical card or form from another source.
(d) An identification card required by the commission under
this section to be worn by a person while on duty during the conduct
of bingo must be in substantial compliance with the form and content
requirements prescribed by the commission under this section.
(e) The commission may not require any other person licensed
under this chapter, or a person acting on the license holder's
behalf, to wear an identification card, whether or not the person is
present or performing the person's duties during the conduct of
bingo.
SECTION 17. Section 2001.411, Occupations Code, is amended
by adding Subsection (e) to read as follows:
(e) The commission may not prohibit an operator responsible
for conducting, promoting, or administering bingo from acting as a
bingo caller for a licensed authorized organization during a bingo
occasion. This subsection does not relieve the operator of the duty
to be available to a commission employee or bingo player if required
by this chapter.
SECTION 18. Subchapter I, Chapter 2001, Occupations Code,
is amended by adding Section 2001.4115 to read as follows:
Sec. 2001.4115. JOINT EMPLOYMENT OF BINGO EMPLOYEES. Two
or more licensed authorized organizations conducting bingo at the
same premises may jointly hire bingo employees. One organization
may act as the employee's employer and the other organization may
reimburse the employing organization for the other organization's
share of the employee's compensation and other employment-related
costs. A reimbursement under this section is an authorized expense
and must be made from the bingo account of the reimbursing
organization.
SECTION 19. Section 2001.413, Occupations Code, is amended
to read as follows:
Sec. 2001.413. ADMISSION CHARGE REQUIRED. Except as
provided by Section 2001.4155, a [A] licensed authorized
organization may not offer or provide to a person the opportunity to
play bingo without charge.
SECTION 20. Section 2001.415, Occupations Code, is amended
to read as follows:
Sec. 2001.415. ADVERTISEMENTS. (a) A person other than a
licensed authorized organization, licensed commercial lessor, or
the commission may not advertise bingo.
(b) A licensed authorized organization, licensed commercial
lessor, or the commission may include in an advertisement or
promotion the amount of a prize or series of prizes offered at a
bingo occasion.
SECTION 21. Subchapter I, Chapter 2001, Occupations Code,
is amended by adding Section 2001.4155 to read as follows:
Sec. 2001.4155. GIFT CERTIFICATES. (a) Nothing in this
chapter prohibits a licensed authorized organization or licensed
commercial lessor from distributing or accepting a gift certificate
that entitles the bearer of the certificate to enter bingo premises
or to play a bingo game, including instant bingo.
(b) A licensed authorized organization or licensed
commercial lessor that distributes or accepts a gift certificate
must keep adequate records relating to the gift certificate as
provided by commission rule.
SECTION 22. Section 2001.451, Occupations Code, is amended
by amending Subsection (b) and adding Subsection (b-1) to read as
follows:
(b) A licensed authorized organization shall deposit in the
bingo account all funds derived from the conduct of bingo, less the
amount awarded as cash prizes under Sections 2001.420(a) and (b).
Except as provided by Subsection (b-1), a [A] deposit must be made
not later than the next business day after the day of the bingo
occasion on which the receipts were obtained.
(b-1) A licensed authorized organization may deposit funds
derived from the conduct of bingo that are paid through a debit card
transaction in the bingo fund not later than 72 hours after the
transaction.
SECTION 23. Section 2001.454, Occupations Code, is amended
to read as follows:
Sec. 2001.454. USE OF NET PROCEEDS FOR CHARITABLE PURPOSES.
(a) A licensed authorized organization shall devote to the [a]
charitable purposes of the organization [purpose] its net proceeds
of bingo and any rental of premises.
(b) Except as otherwise provided by law, the [The] net
proceeds derived from bingo and any rental of premises are
dedicated to the [a] charitable purposes of the organization
[purpose] only if directed to a cause, deed, or activity that is
consistent with the federal tax exemption under which the
organization qualifies as a nonprofit organization as defined by
Section 2001.002[:
[(1) benefits an indefinite number of needy or
deserving persons in this state by:
[(A) enhancing their opportunity for religious
or educational advancement;
[(B) relieving them from disease, suffering, or
distress;
[(C) contributing to their physical well-being;
[(D) assisting them in establishing themselves
in life as worthy and useful citizens; or
[(E) increasing their comprehension of and
devotion to the principles on which this nation was founded and
enhancing their loyalty to their government; or
[(2) initiates, performs, or fosters worthy public
works in this state or enables or furthers the erection or
maintenance of public structures in this state].
