By: Jackson S.B. No. 270
A BILL TO BE ENTITLED
AN ACT
relating to the continuation and functions of the Texas Lottery
Commission.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 466.014, Government Code, is amended by
adding Subsection (d) to read as follows:
(d) A contract between the division and a lottery operator
under Subsection (b) must contain a provision allowing the contract
to be terminated without penalty if the division is abolished.
SECTION 2. Subchapter B, Chapter 466, Government Code, is
amended by adding Section 466.026 to read as follows:
Sec. 466.026. COMPREHENSIVE BUSINESS PLAN. (a) The
commission shall develop a comprehensive business plan to guide the
commission's major initiatives. The plan must at a minimum
include:
(1) a description of each commission program and
project;
(2) key management information;
(3) accurate financial data; and
(4) a detailed financial management plan.
(b) The commission shall at least annually review the
comprehensive business plan to assess the overall performance and
value of each program and project.
SECTION 3. Subchapter C, Chapter 466, Government Code, is
amended by adding Section 466.1005 to read as follows:
Sec. 466.1005. PROCUREMENTS. (a) The commission may
purchase or lease facilities, goods, and services and make any
purchases, leases, or contracts necessary for carrying out the
purposes of this chapter.
(b) The commission shall review and must approve all major
procurements as provided by commission rule. The commission by
rule shall establish a procedure to determine what constitutes a
major procurement based on the cumulative value of a contract and
other relevant factors.
(c) The commission may delegate to the executive director
the authority to approve procurements other than major
procurements.
SECTION 4. Subsections (a) and (b), Section 466.101,
Government Code, are amended to read as follows:
(a) The commission and executive director may establish
procedures for the purchase or lease of facilities, goods, and
services and make any purchases, leases, or contracts that are
necessary for carrying out the purposes of this chapter. The
procedures must, as determined feasible and appropriate by the
commission and executive director, promote competition to the
maximum extent possible.
(b) In all procurement decisions, the commission and
executive director shall take into account the particularly
sensitive nature of the lottery and shall act to promote and ensure
integrity, security, honesty, and fairness in the operation and
administration of the lottery and the objective of producing
revenues for the state treasury.
SECTION 5. Section 466.158, Government Code, is amended by
adding Subsections (d), (e), and (f) to read as follows:
(d) In making a determination whether to renew a license,
the commission shall consider the compliance history of a license
holder. The commission shall adopt rules to govern the specific
areas of compliance history that may be considered in the renewal
determination.
(e) After an opportunity for a hearing, the commission may
deny an application for renewal of a license if the applicant's
compliance history reveals conduct that is inconsistent with this
chapter or the commission's rules adopted under this chapter in the
specific areas considered by the commission in accordance with the
rules adopted under Subsection (d).
(f) The commission by rule may adopt a system under which
licenses expire on various dates during the year. For the year in
which the license expiration date is changed, the commission shall
prorate license fees on a monthly basis so that each license holder
pays only that portion of the license fee that is allocable to the
number of months during which the license is valid. On renewal of
the license on the new expiration date, the total license renewal
fee is payable.
SECTION 6. Section 467.002, Government Code, is amended to
read as follows:
Sec. 467.002. APPLICATION OF SUNSET ACT. The commission is
subject to Chapter 325 (Texas Sunset Act). Unless continued in
existence as provided by that chapter, the commission is abolished
and this chapter, Chapter 466, and Chapter 2001, Occupations Code,
expire [Act expires] September 1, 2015 [2003].
SECTION 7. Subsections (a) and (b), Section 467.021,
Government Code, are amended to read as follows:
(a) The commission is composed of five [three] members
appointed by the governor with the advice and consent of the senate.
(b) Appointments [In making appointments] to the commission
shall be made without[, the governor shall strive to achieve
representation by all the population groups of the state with]
regard to the [economic status, sex,] race, color, disability, sex,
religion, age, or national origin of the appointees [and
ethnicity].
SECTION 8. Section 467.022, Government Code, is amended to
read as follows:
Sec. 467.022. TERM OF OFFICE. Members hold office for
staggered terms of six years with the terms of either one or two
members [member's term] expiring February 1 of each odd-numbered
year.
SECTION 9. Section 467.024, Government Code, is amended by
adding Subsections (c) and (d) to read as follows:
(c) A person may not be a commission employee employed in a
"bona fide executive, administrative, or professional capacity,"
as that phrase is used for purposes of establishing an exemption to
the overtime provisions of the federal Fair Labor Standards Act of
1938 (29 U.S.C. Section 201 et seq.), and its subsequent
amendments, if:
(1) the person is an officer, employee, or paid
consultant of a Texas trade association in the field of bingo or
lottery; or
(2) the person's spouse is an officer, manager, or paid
consultant of a Texas trade association in the field of bingo or
lottery.
