81R1426 YDB-D
 
  By: Geren H.B. No. 1474
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the operation and regulation of charitable bingo and
  the use of bingo proceeds.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 2001.002, Occupations Code, is amended
  by adding Subdivisions (4-a), (8-a), and (25-a) and amending
  Subdivision (11) to read as follows:
               (4-a)  "Bingo chairperson" means an officer of a
  licensed authorized organization who is designated in writing by
  the organization as responsible for overseeing the organization's
  bingo activities and reporting to the membership relating to those
  activities.
               (8-a)  "Crime of moral turpitude" means:
                     (A)  a felony;
                     (B)  a gambling offense;
                     (C)  criminal fraud;
                     (D)  forgery;
                     (E)  theft;
                     (F)  an offense that involves filing false
  information with a governmental agency; or
                     (G)  any offense that:
                           (i)  is classified in this state as a Class A
  misdemeanor; and
                           (ii)  puts the honesty and integrity of the
  individual who committed the offense in question.
               (11)  "Fraternal organization" means any of the
  following other than an organization whose members are
  predominantly veterans or dependents of veterans of the armed
  services of the United States:
                     (A)  a nonprofit organization organized to
  perform and engaged primarily in performing charitable,
  benevolent, patriotic, employment-related, or educational
  functions that meet the other requirements of this chapter; [or]
                     (B)  a nonprofit National Historical District
  Association representing the owners and lessees of a majority of
  the real property located in a National Historical District
  designated for not less than three [five] years by the National
  Register of Historic Places, Heritage Conservation and Recreation
  Service of the United States Department of the Interior, if the
  association's net proceeds are used for restoration, construction,
  maintenance, and security in the district; or
                     (C)  an organization that is exempt from federal
  income taxes under Section 501(a), Internal Revenue Code of 1986,
  by being listed as an exempt organization under Section 501(c)(2),
  (3), (4), (5), (6), (7), (8), (9), (10), or (13), Internal Revenue
  Code of 1986.  [The term "fraternal organization" does not include
  an organization whose members are predominantly veterans or
  dependents of veterans of the armed services of the United States.]
               (25-a)  "Regular license" means a license to conduct
  bingo that is issued by the commission and that expires on the first
  or second anniversary of the date of issuance unless revoked or
  suspended before that date by the commission.  The term includes an
  annual license.
         SECTION 2.  Section 2001.059, Occupations Code, is amended
  by amending Subsection (a) and adding Subsection (g) to read as
  follows:
         (a)  An officer, primary operator, or authorized
  representative of a license holder or an attorney, accountant, or
  bookkeeper 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 3.  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 chairs 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 adjusted gross receipts
  reported by licensed authorized organizations from their bingo
  operations;
               (2)  the total amount of net proceeds reported by
  licensed authorized organizations from their bingo operations; and
               (3)  a comparison of the amounts reported under
  Subdivisions (1) and (2), including the percentage that the net
  proceeds represents of the adjusted gross receipts.
         (b)  For purposes of Subsection (a), "adjusted gross
  receipts" means the amount remaining after deducting prizes paid,
  excluding prize fees collected from bingo players.
         (c)  For purposes of Subsection (a), the commission shall
  determine the total amount of net proceeds in a manner that does not
  reduce gross receipts by the amount of rent paid for the rental of
  bingo premises by a licensed authorized organization to another
  licensed authorized organization if the other organization pays
  rent for the premises to a licensed commercial lessor.
         SECTION 4.  Section 2001.101(a), Occupations Code, is
  amended to read as follows:
         (a)  The commission may license a person who is an authorized
  organization eligible for a license to conduct bingo if the person
  is:
               (1)  a religious society that has existed in this state
  for at least three [eight] years;
               (2)  a nonprofit organization:
                     (A)  whose predominant activities are for the
  support of medical research or treatment programs; and
                     (B)  that for at least three years:
                           (i)  must have had a governing body or
  officers elected by a vote of members or by a vote of delegates
  elected by the members; or
                           (ii)  must have been affiliated with a state
  or national organization organized to perform the same purposes as
  the nonprofit organization;
               (3)  a fraternal organization;
               (4)  a veterans organization that has existed in this
  state for at least three years; [or]
               (5)  a volunteer fire department that has existed in
  this state for at least three years; or
               (6)  a volunteer emergency medical services provider
  that has existed in this state for at least three years.
