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79R2076 MSE-D
By: Flores H.B. No. 1138
A BILL TO BE ENTITLED
AN ACT
relating to the operation and regulation of charitable bingo.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2001.059, Occupations Code, is amended
by amending Subsection (a) and adding Subsection (g) to read as
follows:
(a) An officer of a license holder or a business
representative, attorney, accountant or other bookkeeper, or
primary operator employed or retained by a license holder [A
person] may request from the commission an advisory opinion
regarding compliance with this chapter and the rules of the
commission.
(g) The commission may refuse to issue an advisory opinion
under this section on a matter that the commission knows to be in
active litigation.
SECTION 2. Subchapter B, Chapter 2001, Occupations Code, is
amended by adding Section 2001.060 to read as follows:
Sec. 2001.060. REPORTING. (a) On or before June 1 of each
even-numbered year, the commission shall prepare and deliver to the
governor, the lieutenant governor, the speaker of the house of
representatives, and the clerks of the standing committees of the
senate and house of representatives with primary jurisdiction over
charitable bingo a report stating for each of the preceding two
calendar years:
(1) the total amount of gross receipts earned by
licensed authorized organizations from their bingo operations; and
(2) a comparison of the gross receipts received and
the net proceeds derived from those gross receipts.
(b) For purposes of Subsection (a)(2), the commission shall
determine total net proceeds in a manner that does not reduce gross
receipts by the amount of rent paid by a licensed authorized
organization to another licensed authorized organization for
rental of bingo premises if the other organization pays rent for the
premises to a licensed commercial lessor.
SECTION 3. Section 2001.104, Occupations Code, is amended
by adding Subsection (e) to read as follows:
(e) An applicant for a two-year license under Subsection (d)
may pay an amount equal to one-half of the amount of the license fee
required by Subsection (d) plus $25 on or before the date the
application is due, and may pay the remaining one-half of the
license fee on or before the date the second year of the license
period begins as determined by commission rule.
SECTION 4. Section 2001.102(b), Occupations Code, is
amended to read as follows:
(b) The application must include:
(1) the name and address of the applicant;
(2) the names and addresses of the applicant's
officers;
(3) the address of the premises where and the time when
the applicant intends to conduct bingo under the license sought;
(4) the name and address of the licensed commercial
lessor of the premises, if the applicant intends to lease premises
to conduct bingo from a person other than an authorized
organization;
(5) [the capacity or potential capacity for public
assembly in any premises owned or occupied by the applicant;
[(6)] the amount of rent to be paid or other
consideration to be given, directly or indirectly, for each
occasion for use of the premises of another licensed authorized
organization or for use of the premises of a licensed commercial
lessor;
(6) [(7)] all other items of expense intended to be
incurred or paid in connection with conducting, promoting, and
administering bingo and the names and addresses of the persons to
whom, and the purposes for which, the expenses are to be paid;
(7) [(8)] the specific purposes to and the manner in
which the net proceeds of bingo are to be devoted;
(8) [(9)] a statement that the net proceeds of bingo
will go to one or more of the authorized charitable purposes under
this chapter;
(9) [(10)] a designation of one or more active members
of the applicant organization under whom bingo will be conducted
accompanied by a statement signed by each designated member stating
that the member will be responsible for the conduct of bingo under
the terms of the license and this chapter;
(10) [(11) a statement that a copy of the application
has been sent to the appropriate governing body;
[(12)] the name and address of each person who will
work at the proposed bingo occasion, the nature of the work to be
performed, and a statement as to whether the person has been
convicted of a felony, a gambling offense, criminal fraud, or a
crime of moral turpitude; and
(11) [(13)] sufficient facts relating to the
applicant's incorporation and organization to enable the
commission to determine whether the applicant is an authorized
organization.
