BILL ANALYSIS

C.S.H.B. 2642

By: Thompson, Senfronia

Licensing & Administrative Procedures

Committee Report (Substituted)

BACKGROUND AND PURPOSE

Recently, the Texas Legislature established a special legislative committee to review the lottery and charitable bingo in Texas. On the issue of charitable bingo, general concerns were voiced that the proceeds from the conduct of charitable bingo were at times insufficient to cover bingo operations, the cost of regulation, and state and local tax burden, making it very difficult for operators to generate a profit. Interested parties explain that increased competition from both legal and illegal gaming also is mitigating the bingo operators' ability to turn a profit, particularly in some parts of the state. In response to these concerns, certain reforms to increase the net proceeds of charitable bingo operations have been proposed. C.S.H.B. 2642 seeks to address these reforms by amending the applicable law.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill expressly does one or more of the following: creates a criminal offense, increases the punishment for an existing criminal offense or category of offenses, or changes the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that rulemaking authority previously granted to the Texas Lottery Commission is transferred to the Texas Commission of Licensing and Regulation in SECTIONS 1.006, 1.010, 1.029, 1.031, 1.042, 1.053, 1.059, 1.066, 1.069, and 1.072 of this bill and that rulemaking authority is expressly granted to the Texas Commission of Licensing and Regulation in SECTIONS 1.014, 1.022, 1.055, and 1.061 of this bill.

ANALYSIS

Regulation of Charitable Bingo

C.S.H.B. 2642 amends the Occupations Code to transfer, on September 1, 2015, all functions and activities performed by the Texas Lottery Commission relating to the regulation of bingo operations under the Bingo Enabling Act immediately before that date to the Texas Department of Licensing and Regulation (TDLR). The bill establishes that, on September 1, 2015:

· a rule, policy, procedure, decision, or form adopted by the lottery commission relating to the Bingo Enabling Act is a rule, policy, procedure, decision, or form of the Texas Commission of Licensing and Regulation or TDLR, as applicable, and remains in effect until amended or replaced by that commission or TDLR unless the rule, policy, procedure, decision, or form conflicts with the changes in law made by the bill's provisions;

· unless the context clearly indicates otherwise, a reference to the lottery commission in a law or administrative rule that relates to the Bingo Enabling Act means the Texas Commission of Licensing and Regulation or TDLR, as applicable;

· a complaint, investigation, or other proceeding before the lottery commission that is related to the Bingo Enabling Act is transferred without change in status to TDLR, and TDLR assumes, as appropriate and without a change in status, the position of the lottery commission in an action or proceeding to which the lottery commission is a party;

· a license, permit, certification, or registration in effect that was issued by the lottery commission under the Bingo Enabling Act is continued in effect as a license, permit, certification, or registration of TDLR;

· all money, contracts, leases, property, and obligations of the lottery commission relating to the Bingo Enabling Act are transferred to TDLR; and

· the unexpended and unobligated balance of any money appropriated by the legislature for the lottery commission related to the Bingo Enabling Act is transferred to TDLR.

C.S.H.B. 2642 establishes that, on September 1, 2015, all full time equivalent employee positions at the lottery commission that primarily concern the administration, auditing, accounting, enforcement, or other direct and indirect support of the Bingo Enabling Act become positions at TDLR and requires TDLR, when filling the positions, to give first consideration to an applicant who, as of August 31, 2015, was an employee at the lottery commission primarily involved in administering or enforcing the Bingo Enabling Act. The bill requires the lottery commission, not later than June 1, 2015, to grant TDLR inquiry-only security access to all licensing, enforcement, and examination software or computer systems used by the lottery commission in administering or enforcing the Bingo Enabling Act and to the uniform statewide accounting system, the state property accounting system, the uniform statewide payroll system, and the human resources information system for the lottery commission. The bill authorizes the lottery commission, before September 1, 2015, to agree with TDLR to transfer any property of the lottery commission to TDLR to implement the transfers required by the bill.

C.S.H.B. 2642 requires TDLR and the lottery commission to coordinate implementation of the transfer and requires the lottery commission to cooperate with TDLR in transferring all data and records necessary to implement the transfer. The bill requires the lottery commission and TDLR, before July 15, 2015, to develop and enter into a memorandum of understanding regarding the transfers required by the bill and requires the memorandum to include a transition plan with a timetable and specific steps and deadlines required to complete the transfer. The bill requires, not later than December 1, 2015, a manufacturer of bingo equipment or supplies that submitted to the lottery commission a manufacturer's license bond before September 1, 2015, that is in effect on the bill's effective date to amend the bond to name TDLR as the payee for the bond. The bill requires such a bond given on or after the bill's effective date to comply with Bingo Enabling Act provisions relating to manufacturer's and distributor's licenses as those provisions are amended by the bill. The bill's provisions relating to the transfer are effective on passage, or, if the bill does not receive the necessary vote, September 1, 2015.

C.S.H.B. 2642 repeals Occupations Code provisions defining "adjusted gross receipts," for purposes of the Bingo Enabling Act, as the amount remaining after prizes paid, excluding prize fees collected from bingo players. The bill amends the Occupations Code to replace the term "gross receipts," as defined in the Bingo Enabling Act, with "gross gaming revenue" and to define it as the formerly defined "gross receipts" less the amount of cash prizes paid to winners of bingo games. The bill replaces references to "adjusted gross receipts" with references to "gross gaming revenue" in statutory provisions relating to the biennial charitable bingo report to be prepared by the Texas Commission of Licensing and Regulation under the bill's provisions.

C.S.H.B. 2642 replaces a statutory provision authorizing the appointment by the commission of a bingo advisory committee with a provision requiring the appointment of the committee and includes representatives of bingo equipment and supplies distributors and manufacturers among the representatives the commission is required to appoint to represent a balance of interests. The bill clarifies that an advisory committee member serves at the pleasure of the presiding officer of the commission and subjects an advisory committee member's entitlement to reimbursement for reasonable expenses incurred in performing duties as a member to the availability of funds and applicable limitations of the General Appropriations Act. The bill extends certain advisory committee authority to the executive director of TDLR and TDLR, removes the committee's authority to report annually to the commission on the committee's activities, revises the committee's authority to meet, and removes a provision authorizing the commission to adopt rules to govern the operations of the committee.

C.S.H.B. 2642 removes the requirement that the renewal process for a license to conduct bingo require a license holder renewing a license to submit to the commission the information required in the initial license application. The bill specifies that a fraternal organization TDLR is authorized to license to conduct bingo is to be a fraternal organization that has been organized in Texas for at least three years. The bill repeals a statutory provision prohibiting an authorized organization that holds an annual license to conduct bingo from receiving not more than 24 temporary licenses during a specified time period. The bill increases from six to 24 the maximum number of temporary licenses an authorized organization may receive and changes the period during which a temporary license may be received from a calendar year to the 12-month period following the issuance or renewal of the organization's license to conduct bingo. The bill removes requirements relating to verification by the commission that notification from an organization that will use a temporary license has been received.

C.S.H.B. 2642 specifies that the fees for a license to conduct bingo set by the commission be based on the amount of the licensed authorized organization's total receipts derived from the conduct of bingo, establishes that the fees are to be set by commission rule, and revises the minimum fees. The bill removes a provision authorizing an applicant for a license or renewal of a license to obtain a two-year license by paying an amount equal to two times the amount of the annual license fee.

