89R15265 BEE-D

By: Middleton, Hall S.B. No. 1721

A BILL TO BE ENTITLED

AN ACT

relating to the transfer of the licensing and regulation of charitable bingo to the Texas Commission of Licensing and Regulation.

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

SECTION 1. Section 411.093(a), Government Code, is amended to read as follows:

(a) The Texas Department of Licensing and Regulation is entitled to obtain criminal history record information as provided by Subsection (b) that relates to:

(1) an applicant for or the holder of:

(A) a driver education instructor license under Chapter 1001, Education Code;

(B) a license under Chapter 202, Occupations Code;

(C) a license under Chapter 401, Occupations Code;

(D) a license under Chapter 402, Occupations Code; [or]

(E) a license under Chapter 2001, Occupations Code; or

(F) an instructor license or motorcycle school license under Chapter 662, Transportation Code;

(2) a person who is:

(A) an applicant for or the holder of a license under Chapter 91, Labor Code; or

(B) a controlling person, as defined by Chapter 91, Labor Code, of an entity described by Paragraph (A); or

(3) a person who:

(A) is an applicant for or the holder of a license under Chapter 455, Occupations Code; or

(B) has an interest described under Section 455.1525(e), Occupations Code, in an entity described by Paragraph (A).

SECTION 2. Section 411.108(a-2), Government Code, is amended to read as follows:

(a-2) Subject to Sections 411.087, 466.201, and 467.036(b) [of this code and Section 2001.3025, Occupations Code,] and consistent with the public policy of this state, the Texas Lottery Commission is entitled to:

(1) obtain through the Federal Bureau of Investigation criminal history record information maintained or indexed by that bureau that pertains to a person described by Subsection (a) [or (a-1)]; and

(2) obtain from the department or any other criminal justice agency in this state criminal history record information maintained by the department or that criminal justice agency that relates to a person described by Subsection (a) [or (a-1)].

SECTION 3. Sections 466.002(2) and (3), Government Code, are amended to read as follows:

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

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

SECTION 4. Section 467.002, Government Code, is amended to read as follows:

Sec. 467.002. APPLICATION OF SUNSET ACT. The commission is subject to review under Chapter 325 (Texas Sunset Act). Unless continued in existence as provided by that chapter, the commission is abolished and this chapter and[,] Chapter 466 [of this code, and Chapter 2001, Occupations Code,] expire September 1, 2025.

SECTION 5. Sections 467.024(a) and (c), Government Code, are amended to read as follows:

(a) An individual is not eligible to be an appointed member of the commission if the individual:

(1) is registered, certified, or licensed by a regulatory agency in the field of [bingo or] lottery;

(2) owns or controls, directly or indirectly, more than a 10 percent interest in a business entity or other organization regulated by the commission or receiving funds from the commission;

(3) is employed by or participates in the management of a business entity or other organization regulated by or receiving funds from the commission;

(4) uses or receives a substantial amount of tangible goods, services, or funds from the commission, other than compensation or reimbursement authorized by law for commission membership, attendance, or expenses;

(5) is an officer, employee, or paid consultant of a Texas trade association in the field of [bingo or] lottery;

(6) is required to register as a lobbyist under Chapter 305 because of the person's activities for compensation on behalf of a profession related to the operation of the commission;

(7) is married to an individual described by Subdivisions (2)-(6);

(8) has been convicted of a felony or of any crime involving moral turpitude; or

(9) is not a citizen of the United States.

(c) A person may not be a commission employee employed in a "bona fide executive, administrative, or professional capacity," as that phrase is used for purposes of establishing an exemption to the overtime provisions of the federal Fair Labor Standards Act of 1938 (29 U.S.C. Section 201 et seq.), if:

(1) the person is an officer, employee, or paid consultant of a Texas trade association in the field of [bingo or] lottery; or

(2) the person's spouse is an officer, manager, or paid consultant of a Texas trade association in the field of [bingo or] lottery.

SECTION 6. Section 467.025(a), Government Code, is amended to read as follows:

(a) A commission member may not:

(1) accept any employment or remuneration from[:

[(A)] a person that has a significant financial interest in the lottery[; or

[(B) a bingo commercial lessor, bingo distributor, or bingo manufacturer];

(2) play any lottery [or bingo] game conducted in this state;

(3) accept or be entitled to accept any part of the winnings to be paid from a lottery [or bingo] game conducted in this state;

(4) use the member's official authority to affect the result of an election or nomination for public office; or

(5) directly or indirectly coerce, attempt to coerce, command, or advise a person to pay, lend, or contribute anything of value to another person for political purposes.

SECTION 7. Section 467.035(a), Government Code, is amended to read as follows:

(a) The commission may not employ or continue to employ a person who owns a financial interest in[:

[(1) a bingo commercial lessor, bingo distributor, or bingo manufacturer; or

[(2)] a lottery sales agency or a lottery operator.

SECTION 8. Sections 467.101(a) and (c), Government Code, are amended to read as follows:

(a) The commission has broad authority and shall exercise strict control and close supervision over all activities authorized and conducted in this state under[:

[(1) Chapter 2001, Occupations Code; and

[(2)] Chapter 466 [of this code].

(c) The commission also has the powers and duties granted under[:

[(1) Chapter 2001, Occupations Code; and

[(2)] Chapter 466 [of this code].

SECTION 9. Section 467.111(f), Government Code, is amended to read as follows:

(f) The commission shall prepare a report on the trends and issues identified under Subsection (e) and make the report available to the public. The commission shall address the identified trends and issues, including trends and issues related to the regulation of lottery operations under Chapter 466 [and of bingo under Chapter 2001, Occupations Code].