SECTION 24. Section 2001.458(a), Occupations Code, is
amended to read as follows:
(a) An item of expense may not be incurred or paid in
connection with the conduct of bingo except an expense that is
[those expenses that are] reasonable or necessary to conduct bingo,
including an expense [and necessarily expended] for:
(1) advertising, including the cost of bingo gift
certificates;
(2) security;
(3) repair or maintenance of [repairs to] premises and
equipment;
(4) bingo supplies and equipment;
(5) prizes;
(6) stated rental or mortgage and insurance expenses;
(7) bookkeeping, legal, or accounting services
related to bingo;
(8) fees [in amounts authorized by the commission] for
callers, cashiers, ushers, sales personnel, janitorial services,
and utility supplies and services; [and]
(9) license fees;
(10) attending a bingo seminar or convention;
(11) debit card transaction fees; and
(12) a salary for a manager to act as the operator
responsible for conducting, promoting, or administering bingo.
SECTION 25. Section 2001.459(a), Occupations Code, is
amended to read as follows:
(a) The following items of expense incurred or paid in
connection with the conduct of bingo must be paid from an
organization's bingo account:
(1) advertising, including the cost of bingo gift
certificates;
(2) security during a bingo occasion;
(3) the purchase or repair of bingo supplies and
equipment;
(4) prizes, other than authorized cash prizes;
(5) stated rental expenses;
(6) bookkeeping, legal, or accounting services;
(7) fees for callers, cashiers, and ushers;
(8) janitorial services;
(9) license fees; and
(10) payment for services provided by a system service
provider.
SECTION 26. Subchapter K, Chapter 2001, Occupations Code,
is amended by adding Section 2001.5015 to read as follows:
Sec. 2001.5015. MANUFACTURER GROSS RECEIPTS TAX. (a) A tax
is imposed on the sale of bingo equipment by a manufacturer to a
licensed distributor for use in the conduct of bingo in this state.
(b) The tax rate is the rate that, if applied to the total
amount of gross receipts from all sales of bingo equipment
described by Subsection (a) for the most recent four calendar
quarters for which the information is available, would generate an
amount of revenue equal to the total amount of taxes that would have
been imposed under Chapter 151, Tax Code, for the most recent four
calendar quarters for which the information is available on all
sales of bingo equipment to licensed authorized organizations that
are exempt from taxation under Section 151.3105, Tax Code, if those
sales had been subject to taxation under Chapter 151, Tax Code.
(c) The commission shall set the tax rate under Subsection
(b) for each calendar year not later than January 1 of the year. The
comptroller shall certify to the commission the information
available to the comptroller that the commission requires to set
the tax rate.
(d) The other provisions of this subchapter applicable to
another tax or fee imposed under this subchapter apply to the tax
imposed by this section to the extent those provisions can be made
applicable.
SECTION 27. Section 2001.504(a), Occupations Code, is
amended to read as follows:
(a) A tax or fee authorized or imposed under this subchapter
is due and is payable by the license holder or a person conducting
bingo without a license to the commission quarterly on or before the
25th [15th] day of the month succeeding each calendar quarter.
SECTION 28. Section 2001.602(b), Occupations Code, is
amended to read as follows:
(b) In determining the amount of the penalty, the
[executive] director shall consider:
(1) the seriousness of the violation, including the
nature, circumstances, extent, and gravity of the prohibited acts;
(2) the history of previous violations;
(3) the amount necessary to deter future violations;
(4) efforts to correct the violation; and
(5) any other matter that justice may require.
SECTION 29. Sections 2001.603(a) and (b), Occupations Code,
are amended to read as follows:
(a) If, after investigating a possible violation and the
facts surrounding that possible violation, the [executive]
director determines that a violation has occurred, the [executive]
director may issue a violation report stating the facts on which the
conclusion that a violation occurred is based, recommending that an
administrative penalty be imposed on the person alleged to have
committed the violation, and recommending the amount of the
proposed penalty. The [executive] director shall base the
recommended amount of the proposed penalty on the seriousness of
the violation determined by consideration of the factors set out in
Section 2001.602(b).
(b) Not later than the 14th day after the date on which the
report is issued, the [executive] director shall give written
notice of the report to the person alleged to have committed the
violation.
SECTION 30. Section 2001.604, Occupations Code, is amended
to read as follows:
Sec. 2001.604. PENALTY TO BE PAID OR HEARING REQUESTED. (a)
Not later than the 20th day after the date the person receives the
notice, the person may:
(1) accept the recommendation of the [executive]
director, including the recommended administrative penalty; or
(2) make a written request for a hearing on the
determination.