C.S.H.B. 2642 prohibits TDLR from issuing a license to an authorized organization to conduct bingo if a person under whose name bingo will be conducted has been convicted of criminal fraud or a gambling or gambling-related offense and removes from the conditions under which TDLR is required to issue or renew a license to conduct bingo a determination that no person under whose name bingo will be conducted and no person working at the proposed bingo has been convicted of a gambling offense or criminal fraud. The bill prohibits TDLR from taking disciplinary action against a licensed authorized organization that has on file for an officer, member of the organization's board of directors, a person under whose name bingo will be conducted, or an organization employee a criminal history records check, conducted by a local law enforcement agency or the Department of Public Safety, that does not contain a record of a conviction for such an offense. The bill requires TDLR, if a criminal history records check on the person or employee conducted by TDLR contains a record of a conviction for such an offense, to immediately notify the organization of the conviction and prohibits the organization from allowing the person or employee to conduct bingo for the organization after receipt of the notification. The bill authorizes TDLR to take disciplinary action against an organization that allows such a person or an organization employee to conduct bingo for the organization after the date the organization receives the notice.

C.S.H.B. 2642 removes a statutory provision authorizing a licensed authorized organization, if the commission fails to act within a specified period upon an application to change the premises at which the organization conducts bingo, to act as if the change in premises or bingo occasions has been approved by the commission and to conduct bingo at the new premises or during the new bingo occasion until the commission acts on the application. The bill removes a statutory provision prohibiting TDLR from issuing a commercial lessor license to or renewing a commercial lessor license of a foreign corporation or other foreign legal entity, an individual who is not a Texas resident, a corporation or other legal entity owned or controlled by a foreign corporation or an individual who is not a Texas resident, or a corporation or other legal entity whose shares are publicly traded or is owned or controlled by a corporation whose shares are publicly traded.

C.S.H.B. 2642 establishes that commercial lessor license fees are to be set by commission rule and revises the minimum fees for a commercial lessor license. The bill removes the authority of the commission or a district court in the county for which a commercial lessor license was issued to temporarily or permanently enjoin the conduct of bingo at premises under a license for which the license holder dies or becomes incapacitated as determined by a court of this state and instead authorizes a district court in Travis County by order to temporarily or permanently enjoin such conduct of bingo. The bill prohibits a manufacturer from offering to sell or supply to a person in Texas or for use in Texas certain supplies or equipment designed to be used in playing bingo unless the manufacturer holds a manufacturer's license. The bill removes statutory language specifying that a temporary authorization for activity does not grant a vested right in the temporary authorization or the privileges conferred.

C.S.H.B. 2642 expands the conduct that constitutes an offense involving selling bingo equipment or supplies to a licensed authorized organization by a person who does not hold a manufacturer's or distributor's license to include offering to sell such equipment or supplies. The bill makes the first offense of a person without the appropriate license who sells, offers to sell, or attempts to induce the sale of bingo equipment or supplies to a licensed authorized organization a state jail felony and enhances the penalty for a subsequent offense to a third degree felony. The bill removes the specification, in statutory provisions establishing that immunity from prosecution does not extend to a person engaging in specified actions, that the person engage in those actions knowingly.

C.S.H.B. 2642 changes the basis for which the commission by rule may provide for different recordkeeping procedures for licensed authorized organizations by class from a basis on the amount of gross receipts of the organization to a basis on the amount of the organization's total receipts derived from the conduct of bingo. The bill removes the commission from the entities prohibited from advertising bingo and authorized to advertise the amount of a prize or series of prizes offered at a bingo occasion.

C.S.H.B. 2642 establishes that the value of a merchandise bingo prize is the amount paid for the merchandise by the licensed authorized organization and specifies that a merchandise bingo prize includes bingo cards, bingo pull-tabs, the use of a card-minder, bingo daubers, and other bingo merchandise awarded as a prize for winning a bingo game. The bill authorizes the commission to adopt rules for a bingo market region in Texas that affect the percentage of total receipts derived from the conduct of bingo that is paid by licensed authorized organizations within that market region as prizes for bingo games if the commission determines that the percentages of the total receipts paid for the prizes by the organizations within that market region unreasonably reduce the amount of the organizations' net proceeds in that market region. The bill establishes that such a rule may establish a minimum price charged for a bingo card or pull-tab or for use of a card-minding device, must allow flexibility in compliance with the rule by the licensed authorized organizations within the affected bingo market region to allow the organizations to achieve substantial compliance without undue burden on the organizations or their customers, and must apply equally to each licensed authorized organization operating at a bingo premises within the bingo market region. The bill establishes that an individual bingo market region set by the commission must include all the territory in a single county and that the region may include part of the territory in an adjacent county as necessary for the commission to define a bingo market region. The bill requires the commission to annually review the impact of an adopted rule on the conduct of bingo within the bingo market region and authorizes the commission to amend or repeal the rule if the rule does not serve the specified purposes.

C.S.H.B. 2642 sets out provisions establishing the required minimum net proceeds of licensed authorized organizations located at a single bingo premises based on the combined gross gaming revenue of those organizations, including certain temporary provisions, set to expire December 31, 2019, specifying minimums for the 2016 and 2017 calendar years and establishing specified minimums applicable only to a bingo premises that on January 1, 2015, was operated under an active lessor license and was located in a county any part of which is within 75 miles of a casino that has electronic gaming. The bill exempts a licensed authorized organization located at a single bingo premises with combined gross gaming revenue equal to or less than $500,000 in a calendar year that conducts not more than two bingo occasions during any week during a calendar year from the minimum net proceeds requirement and authorizes the commission by rule to impose minimum net proceeds requirements in amounts less than the amounts required for such an organization. The bill sets out conditions under which TDLR is required to waive or reduce the required minimum net proceeds and requires TDLR, if the minimum net proceeds percentage is waived or reduced because of illegal gaming, to notify the county commissioners court of the county in which each affected bingo premises is located and the governing body of any municipality in which the premises is located of TDLR's action and the reasons for that action. The bill requires the bingo operations of a licensed authorized organization, beginning January 1, 2016, to result in net proceeds in the amounts specified by the bill over the calendar year in which the license is in effect.

C.S.H.B. 2642 replaces references to a prize fee with references to a prize tax, makes statutory provisions requiring a licensed authorized organization to collect a prize tax applicable only to a cash bingo prize, and specifies that the prize tax does not apply to a merchandise prize, including bingo cards, bingo pull-tabs, use of a card-minder, bingo daubers, and other bingo merchandise awarded as a prize for winning a bingo game. The bill removes statutory language requiring a licensed authorized organization to remit a prize fee to the commission and instead sets out provisions requiring such an organization to remit a prize tax quarterly in the amount of 50 percent of the amount collected as the prize tax to the county and municipality in which the bingo game is conducted under certain conditions and to deposit a certain amount of the taxes in the general charitable fund of the organization. The bill authorizes the governing body of a county or municipality that was entitled to receive a portion of the prize fee under specified statutory provisions relating to local share of the fee, as those provisions existed immediately before the bill's effective date, to only continue receiving a portion of the prize tax collected after the bill's effective date if the governing body by majority vote approves the continued receipt of such funds and notifies TDLR of that decision not later than November 1, 2015, and notifies each licensed authorized organization within the county's or municipality's jurisdiction, as applicable, of the continued quarterly imposition of the tax and the payment information for the tax. The bill requires TDLR, not later than October 1, 2015, to notify the governing body of a county or municipality that was entitled to receive a portion of the prize fee of the requirements for continued receipt of the prize tax.

C.S.H.B. 2642 amends the Government Code to exclude the Bingo Enabling Act from statutory provisions set to expire on the abolishment of the lottery commission under the Texas Sunset Act and to make conforming changes.

C.S.H.B. 2642 repeals certain Occupations Code provisions relating to the commission's powers and duties under the Bingo Enabling Act; a license to conduct bingo; a commercial lessor license; manufacturer's and distributor's licenses; general provisions governing such licenses; the denial, revocation, and suspension of licenses; unit accounting; bingo accounts and use of proceeds; taxes and prize fees; enforcement; and administrative penalties. The bill requires the commission, not later than March 1, 2016, to adopt the rules necessary to implement the changes in the Bingo Enabling Act provided in the bill's provisions.

