84R11641 YDB-D
 
  By: Thompson of Harris H.B. No. 2642
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the regulation of charitable bingo and amusement
  redemption machine game rooms; requiring an occupational permit;
  authorizing fees; creating civil and administrative penalties.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
  ARTICLE 1. REGULATION OF CHARITABLE BINGO
         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 1.02.  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.
         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 1.04.  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 1.05.  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 1.06.  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.
         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.
         SECTION 1.08.  Section 2001.409, Occupations Code, is
  amended by adding Subsection (b) to read as follows:
         (b)  Nothing in this chapter shall be construed as
  authorizing any game using a video lottery machine or machines. In
  this section "video lottery machine" or "machine" means any
  electronic video game machine that, on insertion of cash, is
  available to play or simulate the play of a video game, including
  but not limited to video poker, keno, and blackjack, utilizing a
  video display and microprocessor in which the player may receive
  free games or credits that can be redeemed for cash, coins, or
  tokens or that directly dispenses cash, coins, or tokens.
         SECTION 1.09.  Section 2001.414, Occupations Code, is
  amended to read as follows:
         Sec. 2001.414.  BINGO RECORDS. (a) The commission by rule
  may provide for different recordkeeping procedures for licensed
  authorized organizations by class based on the amount of the
  organization's total [gross] receipts derived from the conduct of
  bingo [of the organization].
         (b)  An organization conducting bingo must record on a cash
  register all transactions for which it receives total [bingo gross]
  receipts derived from the conduct of bingo in conformance with
  commission rules relating to transaction recording specifications.
         SECTION 1.10.  Section 2001.420, Occupations Code, is
  amended by adding Subsections (b-1), (d), (e), (f), and (g) to read
  as follows:
         (b-1)  For purposes of Subsections (a) and (b), the value of
  a merchandise bingo prize is the amount paid for the merchandise by
  the licensed authorized organization.  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.
         (d)  The commission may adopt for a bingo market region in
  this state rules 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.
         (e)  A rule adopted under Subsection (d): 
               (1)  may establish a minimum price charged for a bingo
  card or pull-tab or for use of a card-minding device;
               (2)  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
               (3)  must apply equally to each licensed authorized
  organization operating at a bingo premises within the bingo market
  region.
         (f)  An individual bingo market region set by the commission
  must include all the territory in a single county and may include
  part of the territory in an adjacent county as necessary for the
  commission to define a bingo market region under Subsection (d).
         (g)  The commission shall annually review the impact of a
  rule adopted under Subsection (d) on the conduct of bingo within the
  bingo market region and may amend or repeal the rule if the rule
  does not serve the purposes of Subsection (d).
         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 1.12.  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 1.13.  Section 2001.502, Occupations Code, is
  amended to read as follows:
         Sec. 2001.502.  PRIZE FEE. (a) A licensed authorized
  organization shall:
               (1)  collect from a person who wins a cash 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 comptroller [commission] a fee in the
  amount of 2.5 [five] percent of the amount collected under this
  section for distribution as required by Section 2001.503; and
               (3)  deposit the remainder of the fees collected under
  this section in the general charitable fund of the organization [or
  value of all bingo prizes awarded].
         (b)  The fee required under Subsection (a) 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.
         SECTION 1.14.  Section 2001.503, Occupations Code, is
  amended to read as follows:
         Sec. 2001.503.  [LOCAL SHARE OF] PRIZE FEE DISTRIBUTION.
  (a) Except as provided by Subsection (c), a county that imposed a
  gross receipts tax on the conduct of bingo as of January 1, 1993, is
  entitled to [50 percent of] the fee remitted to the comptroller
  [collected] under Section 2001.502(2) [2001.502 on a prize awarded
  at a game conducted in the county].
         (b)  Except as provided by Subsection (c), a municipality
  that imposed a gross receipts tax on the conduct of bingo as of
  January 1, 1993, is entitled to [50 percent of] the fee remitted to
  the comptroller [collected] under Section 2001.502(2) [2001.502 on
  a prize awarded at a game conducted in the municipality].