SECTION 5. Section 2001.106, Occupations Code, is amended
to read as follows:
Sec. 2001.106. FORM AND CONTENTS OF LICENSE. A license to
conduct bingo must include:
(1) the name and address of the license holder;
(2) the names and addresses of the member or members of
the license holder under whom the bingo will be conducted;
(3) an indication of the premises where and the time
when bingo is to be conducted; and
(4) the specific purposes to which the net proceeds of
bingo are to be devoted[; and
[(5) a statement of whether a prize is to be offered
and the amount of any authorized prize].
SECTION 6. Section 2001.154(a), Occupations Code, is
amended to read as follows:
(a) The commission may not issue a commercial lessor license
to or renew a commercial lessor license of:
(1) a person convicted of a felony, criminal fraud, a
gambling or gambling-related offense, or a crime of moral turpitude
if less than 10 years has elapsed since termination of a sentence,
parole, mandatory supervision, or community supervision served for
the offense;
(2) a public officer who receives any consideration,
direct or indirect, as owner or lessor of premises offered for
conducting bingo;
(3) a person who extends credit to, loans money to, or
pays or provides for the payment of license fees for an authorized
organization;
(4) a distributor or manufacturer; or
(5) a person in which a person covered by Subdivision
(1), (2), (3), or (4) or a person married or related in the first
degree by consanguinity or affinity, as determined under Chapter
573, Government Code, to one of those persons has greater than a 10
percent proprietary, equitable, or credit interest or in which one
of those persons is active or employed[;
[(6) a foreign corporation or other foreign legal
entity;
[(7) an individual who is not a resident of this state;
[(8) a corporation or other legal entity owned or
controlled by:
[(A) a foreign corporation; or
[(B) an individual who is not a resident of this
state; or
[(9) a corporation or other legal entity:
[(A) whose shares are publicly traded; or
[(B) owned or controlled by a corporation whose
shares are publicly traded].
SECTION 7. Section 2001.306(c), Occupations Code, is
amended to read as follows:
(c) The holder of a license to conduct bingo may not change
the location at which it conducts bingo until it has[:
[(1) surrendered its original license; and
[(2)] received an amended license.
SECTION 8. Section 2001.313, Occupations Code, is amended
by amending Subsection (d) and adding Subsection (h) to read as
follows:
(d) Except as provided by Subsection (h), a [A] person who
is not listed on the registry established by this section may not
act as an operator, manager, cashier, usher, caller, or salesperson
for a licensed authorized organization.
(h) A licensed authorized organization may employ a person
who is not on the registry established by this section as an
operator, manager, cashier, usher, caller, or salesperson on a
provisional basis for a period not to exceed 14 days if the person
is awaiting the results of a background check by the commission. A
person who has been removed from the registry under Subsection (e)
and has not subsequently been listed on the registry under
Subsection (g) may not be employed under this subsection.
SECTION 9. 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 Subsection (c) of this section
and 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 10. 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 11. 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 12. Section 2001.502, Occupations Code, is amended
to read as follows:
Sec. 2001.502. PRIZE FEE. A licensed authorized
organization shall collect from a person who wins a bingo prize a
fee in the amount of five percent of the amount or value of the
prize, except that a winning pull-tab ticket with a prize of $5 or
less is exempt from the prize fee.
SECTION 13. Section 2001.505(b), Occupations Code, is
amended to read as follows:
(b) A license holder shall[:
[(1)] maintain records to substantiate the contents of
each report[; and
[(2) furnish a copy of each report to the appropriate
governing body].
SECTION 14. The following provisions of Chapter 2001,
Occupations Code, are repealed:
(1) Section 2001.002(10);
(2) Section 2001.152(c);
(3) Section 2001.305;
(4) Sections 2001.410(b) and (d);
(5) Section 2001.417;
(6) Section 2001.457(d); and
(7) Section 2001.505(c).
SECTION 15. (a) 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.
(b) The changes in law made by this Act to the license
application fee apply to an application filed on or after the
effective date of this Act. An application filed before the
effective date of this Act is governed by the law in effect
immediately before the effective date of this Act, and that law is
continued in effect for that purpose.
SECTION 16. (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 17. This Act takes effect September 1, 2005.