         SECTION 5.  Sections 2001.102(a) and (b), Occupations Code,
  are amended to read as follows:
         (a)  An applicant for a license to conduct bingo must file
  with the commission an [a written, executed, and verified]
  application on a form prescribed by the commission.
         (b)  The application must include:
               (1)  the name and address of the applicant;
               (2)  the names and addresses of the applicant's
  officers and directors;
               (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;
               [(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;
               [(8)     the specific purposes to and the manner in which
  the net proceeds of bingo are to be devoted;
               [(9)]  a statement that the net proceeds of bingo will
  go to one or more of the authorized charitable purposes under this
  chapter;
               (6) [(10)]  a designation of the organization's bingo
  chairperson [one or more active members of the applicant
  organization] under whom bingo will be conducted accompanied by a
  statement signed by the chairperson [each designated member]
  stating that the chairperson [member] will be responsible for the
  conduct of bingo under the terms of the license and this chapter;
               (7) [(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
               [(13)]  sufficient facts relating to the applicant's
  incorporation and organization to enable the commission to
  determine whether the applicant is an authorized organization;
               (8)  a copy of the applicant organization's most
  recently filed Internal Revenue Service Form 990, if applicable;
               (9)  a letter of good standing from the applicant
  organization's parent organization, if the organization receives
  an exemption from federal income taxes as a member of a group of
  organizations;
               (10)  copies of the applicant organization's organizing
  instruments, including any bylaws, constitution, charter, and
  articles of incorporation;
               (11)  verification of the applicant organization's good
  standing with the secretary of state if the organization is
  organized under the law of this state; and
               (12)  information necessary to conduct criminal
  background checks on the applicant organization's officers and
  directors.
         SECTION 6.  Section 2001.103(e), Occupations Code, is
  amended to read as follows:
         (e)  Notwithstanding Subsection (c), an authorized
  organization that holds a regular license to conduct bingo may
  receive not more than 24 [12] temporary licenses during the
  12-month period following the issuance or renewal of the license.
         SECTION 7.  Sections 2001.104(b) and (d), Occupations Code,
  are amended to read as follows:
         (b)  The commission by rule shall establish procedures to
  determine if the appropriate license fee [At the end of the license
  period the license holder and the commission shall compute the
  amount of gross receipts actually recorded during the license
  period to determine if the appropriate fee amount] was paid.
         (d)  An applicant shall pay the fees established under
  Subsection (a) annually. An applicant for a license or renewal of a
  license may obtain a license that is effective for two years by
  paying an amount equal to two times the amount of the annual license
  fee, or by paying the license fee for the first year at the time the
  applicant submits the application and the fee for the second year
  not later than the first anniversary of the date the license becomes
  effective [plus $25].
         SECTION 8.  Section 2001.105(b), Occupations Code, is
  amended to read as follows:
         (b)  The commission may not issue a license to an authorized
  organization to conduct bingo if an officer or director of the
  organization has been 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 the termination of a
  sentence, parole, mandatory supervision, or community supervision
  served for the offense.
         SECTION 9.  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; and
               (3)  the address [an indication] of the premises where
  and the time when bingo is to be conducted[;
               [(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 10.  Section 2001.107(a), Occupations Code, is
  amended to read as follows:
         (a)  Unless the organization is a member of a unit that
  designates a unit manager under Section 2001.437, the bingo
  chairperson for a licensed authorized organization [The person
  designated under Section 2001.102(b)(10)] shall complete the 
  [eight hours of] training required [as provided] by commission
  rule.  For a unit operating under Subchapter I-1, the unit manager
  shall complete the training if the unit designates a unit manager
  under Section 2001.437.