(d) A person may not act as the general counsel to the
commission if the person is required to register as a lobbyist under
Chapter 305 because of the person's activities for compensation on
behalf of a profession related to the operation of the commission.
SECTION 10. Subchapter B, Chapter 467, Government Code, is
amended by adding Section 467.0255 to read as follows:
Sec. 467.0255. TRAINING. (a) A person who is appointed to
and qualifies for office as a member of the commission may not vote,
deliberate, or be counted as a member in attendance at a meeting of
the commission until the person completes a training program that
complies with this section.
(b) The training program must provide the person with
information regarding:
(1) the legislation that created the commission;
(2) the programs operated by the commission;
(3) the role and functions of the commission;
(4) the rules of the commission, with an emphasis on
the rules that relate to disciplinary and investigatory authority;
(5) the current budget for the commission;
(6) the results of the most recent formal audit of the
commission;
(7) the requirements of:
(A) the open meetings law, Chapter 551;
(B) the public information law, Chapter 552;
(C) the administrative procedure law, Chapter
2001; and
(D) other laws relating to public officials,
including conflict-of-interest laws; and
(8) any applicable ethics policies adopted by the
commission or the Texas Ethics Commission.
(c) A person appointed to the commission is entitled to
reimbursement, as provided by the General Appropriations Act, for
the travel expenses incurred in attending the training program
regardless of whether the attendance at the program occurs before
or after the person qualifies for office.
SECTION 11. Subsections (a) and (c), Section 467.026,
Government Code, are amended to read as follows:
(a) It is a ground for removal from the [The governor may
remove a] commission that a member [if the member]:
(1) does not have at the time of taking office
[appointment] the qualifications required by Sections 467.023 and
467.024 [for appointment to the commission];
(2) does not maintain during service on the commission
the qualifications required by Sections 467.023 and 467.024 [for
appointment to the commission];
(3) is ineligible for membership under [violates a
prohibition established by] Section 467.023, 467.024, or 467.025;
(4) cannot discharge the member's duties for a
substantial part of the member's term [for which the member is
appointed] because of illness or disability; or
(5) is absent from more than half of the regularly
scheduled commission meetings that the member is eligible to attend
during a calendar year without an excuse approved [unless the
absence is excused] by majority vote of the commission.
(c) If the executive director [presiding officer] has
knowledge that a potential ground for removal exists, the executive
director [presiding officer] shall notify the presiding officer of
the commission of the potential ground. The presiding officer
shall then notify the governorand the attorney general that a
potential ground for removal exists. If the potential ground for
removal involves the presiding officer, the executive director
shall notify the next highest ranking officer of the commission,
who shall then notify the governor and the attorney general that a
potential ground for removal exists.
SECTION 12. Subchapter B, Chapter 467, Government Code, is
amended by adding Sections 467.037 through 467.040 to read as
follows:
Sec. 467.037. DIVISION OF RESPONSIBILITIES. The commission
shall develop and implement policies that clearly separate the
policymaking responsibilities of the commission and the management
responsibilities of the executive director and the staff of the
commission.
Sec. 467.038. EQUAL EMPLOYMENT OPPORTUNITY POLICY; REPORT.
(a) The executive director or the executive director's designee
shall prepare and maintain a written policy statement that
implements a program of equal employment opportunity to ensure that
all personnel decisions are made without regard to race, color,
disability, sex, religion, age, or national origin.
(b) The policy statement must include:
(1) personnel policies, including policies relating
to recruitment, evaluation, selection, training, and promotion of
personnel, that show the intent of the commission to avoid the
unlawful employment practices described by Chapter 21, Labor Code;
and
(2) an analysis of the extent to which the composition
of the commission's personnel is in accordance with state and
federal law and a description of reasonable methods to achieve
compliance with state and federal law.
(c) The policy statement must:
(1) be updated annually;
(2) be reviewed by the state Commission on Human
Rights for compliance with Subsection (b)(1); and
(3) be filed with the governor's office.
Sec. 467.039. REQUIREMENTS AND STANDARDS OF CONDUCT
INFORMATION. The executive director or the executive director's
designee shall provide to members of the commission and to
commission employees, as often as necessary, information regarding
the requirements for office or employment under this chapter,
including information regarding a person's responsibilities under
applicable laws relating to standards of conduct for state officers
or employees.
