Honorable Joan Huffman, Chair, Senate Committee on State Affairs
FROM:
John McGeady, Assistant Director Sarah Keyton, Assistant Director Legislative Budget Board
IN RE:
HB914 by Thompson, Senfronia (relating to the regulation of bingo games.), Committee Report 2nd House, Substituted
Estimated Two-year Net Impact to General Revenue Related Funds for HB914, Committee Report 2nd House, Substituted: a positive impact of $30,728,000 through the biennium ending August 31, 2021.
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2020
$15,364,000
2021
$15,364,000
2022
$15,364,000
2023
$15,364,000
2024
$15,364,000
Fiscal Year
Probable Revenue Gain/(Loss) from General Revenue Fund 1
Probable Revenue Gain/(Loss) from Bingo Administration 5175
2020
$15,364,000
($29,400,000)
2021
$15,364,000
($29,400,000)
2022
$15,364,000
($29,400,000)
2023
$15,364,000
($29,400,000)
2024
$15,364,000
($29,400,000)
Fiscal Analysis
The bill would amend the Occupations Code as it relates to the regulation of bingo games.
The bill would transfer certain responsibilities from an organization that holds a license to conduct bingo to the Texas Lottery Commission (commission). The bill would extend the amount of time a licensed authorized organization can employ certain individuals while the employee awaits the results of a background check by the commission.
The bill would expand the timeframe in which cards, tickets, and devices could be sold for a bingo occasion. The bill would make modifications to reporting procedures related to sales. The bill would extend the amount of time a licensed authorized organization has to deposit funds into the bingo account.
The bill would require a licensed authorized organization or unit to remit 50 percent of the amount collected as the prize fee to the commission and a certain amount to the county and/or the municipality if the county or municipality in which the bingo game is conducted voted before November 1, 2019 to impose the prize fee. The bill would deposit 50 percent of the amount collected as prize fee to the general fund of the charitable organization if a county or municipality is not entitled to a percentage of the prize fee collected, or voted to discontinue the fee after November 1, 2019.
Under the provisions of the bill, the prize fee would not apply to a merchandise prize awarded for winning a bingo game. The bill would require counties or municipalities currently entitled to receive a portion of the prize fee to continue to receive a portion of the prize fee if a majority vote of the members of the governing body approves the continued receipt of funds and notifies the commission and each licensed authorized organization within the county's or municipality's jurisdiction of the continuance of the fee.
The bill would require the commission to notify the governing body of a county or municipality that is entitled to receive a portion of the prize fee before January 1, 2020 of the new requirements for continued receipt of the prize fee by October 1, 2019.
The bill would repeal various sections of the Occupations Code which would eliminate certain refunds under the Occupations Code related to bingo.
The bill would take effect January 1, 2020. Provisions of the bill related to the imposition, collection, and deposit of the prize fee would take effect September 1, 2019.
Methodology
Bingo prize fee revenue is currently collected by the commission and deposited to GR Account 5175 - Bingo Administration. The commission determines the local share of revenue and at the end of each fiscal year sends the local share to local governments and transfers the remaining amount to General Revenue Fund 0001. Interest earned on funds in GR Account 5175 - Bingo Administration Account is deposited to General Revenue Fund 0001. Under the bill, the prize fee would be deposited directly to General Revenue Fund 0001.
Under current statute, a county or municipality that imposed a gross receipts tax on bingo as of January 1, 1993, is entitled to 50 percent of bingo prize fees collected. Under the provisions of the bill, a county or municipality in which a bingo game is conducted is entitled to 50 percent of the amount of the collected prize fee if the county or municipality voted to impose the prize fee before November 1, 2019. The allocation of the prize fee is similar to current statute except in cases where a county or municipality is not entitled to a percentage of the amount of fees collected or votes to discontinue the fee after November 1, 2019. Under those conditions, 50 percent of the prize fee would be deposited with the charitable organization. Under current law, all revenue from bingo prize fees are deposited into the state treasury and then allocated by commission back to local communities. Under the provisions of the bill only 50 percent of total collections -state share would be deposited to the state treasury.
In fiscal 2018, $607,131 was collected under comptroller object code 3152 Bingo Operators/Lessors. Based on the 2020-21 Biennial Revenue Estimate, collections are projected to be $629,000 per fiscal year. As the revenue collected under comptroller object code 3152 cannot be separated from the revenue that will not be affected by the provisions of the bill, the revenue impact of the refund provisions of the bill cannot be determined.
The fiscal impact above represents loss of revenue deposited to GR Account 5175 - Bingo Administration from bingo prize fees (full 100% of revenue before allocations to local communities). Gain to General Revenue represents 50 percent of all total collections and the amount collected in cities and counties that didn't adopted bingo prizes before 1993, and also represents a loss of interest earned on the smaller amount of bingo prizes that would be deposited to the state treasury.
Local Government Impact
In FY 2018, 54 counties and 95 cities received charitable bingo allocations. Any bingo prize fee designated for those counties and municipalities not voted on by the local jurisdiction by November 2019 will be retained in the general charitable fund of the organization or unit and no longer remitted to the local jurisdictions.
According to Ector and Smith counties, no fiscal impact to their counties is anticipated.
Travis County anticipates an annual revenue loss from the Bingo Gross Receipts Tax of $450,000.
Source Agencies:
304 Comptroller of Public Accounts, 362 Texas Lottery Commission, 360 State Office of Administrative Hearings