         SECTION 11.  Sections 2001.108(b) and (c), Occupations Code,
  are amended to read as follows:
         (b)  If the other organization ceased or will cease
  conducting bingo for the reason stated in Subsection (a)(1), the
  commission must act on the joint application filed under Subsection
  (a) not later than the 14th [10th] day after the date the
  application is filed with the commission.
         (c)  If the other organization ceased or will cease
  conducting bingo for the reason stated in Subsection (a)(2), the
  commission must act on the joint application filed under Subsection
  (a) not later than the 14th [10th] day after the date the
  application is filed with the commission or the date on which the
  termination takes effect, whichever is later.
         SECTION 12.  Sections 2001.158(b) and (d), Occupations Code,
  are amended to read as follows:
         (b)  The commission by rule shall establish procedures for
  determining if the appropriate license fee [At the end of the
  license period, the license holder and the commission shall compute
  the amount of the gross rentals actually recorded during the
  license period to determine if the appropriate fee amount] was
  paid.
         (d)  An applicant for a commercial lessor license shall pay
  the fees established under Subsection (a) annually. An applicant
  for a license or renewal of a license may obtain a license that is
  effective for two years by paying an amount equal to two times the
  amount of the annual license fee, or by paying the license fee for
  the first year at the time the applicant submits the application and
  the license fee for the second year not later than the first
  anniversary of the date the license becomes effective [plus $25].
         SECTION 13.  The heading to Section 2001.159, Occupations
  Code, is amended to read as follows:
         Sec. 2001.159.  LICENSE ISSUANCE OR RENEWAL.
         SECTION 14.  Section 2001.159(a), Occupations Code, is
  amended to read as follows:
         (a)  The commission shall issue or renew a commercial lessor
  license if the commission determines that:
               (1)  the applicant has paid the license fee as provided
  by Section 2001.158;
               (2)  the applicant qualifies to be licensed under this
  chapter;
               (3)  [the applicant satisfies the requirements for a
  commercial lessor under this subchapter;
               [(4)]  the rent to be charged is fair and reasonable
  [and will be charged and collected in compliance with Section
  2001.406];
               (4) [(5)     there is no diversion of the funds of the
  proposed lessee from the lawful purposes under this chapter;
               [(6)]  the person whose signature or name appears in
  the application is in all respects the real party in interest and is
  not an undisclosed agent or trustee for the real party in interest;
  and
               (5) [(7)]  the applicant will lease the premises for
  the conduct of bingo in accordance with this chapter.
         SECTION 15.  Section 2001.203, Occupations Code, is amended
  to read as follows:
         Sec. 2001.203.  MANUFACTURER'S LICENSE APPLICATION. (a)  An
  applicant for a manufacturer's license must file with the
  commission an [a written verified] application on a form prescribed
  by the commission.
         (b)  The application must include:
               (1)  the name and address of the applicant and the name
  and address of each of its locations where bingo supplies or
  equipment are manufactured;
               (2)  a full description of each type of bingo supply or
  equipment that the applicant intends to manufacture or market in
  this state and the brand name, if any, under which each item will be
  sold;
               (3)  [the name and address of the applicant and] if the
  applicant:
                     (A)  is not a corporation, the name and home
  address of each owner; or
                     (B)  is a corporation, the name and home address
  of each officer and director and each person owning more than 10
  percent [or more] of a class of stock in the corporation;
               (4)  if the applicant is a foreign corporation or other
  foreign legal entity, the name, business name and address, and
  [home] address of its registered agent for service in this state;
               (5)  the name and address of each manufacturer,
  supplier, and distributor in which the applicant has a financial
  interest and the details of that financial interest, including any
  indebtedness between the applicant and the manufacturer, supplier,
  or distributor of $5,000 [$500] or more;
               (6)  information regarding whether the applicant or a
  person required to be named in the application has been convicted in
  this state or another state of a felony, criminal fraud, a gambling
  or gambling-related offense, or a crime of moral turpitude;
               (7)  information regarding whether the applicant or a
  person required to be named in the application is an owner, officer,
  director, shareholder, agent, or employee of a licensed commercial
  lessor or conducts, promotes, administers, or assists in
  conducting, promoting, or administering bingo for which a license
  is required by this chapter;
               (8)  information regarding whether the applicant or a
  person required to be named in the application is a public officer
  or public employee in this state;
               (9)  the name of each state in which the applicant is or
  has been licensed to manufacture, distribute, or supply bingo
  equipment or supplies, each license number, the period of time
  licensed under each license, and whether a license has been
  revoked, suspended, withdrawn, canceled, or surrendered and, if so,
  the reasons for the action taken;
               (10)  information regarding whether the applicant or a
  person required to be named in the application is or has been a
  professional gambler or gambling promoter;
               (11)  the names and addresses of each manufacturer,
  supplier, or distributor of bingo equipment or supplies in which
  the applicant or a person required to be named in the application is
  an owner, officer, shareholder, director, agent, or employee; and
               (12)  any other information the commission requests.