Sec. 467.040. STATE EMPLOYEE INCENTIVE PROGRAM
INFORMATION. The executive director or the executive director's
designee shall provide to commission employees information and
training on the benefits and methods of participation in the state
employee incentive program.
SECTION 13. Subchapter C, Chapter 467, Government Code, is
amended by adding Sections 467.109 through 467.112 to read as
follows:
Sec. 467.109. TECHNOLOGY POLICY. The commission shall
develop and implement a policy requiring the executive director and
commission employees to research and propose appropriate
technological solutions to improve the commission's ability to
perform its functions. The technological solutions must:
(1) ensure that the public is able to easily find
information about the commission on the Internet;
(2) ensure that persons who want to use the
commission's services are able to:
(A) interact with the commission through the
Internet; and
(B) access any service that can be provided
effectively through the Internet; and
(3) be cost-effective and developed through the
commission's planning processes.
Sec. 467.110. NEGOTIATED RULEMAKING AND ALTERNATIVE
DISPUTE RESOLUTION POLICY. (a) The commission shall develop and
implement a policy to encourage the use of:
(1) negotiated rulemaking procedures under Chapter
2008 for the adoption of commission rules; and
(2) appropriate alternative dispute resolution
procedures under Chapter 2009 to assist in the resolution of
internal and external disputes under the commission's
jurisdiction.
(b) The commission's procedures relating to alternative
dispute resolution must conform, to the extent possible, to any
model guidelines issued by the State Office of Administrative
Hearings for the use of alternative dispute resolution by state
agencies.
(c) The commission shall designate a trained person to:
(1) coordinate the implementation of the policy
adopted under Subsection (a);
(2) serve as a resource for any training needed to
implement the procedures for negotiated rulemaking or alternative
dispute resolution; and
(3) collect data concerning the effectiveness of those
procedures, as implemented by the commission.
Sec. 467.111. PUBLIC PARTICIPATION. The commission shall
develop and implement policies that provide the public with a
reasonable opportunity to appear before the commission and to speak
on any issue under the jurisdiction of the commission.
Sec. 467.112. COMPLAINTS. (a) The commission shall
maintain a file on each written complaint filed with the commission
or a division of the commission. The file must include:
(1) the name of the person who filed the complaint;
(2) the date the complaint is received by the
commission or a division of the commission;
(3) the subject matter of the complaint;
(4) the name of each person contacted in relation to
the complaint;
(5) a summary of the results of the review or
investigation of the complaint; and
(6) an explanation of the reason the file was closed,
if the commission closed the file without taking action other than
to investigate the complaint.
(b) The commission shall provide to the person filing the
complaint and to each person who is a subject of the complaint a
copy of the commission's policies and procedures relating to
complaint investigation and resolution.
(c) The commission, at least quarterly until final
disposition of the complaint, shall notify the person filing the
complaint and each person who is a subject of the complaint of the
status of the investigation unless the notice would jeopardize an
undercover investigation.
(d) The commission shall publish procedures covering the
entire complaint process from submission to disposition.
(e) The commission by rule shall require an investigation
related to a complaint filed with the commission or a division of
the commission to be completed within a reasonable time.
(f) The commission shall analyze the complaints filed with
the commission to identify any trends or issues related to certain
violations.
SECTION 14. Subdivision (5), Section 2001.002, Occupations
Code, is amended 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].
SECTION 15. Subsection (b), Section 2001.051, 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 16. 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 17. 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 18. Subchapter B, Chapter 2001, Occupations Code,
is amended by adding Section 2001.0555 to read as follows:
Sec. 2001.0555. COMPLIANCE MONITORING. The commission
shall adopt rules to govern the commission's monitoring of a
license holder to determine if the license holder is in compliance
with this chapter or rules adopted under this chapter. The rules
must at a minimum address audits and inspections and other
compliance and enforcement activities.
SECTION 19. Section 2001.057, Occupations Code, is amended
by adding Subsections (h) and (i) to read as follows:
(h) The committee shall annually develop a work plan
detailing the committee's objectives and the issues to be addressed
by the committee during the year. The plan must:
(1) assess trends in the charitable bingo industry;
(2) review bingo rules to determine whether changes,
additions, or deletions are needed; and
(3) address other issues as determined by the
commission.
(i) The committee shall perform a review at the end of each
year to:
(1) assess the committee's accomplishments during the
year;
(2) identify opportunities for improving the
commission's regulation of bingo; and
(3) develop specific recommendations for commission
action.
