78R11501 E


By:  Flores, Raymond                                              H.B. No. 2519

Substitute the following for H.B. No. 2519:                                   

By:  Jones of Lubbock                                         C.S.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 The term: (A) includes: (i) a machine or other device from which balls or other items are withdrawn to determine the letters and numbers or other symbols to be called; (ii) an electronic or mechanical cardminding device; (iii) a pull-tab dispenser; (iv) a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 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 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.