         (c)  If a county and municipality are both entitled to [a
  share of] the fee remitted to the comptroller under [imposed by]
  Section 2001.502(2) [2001.502]:
               (1)  the county is entitled to 50 [25] percent of the
  fee [on a prize awarded at a game conducted in the county]; and
               (2)  the municipality is entitled to 50 [25] percent of
  the fee [on a prize awarded at a game conducted in the
  municipality].
         SECTION 1.15.  Section 2001.505(a), Occupations Code, is
  amended to read as follows:
         (a)  A licensed authorized organization conducting bingo
  shall submit quarterly to the commission a report under oath
  stating:
               (1)  the amount of the [gross] receipts derived from
  the conduct of 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.
         SECTION 1.16.  Section 2001.507, Occupations Code, is
  amended to read as follows:
         Sec. 2001.507.  COLLECTION AND DISBURSEMENT OF PRIZE FEE.
  (a) The comptroller [commission] shall deposit the revenue
  collected from the fee on prizes imposed by Section 2001.502 to the
  credit of a special account in the general revenue fund.
         (b)  The comptroller [commission] shall determine the total
  amount of revenue deposited in the account from prizes awarded at
  games in a county or municipality entitled to a fee [share] under
  Section 2001.503.
         (c)  The comptroller [commission] shall send quarterly to a
  county or municipality entitled to [a share of] the fee on prizes
  the amount required [county's or municipality's share as provided]
  by Section 2001.503.
         (d)  [The commission shall transfer any remaining amounts in
  the account to a nondedicated account in the general revenue fund.
         [(e)]  The comptroller [commission] shall transmit a
  jurisdiction's [share of the] fee on prizes to the treasurer or the
  officer of the jurisdiction performing the functions of the
  treasurer's office payable to the jurisdiction. The amount
  transmitted may be used by the jurisdiction for any purpose for
  which the general funds of the jurisdiction may be used.
         (e) [(f)]  The comptroller [commission] may retain in a
  jurisdiction's suspense account a portion of the jurisdiction's
  [share of the] fee on prizes collected under this chapter. The
  amount retained in the suspense account may not exceed five percent
  of the amount remitted to the jurisdiction. The comptroller
  [commission] may make refunds from the suspense account of a
  jurisdiction for overpayments made to those accounts and may redeem
  dishonored checks and drafts deposited to the credit of the
  jurisdiction's suspense account.
         (f) [(g)]  If a jurisdiction entitled to a [share of the] fee
  on prizes prohibits the conduct of bingo under Sections
  2001.651-2001.656, the comptroller [commission] may retain in the
  suspense account of the jurisdiction for one year five percent of
  the final remittance to that jurisdiction. The amount retained in
  the suspense account may be used to cover possible overpayment of
  the jurisdiction's portion of the fee and to redeem dishonored
  checks and drafts deposited to the credit of the account. One year
  after the effective date of the prohibition of bingo in the
  jurisdiction, the comptroller [commission] shall remit the balance
  in the account to the jurisdiction and close the account.
         (g) [(h)]  Interest earned on all fees on prizes collected by
  the comptroller [commission] under this chapter before
  distribution to a local jurisdiction, including interest earned
  from the suspense accounts retained under this section, shall be
  credited to the general revenue fund.
         SECTION 1.17.  Section 2001.554(a), Occupations Code, is
  amended to read as follows:
         (a)  A person commits an offense and the person's license is
  subject to revocation under this chapter if the person:
               (1)  makes a false statement or material omission in an
  application for a license under this chapter;
               (2)  fails to maintain records that fully and
  accurately record each transaction connected with the conducting of
  bingo, the leasing of premises to be used for bingo, or the
  manufacture, sale, or distribution of bingo supplies or equipment;
               (3)  falsifies or makes a false entry in a book or
  record if the entry relates to bingo, the disposition of bingo
  proceeds, the application of rent received by a licensed authorized
  organization, or the gross gaming revenue [receipts] from the
  manufacture, sale, or distribution of bingo supplies or equipment;
               (4)  diverts or pays a portion of the net proceeds of
  bingo to a person except in furtherance of one or more of the lawful
  purposes provided by this chapter; or
               (5)  violates this chapter or a term of a license issued
  under this chapter.
