79R9765 MSE-D
By: Armbrister S.B. No. 1326
A BILL TO BE ENTITLED
AN ACT
relating to the creation of county gaming districts to regulate
local-option video lottery gaming; providing penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle C, Title 10, Local Government Code, is
amended by adding Chapter 328 to read as follows:
CHAPTER 328. COUNTY GAMING DISTRICTS TO ADMINISTER STATE VIDEO
LOTTERY
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 328.001. DEFINITIONS. In this chapter:
(1) "Commission" means the Texas Lottery Commission.
(2) "District" means a county gaming district.
(3) "Video lottery" means the conduct of video lottery
games on behalf of this state as authorized under this chapter.
(4) "Video lottery game" means any game of chance,
including a game of chance in which the outcome may be partially
determined by skill or ability, that for consideration may be
played by an individual on an electronic machine or video display.
(5) "Video lottery retailer" means a person licensed
under this chapter to conduct video lottery.
(6) "Video lottery technology provider" means a person
licensed under this chapter to provide video lottery equipment and
services.
[Sections 328.002-328.050 reserved for expansion]
SUBCHAPTER B. CREATION OF DISTRICTS
Sec. 328.051. CREATION AND PURPOSE OF DISTRICT. (a) The
commissioners court of a county may call an election on the question
of creating a county gaming district in the county under this
chapter to permit the conduct of video lottery games in the
district.
(b) The order calling the election must:
(1) define the boundaries of the district to include
all or part of the boundaries of the county; and
(2) call for the election to be held within those
boundaries.
(c) The ballot at an election held under this section must
be printed to permit voting for or against the proposition:
"Authorizing the creation of the ____ (Name of County) Gaming
District in which video lottery games may be conducted."
(d) The proposition is approved and the district is created
if a majority of the voters of the proposed district voting at the
election favor creation of the district.
(e) If the proposition is not approved at the election,
another election on the question of creating a gaming district may
not be held in the county before the first anniversary of the
election.
(f) The Election Code governs an election held under this
section.
(g) If the proposed district consists of one or more whole
county commissioners precincts, in the order calling the election,
the county may provide for the district boundaries to conform
automatically to any future changes in the boundaries of the
precinct or precincts included in the district.
Sec. 328.052. BOUNDARIES. A district is composed of the
area described by the order calling the election to create the
district, subject to changes made under Section 328.051(g).
[Sections 328.053-328.100 reserved for expansion]
SUBCHAPTER C. VIDEO LOTTERY
Sec. 328.101. VIDEO LOTTERY RETAILER LICENSE. (a) On
application, the commission shall issue a video lottery retailer
license to an applicant who meets the minimum qualifications
established under this section and is not ineligible to hold the
license under another provision of this chapter or commission rule.
(b) A person that holds a license issued under this section
may operate video lottery games in accordance with this chapter and
commission rules at one location approved by the commission within
the boundaries of each district. Any change in the location must be
approved in advance by the commission and the commissioners court
of the county in which the district is located.
(c) The commission by rule may establish the minimum
qualifications for a person to hold a video lottery retailer
license. The commission shall establish those qualifications as
the commission determines appropriate to maximize revenue from the
lottery to support property tax relief and serve the convenience of
persons wishing to play video lottery games consistent with the
health and safety of the public and the integrity of the state
lottery.
Sec. 328.102. VIDEO LOTTERY TECHNOLOGY PROVIDER LICENSE.
(a) The commission shall issue a video lottery technology provider
license to a person with resources and technology the commission
determines adequate to provide video lottery equipment and services
to video lottery retailers conducting video lottery in a district
under this chapter.
(b) A person licensed as a video lottery technology provider
may not provide video lottery technology or equipment to any person
without the consent of the commission.
(c) The commission by rule may establish the minimum
qualifications for a video lottery technology provider license.
The commission shall establish those qualifications as the
commission determines appropriate to promote a competitive market
for video lottery goods and services and the availability of
reliable video lottery equipment and services to the board and to
video lottery retailers conducting video lottery games under this
chapter, consistent with the health and safety of the public.
(d) The commission by rule shall prescribe all necessary
procedures for licenses issued under this section and shall set
licensing fees in amounts necessary to cover the commission's costs
of administering this section.
Sec. 328.103. OTHER LICENSES AND PERMITS. The commission
may establish other licensing or permit requirements the commission
considers appropriate to carry out the commission's duties under
this chapter.
Sec. 328.104. LICENSING PROCEDURES; TERMS AND CONDITIONS.
(a) The commission shall establish the terms of licenses and
permits issued under this chapter, not to exceed a term of two
years, and shall prescribe procedures for applying for and renewing
licenses and permits.
(b) The commission may include any terms or conditions in a
license or permit the commission considers appropriate to further
the purposes of this chapter.
Sec. 328.105. DISCIPLINARY ACTION. (a) The commission
may refuse to issue a license under this chapter or may revoke,
suspend, or refuse to renew a license issued under this chapter, or
may reprimand a license holder for a violation of this chapter,
other state law, or a rule of the commission.