Regulation of Amusement Redemption Machine Game Rooms on Licensed Bingo Premises

C.S.H.B. 2642 amends the Local Government Code to make game room regulations adopted by the commissioners court of a county applicable to a location at which bingo is conducted under the Bingo Enabling Act in the same manner as the regulations apply to other premises subject to the regulations. The bill prohibits the authorized game room regulations from restricting or prohibiting the location of a game room at a location where bingo was conducted on or before January 1, 2015, under a license issued under the Bingo Enabling Act; from requiring signage or the placing of regulations on the windows or doors of such a location; from restricting the hours of operation of a game room at such a location; or from applying to such a location in a manner that is different from a location that derives more than 50 percent of its sales from the sale of food or beverages, including alcohol and liquor sales.

C.S.H.B. 2642 repeals Local Government Code provisions relating to the regulation of game rooms by a county with a population of less than 25,000 that is adjacent to the Gulf of Mexico and is within 50 miles of an international border and repeals a provision within statutory provisions relating to the regulation of game rooms by a county with a population of four million or more limiting the applicability of those provisions to such a county.

C.S.H.B. 2642 repeals the following provisions:

· Section 467.021(c), Government Code

· Section 467.031, Government Code

· Section 2001.051(c), Occupations Code

· Section 2001.052, Occupations Code

· Section 2001.0541, Occupations Code

· Section 2001.058, Occupations Code

· Section 2001.060(b), Occupations Code

· Section 2001.101(b), Occupations Code

· Sections 2001.103(e) and (h), Occupations Code

· Section 2001.157, Occupations Code

· Section 2001.158(d), Occupations Code

· Section 2001.159(c), Occupations Code

· Sections 2001.211(b), (c), and (d), Occupations Code

· Section 2001.213, Occupations Code

· Section 2001.214(b), Occupations Code

· Section 2001.304, Occupations Code

· Section 2001.305, Occupations Code

· Section 2001.308, Occupations Code

· Section 2001.313, Occupations Code

· Section 2001.314, Occupations Code

· Section 2001.351, Occupations Code

· Section 2001.352, Occupations Code

· Section 2001.353(d), Occupations Code

· Section 2001.354, Occupations Code

· Section 2001.355, Occupations Code

· Section 2001.356, Occupations Code

· Section 2001.357, Occupations Code

· Section 2001.358, Occupations Code

· Section 2001.436(c), Occupations Code

· Section 2001.437(f), Occupations Code

· Section 2001.451(b-1), Occupations Code

· Section 2001.459(b), Occupations Code

· Section 2001.501, Occupations Code

· Section 2001.503, Occupations Code

· Sections 2001.504(b), (c), (d), and (e), Occupations Code

· Section 2001.507, Occupations Code

· Section 2001.508, Occupations Code

· Section 2001.509, Occupations Code

· Section 2001.510, Occupations Code

· Section 2001.511, Occupations Code

· Section 2001.512, Occupations Code

· Section 2001.513, Occupations Code

· Section 2001.514, Occupations Code

· Section 2001.515, Occupations Code

· Section 2001.553, Occupations Code

· Section 2001.602, Occupations Code

· Section 2001.603, Occupations Code

· Section 2001.604, Occupations Code

· Section 2001.605, Occupations Code

· Section 2001.606, Occupations Code

· Section 2001.607, Occupations Code

· Section 2001.608, Occupations Code

· Section 2001.609, Occupations Code

· Section 2001.610, Occupations Code

· Section 2001.611, Occupations Code

· Section 10, Chapter 1057 (H.B. 3021), Acts of the 74th Legislature, Regular Session, 1995

· Section 234.132, Local Government Code, as added by Chapter 1377 (H.B. 1127), Acts of the 83rd Legislature, Regular Session, 2013

· Subchapter E, Chapter 234, Local Government Code, as added by Chapter 1284 (H.B. 2123), Acts of the 83rd Legislature, Regular Session, 2013

EFFECTIVE DATE

Except as otherwise provided, September 1, 2015.

COMPARISON OF ORIGINAL AND SUBSTITUTE

While C.S.H.B. 2642 may differ from the original in minor or nonsubstantive ways, the following comparison is organized and formatted in a manner that indicates the substantial differences between the introduced and committee substitute versions of the bill.

INTRODUCED

HOUSE COMMITTEE SUBSTITUTE

ARTICLE 1. REGULATION OF CHARITABLE BINGO

Same as introduced version.

SECTION 1.01. Sections 2001.002(13) and (18), Occupations Code, are amended to read as follows:

(13) "Gross gaming revenue [~~receipts~~]" means the total amount received from the sale, rental, transfer, or use of bingo cards and entrance fees charged at premises at which bingo is conducted less the amount of cash prizes paid to winners of bingo games.

(18) "Net proceeds" means:

(A) in relation to the total [~~gross~~] receipts from the conduct of bingo during one or more bingo occasions, the amount remaining after deducting the reasonable sums necessarily and actually expended for expenses under Section 2001.458 and the fee on prizes under Section 2001.502; and

(B) in relation to the gross rent or other consideration received by a licensed authorized organization for the use of its premises, fixtures, or equipment by another license holder, the amount remaining after deducting the reasonable sums necessarily and actually expended for any janitorial services and utility supplies directly attributable to the use of the premises, fixtures, or equipment.

SECTION 1.001. Section 2001.002, Occupations Code, is amended by amending Subdivisions (8), (13), (18), and (25-a) and adding Subdivisions (8-a) and (9-a) to read as follows:

(8) "Commission" means the Texas [~~Lottery~~] Commission of Licensing and Regulation.

(8-a) "Department" means the Texas Department of Licensing and Regulation.

(9-a) "Executive director" means the executive director of the department.

(18) "Net proceeds" means:

(25-a) "Regular license" means a license to conduct bingo that is issued by the department [~~commission~~] and that expires on the first [~~or second~~] anniversary of the date of issuance unless revoked or suspended before that date by the department [~~commission. The term includes an annual license~~].

No equivalent provision.

SECTION 1.002. The heading to Subchapter B, Chapter 2001, Occupations Code, is amended to read as follows:

SUBCHAPTER B. [~~COMMISSION~~] POWERS AND DUTIES

No equivalent provision.

SECTION 1.003. The heading to Section 2001.051, Occupations Code, is amended to read as follows:

Sec. 2001.051. CONTROL AND SUPERVISION OF BINGO[~~; BINGO DIVISION~~].

No equivalent provision.

SECTION 1.004. Sections 2001.051(a) and (b), Occupations Code, are amended to read as follows:

(a) The department [~~commission~~] shall administer this chapter.

(b) The commission has broad authority and shall exercise [~~strict~~] control and close supervision over all bingo conducted in this state so that bingo is fairly conducted and the proceeds derived from bingo are used for an authorized purpose.

No equivalent provision.

SECTION 1.005. Section 2001.053, Occupations Code, is amended to read as follows:

Sec. 2001.053. OFFICERS AND INVESTIGATORS. The executive director [~~commission~~] may employ officers or investigators the executive director [~~commission~~] considers necessary to administer this chapter.

No equivalent provision.

SECTION 1.006. Sections 2001.056(b), (c), (d), and (e), Occupations Code, are amended to read as follows:

(b) A license holder may not use or distribute a bingo card unless the card has been approved by the department [~~commission~~].

(c) The executive director or commission may set the price or adopt a schedule of prices for the sale or provision of bingo cards by a licensed authorized organization.

(d) A licensed authorized organization may not sell or provide a bingo card at a price other than a price authorized by the executive director or commission or a schedule adopted by the executive director or commission.

(e) The commission by rule may require a licensed authorized organization to notify the department [~~commission~~] of the price for bingo cards the organization will use for one or more reporting periods.