         SECTION 1.18.  (a) The following provisions of the
  Occupations Code are repealed:
               (1)  Section 2001.060(b);
               (2)  Section 2001.305;
               (3)  Section 2001.436(c); and
               (4)  Section 2001.459(b).
         (b)  Section 10, Chapter 1057 (H.B. 3021), Acts of the 74th
  Legislature, Regular Session, 1995, is repealed.
         SECTION 1.19.  (a) Not later than December 1, 2015, the Texas
  Lottery Commission shall:
               (1)  adopt the rules necessary to implement the changes
  in law made by this Act; and
               (2)  send to the comptroller a report on the prize fees
  collected by the commission under Section 2001.502, Occupations
  Code, as that section existed before amendment by this Act, in the
  two years preceding the effective date of this Act and specify the
  licensed authorized organizations that have paid the fee in a
  timely or untimely manner.
         (b)  A licensed authorized organization that is listed on the
  report required under Subsection (a)(2) of this section as paying
  timely is exempt from posting any bond required under Section
  151.254, Tax Code.
         (c)  Section 2001.451, Occupations Code, as amended by this
  Act, applies beginning January 1, 2016.
         (d)  Section 2001.502, Occupations Code, as amended by this
  Act, applies to prize fees collected on and after the effective date
  of this Act. Prize fees collected before that date are governed by
  the law in effect on the date the fees were collected and that law
  continues in effect for that purpose.
  ARTICLE 2. REGULATION OF AMUSEMENT REDEMPTION MACHINE GAME ROOMS
         SECTION 2.01.  Section 234.131, Local Government Code, as
  added by Chapter 1284 (H.B. 2123), Acts of the 83rd Legislature,
  Regular Session, 2013, is amended by adding Subdivisions (1-a),
  (1-b), (1-c), (5), (6), (7), and (8) to read as follows:
               (1-a)  "Applicant" means a person, owner, corporation,
  partnership, or other business entity required to submit a game
  room application.
               (1-b)  "Current fire inspection report" means a fire
  inspection report issued by a fire department not earlier than the
  60th day immediately preceding the date an application for issuance
  or renewal of a game room is filed.
               (1-c)  "Gambling device" has the meaning assigned by
  Section 47.01, Penal Code.
               (5)  "Peace officer" has the meaning assigned by
  Article 2.12, Code of Criminal Procedure.
               (6)  "Public building" means a building used by
  federal, state, or local government that is open to the general
  public.
               (7)  "Regulation" means a regulation adopted by a
  county in this state for the operation of a game room.
               (8)  "School" means a facility, including all attached
  playgrounds, dormitories, stadiums, and other appurtenances that
  are part of the facility, used for the primary purpose of
  instruction or education, including primary or secondary schools,
  colleges, and universities, both public and private.
         SECTION 2.02.  Section 234.134, Local Government Code, as
  added by Chapter 1284 (H.B. 2123), Acts of the 83rd Legislature,
  Regular Session, 2013, is amended to read as follows:
         Sec. 234.134.  [LICENSES OR] PERMITS. (a)  A county may
  require that an owner or operator of a game room obtain a [license
  or] permit or renew a [license or] permit on a periodic basis to own
  or operate a game room in the county.  An application for a [license
  or] permit must be made in accordance with regulations adopted by
  the county.
         (b)  Regulations adopted under this section may provide for
  the denial, suspension, or revocation of a [license or] permit.
         (c)  A district court has jurisdiction of a suit that arises
  from the denial, suspension, or revocation of a [license or other]
  permit by a county.
         SECTION 2.03.  Subchapter E, Chapter 234, Local Government
  Code, as added by Chapter 1284 (H.B. 2123), Acts of the 83rd
  Legislature, Regular Session, 2013, is amended by adding Sections
  234.1341 and 234.1342 to read as follows:
         Sec. 234.1341.  PERMIT APPLICATION. (a) An owner or
  operator of a game room may not operate, use, or maintain any game
  room in a county that requires an owner or operator to obtain a
  permit under Section 234.134 unless the owner or operator holds a
  permit issued under this subchapter.