(b) If the person accepts the [executive] director's
determination, the [executive] director by order shall approve the
determination and impose the proposed penalty.
SECTION 31. Section 2001.605(a), Occupations Code, is
amended to read as follows:
(a) If the person timely requests a hearing or does not
respond to the notice in the time provided by Section 2001.604(a),
the [executive] director shall set a hearing and give notice of the
hearing to the person.
SECTION 32. Section 2001.606, Occupations Code, is amended
to read as follows:
Sec. 2001.606. DECISION BY [EXECUTIVE] DIRECTOR. (a)
Based on the findings of fact and conclusions of law and the
recommendations of the hearings examiner, the [executive] director
by order:
(1) may find that a violation has occurred and may
impose an administrative penalty; or
(2) may find that a violation has not occurred.
(b) The [executive] director shall give notice of the order
to the person. The notice must include:
(1) separate statements of the findings of fact and
conclusions of law;
(2) the amount of any penalty imposed;
(3) a statement of the right of the person to judicial
review of the order; and
(4) other information required by law.
SECTION 33. Sections 2001.607(b) and (c), Occupations Code,
are amended to read as follows:
(b) Within the 30-day period, a person who acts under
Subsection (a)(3) may:
(1) stay enforcement of the penalty by:
(A) paying the penalty to the court for placement
in an escrow account; or
(B) giving to the court a supersedeas bond
approved by the court for the amount of the penalty that is
effective until all judicial review of the order is final; or
(2) request the court to stay enforcement of the
penalty by:
(A) filing with the court a sworn affidavit of
the person stating that the person is financially unable to pay the
penalty and is financially unable to give the supersedeas bond; and
(B) giving a copy of the affidavit to the
[executive] director by certified mail.
(c) On receipt of a copy of the affidavit as provided by
Subsection (b)(2), the [executive] director may file with the
court, not later than the fifth day after the date the copy is
received, a contest to the affidavit. The court shall hold a hearing
on the facts alleged in the affidavit as soon as practicable and
shall stay the enforcement of the penalty on finding that the
alleged facts are true. The person who files an affidavit has the
burden of proving that the person is financially unable to pay the
penalty and to give a supersedeas bond.
SECTION 34. Section 2001.608, Occupations Code, is amended
to read as follows:
Sec. 2001.608. COLLECTION OF PENALTY. If the person does
not pay the administrative penalty and the enforcement of the
penalty is not stayed, the [executive] director may refer the
matter to the attorney general for collection of the penalty.
SECTION 35. Subchapter H, Chapter 151, Tax Code, is amended
by adding Section 151.3105 to read as follows:
Sec. 151.3105. BINGO EQUIPMENT PURCHASED BY CERTAIN
ORGANIZATIONS. Bingo equipment, as defined by Section 2001.002,
Occupations Code, is exempted from the taxes imposed by this
chapter if the bingo equipment is:
(1) purchased by an organization licensed to conduct
bingo under Chapter 2001, Occupations Code, that is exempt from the
payment of federal income taxes under Section 501(a), Internal
Revenue Code of 1986, as amended, by being listed as an exempt
organization under Section 501(c)(3), (4), (8), (10), or (19),
Internal Revenue Code of 1986, as amended; and
(2) used exclusively to conduct bingo authorized under
Chapter 2001, Occupations Code.
SECTION 36. The following sections are repealed:
(1) Section 2001.409(b), Occupations Code; and
(2) Section 2001.410(c), Occupations Code.
SECTION 37. The change in law made by this Act relating to a
license issued under Chapter 2001, Occupations Code, applies only
to the license of a person who files an application with the Texas
Lottery Commission for a license or the renewal of a license under
Chapter 2001, Occupations Code, on or after the effective date of
this Act. The license of a person who files an application before
the effective date of this Act is governed by the law in effect on
the date the application was filed, and the former law is continued
in effect for that purpose.
SECTION 38. (a) Except as provided by Subsections (b) and
(c) of this section, this Act takes effect September 1, 2003.
(b) Section 151.3105, Tax Code, as added by this Act, takes
effect January 1, 2004.
(c) The tax imposed under Section 2001.5015, Occupations
Code, as added by this Act, applies beginning January 1, 2004. The
Texas Lottery Commission shall set the tax rate under that section
for the 2004 calendar year not later than January 1, 2004.