SECTION 20. 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 21. Section 2001.101, Occupations Code, is amended
to read as follows:
Sec. 2001.101. AUTHORIZED ORGANIZATION. (a) The
commission may license a person who is an authorized organization
eligible for a license to conduct bingo if the person has been in
existence for the time required by commission rule to ensure the
continuity and bona fide nature of the organization and is:
(1) a religious society [that has existed in this
state for at least eight years];
(2) a nonprofit organization:
(A) whose predominant activities are for the
support of medical research or treatment programs; and
(B) that [for at least three years]:
(i) has [must have had] a governing body or
officers elected by a vote of members or by a vote of delegates
elected by the members; or
(ii) is [must have been] affiliated with a
state or national organization organized to perform the same
purposes as the nonprofit organization;
(3) a fraternal organization;
(4) a veterans organization; or
(5) a volunteer fire department.
(b) A fraternal organization:
(1) [must have been organized in this state for at
least three years;
[(2)] must have [had during the three-year period] a
bona fide membership actively and continuously engaged as an
organization in furthering its authorized purposes; and
(2) [(3)] may not have authorized a person on behalf of
its membership, governing body, or officers to support or oppose a
particular candidate for public office by:
(A) making political speeches;
(B) passing out cards or other political
literature;
(C) writing letters;
(D) signing or circulating petitions;
(E) making campaign contributions; or
(F) soliciting votes.
SECTION 22. Subsection (d), Section 2001.103, Occupations
Code, is amended to read as follows:
(d) An organization operating under a temporary license is
subject to:
(1) the taxes and fees authorized or imposed by this
chapter; [and]
(2) the standard licensing oversight of the
commission, including audits and inspections; and
(3) the other provisions of this chapter to the extent
they can be made applicable.
SECTION 23. 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 24. 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 25. 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 26. Subsection (a), Section 2001.152, Occupations
Code, is amended to read as follows:
(a) The commission may issue a commercial lessor license
only to:
(1) a licensed authorized organization that owns or
leases a premises where bingo is or will be conducted or an
association of licensed authorized organizations that jointly own
or lease premises where bingo is or will be conducted and that the
organization or association leases or offers for lease to one or
more other authorized organizations for the conduct of bingo; or
(2) [a person who leases premises to a single licensed
authorized organization that subleases or will sublease the
premises to one or more other licensed authorized organizations for
the conduct of bingo; or
[(3)] a person who leases premises for the [total
control and exclusive] use of only one licensed authorized
organization for the conduct of bingo [as that organization's
primary business office].
SECTION 27. 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 28. Subsection (c), Section 2001.159, 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 29. 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 30. Subsection (a), Section 2001.218, 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 31. Subchapter G, Chapter 2001, Occupations Code,
is amended by adding Section 2001.3015 to read as follows:
Sec. 2001.3015. LICENSING RULES. The commission by rule
shall:
(1) establish comprehensive qualifications for a
person to be licensed or the person's license to be renewed under
this chapter;
(2) develop a standard license renewal process, from
submission to completion, for each license issued under this
chapter to ensure that a license holder continues to meet the
eligibility requirements provided by this chapter and commission
rule; and
(3) establish standards of conduct for a person
licensed under this chapter.
SECTION 32. 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 33. 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 34. Section 2001.351, Occupations Code, is amended
to read as follows:
Sec. 2001.351. DENIAL OF LICENSE. (a) The commission may
deny an application for a license or renewal of a license issued
under this chapter for a cause that would permit or require the
suspension or revocation of a license issued under this chapter.
(b) In making a determination whether to renew a license,
the commission shall consider the compliance history of a license
holder. The commission shall adopt rules to govern the specific
areas of compliance history that may be considered in the renewal
determination.
(c) After an opportunity for a hearing, the commission may
deny an application for renewal of a license if the applicant's
compliance history reveals conduct that is inconsistent with this
chapter or the commission's rules adopted under this chapter in the
specific areas considered by the commission in accordance with the
rules adopted under Subsection (b).
SECTION 35. Section 2001.355, Occupations Code, is amended
by amending Subsection (b) and adding Subsection (d) to read as
follows:
(b) Before temporarily suspending a license, the director
of bingo operations must follow any prehearing rules adopted by the
commission to determine if the license holder's continued operation
may constitute:
(1) an immediate threat to the health, safety, morals,
or welfare of the public; or
(2) a financial loss to this state, which includes a
license holder's failure to remit taxes under Section 2001.501 or
prize fee payments under Section 2001.502 to the commission as
required by those sections.
(d) The commission shall adopt rules to govern the temporary
suspension of a license under this section.