         (b)  An applicant shall file a completed application with the
  county sheriff's office of the county in which the proposed game
  room will be located.  The application shall be filed on the form
  provided by the office or on an accurate and legible copy of that
  form.  The applicant must apply in person at the office.
         (c)  The sheriff's office shall post a copy of the
  application form and the permit fee amount on the county's Internet
  website.  The office shall establish the hours for submission of
  applications under this section.
         (d)  The game room administrator of the sheriff's office
  shall mail notice of receipt of a completed application or notice of
  deficiencies in an application to the applicant not later than the
  10th day after the date the application is received by the office.
         (e)  Each application must be accompanied by:
               (1)  an annual inspection report that includes
  documentation of compliance with any previous correction ordered by
  the sheriff's office or a fire safety official;
               (2)  a copy of the certification of occupancy or
  certification of compliance issued by a building official as
  appropriate for the proposed game room premises;
               (3)  a diagram or the game room floor plan prepared by a
  licensed architect or engineer that includes the designed occupancy
  load and has been reviewed by the county clerk;
               (4)  for a game room operating under an assumed name, a
  copy of the assumed name certificate filed in the county clerk's
  office that includes the file mark or stamp evidencing its filing;
               (5)  a nonrefundable application fee in the amount
  established by the county commissioners court; and
               (6)  a copy of the applicant's government-issued photo
  identification. 
         (f)  An applicant's failure to provide the information or
  documents required by this section or pay the fee required by
  Section 234.135 or a determination by the sheriff's office that
  inaccurate, erroneous, or incomplete information has been
  submitted is grounds for denial or revocation of the application.
         (g)  If the sheriff's office denies a game room permit, the
  office shall give the applicant written notice of the basis for
  denial.
         Sec. 234.1342.  PERMIT RENEWAL. A permit holder may
  annually renew the permit not earlier than 60 days before the date a
  permit expires by filing a completed application for the permit
  with the game room permit administrator of the sheriff's office and
  paying the applicable fee. A renewal application is subject to the
  same requirements as a permit application.
         SECTION 2.04.  Section 234.135, Local Government Code, as
  added by Chapter 1284 (H.B. 2123), Acts of the 83rd Legislature,
  Regular Session, 2013, is amended to read as follows:
         Sec. 234.135.  FEES; ISSUANCE OF PERMIT; PREMISES
  REQUIREMENTS. (a) A county may impose a fee not to exceed $1,000 on
  an applicant for a [license or] permit or for the renewal of the
  [license or] permit required under this subchapter. The fee must be
  based on the cost of processing the application and investigating
  the applicant.
         (b)  An applicant shall pay the permit fee imposed under this
  section to the sheriff's office. On completion of the application
  process, the game room administrator of the sheriff's office shall
  give the applicant a signed receipt. The receipt constitutes a
  permit to operate the game room that is valid until the first
  anniversary of the date the permit is issued.
         (c)  A person who holds a permit issued under this section
  must meet and comply with all requirements of law applicable to the
  game room premises or any activity conducted on the game room
  premises. The issuance of a permit under this section does not
  excuse or provide a defense to the permit holder, the permit
  holder's agents or employees, or any patrons of the game room for a
  violation of this subchapter or other law.
         SECTION 2.05.  Section 234.136, Local Government Code, as
  added by Chapter 1284 (H.B. 2123), Acts of the 83rd Legislature,
  Regular Session, 2013, is amended to read as follows:
         Sec. 234.136.  INSPECTION BY LAW ENFORCEMENT OFFICER.  
  (a)  A peace officer or county employee may inspect a business in
  the county to determine the number of amusement redemption machines
  subject to regulation under this subchapter that are located on the
  premises of the business. A peace officer is authorized to inspect
  any business for a violation of this subchapter.