SECTION 1.02. Section 2001.057(a), Occupations Code, is amended to read as follows:

(a) The commission shall [~~may~~] appoint a bingo advisory committee consisting of nine members. The commission shall appoint members representing a balance of interests including representatives of:

(1) the public;

(2) charities that operate bingo games; [~~and~~]

(3) commercial and charity lessors that participate in the bingo industry; and

(4) distributors.

No equivalent provision.

SECTION 1.007. Section 2001.057, Occupations Code, is amended to read as follows:

Sec. 2001.057. BINGO ADVISORY COMMITTEE AND ADVICE FOR COMMISSION.

(1) the public;

(2) charities that operate bingo games; [~~and~~]

(3) commercial and charity lessors that participate in the bingo industry;

(4) distributors; and

(5) manufacturers.

(d) An advisory [A] committee member is not entitled to receive compensation for serving as a member. A [~~committee~~] member is entitled to reimbursement for reasonable expenses incurred in performing duties as a member subject to the availability of funds and applicable limitations of the General Appropriations Act.

(e) The advisory committee, executive director, and department may:

(1) advise the commission on the needs and problems of the state's bingo industry;

(2) comment on rules involving bingo during their development and before final adoption unless an emergency requires immediate action by the commission; and

(3) [~~report annually to the commission on the committee's activities; and~~

[~~(4)~~] perform other duties as determined by the commission or executive director.

(f) The advisory committee may meet [~~quarterly or~~] at the executive director's or the presiding officer's [~~commission's~~] request.

[~~(g) The commission may adopt rules to govern the operations of the committee.~~]

No equivalent provision.

SECTION 1.008. Section 2001.059(f), Occupations Code, is amended to read as follows:

(f) The commission may delegate all or part of the authority and procedures for issuing advisory opinions under this section to an employee of the department [~~commission~~].

SECTION 1.03. Sections 2001.060(a) and (c), Occupations Code, are amended to read as follows:

(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 gaming revenue [~~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 gaming revenue [~~receipts~~].

(c) For purposes of Subsection (a), the commission shall determine the total amount of net proceeds in a manner that does not include [~~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 1.009. Sections 2001.060(a) and (c), Occupations Code, are amended to read as follows:

(a) On or before June 1 of each even-numbered year, the department [~~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 gaming revenue [~~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 gaming revenue [~~receipts~~].

(c) For purposes of Subsection (a), the department [~~commission~~] shall determine the total amount of net proceeds in a manner that does not reduce gross gaming revenue [~~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.

No equivalent provision.

SECTION 1.010. Section 2001.061, Occupations Code, is amended to read as follows:

Sec. 2001.061. LICENSE RENEWAL PROCESS. The commission shall adopt rules governing each part of the license renewal process for all licenses issued under this chapter, from application submission to completion of the renewal process. [~~The process must require a license holder renewing a license to submit to the commission the information required in the initial license application.~~]

No equivalent provision.

SECTION 1.011. Section 2001.101(a), Occupations Code, is amended to read as follows:

(a) The department [~~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 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 that has been organized in this state for at least three years;

(4) a veterans organization that has existed in this state for at least three years;

(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.

No equivalent provision.

SECTION 1.012. 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 department [~~commission~~] an application on a form prescribed by the department [~~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) a statement that the net proceeds of bingo will go to one or more of the authorized charitable purposes under this chapter;

(6) a designation of the applicant organization's bingo chairperson under whom bingo will be conducted accompanied by a statement signed by the chairperson stating that the chairperson will be responsible for the conduct of bingo under the terms of the license and this chapter;

(7) sufficient facts relating to the applicant's incorporation and organization to enable the department [~~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.

No equivalent provision.

SECTION 1.013. Sections 2001.103(a), (c), (f), and (g), Occupations Code, are amended to read as follows:

(a) An authorized organization may receive a temporary license to conduct bingo by filing with the department [~~commission~~] an application, on a form and in the manner prescribed by the department [~~commission~~], accompanied by a $25 license fee.

(c) An organization may not receive more than 24 [~~six~~] temporary licenses in the 12-month period following the issuance or renewal of the organization's license to conduct bingo [~~a calendar year~~].

(f) An authorized organization that holds an annual [~~a regular~~] license to conduct bingo may apply for all or any portion of the total number of temporary licenses to which the organization is entitled under Subsection (c) [~~(e)~~] in one application without stating the days or times for which the organization will use the temporary licenses.

(g) An organization that has been issued a temporary license under Subsection (f) shall notify the department [~~commission~~] of the specific date and time of the bingo occasion for which the temporary license will be used before using the license. [If the commission receives the notification by noon of the day before the day the temporary license will be used, the commission shall verify receipt of the notice before the end of the business day on which the notice is received. If the commission does not receive the notification by noon of the day before the day the temporary license will be used, the commission shall verify receipt of the notice before noon of the business day that follows the day the commission received the notice.]

SECTION 1.04. Section 2001.104, Occupations Code, is amended by amending Subsections (a) and (d) and adding Subsection (d-1) to read as follows:

(a) The commission shall set the fees for a license to conduct bingo based on the amount of the licensed authorized organization's total receipts derived from the conduct of bingo and in an amount reasonable to defray administrative costs but not less than the following:

(1) Class A (annual [~~gross~~] receipts of $25,000 or less)-$100;

(2) Class B (annual [~~gross~~] receipts of more than $25,000 but not more than $50,000)-$200;

(3) Class C (annual [~~gross~~] receipts of more than $50,000 but not more than $75,000)-$300;

(4) Class D (annual [~~gross~~] receipts of more than $75,000 but not more than $100,000)-$400;

(5) Class E (annual [~~gross~~] receipts of more than $100,000 but not more than $150,000)-$600;

(6) Class F (annual [~~gross~~] receipts of more than $150,000 but not more than $200,000)-$900;

(7) Class G (annual [~~gross~~] receipts of more than $200,000 but not more than $250,000)-$1,200;

(8) Class H (annual [~~gross~~] receipts of more than $250,000 but not more than $300,000)-$1,500;

(9) Class I (annual [~~gross~~] receipts of more than $300,000 but not more than $400,000)-$2,000; and

(10) Class J (annual [~~gross~~] receipts of more than $400,000)-$2,500.

(d) Except as provided by Subsection (d-1), an [An] applicant shall pay the fees established under Subsection (a) annually.

(d-1) 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 before the beginning of each year of the two-year license.

SECTION 1.014. Sections 2001.104(a), (d), and (e), Occupations Code, are amended to read as follows:

(a) The commission by rule shall set the fees for a license to conduct bingo based on the amount of the licensed authorized organization's total receipts derived from the conduct of bingo and in an amount reasonable to defray the department's administrative costs but not less than the following:

(1) Class A (annual [~~gross~~] receipts of not more than $75,000)-$300 [~~$25,000 or less)-$100~~];

(2) Class B (annual [~~gross~~] receipts of more than $75,000 [~~$25,000~~] but not more than $200,000)-$900 [~~$50,000)-$200~~];

(3) Class C (annual [~~gross~~] receipts of more than $200,000 [~~$50,000~~] but not more than $400,000)-$2,000 [~~$75,000)-$300~~]; and

(4) Class D (annual [~~gross~~] receipts of more than [~~$75,000 but not more than $100,000)-$400;~~

[~~(5) Class E (annual gross receipts of more than $100,000 but not more than $150,000)-$600;~~

[~~(6) Class F (annual gross receipts of more than $150,000 but not more than $200,000)-$900;~~

[~~(7) Class G (annual gross receipts of more than $200,000 but not more than $250,000)-$1,200;~~

[~~(8) Class H (annual gross receipts of more than $250,000 but not more than $300,000)-$1,500;~~

[~~(9) Class I (annual gross receipts of more than $300,000 but not more than $400,000)-$2,000; and~~

[~~(10) Class J (annual gross receipts of more than~~] $400,000)-$2,500.

