By: Geren H.J.R. No. 78
A JOINT RESOLUTION
proposing a constitutional amendment authorizing casino gaming and
requiring creation of a Texas Gaming Commission to regulate gaming
and casino-based development projects in this state and authorizing
the state to operate video lottery games at racetracks and on Indian
lands.
BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subsection (a), Section 47, Article III, Texas
Constitution, is amended to read as follows:
(a) The Legislature shall pass laws prohibiting lotteries
and gift enterprises in this State other than those authorized by
Subsections (b), (d), [and] (e), and (f) of this section and Section
47a of this article.
(f) The Legislature by general law in accordance with this
section may authorize this state to control and operate a video
lottery system under which individuals may play lottery games of
chance on video lottery terminals owned and operated by persons
licensed or otherwise authorized by this state, and may authorize
other games of chance to be conducted to supplement lottery games at
licensed or authorized locations, in order to generate revenue for
public purposes. The law authorizing a video lottery system must:
(1) except as otherwise provided by this section,
require this state to continually monitor the activity of each
video lottery terminal and remotely terminate the operation of a
terminal as necessary to protect the public health, welfare, or
safety or the integrity of the state lottery or to prevent financial
loss to the state;
(2) include a comprehensive registration program to
govern a person that manufactures, distributes, sells, or leases
video lottery terminals for use or play in this state and a process
to approve terminals for us in the video lottery system in
accordance with technical standards established by this state;
(3) provide for a comprehensive licensing program
govern a person that owns, manages, or maintains video lottery
terminals operated in this state;
(4) limit the operation of video lottery games on
behalf of this state to only the following legal entities:
(A) a person that is licensed in this state on
January 1, 2005, to conduct wagering on a horse race or greyhound
race or that has submitted on or before that date an application to
be licensed by this state to conduct wagering on a horse race or
greyhound race, provided that the person may be licensed to conduct
video lottery games only at a location licensed for conducting
horse races or greyhound races; or
(B) a federally recognized Indian tribe, which,
under an agreement with this state in the form prescribed by general
law or negotiated by the governor and ratified by the Legislature,
may conduct the games only on land:
(i) held in trust by the United States for
the tribe pursuant to federal law and designated by the applicable
tribe for video lottery activity; or
(ii) held in trust by the United States for
the benefit of the tribe on which Class III gaming is permitted
under the Indian Gaming Regulatory Act of 1988 (P.L. 100-497,
codified at 18 U.S.C. Section 1166 et seq. and 25 U.S.C. Section
2701 et. seq.) and designated by the tribe for lottery activity;
(5) prescribe the method for allocating video lottery
terminals that may be operated by an entity listed under
Subdivision (4) of this subsection, which method must include
consideration of demographic, public health and safety, and
optimization of state revenue;
(6) authorize this state to impose and collect state
taxes on the purchase, use, or other consumption of a good or
service at a video lottery facility on tribal land by a person who
is not a member of the Indian tribe operating the facility;
(7) prohibit and impose criminal penalties for the
possession and operation of all electronic and mechanical gaming
devices other than video lottery system or gaming devices
authorized by a law enacted under this section; and
(8) prohibit the operation or possession of a video
lottery terminal or other similar gaming device that is not subject
to this state's measures for monitoring and terminating operation
of the terminal required by this subsection and does not generate
revenue for this state, except that the law may provide for limited
storage of video lottery terminals as authorized and supervised by
this state and for possession of video lottery terminals by this
state for testing and evaluation.
(f-1) After an election of the voters approving Section 47a
of this article and until such time as the Legislature enacts laws
under Subsection (f), the Texas Lottery Commission may collect a
fee of $15,000 for each video lottery, terminal that a person
described in Subsection (4) may apply for. The commission shall
adopt rules to allow for the operation of the a video lottery
system. This subsection expires January 1, 2008.
(f-2) Net revenue generated from video lottery terminals
located at a racetrack shall be distributed as follows:
(A) 30 percent to the racetrack; and
(B) 70 percent to this state.
This subsection expires January 1, 2008
(f-3) The law enacted under Subsection (f) must abolish the
Texas Racing Commission and the Texas Lottery Commission and merge
the functions of those agencies into the Texas Gaming Commission
not later than January 1, 2007. This subsection expires January 1,
2008
(g) An applicant for a license, registration, or other
affirmative regulatory approval under a law enacted under
Subsection (f) of this section is a revocable privilege, and the
person does not acquire any vested right in or under the privilege.