         (a-1)  This section does not authorize a right of entry
  otherwise prohibited by law. A peace officer may enter a business
  under this section with consent, with a warrant, or under exigent
  circumstances. A game room permit granted under this subchapter
  gives peace officers implied consent under this section to enter
  the premises of the game room.
         (a-2)  A business for which a game room permit has not been
  issued under this subchapter that holds itself out as a game room,
  by sign, advertisement, word-of-mouth, offering of memberships, or
  any other means, is subject to inspection by a peace officer.
  Refusal to allow a peace officer entry to inspect the premises of
  the game room may be considered in establishing probable cause for
  the issuance of a search warrant to inspect for violations of this
  subchapter.
         (b)  A peace officer or county employee may inspect any
  business in which six or more amusement redemption machines are
  located to determine whether the business is in compliance with
  this subchapter or regulations adopted under this subchapter or to
  inspect records required under Section 234.1362.
         (c)  A person violates this subchapter if the person fails to
  allow a peace officer or county employee to conduct an inspection of
  a game room, an amusement redemption machine, or records required 
  under Section 234.1362 or this section.
         SECTION 2.06.  Subchapter E, Chapter 234, Local Government
  Code, as added by Chapter 1284 (H.B. 2123), Acts of the 83rd
  Legislature, Regular Session, 2013, is amended by adding Sections
  234.1361, 234.1362, 234.1363, 234.1364, 234.1365, and 234.1366 to
  read as follows:
         Sec. 234.1361.  DISPLAY OF GAME ROOM PERMITS. An owner or
  operator of a game room shall display the valid game room permit
  issued to the owner or operator under this subchapter on the game
  room premises.  The permit must be displayed in plain sight in a
  common area accessible to the public without entrance to a
  controlled area of the business.
         Sec. 234.1362.  RECORDS REQUIRED. (a)  An owner or operator
  of a game room shall maintain on the premises:
               (1)  a record for each employee that includes:
                     (A)  the employee's name, address, date of birth,
  state identification number or social security number, job
  function, and W-2 or W-4 form;
                     (B)  a copy of the employee's application to work
  with the game room and a copy of the employee's I-9 filed for
  employment eligibility verification with the Department of
  Homeland Security; and
                     (C)  a photograph of the employee;
               (2)  a daily register that includes the name, date of
  birth, state identification number or social security number, and
  job function of each employee present at the establishment that
  day; and
               (3)  a copy of the county and state tax record forms
  required under Chapter 2153, Occupations Code, or other law for
  each amusement redemption machine on the premises that includes the
  name of the manufacturer, the serial number, the type of machine,
  and the serial number of the tax permit for a coin-operated machine
  and, if applicable, the serial number for the county tax permit,
  with the year of expiration for any tax permit.
         (b)  An owner or operator who violates Subsection (a) shall
  be assessed a civil penalty of not more than $10,000 for each record
  required under this section that is missing.
         (c)  The game room shall preserve the daily register required
  by Subsection (a)(2) for at least 90 days after the date the
  register was made. An owner or operator who violates this
  subsection may be assessed an administrative penalty in the amount
  of $500 for each register required to be preserved that is missing.
         Sec. 234.1363.  PROHIBITED EMPLOYMENT; CIVIL PENALTY. (a)
  An owner or operator of a game room may not knowingly employ any
  person who has been previously convicted of, or entered a plea of
  nolo contendere or guilty or received deferred adjudication for, an
  offense involving any conduct involving gambling violations
  prohibited under Chapter 47, Penal Code.
         (b)  An owner or operator of a game room shall conduct a
  criminal background check on each potential employee.
         (c)  Failure to comply with this section is a violation and
  punishable by a civil penalty assessed against an owner or operator
  not to exceed $10,000 per prohibited employee working at the game
  room and per employee working at the game room without being
  subjected to a criminal background check.
         (d)  Each day a violation of this section continues or occurs
  constitutes a separate violation for purposes of imposing a penalty
  under Section 234.137.
         Sec. 234.1364.  AMUSEMENT REDEMPTION MACHINES; PERMITS AND
  VIOLATIONS. (a) An owner or operator of a game room shall obtain
  from the county a permit for each amusement redemption machine on
  the game room premises in accordance with Chapter 2153, Occupations
  Code.