SECTION 36. Subsection (a), Section 2001.406, Occupations
Code, is amended to read as follows:
(a) The rent charged by a licensed commercial lessor to a
licensed authorized organization to conduct bingo may not exceed
$600 for each bingo occasion conducted on the lessor's premises
[unless the organization subleases the premises to one or more
other licensed authorized organizations to conduct bingo, in which
event the rent charged by the licensed commercial lessor may not
exceed $600 for each day].
SECTION 37. 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 38. 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 39. 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 40. 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 41. 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 42. Chapter 2001, Occupations Code, is amended by
adding Subchapter I-1 to read as follows:
SUBCHAPTER I-1. UNIT ACCOUNTING
Sec. 2001.431. DEFINITIONS. In this subchapter:
(1) "Unit" means two or more licensed authorized
organizations that conduct bingo at the same location joining
together to share revenues, authorized expenses, and inventory
related to bingo operations.
(2) "Unit accounting" means a method by which licensed
authorized organizations that are members of a unit account for the
sharing of revenues, authorized expenses, and inventory related to
bingo operations.
(3) "Unit accounting agreement" means a written
agreement by all the licensed authorized organizations that are
members of a unit that contains, at a minimum:
(A) the taxpayer name and number of each licensed
authorized organization that is a member of the unit;
(B) the method by which the net proceeds of the
bingo operations of the unit will be apportioned among the members
of the unit;
(C) the name of the unit manager or designated
agent of the unit; and
(D) the methods by which the unit may be
dissolved and by which one or more members of the unit may withdraw
from participation in the unit, including the distribution of
funds, records, and inventory and the allocation of authorized
expenses and liabilities on dissolution or withdrawal of one or
more members of the unit.
(4) "Unit manager" means an individual licensed under
this subchapter to be responsible for the revenues, authorized
expenses, and inventory of a unit.
Sec. 2001.432. FORMING ACCOUNTING UNIT. (a) Two or more
licensed authorized organizations may form and operate a unit as
provided by this subchapter by:
(1) executing a unit accounting agreement; and
(2) stating in the unit accounting agreement whether
the unit will use:
(A) a unit manager; or
(B) a designated agent.
(b) More than one unit may be formed at a single location. A
licensed authorized organization may not be a member of more than
one unit.
(c) This subchapter does not require a licensed authorized
organization to join a unit. Except as provided by Subsection (d),
whether to join or withdraw from a unit is at the discretion of each
licensed authorized organization.
(d) The members of a unit may determine whether to allow
another licensed authorized organization to join the unit. The
terms of the withdrawal of a member from the unit are governed by
the unit accounting agreement.
Sec. 2001.433. APPLICABILITY OF CHAPTER. A licensed
authorized organization that uses unit accounting is subject to the
other provisions of this chapter to the extent the provisions are
applicable and are not inconsistent with this subchapter.
Sec. 2001.434. CONDUCT OF BINGO. (a) Each licensed
authorized organization that is a member of a unit shall conduct its
bingo games separately from the bingo games of the other members of
the unit.
(b) A unit may purchase or lease bingo supplies and
equipment in the same manner as a licensed authorized organization.
(c) A licensed distributor may sell or lease bingo supplies
or equipment to a unit in the same manner as the distributor sells
or leases bingo supplies and equipment to a licensed authorized
organization.
Sec. 2001.435. UNIT ACCOUNTING. (a) A unit:
(1) shall establish and maintain one checking account
designated as the unit's bingo account;
(2) shall maintain one inventory of bingo supplies and
equipment for use in the bingo operations of members of the unit;
and
(3) may maintain an interest-bearing savings account
designated as the unit's bingo savings account.
(b) Each member of a unit shall deposit into the unit's
bingo account all funds derived from the conduct of bingo, less the
amount awarded as cash prizes under Sections 2001.420(a) and (b).
The deposit shall be made not later than the next business day after
the day of the bingo occasion on which the receipts were obtained.
(c) All authorized expenses and distributions of the unit
and its members shall be paid from the unit's bingo checking
account.
Sec. 2001.436. DISBURSEMENT OF FUNDS BY DISSOLVED UNIT.
(a) Sections 2001.457(a) and (b) apply to a unit formed under this
subchapter. For purposes of this subchapter, the requirements of
Sections 2001.457(a) and (b) that are applicable to a licensed
authorized organization shall be applied to a unit.
(b) A unit that has dissolved for any reason and has
unexpended bingo funds shall disburse those funds to the bingo
account of each member of the unit before the end of the next
calendar quarter after the calendar quarter in which the unit
dissolves.