The courts of this state do not have jurisdiction to review a
decision to deny, limit, or condition a license, registration, or
request for approval unless the judicial review is sought on the
ground that the denial, limitation, or condition is based on a
suspect classification, such as race, color, religion, sex, or
national origin, in violation of the Equal Protection Clause of the
Fourteenth Amendment to the United States Constitution. The court
must affirm the denial, limitation, or condition unless the
violation is proven by clear and convincing evidence.
SECTION 2. Article III, Texas Constitution, is amended by
adding Section 47a to read as follows:
Sec. 47a. (a) The legislature by general law shall
authorize and regulate casino gaming conducted by a person licensed
by this state.
(b) The legislature by general law shall establish a Texas
Gaming Commission to administer the laws regulating gaming
activities authorized by this section or Section 47 of this
article.
(b-i) The law enacted under Subsection (b) must abolish the
Texas Racing Commission and the Texas Lottery Commission and merge
the functions of those agencies into the Texas Gaming Commission
not later than January 1, 2007. This subsection expires January 1,
2008.
(c) The Texas Gaming Commission established under this
section must consist of five members appointed as follows:
(1) one member appointed by the governor;
(2) one member appointed by the lieutenant governor;
(3) one member appointed by the speaker of the house of
representatives;
(4) one member appointed by the attorney general; and
(5) one member appointed by the comptroller of public
accounts.
(c-1) Not later than January 1, 2006, the initial members of
the gaming commission shall be appointed as provided by Subsection
(c) of this section to terms as follows:
(1) the initial term of the member appointed under
Subsection (c) (1) of this section expires January 1, 2008;
(2) the initial terms of the members appointed under
Subsections (c) (2) and (4) of this section expire January 1, 2010;
and
(3) the initial terms of the members appointed under
Subsections (c) (3) and (5) of this section expire January 1, 2012.
(c-2) Subsection (c-i) of this section and this subsection
expire January 1, 2013.
(d) Members of the commission appointed under Subsection
(c) of this section serve staggered terms of six years, with the
terms of one or two members expiring January 1 of each even numbered
year.
(e) A vacancy in a commission membership shall be filled for
the unexpired term in the same manner as the original appointment.
(f) The general law enacted under Subsection (a) of this
section must authorize the licensing by the commission of 12
casino-anchored destination attraction development projects in
this state as follows:
(1) seven projects in urban areas, allocated
population;
(2) three projects in counties adjacent to the coast
that are tourist destinations with at least 1,000 guest rooms
available for visitors; and
(3) two additional projects, at locations to be
determined by the commission to achieve targeted economic
development or permanent new job creation, or based on other
considerations determined appropriate by the commission.
(g) The commission may not award a license for a
casino-anchored destination attraction development project unless
the project meets the major economic development qualifications
established by this subsection. The minimum total land and
development costs for a project to qualify for a license are as
follows:
(1) $400 million for an urban area project;
(2) $200 million for a tourist destination project in
a coastal area; and
(3) $150 million for an additional project.
(h) A political subdivision of this state may not offer or
award a tax abatement, tax credit, tax subsidy, tax exemption or any
other form of publicly funded incentive to assist, develop, or aide
in the establishment or operation of a casino-anchored destination
attraction development project.
(i) A facility or land used in connection with the operation
of a casino-anchored destination attraction shall be subject to all
applicable state and local taxation, including ad valorem taxation.
(j) A local option election shall be held in the manner
determined by the commission in each county in which a person
applies for a license for a casino-anchored destination attraction
development project. The commission may not award a license for a
project unless a majority of the voters of the county voting in the
election favor selection of that county as the site for a project.
The commission may not award a license for a project located in a
municipality unless a majority of the voters of the municipality
voting in the local option election favor the proposition to allow a
casino-anchored destination attraction development project in the
county.
(k) The commission may not award a license for a casino
anchored destination attraction development project to a person
unless at least 51 percent of the development project will be owned
by residents of this state who have maintained their principal
residence in this state for not less than the two years preceding
September 1, 2005.
(1) the legislature shall provide the initial funding
for the commission through a loan from the Texas Enterprise Fund in
the amount of $2.5 million. The commission shall repay the loan
with interest from the first money received by the commission from
license fees received in connection with licenses for
casino-anchored destination attraction development projects.
SECTION 3. This proposed constitutional amendment shall be
submitted to the voters at an election to be held November 8, 2005.
The ballot shall be printed to provide for voting for or against the
proposition: "The constitutional amendment authorizing limited
casino gaming in Texas, providing local elections for final
approval of proposed casino-based development projects, and
providing for a Texas Gaming Commission to regulate gaming in this
state."