(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.~~]

(e) A licensed authorized organization may pay in advance, or establish an escrow account with the department [~~commission~~] to cover, fees assessed under this chapter for the amendment of a license or issuance of a temporary license.

No equivalent provision.

SECTION 1.015. Section 2001.105, Occupations Code, is amended to read as follows:

Sec. 2001.105. LICENSE ISSUANCE OR RENEWAL; DISCIPLINARY ACTION FOR CERTAIN CONVICTIONS. (a) The department [~~commission~~] shall issue or renew a license to conduct bingo on payment of the license fee provided by Section 2001.104 if the department [~~commission~~] determines that:

(1) the member or members of the applicant designated in the application to conduct bingo are active members of the applicant;

(2) the bingo is to be conducted in accordance with this chapter;

(3) the proceeds of the bingo are to be disposed in accordance with this chapter;

(4) the applicant has made and can demonstrate significant progress toward the accomplishment of the purposes of the organization during the 12 months preceding the date of application for a license or license renewal; and

(5) all persons who will conduct, promote, or administer the proposed bingo are active members of the applicant organization and all other persons who will assist in conducting, promoting, or administering the proposed bingo games are persons authorized [~~to do so~~] by the applicant [~~Section 2001.411; and~~

[~~(6) no person under whose name bingo will be conducted and no person working at the proposed bingo has been convicted of a gambling offense or criminal fraud~~].

(b) The department [~~commission~~] may not issue a license to an authorized organization to conduct bingo if an officer or member of the board of directors of the organization, or a person under whose name bingo will be conducted, has been convicted of criminal fraud or a gambling or gambling-related offense.

(b-1) The department may not take disciplinary action against a licensed authorized organization that has on file for a person described by Subsection (b) or an organization employee a criminal history records check, conducted by a local law enforcement agency or the Department of Public Safety, that does not contain a record of a conviction for an offense described by that subsection. If the department conducts a criminal history records check on the person or employee that contains a record of a conviction for an offense described by that subsection:

(1) the department shall immediately notify the organization of the conviction; and

(2) the organization is prohibited from allowing the person or employee to conduct bingo for the organization after receipt of the notification.

(b-2) The department may take disciplinary action against an organization that allows a person described by Subsection (b) or organization employee to conduct bingo for the organization after the date the organization receives the notification required under Subsection (b-1)(1).

No equivalent provision.

SECTION 1.016. Sections 2001.107(b) and (c), Occupations Code, are amended to read as follows:

(b) A training program approved by the department [~~commission~~] must include training related to:

(1) conducting bingo;

(2) administering and operating bingo; and

(3) promoting bingo.

(1) the content of the training course;

(2) information concerning training to be reported to the department [~~commission~~]; and

(3) other training program requirements that the department [~~commission~~] determines to be necessary to promote the fair conduct of bingo and compliance with this chapter.

No equivalent provision.

SECTION 1.017. Section 2001.108, Occupations Code, is amended to read as follows:

Sec. 2001.108. LICENSE AMENDMENT FOR CHANGE OF BINGO PREMISES OR OCCASIONS. (a) A licensed authorized organization and the licensed commercial lessor at which the organization conducts or will conduct bingo may file a joint application with the department [~~commission~~] to change the premises at which the organization may conduct bingo or the times of the organization's bingo occasions to allow the organization to conduct bingo at the same time and premises that another licensed authorized organization is licensed to conduct bingo if the other organization has ceased, or will cease, conducting bingo at that time and premises. The application must state whether the other organization has ceased or will cease conducting bingo at that time and premises because:

(1) the organization has abandoned or will abandon its licensed time or premises; or

(2) the organization's lease has been or will be terminated.

(b) If the other organization ceased or will cease conducting bingo for the reason stated in Subsection (a)(1), the department [~~commission~~] must act on the joint application filed under Subsection (a) not later than the 14th day after the date the application is filed with the department [~~commission~~].

(c) If the other organization ceased or will cease conducting bingo for the reason stated in Subsection (a)(2), the department [~~commission~~] must act on the joint application filed under Subsection (a) not later than the 14th day after the date the application is filed with the department [~~commission~~] or the date on which the termination takes effect, whichever is later.

(d) The department [If the commission fails to act within the time provided by Subsection (b) or (c), the licensed authorized organization may act as if the change in premises or bingo occasions has been approved by the commission and may conduct bingo at the new premises or during the new bingo occasion until the commission acts on the application.

[~~(e) Notwithstanding Subsection (d), the commission~~] may issue temporary licenses to one or more licensed authorized organizations that conduct bingo at the same location as an organization that has ceased or will cease to conduct bingo, which are in addition to the number of temporary licenses each organization is entitled to under another provision of this chapter. The department [~~commission~~] is not required to act on a joint application under Subsection (a) within the time provided by this section if the number of additional temporary licenses is sufficient to allow the other organizations at the location to conduct bingo during the licensed times of the organization that has ceased or will cease to conduct bingo.

No equivalent provision.

SECTION 1.018. Section 2001.152(a), Occupations Code, is amended to read as follows:

(a) The department [~~commission~~] may issue a commercial lessor license only to:

(1) a licensed authorized organization that owns or leases a premises where bingo is or will be conducted or an association of licensed authorized organizations that jointly own or lease premises where bingo is or will be conducted and that the organization or association leases or offers for lease to one or more other authorized organizations for the conduct of bingo;

(2) a person who leases premises to a single licensed authorized organization that subleases or will sublease the premises to one or more other licensed authorized organizations for the conduct of bingo; or

(3) a person who leases premises for the total control and exclusive use of only one licensed authorized organization as that organization's primary business office.

No equivalent provision.

SECTION 1.019. Section 2001.153(a), Occupations Code, is amended to read as follows:

(a) The department [~~commission~~] may not issue a commercial lessor license to a person unless the department [~~commission~~] receives evidence the department [~~commission~~] considers adequate that funds used by the person seeking the license to obtain the premises, provide the premises with furniture, fixtures, or equipment, renovate the premises, or provide utilities to the premises are:

(1) the person's own funds; or

(2) the funds of another person, including loan proceeds, that:

(A) were obtained in an arms-length transaction that was commercially reasonable under the circumstances; and

(B) were not obtained under an expectation or obligation that the person from whom the funds were obtained would directly participate in, or have a legal interest in, rents obtained under the license or revenues or profits from the conduct of bingo on the premises.

No equivalent provision.

SECTION 1.020. Section 2001.154(a), Occupations Code, is amended to read as follows:

(a) The department [~~commission~~] may not issue a commercial lessor license to or renew a commercial lessor license of:

(1) a person convicted of criminal fraud or a gambling or gambling-related 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~~].

No equivalent provision.

SECTION 1.021. Section 2001.156(a), Occupations Code, is amended to read as follows:

(a) An applicant for a commercial lessor license must file with the department [~~commission~~] a written verified application on a form prescribed by the department [~~commission~~].

No equivalent provision.

SECTION 1.022. Section 2001.158(a), Occupations Code, is amended to read as follows:

(a) The commission by rule shall set the fees for a commercial lessor license in an amount reasonable to defray the department's administrative costs but not less than the following:

(1) Class A (annual gross rentals from licensed organizations of not more than $30,000)-$300 [~~$12,000)-$100~~];

(2) Class B (annual gross rentals from licensed organizations of more than $30,000 [~~$12,000~~] but not more than $60,000)-$900 [~~$20,000)-$200~~];

(3) Class C (annual gross rentals from licensed organizations of more than $60,000 [~~$20,000~~] but not more than $90,000)-$2,000 [~~$30,000)-$300~~]; and

(4) Class D (annual gross rentals from licensed organizations of more than [~~$30,000 but not more than $40,000)-$400;~~

[~~(5) Class E (annual gross rentals from licensed organizations of more than $40,000 but not more than $50,000)-$600;~~

[~~(6) Class F (annual gross rentals from licensed organizations of more than $50,000 but not more than $60,000)-$900;~~

[~~(7) Class G (annual gross rentals from licensed organizations of more than $60,000 but not more than $70,000)-$1,200;~~

[~~(8) Class H (annual gross rentals from licensed organizations of more than $70,000 but not more than $80,000)-$1,500;~~

[~~(9) Class I (annual gross rentals from licensed organizations of more than $80,000 but not more than $90,000)-$2,000; and~~

[~~(10) Class J (annual gross rentals from licensed organizations of more than~~] $90,000)-$2,500.