         SECTION 16.  Section 2001.208(b), Occupations Code, is
  amended to read as follows:
         (b)  The application must include:
               (1)  the full name and address of the applicant;
               (2)  the name and address of each location operated by
  the distributor from which bingo supplies or equipment are
  distributed or at which bingo supplies or equipment are stored;
               (3)  if a noncorporate distributor, the name and home
  address of each owner;
               (4)  if a corporate distributor, the name and home
  address of each officer or director and of each person owning more
  than [at least] 10 percent of a class of stock in the corporation;
               (5)  if a foreign corporation or other foreign legal
  entity, the name, business name and address, and [home] address of
  its registered agent for service in this state;
               (6)  a full description of the type of bingo supply or
  equipment that the applicant intends to store or distribute in this
  state and the name of the manufacturer of each item and the brand
  name, if any, under which the item will be sold or marketed;
               (7)  the name and address of a manufacturer, supplier,
  or distributor in which the applicant has a financial interest and
  the details of that financial interest, including an indebtedness
  between the applicant and the manufacturer, supplier, or
  distributor of $5,000 [$500] or more;
               (8)  information regarding whether the applicant or a
  person required to be named in the application has been convicted in
  this state or another state of a felony, criminal fraud, a gambling
  or gambling-related offense, or a crime of moral turpitude;
               (9)  information regarding whether the applicant or a
  person required to be named in the application is an owner, officer,
  director, shareholder, agent, or employee of a licensed commercial
  lessor or conducts, promotes, administers, or assists in
  conducting, promoting, or administering bingo for which a license
  is required under this chapter;
               (10)  information regarding whether the applicant or a
  person required to be named in the application is a public officer
  or public employee in this state;
               (11)  the name of each state in which the applicant is
  or has been licensed to manufacture, distribute, or supply bingo
  equipment or supplies, each license number, the period of time
  licensed under each license, and whether a license was revoked,
  suspended, withdrawn, canceled, or surrendered and, if so, the
  reasons for the action taken;
               (12)  information regarding whether the applicant or a
  person required to be named in the application is or has been a
  professional gambler or gambling promoter;
               (13)  the name and address of each manufacturer,
  supplier, or distributor of bingo equipment or supplies in which
  the applicant or a person required to be named in the application is
  an owner, officer, shareholder, director, agent, or employee; and
               (14)  any other information the commission requests.
         SECTION 17.  Sections 2001.211(b), (c), and (d), Occupations
  Code, are amended to read as follows:
         (b)  If a change occurs after issuance of a manufacturer's or
  distributor's license, the license holder shall report the change
  to the commission not later than the 14th [10th] day after the date
  of the change.
         (c)  Not later than the 14th [10th] day after the date of the
  change, a license holder shall notify the commission of a change in:
               (1)  the license holder's organization, structure, or
  mode of operation;
               (2)  the identity of persons named or required to be
  named in the application and the nature or extent of those persons'
  interest; or
               (3)  any other facts stated in the application.
         (d)  Failure to give a notice required under this section is
  cause for:
               (1)  denial, suspension, or revocation of a license; or
               (2)  imposition of an administrative penalty or other
  administrative action.
