2005S1397-1 06/23/05
By: Armbrister S.B. No. 38
A BILL TO BE ENTITLED
AN ACT
relating to the authorization and regulation of electronic pull-tab
bingo; not authorizing the use of slot machines or video lottery
terminals.
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 Subdivisions (9-a), (9-b),
(9-c), (13-a), (20-a), (20-b), and (26-a) 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balls or other items are withdrawn to determine the letters and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;
(v) a bingo ball; [and]
(vi) an electronic monitoring terminal;
(vii) a site controller; and
(viii) 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.
(9-a) "Electronic monitoring terminal" means a
computer or other electronic terminal with input capabilities and
touch screen or other video monitors that may be used to play
electronic pull-tab bingo. The term includes a portable, upright,
or tabletop terminal.
(9-b) "Electronic pull-tab bingo" means a version of
pull-tab bingo that is capable of being played on a card-minding
device or electronic monitoring terminal using electronic pull-tab
bingo tickets.
(9-c) "Electronic pull-tab bingo ticket" means an
electronic or printed ticket used in electronic pull-tab bingo that
is issued from a finite deal of tickets in which some of the tickets
have been designated in advance as winning tickets.
(13-a) "Independent testing facility" means a
laboratory of national reputation that is demonstrably competent
and qualified to scientifically test and evaluate devices for
compliance with this chapter. An independent testing facility may
not be owned or controlled by a licensee subject to this chapter,
except that the licensee may pay the facility for requested testing
and evaluation activities.
(20-a) "Player account card" means a plastic, magnetic
stripe, paper, or smart card that may be used to:
(A) enable or track the play of bingo games;
(B) track and record customer account data,
including electronic credits purchased, played, won, or otherwise
available for participating in bingo games; or
(C) redeem credits purchased, played, or won
through a cashier or other point-of-sale station or redemption
system.
(20-b) "Point-of-sale station" includes a cashier or a
terminal that accepts or dispenses player account cards, debit
cards, or cash.
(26-a) "Site controller" means computer hardware or
software that is located on the premises of a licensed authorized
organization and that stores and distributes electronic pull-tab
bingo tickets for display on electronic monitoring terminals or
card-minding devices.
SECTION 2. Section 2001.054, Occupations Code, is amended
to read as follows:
Sec. 2001.054. RULEMAKING AUTHORITY. (a) The commission
may adopt rules to enforce and administer this chapter.
(b) The commission has broad authority to adopt rules to
administer and ensure compliance with Sections 2001.409(b) and
2001.4091-2001.4095.
SECTION 3. Subsections (b), (d), and (f), Section 2001.407,
Occupations Code, are amended to read as follows:
(b) A licensed distributor may not furnish, by sale, lease,
or otherwise, bingo equipment or supplies to a person other than a
licensed authorized organization, another licensed distributor, or
a person authorized to conduct bingo under Section 2001.551(b)(3)
or (4). A sale or lease of bingo equipment or supplies authorized
by this section must be made on terms requiring immediate payment or
payment not later than the 30th day after the date of actual
delivery.
(d) A licensed authorized organization may lease or
purchase bingo equipment or supplies [electronic or mechanical
card-minding devices, pull-tab dispensers, bingo machines,
consoles, blowers, and flash boards] directly from a licensed
distributor.
(f) With the prior written consent of the commission, a
licensed authorized organization may make an occasional sale of
bingo equipment or supplies [cards or of a used bingo flash board or
blower] to another licensed authorized organization.
SECTION 4. Sections 2001.408 and 2001.409, Occupations
Code, are amended to read as follows:
Sec. 2001.408. OTHER METHODS FOR PLAYING BINGO.
(a) Subject to the commission's rules, bingo may be played using a
pull-tab bingo ticket or an electronic pull-tab bingo ticket.
(b) All prize limitations and exemptions applicable to
pull-tab bingo under Section 2001.420 are also applicable to
electronic pull-tab bingo.