No equivalent provision.

SECTION 1.023. Sections 2001.159(a) and (b), Occupations Code, are amended to read as follows:

(a) The department [~~commission~~] shall issue or renew a commercial lessor license if the department [~~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 rent to be charged is fair and reasonable;

(4) there is no diversion of the funds of the proposed lessee from the lawful purposes under this chapter;

(5) 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

(6) the applicant will lease the premises for the conduct of bingo in accordance with this chapter.

(b) The department [~~commission~~] shall issue a commercial lessor license under this section for the period specified in the license application or for a shorter period as the department [~~commission~~] determines.

No equivalent provision.

SECTION 1.024. Sections 2001.160(a), (e), (f), and (g), Occupations Code, are amended to read as follows:

(a) On approval by the department [~~commission~~], a licensed commercial lessor may transfer a commercial lessor license if the person to whom the license will be transferred otherwise meets the requirements of this subchapter.

(e) Unless the department [~~commission~~] revokes or suspends the license under this chapter, or an injunction is issued under this section, a licensed authorized organization that conducts bingo lawfully at premises under a license to which Subsection (d) applies may continue conducting bingo at the premises after the death or incapacity of the commercial lessor license holder.

(f) On the showing by the department [~~commission~~] of a cause that would be sufficient for the department [~~commission~~] to revoke or suspend a license under this chapter or an applicable commission rule, a district court in Travis County [~~the county for which a commercial lessor license was issued or the commission~~] by order may temporarily or permanently enjoin the conduct of bingo at premises under a license to which Subsection (d) applies.

(g) The estate or guardian of an individual to whom Subsection (d) applies shall notify the department [~~commission~~] not later than one year after the date the individual dies or is determined to be incapacitated by a court of this state. The estate or guardian and the heirs or other appropriate person shall promptly take all necessary steps to complete a transfer of the license to the heirs or other appropriate person.

No equivalent provision.

SECTION 1.025. Section 2001.161(c), Occupations Code, is amended to read as follows:

(c) The department [~~commission~~] may issue a commercial lessor license to a licensed authorized organization only for the same premises where the organization is licensed to conduct bingo.

No equivalent provision.

SECTION 1.026. Section 2001.201, Occupations Code, is amended to read as follows:

Sec. 2001.201. MANUFACTURER'S LICENSE REQUIRED. A manufacturer may not sell or supply or offer to sell or supply to a person in this state or for use in this state bingo cards, boards, sheets, pads, or other supplies, or equipment designed to be used in playing bingo, or engage in any intrastate activity involving those items, unless the manufacturer holds a manufacturer's license under this subchapter.

No equivalent provision.

SECTION 1.027. 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 department [~~commission~~] an application on a form prescribed by the department [~~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) 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 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 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 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 criminal fraud or a gambling or gambling-related offense;

(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 department [~~commission~~] requests.

No equivalent provision.

SECTION 1.028. Section 2001.204, Occupations Code, is amended to read as follows:

Sec. 2001.204. MANUFACTURER'S LICENSE BOND. (a) An applicant for a manufacturer's license must give the department [~~commission~~] a cash bond or a bond in the amount of $10,000 issued by a surety company chartered or authorized to do business in this state.

(b) The bond must provide for forfeiture to the department [~~state~~] on the manufacturer's failure to comply with this chapter or a commission rule or on suspension or revocation of the manufacturer's license.

No equivalent provision.

SECTION 1.029. Section 2001.205(b), Occupations Code, is amended to read as follows:

(b) In addition to the annual license fee, the department [~~commission~~] may require an additional fee in an amount necessary to defray the cost of a background investigation, including the inspection of manufacturing plants and locations. The commission by rule may establish the conditions and procedure for payment of the additional fee.

No equivalent provision.

SECTION 1.030. Section 2001.208, Occupations Code, is amended to read as follows:

Sec. 2001.208. DISTRIBUTOR'S LICENSE APPLICATION. (a) An applicant for a distributor's license must file with the department [~~commission~~] an executed verified application on a form prescribed by the department [~~commission~~].

(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 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 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 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 criminal fraud or a gambling or gambling-related offense;

(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 department [~~commission~~] requests.

No equivalent provision.

SECTION 1.031. Section 2001.209(b), Occupations Code, is amended to read as follows:

(b) In addition to the annual license fee, the department [~~commission~~] may require an additional fee in an amount necessary to defray the cost of a background investigation of the applicant, including the inspection of storage, distribution, or operating locations. The commission by rule may establish the conditions and procedure for payment of the additional fee.

No equivalent provision.

SECTION 1.032. Section 2001.211(a), Occupations Code, is amended to read as follows:

(a) An applicant for a manufacturer's or distributor's license shall, during pendency of the application, notify the department [~~commission~~] immediately of any change relating to a fact stated in the application.

No equivalent provision.

SECTION 1.033. Section 2001.212, Occupations Code, is amended to read as follows:

Sec. 2001.212. DENIAL OF LICENSE. The executive director or commission may deny an application for or renewal of a license for a cause that would permit or require the suspension or revocation of the license.

No equivalent provision.

SECTION 1.034. Section 2001.214(a), Occupations Code, is amended to read as follows:

(a) A [~~Except as provided by Subsection (b), a~~] manufacturer's or distributor's license is effective for one year unless revoked or suspended by the department [~~commission~~].

No equivalent provision.

SECTION 1.035. Section 2001.216, Occupations Code, is amended to read as follows:

Sec. 2001.216. EXAMINATION OF RECORDS. (a) The department [~~commission~~] may examine the books and records of the holder of or an applicant for a manufacturer's or distributor's license.

(b) The department [~~commission~~] may not disclose information obtained during the examination except as necessary to carry out this chapter.

No equivalent provision.

SECTION 1.036. Section 2001.217, Occupations Code, is amended to read as follows:

Sec. 2001.217. OFFENSE. (a) A person who does not hold a manufacturer's or distributor's license commits an offense if the person sells, offers to sell, or attempts to induce the sale of bingo equipment or supplies to a licensed authorized organization.

(b) A first offense under this section is a state jail felony. A subsequent offense under this section is a felony of the third degree.

No equivalent provision.

SECTION 1.037. Sections 2001.218(b) and (c), Occupations Code, are amended to read as follows:

(b) If a payment is not made when due, the seller shall immediately notify the department [~~commission~~]. The department [~~commission~~] shall notify all manufacturers and distributors licensed in this state of the default.

(c) In the event of a default, a person may not sell or transfer bingo equipment or supplies to the purchaser in default on terms other than immediate payment on delivery until otherwise authorized by the department [~~commission~~].

No equivalent provision.

SECTION 1.038. The heading to Subchapter G, Chapter 2001, Occupations Code, is amended to read as follows:

SUBCHAPTER G. GENERAL PROVISIONS RELATING TO

DEPARTMENT [~~COMMISSION~~] LICENSES

No equivalent provision.

SECTION 1.039. Section 2001.301, Occupations Code, is amended to read as follows:

Sec. 2001.301. LICENSE INVESTIGATION. Promptly after the filing of the application for a license under this chapter, the department [~~commission~~] shall investigate the qualifications of each applicant and the merits of the application.

No equivalent provision.