SECTION 10. Section 572.003(b), Government Code, is amended to read as follows:

(b) The term means:

(1) the banking commissioner of the Texas Banking Department [Banking Commissioner of The Banking Department of Texas];

(2) the administrative director of the Office of Court Administration of the Texas Judicial System;

(3) the chief executive of the Office of Public Utility Counsel;

(4) the executive director of the State Bar of Texas;

(5) the lottery director [of the lottery division] of the Texas Lottery Commission;

(6) the deputy in charge of the department of security in a [the] lottery division of the Texas Lottery Commission;

(7) the director of the bingo division of the Texas [Lottery] Commission of Licensing and Regulation; or

(8) the secretary of state.

SECTION 11. Section 2001.002, Occupations Code, is amended by amending Subdivision (8) and adding Subdivision (8-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.

SECTION 12. Subchapter B, Chapter 2001, Occupations Code, is amended by adding Section 2001.0501 to read as follows:

Sec. 2001.0501. ALLOCATION OF POWERS AND DUTIES. A power granted or duty assigned to the commission under this chapter is a power or duty of the executive director of the department, the director of bingo operations, the department, or the commission, as established by commission rule.

SECTION 13. The following provisions of the Government Code are repealed:

(1) Section 411.108(a-1);

(2) Section 467.021(c);

(3) Section 467.031; and

(4) Section 467.033.

SECTION 14. (a) On September 1, 2025:

(1) all functions and activities performed by the Texas Lottery Commission relating to the regulation of bingo operations under Chapter 2001, Occupations Code, immediately before that date are transferred to the Texas Department of Licensing and Regulation;

(2) a rule, policy, procedure, decision, or form adopted by the Texas Lottery Commission relating to Chapter 2001, Occupations Code, is a rule, policy, procedure, decision, or form of the Texas Commission of Licensing and Regulation or the Texas Department of Licensing and Regulation, as applicable, and remains in effect until amended or replaced by that commission or department unless the rule, policy, procedure, decision, or form conflicts with the changes in law made by this Act;

(3) unless the context clearly indicates otherwise, a reference to the Texas Lottery Commission in a law or administrative rule that relates to Chapter 2001, Occupations Code, means the Texas Commission of Licensing and Regulation or the Texas Department of Licensing and Regulation, as applicable;

(4) a complaint, investigation, or other proceeding before the Texas Lottery Commission that is related to Chapter 2001, Occupations Code, is transferred without change in status to the Texas Department of Licensing and Regulation, and the Texas Department of Licensing and Regulation assumes, as appropriate and without a change in status, the position of the Texas Lottery Commission in an action or proceeding to which the Texas Lottery Commission is a party;

(5) a license, permit, certification, or registration in effect that was issued by the Texas Lottery Commission under Chapter 2001, Occupations Code, is continued in effect as a license, permit, certification, or registration of the Texas Department of Licensing and Regulation;

(6) all money, contracts, leases, property, and obligations of the Texas Lottery Commission relating to Chapter 2001, Occupations Code, are transferred to the Texas Department of Licensing and Regulation; and

(7) the unexpended and unobligated balance of any money appropriated by the legislature for the Texas Lottery Commission related to Chapter 2001, Occupations Code, is transferred to the Texas Department of Licensing and Regulation.

(b) On September 1, 2025, all full-time equivalent employee positions at the Texas Lottery Commission that primarily concern the administration, auditing, accounting, enforcement, or other direct and indirect support of Chapter 2001, Occupations Code, become positions at the Texas Department of Licensing and Regulation. When filling the positions, the Texas Department of Licensing and Regulation shall give first consideration to an applicant who, as of August 31, 2025, was an employee at the Texas Lottery Commission primarily involved in administering or enforcing Chapter 2001, Occupations Code.

(c) Not later than June 1, 2025, the Texas Lottery Commission shall grant the Texas Department of Licensing and Regulation inquiry-only security access to:

(1) all licensing, enforcement, and examination software or computer systems used by the Texas Lottery Commission in administering or enforcing Chapter 2001, Occupations Code; and

(2) the uniform statewide accounting system, the state property accounting system, the uniform statewide payroll system, and the human resources information system for the Texas Lottery Commission.

(d) Before September 1, 2025, the Texas Lottery Commission may agree with the Texas Department of Licensing and Regulation to transfer any property of the Texas Lottery Commission to the Texas Department of Licensing and Regulation to implement the transfers required by this Act.

(e) The Texas Department of Licensing and Regulation and the Texas Lottery Commission shall coordinate implementation of this section. The Texas Lottery Commission shall cooperate with the Texas Department of Licensing and Regulation in transferring all data and records necessary to implement the transfers required by this Act.

(f) Before July 15, 2025, the Texas Lottery Commission and the Texas Department of Licensing and Regulation shall develop and enter into a memorandum of understanding regarding the transfers required by this Act. The memorandum must include a transition plan with a timetable and specific steps and deadlines required to complete the transfer.

(g) Not later than December 1, 2025, a manufacturer of bingo equipment or supplies that submitted to the Texas Lottery Commission a bond as required under Section 2001.204, Occupations Code, before September 1, 2025, that is in effect on the effective date of this Act must amend the bond to name the Texas Department of Licensing and Regulation as the payee for the bond.

SECTION 15. The changes in law made by this Act to Chapter 2001, Occupations Code, apply only to a tax or fee charged on or after September 1, 2025. A tax or fee charged before September 1, 2025, is governed by the law in effect immediately before that date, and the former law is continued in effect for that purpose.

SECTION 16. Not later than March 1, 2026, the Texas Commission of Licensing and Regulation shall adopt the rules necessary to implement the changes in law made by this Act.

SECTION 17. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2025.