(b) If the commission proposes to take action under
Subsection (a), the person is entitled to notice and a hearing.
(c) The commission may place on probation subject to
reasonable conditions a person whose license is suspended by the
commission.
(d) The commission may summarily suspend a license issued by
the commission under this chapter in the manner prescribed by
Section 466.160, Government Code, if the commission determines that
the action is necessary to maintain the integrity, security, or
fairness of video lottery operations.
(e) The commission by rule shall develop a system for
monitoring a license holder's compliance with this chapter and
applicable rules of the commission.
(f) The commission shall adopt the rules and procedures
necessary to administer this section.
[Sections 328.106-328.150 reserved for expansion]
SUBCHAPTER D. REVENUE
Sec. 328.151. NET TERMINAL INCOME DEFINED. In this
subchapter, "net terminal income" means the total amount of money
paid to play video lottery games less the value of all prizes paid
to players of the games, including the value of credits redeemed for
money. The costs associated with progressive prizes may not be
deducted from the total amount of money paid to play video lottery
games for purposes of determining net terminal income. Promotional
prizes offered by a video lottery retailer may not be deducted as
prizes paid to players for the purpose of determining net terminal
income.
Sec. 328.152. DIVISION OF NET TERMINAL INCOME OF VIDEO
LOTTERY RETAILER. (a) At the times and in the manner prescribed by
commission rule, a video lottery retailer shall pay to the
commission an amount equal to 40 percent of the net terminal income
derived from video lottery games conducted by the video lottery
retailer.
(b) The remainder of the net terminal income shall be
retained by the video lottery retailer.
Sec. 328.153. VIDEO LOTTERY FUND. (a) The commission shall
establish a fund known as the video lottery fund. The commission
shall establish a separate account within the fund for each
district.
(b) The fund consists of all revenue received by the
commission from video lottery, including fees received by the
commission under this chapter, and all money credited to the
account from any other fund or source under law. Net terminal
income received from a video lottery retailer shall be deposited to
the credit of the account established for the district in which the
net terminal income was collected.
(c) Money deposited in the video lottery fund may be used
only for:
(1) the payment of costs incurred by the commission in
the administration of this chapter; and
(2) distribution to counties and municipalities under
Section 328.154.
(d) The commission may establish a reserve account in the
fund to maintain sufficient money in the fund for purposes of
Subsection (c)(1). The commission shall use money in the fund not
credited to the account established for any district for purposes
of Subsection (c)(1) before using money credited to an account for a
district. If the money in the fund not credited to the account
established for a district is insufficient for purposes of
Subsection (c)(1), the commission may use money credited to the
accounts established for the districts for those purposes in
proportion to the amount deposited to the credit of each account for
the most recent year for which the information is available.
Sec. 328.154. DISTRIBUTION OF NET TERMINAL INCOME TO
COUNTIES AND MUNICIPALITIES. (a) Except for amounts used as
permitted by Section 328.153(d), not later than February 1 of each
year, the comptroller shall distribute the money deposited in the
fund to the credit of the account established for each district in
the preceding year as follows:
(1) an amount equal to six percent of the net terminal
income deposited to the credit of the account for the preceding year
shall be distributed as provided by Subsection (b); and
(2) the remainder shall be transferred to the county
in which the district is located for property tax relief as provided
by Section 328.155.
(b) The comptroller shall distribute the revenue described
by Subsection (a)(1) for each district as follows:
(1) one-third to the county in which the district is
located, to be used for general governmental purposes;
(2) one-third allocated in proportion to population
within the county in which the district is located to the
municipalities having territory in the county, to be used for
general governmental purposes; and
(3) the remainder allocated in proportion to
population to all other counties and municipalities in this state.
(c) A county or municipality may spend revenue received
under Subsection (b)(3) only for:
(1) property tax relief as provided by Section
328.155;
(2) water infrastructure projects;
(3) mobility projects; or
(4) health care and health services.
Sec. 328.155. PROPERTY TAX RELIEF. (a) A county that
receives revenue designated for tax relief under Section
328.154(a)(2) or a county or municipality that receives revenue
under Section 328.154(b) that the governing body of the county or
municipality designates for property tax relief shall adjust the
effective tax rate and rollback tax rate for the county or
municipality, as applicable, for purposes of Chapter 26, Tax Code,
as follows:
(1) if the amount of revenue designated for tax relief
received in the preceding tax year exceeds the amount of that
revenue received in the tax year preceding that tax year, the
effective tax rate and rollback tax rates for the current tax year
are reduced by the rate that, if applied to current total value as
defined by Chapter 26, Tax Code, would generate taxes in an amount
equal to the difference in revenue designated for tax relief
received in those two preceding tax years; and
(2) if the amount of revenue designated for tax relief
received in the preceding tax year is less than the amount of that
revenue received in the tax year preceding that tax year, the
effective tax rate and rollback tax rates for the current tax year
are increased by the rate that, if applied to current total value as
defined by Chapter 26, Tax Code, would generate taxes in an amount
equal to the difference in revenue designated for tax relief
received in those two preceding tax years.