         SECTION 18.  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)  returned [surrendered] its original license if
  available, or certified that the license is not available; and
               (2)  received an amended license for the new location.
         SECTION 19.  Section 2001.313, Occupations Code, is amended
  by adding Subsections (b-1), (h), and (i) and amending Subsections
  (a), (b), (d), (e), (f), and (g) to read as follows:
         (a)  To minimize duplicate criminal history background
  checks by the commission and the costs incurred by organizations
  and individuals, the commission shall maintain a registry of
  individuals [persons] on whom the commission has conducted a
  criminal history background check and who are approved to be
  involved in the conduct of bingo or to act as a bingo operator.
         (b)  An individual [A person] listed in the registry may be
  involved in the conduct of bingo or act as an operator at any
  location at which bingo is lawfully conducted.
         (b-1)  An individual's listing on the registry expires on the
  third anniversary of the date the individual was initially included
  on the registry.  The individual may renew the listing before the
  expiration date.  If the individual fails to renew the listing, the
  commission shall remove the individual's name from the registry.  
  An individual whose name is removed from the registry may reapply
  for listing on the registry.
         (d)  An individual [A person] who is not listed on the
  registry established by this section may not act, and a licensed
  authorized organization may not allow the individual to act, as an
  operator, manager, cashier, usher, caller, bingo chairperson,
  bookkeeper, or salesperson for the [a] licensed authorized
  organization.
         (e)  The commission may refuse to add an individual's [a
  person's] name to, or remove an individual's [a person's] name from,
  the registry established by this section if, after notice and, if
  requested by the individual, a hearing, the individual [person] is
  finally determined to have:
               (1)  been convicted of an offense listed under Section
  2001.105(b);
               (2)  converted bingo equipment in a premises to an
  improper use;
               (3)  converted funds that are in, or that should have
  been in, the bingo account of any licensed authorized organization;
               (4)  taken any action, individually or in concert with
  another person, that affects the integrity of any bingo game to
  which this chapter applies; [or]
               (5)  acted as an operator, manager, cashier, usher,
  caller, bingo chairperson, bookkeeper, or salesperson for a
  licensed authorized organization without being listed on the
  registry established under this section;
               (6)  failed to provide a complete application; or
               (7)  participated in any violation of this chapter or
  rules adopted by the commission for the administration of this
  chapter.
         (f)  A licensed authorized organization shall report to the
  commission or its designee the discovery of any conduct on the part
  of an individual [a person] registered or required to be registered
  under this section where there is substantial basis for believing
  that the conduct would constitute grounds for removal of the
  individual's [person's] name from, or refusal to add the
  individual's [person's] name to, the registry established by this
  section. A statement made in good faith to the commission or to an
  adjudicative body in connection with any such report may not be the
  basis for an action for defamation of character.
         (g)  An individual [A person] who has been finally determined
  to have taken action prohibited by Subsection (e)(2), (3), (4),
  [or] (5), (6), or (7) cannot be listed on the registry of approved
  bingo workers and cannot work as a bingo worker for one year from
  the date of such determination. Upon expiration of the one-year
  period, the individual [person] is eligible for listing on the
  registry provided a licensee subject to this chapter makes
  application to list the individual [person]. In such event, the
  commission shall take into consideration the facts and
  circumstances that occurred that led to the applicable action under
  Subsections (e)(2)-(7) [(e)(2)-(5)] in deciding whether to list the
  individual [person] on the registry.
         (h)  A licensed authorized organization may employ an
  individual who is not on the registry established by this section as
  an operator, manager, cashier, usher, caller, or salesperson on a
  provisional basis if the individual is awaiting the results of a
  background check by the commission:
               (1)  for a period not to exceed 14 days if the
  individual is a resident of this state; or
               (2)  for a period to be established by commission rule
  if the individual is not a resident of this state.
         (i)  An individual 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 Subsection
  (h).