(c) For purposes of the application of Sections 2001.457(a)
and (b) to a unit under this section:
(1) "adjusted gross receipts" means gross receipts
less the amount of cost of goods purchased by a unit and prizes paid
in the preceding quarter; and
(2) "cost of goods purchased by a unit" means the cost
of bingo paper and pull-tab bingo tickets purchased by the unit and
payments to distributors for electronic card-minding devices.
Sec. 2001.437. UNIT MANAGER; LICENSE. (a) If the unit
accounting agreement of a unit states that a unit manager is
responsible for compliance with commission rules and this chapter,
the unit manager is responsible for:
(1) the filing of one quarterly report for the unit on
a form prescribed by the commission; and
(2) the payment of taxes and fees and the maintenance
of the bingo inventory and financial records of the unit.
(b) A unit with a unit manager shall notify the commission
of the name of the unit manager and immediately notify the
commission of any change of unit manager.
(c) A person may not provide services as a unit manager to
licensed authorized organizations that form a unit unless the
person holds a unit manager license under this subchapter. A person
designated as an agent under Section 2001.438(b) is not a unit
manager on account of that designation for purposes of this
section.
(d) An applicant for a unit manager license must file with
the commission a written application on a form prescribed by the
commission that includes:
(1) the name and address of the applicant;
(2) information regarding whether the applicant, or
any officer, director, or employee of the applicant, has been
convicted of a felony, criminal fraud, gambling or gambling-related
offense, or crime of moral turpitude; and
(3) any other information required by commission rule.
(e) The commission by rule shall establish an annual license
fee for a unit manager license in an amount reasonable to defray
administrative costs plus any costs incurred to conduct a criminal
background check.
(f) A person who holds a unit manager license shall post a
bond or other security pursuant to Section 2001.514.
(g) A person is not eligible for a unit manager license
under this subchapter if the person, or any officer, director, or
employee of the person:
(1) has been convicted of a felony, criminal fraud, a
gambling or gambling-related offense, or crime of moral turpitude,
if less than 10 years has elapsed since the termination of a
sentence, parole, or community supervision served for the offense;
(2) is an owner, officer, or director of a licensed
commercial lessor, is employed by a licensed commercial lessor, or
is related to a licensed commercial lessor within the second degree
by consanguinity or affinity, unless the holder of the license is a
licensed authorized organization or an association of licensed
authorized organizations; or
(3) holds or is listed on another license under this
chapter, unless the holder of the license is a licensed authorized
organization or an association of licensed authorized
organizations.
(h) A unit manager must complete the training required by
Section 2001.107.
Sec. 2001.438. AGREEMENT WITHOUT UNIT MANAGER. (a) This
section applies to a unit if the unit accounting agreement for the
unit:
(1) does not state that a unit manager will be
responsible for compliance with the rules of the commission and
this chapter; or
(2) states that the unit will use a designated agent.
(b) The unit shall designate with the commission an agent
who will be responsible for providing the commission access to all
inventory and financial records of the unit on request of the
commission.
(c) The agent designated under Subsection (b) may not:
(1) hold or be listed on another license issued under
this chapter, unless the holder of the license is a licensed
authorized organization or an association of licensed authorized
organizations; or
(2) be an owner, officer, or director of a licensed
commercial lessor, be employed by a licensed commercial lessor, or
be related to a licensed commercial lessor within the second degree
by consanguinity or affinity, unless the holder of the license is a
licensed authorized organization or an association of licensed
authorized organizations.
(d) The unit shall immediately notify the commission of any
change in the agent designated under Subsection (b).
(e) The designated agent must complete the training
required by Section 2001.107.
(f) Each licensed authorized organization that is a member
of the unit shall be jointly and severally liable for:
(1) compliance with the requirements of this
subchapter and the rules of the commission relating to the filing of
required reports;
(2) the maintenance of bingo inventory and financial
records; and
(3) the payment of taxes, fees, and any penalties
imposed for a violation of this subchapter or commission rules
related to the operations of the unit.
(g) Each licensed authorized organization that is a member
of the unit may be made a party to any administrative or judicial
action relating to the enforcement of this subchapter or the rules
of the commission pertaining to the operation of the unit.
Sec. 2001.439. TRUST AGREEMENT. (a) Notwithstanding any
other provision of this subchapter, a unit may be formed pursuant to
a trust agreement between two or more licensed authorized
organizations that conduct bingo at the same location. The
agreement must:
(1) designate one of the organizations as the trustee;
(2) designate a person who will carry out the duties
described by Section 2001.438(b);
(3) specify the method by which the unit will comply
with the requirements of Section 2001.436(a); and
(4) state that the trustee is responsible for
compliance with the rules of the commission and this chapter.