(b) Revenue designated for tax relief received by a county
or municipality under this chapter shall be deposited to the credit
of the general fund of the county or municipality and may be used
for any governmental purpose.
[Sections 328.156-328.200 reserved for expansion]
SUBCHAPTER E. OFFENSES; PENALTIES
Sec. 328.201. MANIPULATION OR TAMPERING. (a) A person
commits an offense if the person intentionally or knowingly
manipulates the outcome of a video lottery game, the amount of a
video lottery game prize, or the operation of a video lottery
machine by physical, electronic, or other means, other than in
accordance with commission rules.
(b) An offense under this section is a felony of the third
degree.
Sec. 328.202. SALE OF VIDEO LOTTERY GAME TO PERSON YOUNGER
THAN 18 YEARS OF AGE. (a) A video lottery retailer or an employee
or agent of a video lottery retailer commits an offense if the
person intentionally or knowingly:
(1) sells or offers to sell a play of a video lottery
game to an individual the person knows is younger than 18 years of
age or permits the individual to purchase a play of a video lottery
game; or
(2) pays money or issues a credit slip or other
winnings for a play of a video lottery game to an individual the
person knows is younger than 18 years of age.
(b) An individual who is younger than 18 years of age
commits an offense if the individual:
(1) purchases a play of a video lottery game;
(2) accepts money, a video credit slip, or other
payment of winnings for play of a video lottery game; or
(3) falsely represents the individual to be 18 years
of age or older by displaying evidence of age that is false or
fraudulent or misrepresents in any way the individual's age in
order to purchase a play of a video lottery game.
(c) An offense under Subsection (a) is a Class B
misdemeanor.
(d) An offense under Subsection (b) is a misdemeanor
punishable by a fine not to exceed $250.
Sec. 328.203. ADMINISTRATIVE PENALTY. The commission may
impose an administrative penalty against a person licensed under
this chapter who violates this chapter or a rule or order adopted by
the commission under this chapter.
Sec. 328.204. CIVIL PENALTY. (a) A person who violates
this chapter or a rule adopted by the commission under this chapter
is liable to the state for a civil penalty not to exceed $5,000 for
each day of violation.
(b) At the request of the commission, the attorney general
shall bring an action to recover a civil penalty authorized by this
section.
SECTION 2. Section 466.024(b), Government Code, is amended
to read as follows:
(b) The commission shall adopt rules prohibiting the
operation of any game using a video lottery machine or machine,
except in accordance with Chapter 328, Local Government Code.
SECTION 3. Section 47.02(c), Penal Code, is amended to read
as follows:
(c) It is a defense to prosecution under this section that
the actor reasonably believed that the conduct:
(1) was permitted under Chapter 2001, Occupations
Code;
(2) was permitted under Chapter 2002, Occupations
Code;
(3) consisted entirely of participation in:
(A) the state lottery authorized by [the State
Lottery Act (]Chapter 466, Government Code[)]; or
(B) state video lottery authorized by Chapter
328, Local Government Code;
(4) was permitted under the Texas Racing Act (Article
179e, Vernon's Texas Civil Statutes); or
(5) consisted entirely of participation in a drawing
for the opportunity to participate in a hunting, fishing, or other
recreational event conducted by the Parks and Wildlife Department.
SECTION 4. Section 47.09, Penal Code, is amended by
amending Subsection (a) and adding Subsection (c) to read as
follows:
(a) It is a defense to prosecution under this chapter that
the conduct:
(1) was authorized under:
(A) Chapter 2001, Occupations Code;
(B) Chapter 2002, Occupations Code; or
(C) the Texas Racing Act (Article 179e, Vernon's
Texas Civil Statutes);
(2) consisted entirely of participation in the state
lottery authorized by Chapter 466, Government Code, or in state
video lottery authorized by Chapter 328, Local Government Code; or
(3) was a necessary incident to the operation of the
state lottery or of state video lottery and was directly or
indirectly authorized by:
(A) Chapter 466, Government Code;
(B) Chapter 328, Local Government Code;
(C) the lottery division of the Texas Lottery
Commission;
(D) [(C)] the Texas Lottery Commission; or
(E) [(D)] the director of the lottery division of
the Texas Lottery Commission.
(c) Subsection (a)(3) applies to a person manufacturing,
possessing, or operating a gambling device under a license or other
authorization of the Texas Lottery Commission under Chapter 328,
Local Government Code.
SECTION 5. Chapter 47, Penal Code, is amended by adding
Section 47.095 to read as follows:
Sec. 47.095. INTERSTATE OR FOREIGN COMMERCE DEFENSE. It is
a defense to prosecution under this chapter that a person sells,
leases, transports, possesses, stores, or manufactures a gambling
device under a video lottery technology provider license issued
under Chapter 328, Local Government Code, for transportation in
interstate or foreign commerce.
SECTION 6. The change in law made by this Act applies only
to an offense committed on or after the effective date of this Act.
An offense committed before the effective date of this Act is
covered by the law in effect when the offense was committed, and the
former law is continued in effect for that purpose. For purposes of
this section, an offense was committed before the effective date of
this Act if any element of the offense was committed before that
date.
SECTION 7. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2005.