SECTION 1.040. Section 2001.302, Occupations Code, is amended to read as follows:

Sec. 2001.302. PROVISION OF SUPPLEMENTAL INFORMATION. (a) In addition to any required application form, a license applicant or license holder shall submit any supplemental information requested by the department [~~commission~~].

(b) The executive director or commission may deny or refuse to renew a license application or revoke a license based on a failure to submit requested supplemental information when required.

No equivalent provision.

SECTION 1.041. Section 2001.3025, Occupations Code, is amended to read as follows:

Sec. 2001.3025. ACCESS TO CRIMINAL HISTORY RECORD INFORMATION. The department [~~commission~~] is entitled to conduct an investigation of and is entitled to obtain criminal history record information maintained by the Department of Public Safety, the Federal Bureau of Investigation identification division, or another law enforcement agency to assist in the investigation of:

(1) an applicant for or holder of a license issued under this chapter;

(2) a person required to be named in a license application; or

(3) an employee or other person who works or will work for a license holder and who is required by another provision of this chapter to undergo a criminal background check.

No equivalent provision.

SECTION 1.042. Sections 2001.306(a), (a-1), and (d), Occupations Code, are amended to read as follows:

(a) A license issued under this chapter may be amended on application to the department [~~commission~~] and on payment of a fee in the amount required by the department [~~commission~~] if the subject matter of the proposed amendment could properly have been included in the original license.

(a-1) The commission by rule shall establish an amendment fee schedule. The amount of a fee charged by the department [~~commission~~] may vary based on the complexity of the proposed license amendment.

(d) The holder of a license to conduct bingo shall notify the department [~~commission~~] before changing the time or date of a game. The license holder may provide notice to the department [~~commission~~] regarding the change by use of telephone or other means acceptable to the department [~~facsimile~~].

SECTION 1.05. Section 2001.307, Occupations Code, is amended to read as follows:

Sec. 2001.307. MAXIMUM LICENSE TERM. A [~~Except as otherwise provided by this chapter, a~~] license issued under this chapter may not be effective for more than two years [~~one year~~].

SECTION 1.043. Section 2001.307, Occupations Code, is amended to read as follows:

Sec. 2001.307. MAXIMUM LICENSE TERM. A [~~Except as otherwise provided by this chapter, a~~] license issued under this chapter may not be effective for more than one year.

SECTION 1.06. Section 2001.313, Occupations Code, is amended by amending Subsections (a) and (b-2) and adding Subsections (j) and (k) 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 on whom the commission has conducted a criminal history background check, or another person authorized under Subsection (j) has conducted a criminal history background check and has submitted the background check to the commission, and who are approved to be involved in the conduct of bingo or to act as a bingo operator.

(b-2) The commission by rule may impose a fee for an initial registration application and renewal application submitted under this section and on an individual for whom the commission conducts a criminal history background check. The commission shall set the fees [~~fee~~] in amounts [~~an amount~~] sufficient to cover the application processing costs, including the [a] criminal history background check, identification card, and other administrative costs the commission considers appropriate.

(j) A person other than an individual whose name is included on an initial or renewal license application under this chapter may obtain a criminal history background check to submit under this section from:

(1) the Department of Public Safety, including through the use of the department's online criminal history background check service;

(2) a local law enforcement agency, including through the use of the agency's online criminal history background check service; or

(3) the commission.

(k) A criminal history background check for an individual whose name is included on an initial or renewal license application under this chapter must be performed by the commission.

No equivalent provision.

SECTION 1.07. Section 2001.314(b), Occupations Code, is amended to read as follows:

(b) The commission may [~~shall~~] provide the identification card and [~~shall provide~~] a form to be completed by an individual that allows the individual to prepare the identification card. The commission may collect a reasonable charge to cover the cost of providing the card or form.

No equivalent provision.

SECTION 1.044. Section 2001.311, Occupations Code, is amended to read as follows:

Sec. 2001.311. RIGHTS NOT VESTED. The issuance of a license [~~or temporary authorization~~] by the department [~~commission~~] does not grant a vested right in the license[~~, the temporary authorization,~~] or the privileges conferred.

No equivalent provision.

SECTION 1.045. Sections 2001.315(a) and (b), Occupations Code, are amended to read as follows:

(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 department [~~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 department [~~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 department [~~commission~~].

(b) A person who files a renewal application with the department [~~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.

No equivalent provision.

SECTION 1.046. Section 2001.316, Occupations Code, is amended to read as follows:

Sec. 2001.316. DELIVERY OF DEPARTMENT [~~COMMISSION~~] NOTICE. If notice under this chapter is required to be given to an authorized organization, the department [~~commission~~] shall send the notice to the bingo chairperson of the authorized organization and to the appropriate commercial lessor, if applicable.

No equivalent provision.

SECTION 1.047. The heading to Section 2001.353, Occupations Code, is amended to read as follows:

Sec. 2001.353. DISCIPLINE OF LICENSE [~~AND REGISTRATION~~] HOLDERS.

No equivalent provision.

SECTION 1.048. Sections 2001.353(a), (b), and (c), Occupations Code, are amended to read as follows:

(a) After a hearing, the executive director or commission may suspend, revoke, or refuse to renew a license [~~or registration~~] issued under this chapter for:

(1) failure to comply with this chapter or a commission rule; or

(2) a reason that would allow or require the executive director or commission to refuse to issue or renew a license [~~or registration~~] of the same class.

(b) The executive director or commission may place on probation a person whose license [~~or registration~~] is suspended. If a license [~~or registration~~] suspension is probated, the executive director or commission may require the person:

(1) to report regularly to the department [~~commission~~] on the matters that are the basis of the probation;

(2) to limit the person's activities under the license [~~or registration~~] in the manner prescribed by the executive director or commission; or

(3) to take any other reasonable action prescribed by the executive director or commission to address the matters that are the basis of the probation.

(c) If the person fails to comply with the conditions of probation, the executive director or commission may suspend or revoke the person's license [~~or registration~~].

No equivalent provision.

SECTION 1.049. Section 2001.403(b), Occupations Code, is amended to read as follows:

(b) This section does not apply if more than one premises lawfully exists under a common roof or over a common foundation under a license application filed with the Texas Lottery Commission [~~commission~~] on or before May 23, 1997. The department [~~commission~~] shall renew a license at the premises that is otherwise in compliance with this chapter.

No equivalent provision.

SECTION 1.050. Section 2001.407(f), Occupations Code, is amended to read as follows:

(f) With the prior written consent of the department [~~commission~~], a licensed authorized organization may make an occasional sale of bingo cards or of a used bingo flash board or blower to another licensed authorized organization.

SECTION 1.08. Section 2001.409, Occupations Code, is amended.

SECTION 1.051. Same as introduced version.

No equivalent provision.

SECTION 1.052. Section 2001.411(e), Occupations Code, is amended to read as follows:

(e) The department [~~commission~~] may not prohibit an operator responsible for conducting, promoting, or administering bingo from acting as a bingo caller for a licensed authorized organization during a bingo occasion. This subsection does not relieve the operator of the duty to be available to a department [~~commission~~] employee or bingo player if required by this chapter.

SECTION 1.09. Section 2001.414, Occupations Code, is amended.

SECTION 1.053. Same as introduced version.

No equivalent provision.

SECTION 1.054. Section 2001.415, Occupations Code, is amended to read as follows:

Sec. 2001.415. ADVERTISEMENTS. (a) A person other than a licensed authorized organization or a[,] licensed commercial lessor[~~, or the commission~~] may not advertise bingo.

(b) A licensed authorized organization or[,] licensed commercial lessor[~~, or the commission~~] may include in an advertisement or promotion the amount of a prize or series of prizes offered at a bingo occasion.

SECTION 1.10. Section 2001.420, Occupations Code, is amended.

SECTION 1.055. Same as introduced version.

No equivalent provision.