         SECTION 20.  Section 2001.314, Occupations Code, is amended
  to read as follows:
         Sec. 2001.314.  IDENTIFICATION CARD FOR APPROVED BINGO
  WORKER.  (a)  The commission may require an individual [a person]
  listed in the registry maintained under Section 2001.313 to wear an
  identification card to identify the individual [person] to license
  holders, bingo players, and commission staff while the individual
  [person] is on duty during the conduct of bingo. The commission by
  rule shall prescribe the form and content of the card.
         (b)  The commission shall provide the identification card
  and shall provide a form to be completed by an individual [a person]
  that allows the individual [person] to prepare the identification
  card. The commission shall collect a reasonable charge to cover the
  cost of providing the card or form.
         (c)  An identification card required by the commission under
  this section to be worn by an individual [a person] while on duty
  during the conduct of bingo must be in substantial compliance with
  the form and content requirements prescribed by the commission
  under this section.
         (d)  The commission may not require any other individual
  [person] licensed under this chapter, or an individual [a person]
  acting on the license holder's behalf, to wear an identification
  card, whether or not the individual [person] is present or
  performing the individual's [person's] duties during the conduct of
  bingo.
         SECTION 21.  Subchapter G, Occupations Code, is amended by
  adding Sections 2001.315 and 2001.316 to read as follows:
         Sec. 2001.315.  LATE LICENSE RENEWAL. (a) A person who fails
  to renew the person's license under this chapter before the date the
  license expires may renew the license after the expiration date by:
               (1)  filing a license renewal application with the
  commission not later than the 14th day after the date the license
  expires, paying the applicable annual license fee, and paying a
  late license renewal fee equal to 10 percent of the annual license
  fee; or
               (2)  filing a license renewal application with the
  commission not later than the 60th day after the date the license
  expires, paying the applicable annual license fee, and paying a
  late license renewal fee equal to 10 percent of the annual license
  fee for each 14-day period occurring after the date the license
  expires and before the date the renewal application is filed with
  the commission.
         (b)  A person who files a renewal application with the
  commission under Subsection (a) may continue to perform the bingo
  activities authorized under the license as if the license has not
  expired until the license is renewed or renewal of the license is
  denied.
         (c)  To renew a license after the 60th day after the date the
  license expires, the person must file an application for an
  original license and cease all bingo activities for which the
  license is required as of the 61st day after the date the license
  expires until a new license is issued.
         Sec. 2001.316.  DELIVERY OF COMMISSION NOTICE.  If notice
  under this chapter is required to be given to an authorized
  organization, the commission shall send the notice to the bingo
  chairperson of the authorized organization and to the appropriate
  commercial lessor, if applicable.
         SECTION 22.  Section 2001.356(c), Occupations Code, is
  amended to read as follows:
         (c)  If a notice of temporary suspension is served on a
  license holder, the director of bingo operations shall
  simultaneously serve notice of a hearing, to be held not later than
  the 14th [10th] day after the date the notice is served, at which
  the license holder must show cause why the license should not be
  temporarily suspended on the 14th [10th] day after the date the
  notice is served. If the license holder does not show cause, the
  license is suspended.
         SECTION 23.  Section 2001.404, Occupations Code, is amended
  to read as follows:
         Sec. 2001.404.  PRINCIPAL LOCATION.  A licensed authorized
  organization may conduct bingo only in:
               (1)  the county where the organization has its primary
  business office or another county contiguous to that county; or
               (2)  if the organization does not have a [has no]
  business office, in the county of the principal residence of its
  chief executive officer, or a contiguous county of this state.
         SECTION 24.  Section 2001.407(a), Occupations Code, is
  amended to read as follows:
         (a)  A licensed manufacturer may furnish, by sale or
  otherwise, bingo equipment or supplies to a licensed distributor.
  A [Except as provided by Section 2001.257(b), a] licensed
  manufacturer may not furnish, by sale or otherwise, bingo equipment
  or supplies to a person other than a licensed distributor.
         SECTION 25.  Section 2001.411, Occupations Code, is amended
  by adding Subsection (c-1) to read as follows:
         (c-1)  An organization may designate as members of the
  organization one or more individuals who elect to become members,
  including all of the organization's directors, and the designated
  members are bona fide members of the organization for purposes of
  this section and other law.