(b) The commission by rule may prohibit a person from
serving as a unit manager or as a designated agent for a unit that
does not use a unit manager if the person has failed to comply with
the duties required of the person as a unit manager or designated
agent.
(c) The commission may prohibit a person who serves as a
designated agent that is listed on a license under this chapter,
including having been approved by the commission to work in the
bingo operations of a licensed authorized organization or as an
operator, from holding or being listed on any license or from being
approved to work in the bingo operations of any licensed authorized
organization or to serve as an operator if the person has failed to
comply with the duties required of the person as a unit manager or
designated agent.
SECTION 43. Section 2001.451, Occupations Code, is amended
by amending Subsection (b) and adding Subsections (b-1) and (g)
through (k) 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.
(g) The commission shall adopt rules establishing a limit on
the amount of operating capital that a licensed authorized
organization may retain in the organization's bingo account
according to the licensed authorized organization's class
designation, as provided under Section 2001.104(a). The amount of
retained operating capital allowed under this subsection shall not
be less than the licensed authorized organization's actual average
bingo occasion expenses, less prizes paid, based on the preceding
four quarters multiplied by the average number of occasions per
quarter, and can be no greater than $50,000.
(h) A licensed authorized organization's bingo operations
must result in net proceeds being earned by the organization over
the organization's license period.
(i) Notwithstanding Subsection (g):
(1) on September 1, 2003, if an organization has a
balance in its bingo account of more than the maximum amount of
operating capital allowed under rules adopted by the commission
under that subsection, the organization shall distribute the funds
in excess of its maximum operating capital to charitable purposes
within:
(A) one year if the excess amount is less than 200
percent of the maximum amount of operating capital;
(B) two years if the excess amount is more than
200 percent but less than 300 percent of the maximum amount of
operating capital; or
(C) three years if the excess amount is 300
percent or more of the maximum amount of operating capital;
(2) a licensed authorized organization may transfer
net proceeds of bingo from its bingo savings account or its general
fund into the bingo account if the balance in the bingo account is
less than the maximum amount of operating capital allowed by this
section and the organization notifies the commission not later than
the seventh working day after the date of the transfer; and
(3) the commission by rule shall provide for a maximum
amount of operating capital that may be maintained in the bingo
account by a licensed authorized organization:
(A) that has conducted bingo for less than one
year; or
(B) that experiences circumstances beyond the
control of the organization, such as force majeure.
(j) A licensed authorized organization may apply for and the
commission may grant approval of a waiver of the requirements of
Subsection (i)(1) or Section 2001.457 if the organization
establishes good cause why complying with the requirements will
work to the detriment of the existing or planned charitable
purposes of the organization.
(k) This subsection and Subsection (i)(1) expire
September 1, 2006.
SECTION 44. 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 45. Subsections (a), (b), and (d), Section
2001.457, Occupations Code, are amended to read as follows:
(a) Before the end of each quarter, a licensed authorized
organization shall disburse for charitable purposes all [an amount
not less than 35 percent] of the organization's adjusted gross
receipts from the preceding quarter, except for the amount that may
be retained as provided by Section 2001.451(g)[, less the amount of
authorized expenses not to exceed six percent of the gross
receipts].
(b) The commission shall sanction [If] a licensed
authorized organization that fails to make [meet] the disbursement
required by Subsection (a) or to make any disbursement for
charitable purposes [requirements of this section] for a quarter.
The[, the] commission in applying appropriate sanctions may
consider whether, taking into account the amount required to be
distributed during that quarter and the three preceding quarters
and the charitable distributions for each of those quarters, the
organization has distributed a total amount sufficient to have met
the disbursement requirements [35 percent requirement] for that
quarter and the three preceding quarters combined.
(d) In this section, "adjusted[:
[(1) "Adjusted] gross receipts" means gross receipts
less the total [amount of cost of goods purchased by an organization
and] prizes paid in the preceding quarter[;] and the licensed
authorized organization's reasonable and necessary expenses as
provided by Sections 2001.458 and 2001.459 and by commission rule
[(2) "Cost of goods purchased by an organization"
means the cost of bingo paper or pull-tab bingo tickets purchased by
the organization].
SECTION 46. Subsection (a), Section 2001.458, 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 47. Subsection (a), Section 2001.459, 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 48. Subsection (a), Section 2001.504, 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 49. Subchapter M, Chapter 2001, Occupations Code,
is amended by adding Section 2001.6015 to read as follows:
Sec. 2001.6015. ADMINISTRATIVE PENALTY SCHEDULE; TIMELINE.