SECTION 1.056. Sections 2001.437(a), (b), and (d), Occupations Code, are amended to read as follows:

(a) If the unit accounting agreement of a unit states that a unit manager is responsible for compliance with commission rules and this chapter, the unit manager is responsible for:

(1) the filing of one quarterly report for the unit on a form prescribed by the executive director [~~commission~~]; and

(2) the payment of taxes and fees and the maintenance of the bingo inventory and financial records of the unit.

(b) A unit with a unit manager shall notify the department [~~commission~~] of the name of the unit manager and immediately notify the department [~~commission~~] of any change of unit manager.

(d) An applicant for a unit manager license must file with the department [~~commission~~] a written application on a form prescribed by the executive director [~~commission~~] that includes:

(1) the name and address of the applicant;

(2) information regarding whether the applicant, or any officer, director, or employee of the applicant, has been convicted of criminal fraud or a gambling or gambling-related offense; and

(3) any other information required by commission rule.

No equivalent provision.

SECTION 1.057. Sections 2001.438(b) and (d), Occupations Code, are amended to read as follows:

(b) The unit shall designate with the department [~~commission~~] an agent who will be responsible for providing the department [~~commission~~] access to all inventory and financial records of the unit on request of the department [~~commission~~].

(d) The unit shall immediately notify the department [~~commission~~] of any change in the agent designated under Subsection (b).

No equivalent provision.

SECTION 1.058. Section 2001.439(c), Occupations Code, is amended to read as follows:

(c) The department [~~commission~~] may prohibit a person who serves as a designated agent that is listed on a license under this chapter, including having been approved by the department [~~commission~~] to work in the bingo operations of a licensed authorized organization or as an operator, from holding or being listed on any license or from being approved to work in the bingo operations of any licensed authorized organization or to serve as an operator if the person has failed to comply with the duties required of the person as a unit manager or designated agent.

SECTION 1.11. Sections 2001.451(d), (e), and (g), Occupations Code, are amended to read as follows:

(d) Except as permitted by Subsection (c), 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 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 in the amounts provided by Section 2001.460 over the calendar year in which the license is in effect [~~the organization's license period~~]; or

(2) if the organization has a two-year license, result in net proceeds in the amounts provided by Section 2001.460 over each calendar year in which [~~12-month period that ends on an anniversary of the date~~] the two-year license is in effect [~~was issued~~].

SECTION 1.059. Sections 2001.451(b), (c), (d), (e), (g), (i), (j), and (k), Occupations Code, are amended to read as follows:

(b) Except as provided by Section 2001.502(a), a [A] licensed authorized organization shall deposit in the bingo account all funds derived from the conduct of bingo, less the amount awarded as cash prizes under Sections 2001.420(a) and (b). A [~~Except as provided by Subsection (b-1), a~~] deposit must be made not later than the second business day after the day of the bingo occasion on which the receipts were obtained.

(c) A licensed authorized organization may transfer money from its general fund or other account to the organization's 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 the department [~~commission~~] of the transfer not later than the 14th day after the date of the transfer.

(d) Except as permitted by Subsection (c), a licensed authorized organization may not commingle [~~gross~~] receipts derived from the conduct of bingo with other funds of the organization.

(g) The bingo operations of a licensed authorized organization must[:

[~~(1)~~] result in net proceeds in the amounts provided by Section 2001.460 over the calendar year in which the license is in effect [~~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~~].

(i) Prize taxes [~~fees~~] held in escrow for remittance as provided by this chapter [~~to the commission~~] are not included in the calculation of operating capital under Subsection (h).

(j) 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 department [~~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.

(k) A licensed authorized organization may apply to the department [~~commission~~] for a waiver of the requirements of this section and Section 2001.457. The department [~~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 department [~~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.

No equivalent provision.

SECTION 1.060. Section 2001.457(b), Occupations Code, is amended to read as follows:

(b) If a licensed authorized organization fails to meet the requirements of Subsection (a) for a quarter, the department [~~commission~~] in applying appropriate sanctions shall consider whether, taking into account the amount required to be disbursed during that quarter and the three preceding quarters, the organization has disbursed a total amount sufficient to have met the disbursement requirement for that quarter and the three preceding quarters combined.

SECTION 1.12. Subchapter J, Chapter 2001, Occupations Code, is amended by adding Section 2001.460 to read as follows:

Sec. 2001.460. REQUIRED MINIMUM NET PROCEEDS. (a) If the combined gross gaming revenue of the licensed authorized organizations located at a single bingo premises exceeds $500,000 in a calendar year, the combined net proceeds of those organizations for that calendar year may not be less than 10 percent of the combined gross gaming revenue of those organizations.

(a-1) Notwithstanding Subsection (a), if the combined gross gaming revenue of the licensed authorized organizations located at a single bingo premises exceeds $500,000 in a calendar year, the combined net proceeds of those organizations may not be:

(1) in 2016, less than six percent of the combined gross gaming revenue of those organizations; and

(2) in 2017, less than eight percent of the combined gross gaming revenue of those organizations.

(b) If the combined gross gaming revenue of the licensed authorized organizations located at a single bingo premises is equal to $500,000 or less in a calendar year, the combined net proceeds of those organizations for that calendar year may not be less than five percent of the combined gross gaming revenue of those organizations.

(b-1) Notwithstanding Subsection (b) and subject to Subsection (c), if the combined gross gaming revenue of the licensed authorized organizations located at a single bingo premises is equal to $500,000 or less in a calendar year, the combined net proceeds of those organizations for that calendar year may not be:

(1) in 2016, less than three percent of the combined gross gaming revenue of those organizations; and

(2) in 2017, less than four percent of the combined gross gaming revenue of those organizations.

(c) A licensed authorized organization located at a bingo premises described by Subsection (b) that conducts not more than two bingo occasions during any week during a calendar year is exempt from the requirements of Subsection (b). The commission by rule may impose minimum net proceeds requirements in amounts less than the amounts required under Subsection (b) on the organizations located at a premises to which this subsection applies.

(c-1) This subsection applies only to a bingo premises that on January 1, 2015, was operated under an active lessor license and was located in a county any part of which is within 75 miles of a casino that has electronic gaming. Notwithstanding any other subsection of this section, the minimum net proceeds requirement for a single bingo premises described by this subsection during a calendar year is:

(1) for a single bingo premises at which the licensed authorized organizations have a combined gross gaming revenue that exceeds $500,000, the lesser of:

(A) the amount determined using the percentage required by this section; or

(B) $12,000 multiplied by the number of licensed authorized organizations conducting bingo at that premises; and

(2) for a single bingo premises at which the licensed authorized organizations have a combined gross gaming revenue equal to $500,000 or less, the lesser of:

(A) the amount determined using the percentage required by this section; or

(B) $6,000 multiplied by the number of licensed authorized organizations conducting bingo at that premises.

(c-2) This subsection and Subsections (a-1), (b-1), and (c-1) expire December 31, 2019.

(d) The commission shall waive or reduce the minimum net proceeds required by this section if:

(1) bingo has been conducted at the bingo premises for less than 12 months;

(2) circumstances beyond the control of the licensed authorized organizations operating at the bingo premises, including force majeure, prevented the organizations from satisfying the minimum net proceeds percentage;

(3) the licensed authorized organizations present a business plan that the commission determines reasonably establishes procedures to satisfy the minimum net proceeds percentage in the next calendar year; or

(4) legal or illegal gaming in the area of the bingo premises affected the ability of the organizations to satisfy the minimum net proceeds percentage.

(e) If the commission waives or reduces the minimum net proceeds percentage required by this section because of illegal gaming, the commission shall notify the county commissioners court of the county in which each affected bingo premises is located and the governing body of any municipality in which the premises is located of the commission's action and the reasons for that action.

SECTION 1.061. Subchapter J, Chapter 2001, Occupations Code, is amended by adding Section 2001.460 to read as follows: