By: Bonnen H.B. No. 3973

A BILL TO BE ENTITLED

AN ACT

relating to authorizing a long-term concession agreement for operation of the lottery and establishing three trust funds to receive the revenue resulting from the long-term concession agreement.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 466.002, Government Code is amended to read as follows:

(2) "Concession agreement" means an agreement between the state and private entity that authorizes the private entity to operate and maintain the lottery on behalf of the state and retain the revenues derived from the operation and maintenance of the lottery.

(3[2]) "Director" means the director of the division.

(4[3]) "Division" means the lottery division established by the commission under Chapter 467.

(5[4]) "Executive director" means the executive director of the commission.

(6[5]) "Lottery" means the procedures operated by the state under this chapter through which prizes are awarded or distributed by chance among persons who have paid, or unconditionally agreed to pay, for a chance or other opportunity to receive a prize.

(7[6]) "Lottery game" includes a lottery activity.

(8[7]) "Lottery operator" means a person selected under Section 466.014(b) to operate a lottery.

(9[8]) "Player" means a person who contributes any part of the consideration for a ticket.

(10[9]) "Sales agent" or "sales agency" means a person licensed under this chapter to sell tickets.

(11[10]) "Ticket" means any tangible evidence issued to provide participation in a lottery game authorized by this chapter.

SECTION 2. Section 466.014, Government Code is amended by adding Subsection (d) to read as follows:

(d) The commission may, in the exercise of authority granted under Subsections (b) and (c) of this Section, execute a long-term concession agreement for operation of the lottery.

SECTION 3. Section 466.0141, Government Code, is added to read as follows:

The commission shall be advised by the Governor and Legislative Budget Board in the development of a long-term concession agreement authorized by Section 466.014(d). Any agreement must provide:

(1) At least $ billion cash to be received by the state not later than the third day after the date the concession agreement is executed;

(2) The term in years of the concession;

(3) Exclusivity of games to be operated;

(4) Approval process for technological developments;

(5) Background requirements for concession owners and operators;

(6) Advertising and marketing terms;

(7) Treatment of unclaimed prizes; and

(8) Reversion terms.

SECTION 4. Section 466.015(a), Government Code, is amended to read as follows:

(a) The commission shall adopt all rules necessary to administer this chapter. If the commission executes a long-term concession agreement as authorized under Section 466.014(d), then the commission shall adopt rules necessary to administer the concession agreement. If the commission adopts rules necessary to administer the concession agreement, then the commission shall abate existing rules that conflict with the long-term concession agreement. The executive director may propose rules to be adopted by the commission, but the executive director's proposed rules have no effect until adopted by the commission.

SECTION 5. Section 466.0161(a), Government Code, is amended to read as follows:

(a) Annually, the comptroller [shall review the management and operations of the lottery. The comptroller] may examine persons, tangible objects, books, records, documents, or things[, or persons] of the commission [as necessary for that purpose].

SECTION 6. Section 466.101(c), Government Code, is amended to read as follows:

(c) The procurement procedures adopted by the executive director must, as determined feasible and appropriate by the executive director, afford any party who is aggrieved by the terms of a solicitation or the award of a contract, other than a contract awarded under Section 466.014(d), an opportunity to protest the executive director's action to the commission. The protest procedures must provide for an expedient resolution of the protest in order to avoid substantially delaying a solicitation or contract award that is necessary for the timely implementation of a lottery game. A protest must be in writing and be filed with the commission not later than 72 hours after receipt of notice of the executive director's action.

SECTION 7. Section 466.351(a), Government Code, is amended to read as follows:

Sec. 466.351. DELIVERY OF FUND. (a) Except as provided by Subsection (d), all revenue received from the sale of tickets, except revenue received from the sale of tickets after the execution of a long-term concession agreement authorized under Section 466.014(d), and all money credited to the state lottery account from any other source shall be deposited in the state treasury through approved state depositories on the settlement day or days established by the director.

SECTION 8. Section 466.351, Government Code, is amended by adding Subsections (f), (g) and (h) to read as follows:

(f) Revenue resulting from a concession agreement authorized under Section 466.014(d) shall be deposited into three trust funds established to receive the revenue in the following ratios:

(1) $2.7 billion into the Uninsured Partnership Trust Fund;

(2) $3 billion into the Texas Cancer Research Initiative Trust Fund; and

(3) all remaining revenue into the Texas Public Education Trust Fund.

(g) Appropriations from the earnings of the trust funds established by Section 466.351(f) are subject to ratification under Section 317.002(a), Government Code.

(h) All revenue resulting from a concession agreement authorized under Section 466.014(d) received later than the third day after the concession agreement is executed shall be deposited in the unobligated portion of the general revenue fund.

SECTION 9. Section 466.355(a), Government Code, is amended to read as follows:

Sec. 466.355. STATE LOTTERY ACCOUNT. (a) The state lottery account is a special account in the general revenue fund. Excluding revenue received pursuant to a long-term concession agreement authorized under Section 466.014(d), t[T]he account consists of all revenue received from the sale of tickets, license and application fees under this chapter, and all money credited to the account from any other fund or source under law. Interest earned by the state lottery account shall be deposited in the unobligated portion of the general revenue fund.

SECTION 10. This Act takes effect immediately if it receives a vote of two-thirds of the member elected to each house, as provided by Section 39, Article III, Texas Constitution. If it does not receive the necessary votes for immediate effect, if takes effect September 1, 2007.