         (b)  The owner or operator of a game room shall pay an annual
  fee in an amount equal to 25 percent of the state's annual fee per
  machine.
         (c)  Each amusement redemption machine permit application
  shall specify on the application the physical location of the
  amusement redemption machine.
         (d)  If a permit is not obtained for an amusement redemption
  machine, the county tax assessor-collector's office shall lock the
  machine, and it may not be used until the owner purchases a permit
  for the machine by paying a $100 permit fee and a $5 release fee per
  machine.
         (e)  If a county compliance officer is not allowed entrance
  to a game room during business hours, a civil penalty not to exceed
  $10,000 for each date of denial shall be assessed on the owner or
  operator of the game room.
         (f)  A county may assess a civil penalty under Section
  234.137 on the owner or operator of a game room for each machine:
               (1)  that is not registered with a valid current year
  video tax stamp decal prominently displayed on the machine; and
               (2)  used for illegal gambling.
         (g)  If a law enforcement agency determines through
  investigation that a game room is operating in violation of Chapter
  47, Penal Code, each amusement redemption machine or gambling
  device in the game room is considered in violation. A civil penalty
  not to exceed $10,000 per machine or device may be assessed on the
  owner or operator of the game room.
         (h)  It is not a defense to prosecution under this section
  that the owner is not doing business in the owner's name, is not
  leasing property in the owner's name, or only has an ownership
  interest in the business.
         Sec. 234.1365.  GROUNDS FOR DENIAL, REVOCATION, OR
  SUSPENSION OF PERMIT. (a) Any violation of this subchapter or
  regulations adopted under this subchapter or failure to meet the
  requirements of this subchapter and regulations adopted under this
  subchapter is grounds for denial, revocation, or suspension of a
  permit to operate a game room. If a game room's permit has been
  revoked, denied, or suspended, the game room may not be operated
  during the pendency of any appeal from the revocation, denial, or
  suspension.
         (b)  The sheriff shall deny a game room permit on a finding by
  the sheriff that the applicant:
               (1)  has been previously convicted of any of the
  following offenses:
                     (A)  gambling, gambling promotion, keeping a
  gambling place, communicating gambling information, possession of
  gambling devices or equipment, or possession of gambling
  paraphernalia under Chapter 47, Penal Code;
                     (B)  forgery, credit card abuse, or commercial
  bribery under Chapter 32, Penal Code;
                     (C)  any criminal offense under Chapter 34, Penal
  Code;
                     (D)  criminal attempt, conspiracy, or
  solicitation to commit any of the offenses listed in Paragraphs
  (A)-(C) or any other offense under the laws of another state or of
  the United States that, if committed in this state, would have been
  punishable as one or more of the offenses; or
                     (E)  a criminal offense under Subchapter B,
  Chapter 352, if:
                           (i)  less than two years have elapsed since
  the later of the date of conviction or the date of release from
  confinement imposed for the conviction of a misdemeanor offense; or
                           (ii)  less than five years have elapsed
  since the later of the date of conviction or the date of release
  from confinement for the conviction of a felony offense;
               (2)  makes a misleading statement in the application
  for the game room permit;
               (3)  is younger than 18 years of age;
               (4)  has had a game room permit revoked within the
  180-day period immediately preceding the date the application was
  filed;
               (5)  is delinquent in the payment to the county of
  taxes, fees, fines, or penalties assessed or imposed regarding the
  operation of a game room;
               (6)  failed to pay the application or renewal fee
  required by this subchapter; or
               (7)  has not had the required fire and life safety
  inspection by a fire safety official within 60 days immediately
  preceding the date the application was filed.