Sec. 2001.409. CARD-MINDING DEVICES. (a) A person may
[not] use a card-minding device:
(1) to account for credits purchased, played, or won
by playing electronic pull-tab bingo authorized by this chapter;
(2) to display and exchange credits described by
Subdivision (1) for electronic pull-tab bingo tickets that may be
played by the person during a bingo occasion;
(3) to read a player account card;
(4) for purchasing, marketing, and playing electronic
pull-tab bingo authorized by this chapter; and
(5) to display graphics and animation that correspond
to or represent, in an entertaining manner, the outcome of an
approved electronic pull-tab bingo ticket or game [generate or
determine the random letters, numbers, or other symbols used in
playing the bingo card played with the device's assistance;
[(2) as a receptacle for the deposit of tokens or money
in payment for playing the bingo card played with the device's
assistance; or
[(3) as a dispenser for the payment of a bingo prize,
including coins, paper currency, or a thing of value for the bingo
card played with the device's assistance].
(b) The display of graphics and animation used to correspond
to, display, or represent the outcome of an approved electronic
pull-tab bingo ticket may not be the basis of a requirement that a
card-minding device that has previously been approved for the play
of electronic pull-tab bingo be retested or reapproved.
SECTION 5. Subchapter I, Chapter 2001, Occupations Code, is
amended by adding Sections 2001.4091 through 2001.4095 to read as
follows:
Sec. 2001.4091. SITE CONTROLLERS. (a) A site controller
may be used to:
(1) create, shuffle, store, and configure electronic
pull-tab bingo tickets;
(2) distribute electronic pull-tab bingo tickets to
electronic monitoring terminals or card-minding devices;
(3) account for, through a means that may include a
player account card, electronic credits purchased, played, or won
by playing electronic pull-tab bingo authorized by this chapter;
(4) exchange credits described by Subdivision (3) for
electronic pull-tab bingo tickets that may be played by a person
during a bingo occasion; or
(5) play electronic pull-tab bingo authorized by this
chapter.
(b) The creation or distribution of electronic pull-tab
bingo tickets by or through a site controller or other method may
not be the basis of a requirement that a preapproved site controller
be retested or reapproved.
(c) A person who sells or supplies a site controller or
other equipment used to play electronic pull-tab bingo is not
required to hold a system service provider license, and the
functions performed by a site controller or other equipment related
to electronic pull-tab bingo may not be construed as the provision
of automated bingo services governed by Subchapter F.
(d) A site controller used for electronic pull-tab bingo
must be manufactured in accordance with the standards provided by
this chapter and is subject to testing by the commission or by an
independent testing facility reasonably acceptable to the
commission.
(e) The commission may inspect a site controller.
(f) The manufacturer of a site controller shall maintain a
central communications system or facility to provide the commission
with the ability to review and audit electronic pull-tab bingo
sales data.
(g) A site controller must provide a physical and electronic
means, by use of a password or other method specified by commission
rule, for securing:
(1) electronic pull-tab bingo tickets created,
shuffled, stored, and configured by the site controller; and
(2) accounting system data.
(h) Nothing in this chapter requires the use of a site
controller to play electronic pull-tab bingo or prohibits the use
of other means of creating, shuffling, storing, configuring, or
distributing electronic pull-tab bingo tickets. All manufacturers
shall maintain a central communications system or facility to
provide the commission with the ability to review and audit
electronic pull-tab bingo sales data.
Sec. 2001.4092. ELECTRONIC MONITORING TERMINALS. (a) A
person may use an electronic monitoring terminal:
(1) to insert or read a player account card;
(2) to account for credits purchased, played, or won
by playing electronic pull-tab bingo authorized by this chapter;
(3) to display or exchange credits purchased, won, or
otherwise available for play of electronic pull-tab bingo
authorized by this chapter; or
(4) for purchasing, marketing, and playing electronic
pull-tab bingo authorized by this chapter.
(b) Nothing in this chapter prohibits an electronic
monitoring terminal from generating or creating graphics and
animation to correspond to, display, or represent, in an
entertaining manner, the outcome of an approved electronic pull-tab
bingo ticket. The generation or creation of the graphics and
animation may not be the basis of a requirement that a preapproved
electronic monitoring terminal be retested or reapproved.
Sec. 2001.4093. USE OF CARD-MINDING DEVICES OR ELECTRONIC
MONITORING TERMINALS IN ELECTRONIC PULL-TAB BINGO. (a) A
card-minding device, a site controller, or an electronic monitoring
terminal used for electronic pull-tab bingo:
(1) must be manufactured in accordance with the
standards provided by this chapter;
(2) is subject to testing by the commission or by an
independent testing facility reasonably acceptable to the
commission;
(3) must be approved by the commission prior to use;
and
(4) may not use graphics, audio, lights or animation
to display the play or outcome of an approved electronic pull-tab
bingo ticket if the graphics, audio, lights or animation include a
spinning reel or reels or the electronic monitoring terminal or
card-minding device generates sounds that resemble the sounds of
bells, gongs, or whistles or of dropping coins in or spinning reels
on a slot machine.
(b) The commission may audit data relating to the sale,
exchange, inventory, or play of electronic pull-tab bingo tickets.
(c) The commission may inspect a card-minding device or
electronic monitoring terminal. The commission shall not approve
any electronic pull-tab bingo ticket or electronic pull-tab bingo
display that fails to preserve the integrity of the commission, in
that it depicts alcoholic beverages, profane language, or
provocative, sexually explicit, or derogatory images or text, or
otherwise, and is inconsistent with symbols or displays previously
approved by the commission for pull-tab bingo or lottery tickets.
(d) A person may not use a card-minding device or electronic
monitoring terminal:
(1) as a receptacle for the deposit of tokens or money
in payment for playing bingo played with the device's assistance;
or
(2) as a physical dispenser for the payment of a bingo
prize, including coins, paper currency, or a thing of value for
bingo played with the device's assistance.
(e) A card-minding device, site controller, or electronic
monitoring terminal may not be used in connection with electronic
pull-tab bingo unless the system that includes the use of the
card-minding device, site controller, or electronic monitoring
terminal would be a Class II game, if it were subject to the
provisions of Chapter 29, Title 25, United States Code, and the
rules and regulations under those provisions in effect on January
1, 2005. For purposes of the preceding sentence, the commission may
determine that the system that includes the card-minding device,
site controller, or electronic monitoring terminal would be a Class
II game if it were subject to the provisions of Chapter 29, Title
25, United States Code, and the rules and regulations under those
provisions in effect on January 1, 2005. In the alternative, a
licensee may demonstrate that its system complies with the above
requirements by submitting evidence to the commission under this
subsection, which may include a certification or letter opinion
from the National Indian Gaming Commission or an independent
testing facility, or a final determination from a court of
competent jurisdiction that the system that includes the use of a
card-minding device, site controller, or electronic monitoring
terminal in connection with electronic pull-tab bingo is a Class II
game, and such determination shall be binding on the commission.
(f) All requests for an approval of bingo equipment under
this section that are received not later than the 30th day after the
date of adoption of a rule establishing the standards for such
approval and that satisfy all requirements applicable to such
equipment shall be approved on the same date, which shall be no
later than the 120th day after the date of adoption of such
standards. In no event shall such requests be approved on different
dates by the commission. Similar deadlines may be established for
future approvals of new card-minding devices, site controllers, or
electronic monitoring terminals.
Sec. 2001.4094. AUDIT AND COMPLIANCE OF ELECTRONIC PULL-TAB
BINGO. (a) The commission may adopt rules governing:
(1) the central communications system or facility
required to be maintained by the manufacturer to provide the
commission with the ability to review and audit electronic pull-tab
bingo sales data;
(2) the recording and reporting of:
(A) revenue generated from the play of electronic
pull-tab bingo;
(B) all stored but unplayed electronic pull-tab
bingo tickets or prizes; and
(C) all electronic pull-tab bingo tickets played
and total prizes awarded;
(3) if a player account card is used, the recording and
tracking of player account information, including electronic
credits purchased, played, won, or otherwise available for play for
electronic pull-tab bingo authorized by this chapter and electronic
credits redeemed for cash; and
(4) the retention of data necessary for audit
compliance under this chapter, including a requirement that the
data be retained electronically for one year.
(b) The commission may investigate a violation or alleged
violation of this chapter.
Sec. 2001.4095. SLOT MACHINE AND VIDEO LOTTERY NOT
AUTHORIZED. This chapter does not authorize the use of a slot
machine or a video lottery terminal.
SECTION 6. Subchapter I, Chapter 2001, Occupations Code, is
amended by adding Sections 2001.421, 2001.422, and 2001.423 to read
as follows:
Sec. 2001.421. PRIZE FEE, PAYOUT PERCENTAGE, AND REVENUE
DEDICATION FOR ELECTRONIC PULL-TAB BINGO. (a) A licensed
authorized organization shall collect from a person who wins an
electronic pull-tab bingo prize of more than $5 a fee in the amount
of five percent of the amount or value of the prize and shall remit a
fee in the amount of five percent for all prizes awarded as a result
of electronic pull-tab bingo games.
(b) The prize payout percentage for electronic pull-tab
bingo games may not be less than the prize payout percentage
established for a paper pull-tab bingo game.
(c) The revenue received by the state from the fee imposed
by Subsection (a) shall be used to finance the public primary and
secondary schools of this state or to reduce public school property
taxes, or both, as provided by the General Appropriations Act or
other law.
Sec. 2001.422. NO EXCLUSIVE VENDOR FOR ELECTRONIC PULL-TAB
BINGO. The commission may not require that electronic pull-tab
bingo be provided by a single vendor.
Sec. 2001.423. ADDITIONAL PROVISIONS REGARDING ELECTRONIC
PULL-TAB BINGO. (a) In addition to the other provisions contained
in this chapter, electronic pull-tab bingo may be allowed only
under the following circumstances:
(1) at a location authorized by the commission as of
January 1, 2005, that is owned by a governmental agency where bingo
is conducted;
(2) at a location that was owned by a licensed
authorized organization where bingo was authorized to be conducted
on January 1, 2005; and
(3) under a license held by a licensed commercial
lessor whose license was in effect as of January 1, 2005, and whose
license has been in effect continuously since that date.
SECTION 7. The legislature finds and declares the
following:
(1) In light of the state's need to reduce school
property taxes and finance the public schools, the Texas Lottery
Commission must be authorized to commence implementation and
authorization of electronic pull-tab bingo games in accordance with
Chapter 2001, Occupations Code, as amended by this Act, at the
earliest possible date, consistent with legislative directive.
(2) The implementation of electronic pull-tab bingo
described as authorized by Chapter 2001, Occupations Code, as
amended by this Act, may require significant time, including
analysis and testing of electronic monitoring terminals,
electronic pull-tab bingo tickets, site controllers, point-of-sale
stations, and card-minding devices, in order to establish
electronic pull-tab bingo systems.
(3) The state's need to reform the public school
finance system and to reduce property taxes constitutes an imminent
peril to the public welfare, requiring the adoption of rules and
authorization for the Texas Lottery Commission to conduct certain
preimplementation activities related to regulating electronic
pull-tab bingo to ensure:
(A) that the increase in state revenue from the
prize fees derived from the conduct of electronic pull-tab bingo
games is realized as soon as possible to further the public interest
in reforming the public school finance system and reducing property
taxes; and
(B) that electronic pull-tab bingo is fairly
conducted and the proceeds derived from it are used for an
authorized purpose, and to promote and ensure the integrity,
security, honesty, and fairness of the electronic pull-tab bingo
system.
(4) In order to commence operation of electronic
pull-tab bingo, as authorized by Chapter 2001, Occupations Code, as
amended by this Act, the Texas Lottery Commission may conduct
limited preimplementation activities as necessary to ensure the
prompt approval of electronic pull-tab bingo equipment after the
effective date of this Act.
(5) Before the effective date of the changes made to
Chapter 2001, Occupations Code, by this Act, the Texas Lottery
Commission may request and receive information related to
applications for licensing and testing of electronic pull-tab bingo
components as authorized under Chapter 2001, Occupations Code, as
amended by this Act.
SECTION 8. The Texas Lottery Commission may expend money
from the Commission's appropriations for the 2006-2007 biennium for
purposes of conducting preimplementation activities to implement
the changes made to Subchapter I, Chapter 2001, Occupations Code,
by this Act, including the development and approval of forms for
applications for licensing and testing of electronic pull-tab bingo
equipment authorized by Chapter 2001, Occupations Code, as amended
by this Act.
SECTION 9. (a) Not later than January 1, 2006, the Texas
Lottery Commission shall adopt rules necessary to implement the
changes in law made to Chapter 2001, Occupations Code, by this Act.
(b) Notwithstanding any other law, the following provisions
apply to the procedures for adoption of the rules required by
Subsection (a) of this section:
(1) the Texas Lottery Commission shall give at least
15 days' notice of its intention to adopt a rule before it adopts
the rule under this section;
(2) a rule adopted under this section takes effect on
the date it is filed in the office of the secretary of state;
(3) the commission shall notify all holders of a
manufacturer's license of the adoption of a rule under this section
not later than the 10th day after the adoption of the rule; and
(4) to the extent the provisions of this section are
inconsistent with Subchapter B, Chapter 2001, Government Code, this
section prevails.
SECTION 10. This Act takes effect November 1, 2005.