(a) The commission by rule shall adopt an administrative penalty
schedule to define and summarize violations of this chapter or
commission rules adopted under this chapter to ensure the amounts
of penalties imposed are appropriate to the violation.
(b) The administrative penalty schedule must:
(1) allow deviations from the schedule for mitigating
circumstances clearly established by the commission;
(2) include a list of the most common violations and
the penalty amounts assessed for those violations; and
(3) provide the penalty amount in accordance with the
seriousness or frequency of each type of violation.
(c) The commission by rule shall establish a timeline for
the resolution of a violation of this chapter or commission rules
adopted under this chapter. The rules must include:
(1) a designated period for a person licensed under
this chapter to provide proof of corrective measures taken as
required by the commission for a violation of this chapter or
commission rules; and
(2) an approach and a designated period for the
commission to subsequently monitor a person found to have committed
a significant violation of this chapter or commission rules.
SECTION 50. The following statutes are repealed:
(1) Section 466.003, Government Code;
(2) Subsection (b), Section 2001.057, Occupations
Code;
(3) Subsection (b), Section 2001.409, Occupations
Code; and
(4) Subsection (c), Section 2001.410, Occupations
Code.
SECTION 51. 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 52. (a) Not later than January 1, 2004, the Texas
Lottery Commission shall:
(1) adopt the rules and procedures required by Section
466.1005, Government Code, and Subchapter I-1, Chapter 2001,
Occupations Code, as added by this Act; and
(2) adopt the rules required by:
(A) Subsection (d), Section 466.158, Government
Code, as added by this Act;
(B) Section 2001.3015, Occupations Code, as
added by this Act; and
(C) Sections 2001.101, 2001.355, 2001.451, and
2001.458, Occupations Code, as amended by this Act.
(b) Not later than September 1, 2004, the Texas Lottery
Commission shall:
(1) adopt the comprehensive business plan required by
Section 466.026, Government Code, as added by this Act;
(2) adopt the rules required by Section 2001.0555,
Occupations Code, as added by this Act; and
(3) adopt the administrative penalty schedule and
timeline required by Section 2001.6015, Occupations Code, as added
by this Act.
SECTION 53. (a) The changes in law made by this Act in the
prohibitions or qualifications applying to a member of the Texas
Lottery Commission do not affect the entitlement of a member
serving on the Texas Lottery Commission immediately before
September 1, 2003, to continue to serve and function as a member of
the Texas Lottery Commission for the remainder of the member's
term. Those changes in law apply only to a member appointed on or
after September 1, 2003.
(b) Promptly after this Act takes effect, the governor shall
appoint two additional members to the Texas Lottery Commission. In
appointing those members, the governor shall appoint one person to
a term expiring February 1, 2007, and one to a term expiring
February 1, 2009.
(c) The change in law made by this Act to Chapter 467,
Government Code, relating to the investigation of a complaint
applies only to a complaint filed with the Texas Lottery Commission
on or after September 1, 2003. A complaint filed with the
commission or a division of the commission before September 1,
2003, is governed by the law as it existed immediately before that
date, and the former law is continued in effect for that purpose.
(d) The change in law made by this Act requiring the Texas
Lottery Commission to approve a procurement applies only to a
procurement or a contract for a procurement made on or after the
effective date of this Act. A procurement or procurement contract
made before the effective date of this Act is governed by the law in
effect when the procurement or contract was made, and the former law
is continued in effect for that purpose.
(e) The changes in law made by this Act governing
eligibility of a person for a license apply only to the issuance or
renewal of a license by the Texas Lottery Commission under Chapter
466, Government Code, as amended by this Act, or Chapter 2001,
Occupations Code, as amended by this Act, on or after the effective
date of this Act. A license issued by the Texas Lottery Commission
under either of those laws before the effective date of this Act is
governed by the applicable licensing requirements in effect when
the license was last issued or renewed until the license expires or
is renewed as provided by Chapter 466, Government Code, as amended
by this Act, or Chapter 2001, Occupations Code, as amended by this
Act.
(f) The change in law made by this Act to Section 2001.457,
Occupations Code, applies to the charitable disbursements made by a
licensed authorized organization beginning with disbursements for
the second quarter of 2004. A charitable disbursement made by a
licensed authorized organization for a quarter before the second
quarter of 2004 is governed by the law in effect immediately before
the effective date of this Act, and the former law is continued in
effect for that purpose.
SECTION 54. This Act takes effect September 1, 2003.