79R3430 MSE-F
By: Flores H.B. No. 1112
A BILL TO BE ENTITLED
AN ACT
relating to bingo accounts and the disposition of revenue from
charitable bingo.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2001.451, Occupations Code, is amended
by amending Subsections (a), (c), (d), and (e) and adding
Subsections (g), (h), (i), and (j) to read as follows:
(a) A licensed authorized organization shall establish and
maintain one regular checking account designated as the
organization's "bingo account." [The organization may also
maintain an interest-bearing savings account designated as the
"bingo savings account."]
(c) A licensed authorized organization may transfer [lend]
money from its general fund or other account to the organization's
[its] bingo account or to the bingo account of a unit of which the
organization is a member under Subchapter I-1, if applicable, if:
(1) the balance in the bingo account to which the funds
are transferred is less than the maximum amount permitted by this
section; and
(2) the organization notifies [requests and receives
the prior approval of] the commission of the transfer not later than
the 10th working day after the date of the transfer. [Except as
provided by this section, no other funds may be deposited in the
bingo account.]
(d) Except as permitted by Subsection (c), a [A] licensed
authorized organization may not commingle [gross] receipts derived
from the conduct of bingo with other funds of the organization.
(e) Except as permitted by Section 2001.453(2) [Sections
2001.453(a)(2) and (3)], a [the] licensed authorized organization
may not transfer [gross] receipts derived from the conduct of bingo
to another account maintained by the organization.
(g) The bingo operations of a licensed authorized
organization must result in net proceeds over the organization's
license period.
(h) Except as provided by Subsection (i), a licensed
authorized organization or a unit of licensed authorized
organizations may retain operating capital in the organization's or
unit's bingo account in an amount equal to the organization's or
unit's actual average bingo expenses per quarter based on the
preceding four quarters, excluding prizes paid, but not to exceed a
total of $50,000 for a single organization or $50,000 for each
member of a unit.
(i) The commission shall adopt rules permitting a licensed
authorized organization to retain a maximum amount of operating
capital in the bingo account in excess of the amount provided by
Subsection (h) if the organization:
(1) has conducted bingo for less than one year;
(2) experiences circumstances beyond the control of
the organization, including force majeure, that necessitate an
increase in operating capital; or
(3) furnishes the commission with a credible business
plan for the conduct of bingo or for the organization's existing or
planned charitable purposes that an increase in operating capital
will reasonably further.
(j) A licensed authorized organization may apply to the
commission for a waiver of the requirements of this section and
Section 2001.457. The commission may grant the waiver upon a
showing of good cause by the organization that compliance with this
section and Section 2001.457 is detrimental to the organization's
existing or planned charitable purposes. An organization applying
for a waiver establishes good cause by:
(1) providing credible evidence of circumstances
beyond the control of the organization, including force majeure; or
(2) furnishing the commission with a credible business
plan for the organization's conduct of bingo or the organization's
existing or planned charitable purposes.
SECTION 2. Section 2001.453, Occupations Code, is amended
to read as follows:
Sec. 2001.453. AUTHORIZED USES OF BINGO ACCOUNT. [(a)] A
licensed authorized organization may draw a check on its bingo
account only for:
(1) the payment of necessary and reasonable bona fide
expenses, including compensation of personnel, as permitted under
Section 2001.458 incurred and paid in connection with the conduct
of bingo; or
(2) the disbursement of net proceeds derived from the
conduct of bingo as provided by this subchapter [to charitable
purposes; or
[(3) the transfer of net proceeds derived from the
conduct of bingo to the organization's bingo savings account
pending a disbursement to a charitable purpose.
[(b) A licensed authorized organization must make the
disbursement of net proceeds on deposit in the bingo savings
account to a charitable purpose by transferring the intended
disbursement back into the organization's bingo account and then
withdrawing an amount by a check drawn on the bingo account].
SECTION 3. Sections 2001.457(a), (b), and (c), Occupations
Code, are amended to read as follows:
(a) Before the end of each quarter, a licensed authorized
organization shall disburse all [for charitable purposes an amount
not less than 35 percent] of the organization's net proceeds
[adjusted gross receipts] from the preceding quarter, other than
amounts retained under Section 2001.451, as provided by this
subchapter [less the amount of authorized expenses not to exceed
six percent of the gross receipts].
(b) If a licensed authorized organization fails to meet the
requirements of Subsection (a) [this section] for a quarter, the
commission in applying appropriate sanctions shall [may] consider
whether, taking into account the amount required to be disbursed
[distributed] during that quarter and the three preceding quarters
[and the charitable distributions for each of those quarters], the
organization has disbursed [distributed] a total amount sufficient
to have met the disbursement [35 percent] requirement for that
quarter and the three preceding quarters combined.
(c) A licensed authorized organization that has ceased to
conduct bingo for any reason and that has unexpended bingo funds
shall disburse those funds as provided by this subchapter [to
charitable purposes] before the end of the next calendar quarter
after the calendar quarter in which the organization ceases to
conduct bingo.
SECTION 4. The Texas Lottery Commission shall adopt rules
as required by Section 2001.451, Occupations Code, as amended by
this Act, not later than January 1, 2006.
SECTION 5. (a) If on or after the effective date of this Act
a licensed authorized organization has a balance in its bingo
account of more than the maximum amount of operating capital
allowed by Chapter 2001, Occupations Code, as amended by this Act,
the organization shall distribute the funds in excess of the
organization's maximum operating capital allowed by Chapter 2001,
Occupations Code, as amended by this Act, not later than:
(1) the first anniversary of the effective date of
this Act if the excess amount is less than 200 percent of the
maximum amount of operating capital;
(2) the second anniversary of the effective date of
this Act if the excess amount is 200 percent or more but less than
300 percent of the maximum amount of operating capital; or
(3) the third anniversary of the effective date of
this Act if the excess amount is 300 percent or more of the maximum
amount of operating capital.
(b) The Texas Lottery Commission may waive the requirements
of Subsection (a) of this section on application and a showing of
good cause by a licensed authorized organization.
(c) This section expires January 1, 2009.
SECTION 6. This Act takes effect September 1, 2005.