         (c)  The sheriff may initiate a proceeding to revoke or
  suspend a game room permit if:
               (1)  any person commits on the premises of the game room
  an offense listed in Subsection (b)(1);
               (2)  the applicant provides false, fraudulent, or
  untruthful information on the original or renewal application;
               (3)  the game room permit should not have been issued
  under the requirements of this subchapter or regulations adopted
  under this subchapter;
               (4)  the owner or operator of the game room fails to
  comply with corrections ordered by a fire safety official with
  authority to conduct fire and life safety inspections in the county
  in which the game room is located; or 
               (5)  the owner is convicted of an offense listed in
  Subsection (b)(1).
         (d)  The sheriff may not issue a game room permit or
  temporary game room permit until final disposition of any case
  involving an offense listed in Subsection (b)(1) that is pending or
  arises during the application process.
         Sec. 234.1366.  DENIAL, REVOCATION, OR SUSPENSION OF PERMIT;
  HEARING; APPEAL. (a) If an event providing a basis for denial,
  revocation, or suspension of a game room permit under this
  subchapter occurs, the sheriff shall send to the game room permit
  holder or the holder's designated agent a written notice of denial,
  revocation, or suspension. The notice must set out the reasons for
  the action. The revocation or suspension is final on the fifth day
  after the date notice is issued. 
         (b)  The game room permit holder or the holder's designated
  agent is entitled to appear before a hearing examiner appointed by
  the commissioners court of the county in which the game room is
  located on written request submitted to the sheriff not less than
  the 10th business day after the date the notice is delivered.  The
  written request for a hearing stays the revocation or suspension
  until the hearing is concluded.
         (c)  The hearing examiner may not have participated in any
  investigation of the alleged grounds for the denial, revocation, or
  suspension. The hearing must be held not later than the 14th
  business day after the date the request for hearing is submitted.
         (d)  The game room permit holder and the sheriff are entitled
  to present evidence, cross-examine witnesses, and be represented by
  legal counsel. The rules of evidence for a civil, nonjury trial
  apply to the hearing.
         (e)  If the facts presented at the hearing support a finding
  that grounds exist for revoking or suspending a game room permit,
  the hearing examiner may request that the parties present relevant
  evidence to show whether suspension or revocation of the game room
  permit is more appropriate. Reasonable conditions may be attached
  to a game room permit by the hearing examiner based on the evidence
  presented at the hearing.
         (f)  If the hearing examiner determines that a game room
  permit should be revoked, the hearing examiner shall issue a
  written order revoking the game room permit that is effective
  immediately. 
         (g)  If the hearing examiner determines based on the nature
  of the violations that a suspension instead of a revocation is
  appropriate, operation of the game room permit may be suspended for
  a period not to exceed six months. The hearing examiner shall issue
  a written order suspending the game room permit and attaching any
  applicable conditions that is effective on the date the owner
  receives notice.
         (h)  On a finding that Section 234.1365(c)(3), (4), or (5)
  has been violated, the hearing examiner shall revoke the game room
  permit.
         (i)  Revocation takes effect immediately on notice by the
  sheriff, subject to reinstatement following an appeal, if:
               (1)  immediate action is required to protect the public
  from injury or imminent danger; or
               (2)  a game room permit was issued based on a
  misrepresentation in the application, and the game room permit
  would not have been issued otherwise.
         (j)  The decision of the hearing examiner is final. The
  losing party may appeal the decision by filing a petition in a
  district court in the county not later than the 30th day after the
  date of the decision. Judicial review is under the substantial
  evidence rule, and the judgment of the district court may be
  appealed, as in other civil cases.
         (k)  An applicant whose permit has been denied, revoked, or
  suspended may reapply for a game room permit if the applicant makes
  the changes necessary for the proposed game room to be in compliance
  with this subchapter and regulations adopted under this subchapter.
         SECTION 2.07.  Section 234.132, Local Government Code, as
  added by Chapter 1284 (H.B. 2123), Acts of the 83rd Legislature,
  Regular Session, 2013, is repealed.
         SECTION 2.08.  Subchapter E, Chapter 234, Local Government
  Code, as added by Chapter 1377 (H.B. 1127), Acts of the 83rd
  Legislature, Regular Session, 2013, is repealed.
  ARTICLE 3.  EFFECTIVE DATE
         SECTION 3.01.  This Act takes effect September 1, 2015.