         SECTION 26.  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 a separate [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 14th 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), a [Sections 2001.453(a)(2) and (3),
  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:
               (1)  result in net proceeds over the organization's
  license period; or
               (2)  if the organization has a two-year license, result
  in net proceeds over each 12-month period that ends on an
  anniversary of the date the two-year license was issued.
         (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 that:
               (1)  is equal to the organization's or unit's actual
  average bingo expenses per quarter based on the preceding license
  period, excluding prizes paid; and
               (2)  does not 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 allowing 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)  provides to the commission 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 on 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 providing to the commission:
               (1)  credible evidence of circumstances beyond the
  control of the organization, including force majeure; or
               (2)  a credible business plan for the organization's
  conduct of bingo or the organization's existing or planned
  charitable purposes.
         SECTION 27.  Sections 2001.452(a) and (c), Occupations Code,
  are amended to read as follows:
         (a)  Funds from the bingo account must be withdrawn by
  electronic funds transfer or by preprinted, consecutively numbered
  checks or withdrawal slips, signed by an authorized representative
  of the licensed authorized organization and made payable to a
  person. A check or withdrawal slip may not be made payable to
  "cash," "bearer," or a fictitious payee. The nature of the payment
  made must also be noted on the face of the check or withdrawal slip.  
  The purpose, amount, and payee for each electronic funds transfer
  must be recorded in accordance with rules adopted by the
  commission.
         (c)  A licensed authorized organization shall [keep and]
  account for all checks and withdrawal slips, including voided
  checks and withdrawal slips.
         SECTION 28.  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 or [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 29.  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 30.  Section 2001.458(a), Occupations Code, is
  amended to read as follows:
         (a)  An item of expense may not be incurred or paid in
  connection with the conduct of bingo except an expense that is
  reasonable or necessary to conduct bingo, including an expense for:
               (1)  advertising, including the cost of printing bingo
  gift certificates;
               (2)  security;
               (3)  repairs to premises and equipment;
               (4)  bingo supplies and equipment;
               (5)  prizes;
               (6)  stated rental or mortgage and insurance expenses;
               (7)  bookkeeping, legal, or accounting services
  related to bingo;
               (8)  fees for callers, cashiers, ushers, janitorial
  services, and utility supplies and services;
               (9)  license fees;
               (10)  attending a bingo seminar or convention required
  under Section 2001.107; and
               (11)  debit card transaction fees and electronic funds
  transfer fees.
         SECTION 31.  Section 2001.459(a), Occupations Code, is
  amended to read as follows:
         (a)  The following items of expense incurred or paid in
  connection with the conduct of bingo must be paid from an
  organization's bingo account:
               (1)  advertising, including the cost of printing bingo
  gift certificates;
               (2)  security during a bingo occasion;
               (3)  the purchase or repair of bingo supplies and
  equipment;
               (4)  prizes, other than authorized cash prizes;
               (5)  stated rental expenses;
               (6)  bookkeeping, legal, or accounting services;
               (7)  fees for callers, cashiers, and ushers;
               (8)  janitorial services; and
               (9)  license fees[; and
               [(10)     payment for services provided by a system
  service provider].
         SECTION 32.  Section 2001.502, Occupations Code, is amended
  to read as follows:
         Sec. 2001.502.  PRIZE FEE.  A licensed authorized
  organization shall:
               (1)  collect from a person who wins a bingo prize of
  more than $5 a fee in the amount of five percent of the amount or
  value of the prize; and
               (2)  remit to the commission a fee in the amount of five
  percent of the amount or value of all bingo prizes awarded.
         SECTION 33.  Sections 2001.505(a) and (b), Occupations Code,
  are amended to read as follows:
         (a)  A licensed authorized organization conducting bingo
  shall submit quarterly to the commission [and to the comptroller] a
  report under oath stating:
               (1)  the amount of the gross receipts derived from
  bingo;
               (2)  each item of expense incurred or paid;
               (3)  each item of expenditure made or to be made, the
  name and address of each person to whom each item has been paid or is
  to be paid, and a detailed description of the merchandise purchased
  or the services rendered;
               (4)  the net proceeds derived from bingo;
               (5)  the use to which the proceeds have been or are to
  be applied; and
               (6)  a list of prizes offered and given, with their
  respective values.
         (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 34.  Section 2001.551(b), Occupations Code, is
  amended to read as follows:
         (b)  A person conducting, promoting, or administering bingo
  commits an offense if the person conducts, promotes, or administers
  bingo other than:
               (1)  under a license issued under this chapter;
               (2)  [within the confines of a home] for purposes of
  amusement or recreation when:
                     (A)  no player or other person furnishes anything
  of [more than nominal] value as defined by rule [for the
  opportunity] to participate;
                     [(B)     participation in the game does not exceed 15
  players;] and
                     (B) [(C)]  the prizes awarded or to be awarded are
  nominal as defined by rule;
               (3)  on behalf of an organization of individuals 60
  years of age or over, a senior citizens' association, a senior
  citizens' community center program operated or funded by a
  governmental entity, the patients in a hospital or nursing home,
  residents of a retirement home, or the patients in a Veteran's
  Administration medical center or a military hospital, solely for
  the purpose of amusement and recreation of its members, residents,
  or patients, when:
                     (A)  no player or other person furnishes anything
  of more than nominal value for the opportunity to participate; and
                     (B)  the prizes awarded or to be awarded are
  nominal; or
               (4)  on behalf of a business conducting the game for
  promotional or advertising purposes if:
                     (A)  the game is conducted by or through a
  newspaper or a radio or television station;
                     (B)  participation in the game is open to the
  general public and is not limited to customers of the business;
                     (C)  playing materials are furnished without
  charge to a person on request; and
                     (D)  no player is required to furnish anything of
  value for the opportunity to participate.
         SECTION 35.  Section 2001.603(b), Occupations Code, is
  amended to read as follows:
         (b)  Not later than the 21st [14th] day after the date on
  which the report is issued, the director shall give written notice
  of the report to the person alleged to have committed the violation.
         SECTION 36.  Sections 2001.656(a), (b), and (d), Occupations
  Code, are amended to read as follows:
         (a)  If a majority of the qualified voters voting on the
  question in a legalization election vote in favor of legalization,
  bingo is legalized throughout the political subdivision beginning
  on the 14th [10th] day after the date the result of the election is
  officially declared, except as otherwise provided as to a part of
  the political subdivision for which Section 2001.657 requires a
  contrary status.
         (b)  If a majority of the qualified voters voting on the
  question in a prohibitory election vote in favor of prohibition,
  bingo is prohibited throughout the political subdivision beginning
  on the 14th [10th] day after the date the result of the election is
  officially declared, except as otherwise provided as to a part of
  the political subdivision for which Section 2001.657 requires a
  contrary status.
         (d)  The governing body of a political subdivision in which a
  bingo election has been held shall not later than the 14th [10th]
  day after the date of the election give written notification to the
  commission of the results of the election. If as a result of the
  election bingo is legalized in the political subdivision, the
  governing body shall furnish the commission with a map prepared by
  the governing body indicating the boundaries of the political
  subdivision in which bingo may be conducted.
         SECTION 37.  The following provisions of the Occupations
  Code are repealed:
               (1)  Sections 2001.002(3) and (10);
               (2)  Section 2001.057(b);
               (3)  Section 2001.160(c);
               (4)  Section 2001.161(a);
               (5)  Section 2001.204;
               (6)  Section 2001.305;
               (7)  Section 2001.406(c);
               (8)  Sections 2001.410(b) and (d);
               (9)  Section 2001.417;
               (10)  Section 2001.457(d);
               (11)  Section 2001.505(c);
               (12)  Section 2001.553(b); and
               (13)  Subchapter F, Chapter 2001.
         SECTION 38.  The Texas Lottery Commission shall adopt the
  rules required by Chapter 2001, Occupations Code, as amended by
  this Act, not later than April 1, 2010.
         SECTION 39.  (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, 2013.
         SECTION 40.  This Act takes effect October 1, 2009.