Relating to the abolishment of the state lottery and the administration of charitable bingo by the Texas Commission of Licensing and Regulation.

The text as introduced · 6,653 words

90R1417 BEE-D

By: Hall, Hagenbuch
S.B. No. 188

A BILL TO BE ENTITLED

AN ACT

relating to the abolishment of the state lottery and the

administration of charitable bingo by the Texas Commission of

Licensing and Regulation.

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

SECTION 1. Section 9.406(f), Business & Commerce Code, is

amended to read as follows:

(f) Except as otherwise provided in Sections 2A.303 and

9.407, and subject to Subsections (h) and [ , ] (i)[ , and (k) ], a rule

of law, statute, or regulation that prohibits, restricts, or

requires the consent of a government, governmental body or

official, or account debtor to the assignment or transfer of, or

creation of a security interest in, an account or chattel paper is

ineffective to the extent that the rule of law, statute, or

regulation:

(1) prohibits, restricts, or requires the consent of

the government, governmental body or official, or account debtor to

the assignment or transfer of, or the creation, attachment,

perfection, or enforcement of a security interest in, the account

or chattel paper; or

(2) provides that the assignment or transfer or the

creation, attachment, perfection, or enforcement of the security

interest may give rise to a default, breach, right of recoupment,

claim, defense, termination, right of termination, or remedy under

the account or chattel paper.

SECTION 2. Article 2A.001, Code of Criminal Procedure, as

amended by Chapters 135 (H.B. 3248), 204 (H.B. 1620), 255 (S.B.

434), 558 (H.B. 1458), 771 (S.B. 502), 1022 (S.B. 2405), and 1070

(H.B. 121), Acts of the 89th Legislature, Regular Session, 2025, is

reenacted and amended to read as follows:

Art. 2A.001. PEACE OFFICERS GENERALLY. The following are

peace officers:

(1) a sheriff, a sheriff's deputy, or a reserve deputy

sheriff who holds a permanent peace officer license issued under

Chapter 1701, Occupations Code;

(2) a constable, a deputy constable, or a reserve

deputy constable who holds a permanent peace officer license issued

under Chapter 1701, Occupations Code;

(3) a marshal or police officer of a municipality or a

reserve municipal police officer who holds a permanent peace

officer license issued under Chapter 1701, Occupations Code;

(4) a ranger, officer, or member of the reserve

officer corps commissioned by the Public Safety Commission and the

director of the Department of Public Safety;

(5) an investigator of a district attorney's, criminal

district attorney's, or county attorney's office;

(6) a law enforcement agent of the Texas Alcoholic

Beverage Commission;

(7) a member of an arson investigating unit

commissioned by a municipality, a county, or the state;

(8) an officer commissioned under Section 37.081 or

37.0818, Education Code, or Subchapter E, Chapter 51, Education

Code, or a reserve police officer appointed under Section 37.0816,

Education Code, who holds a permanent peace officer license issued

under Chapter 1701, Occupations Code;

(9) an officer commissioned by the Texas Facilities

Commission;

(10) a law enforcement officer commissioned by the

Parks and Wildlife Commission;

(11) an officer commissioned under Chapter 23,

Transportation Code;

(12) a municipal park and recreational patrol officer

or security officer;

(13) a security officer or investigator commissioned

as a peace officer by the comptroller;

(14) an officer commissioned by a water control and

improvement district under Section 49.216, Water Code;

(15) an officer commissioned by a board of trustees

under Chapter 54, Transportation Code;

(16) an investigator commissioned by the Texas Medical

Board;

(17) an officer commissioned by:

(A) the board of managers of the Dallas County

Hospital District, the Tarrant County Hospital District, the Bexar

County Hospital District, the El Paso County Hospital District, or

the Harris County Hospital District under Section 281.057, Health

and Safety Code;

(B) the board of directors of the Ector County

Hospital District under Section 1024.117, Special District Local

Laws Code;

(C) the board of directors of the Midland County

Hospital District of Midland County, Texas, under Section 1061.121,

Special District Local Laws Code;

(D) the board of hospital managers of the Lubbock

County Hospital District of Lubbock County, Texas, under Section

1053.113, Special District Local Laws Code; or

(E) the board of directors of a defense base

development authority established under Chapter 379B, Local

Government Code;

(18) a county park ranger commissioned under

Subchapter E, Chapter 351, Local Government Code;

(19) an investigator employed by the Texas Racing

Commission;

(20) an officer commissioned under Chapter 554,

Occupations Code;

(21) an officer commissioned by the governing body of

a metropolitan rapid transit authority under Section 451.108,

Transportation Code, or a regional transportation authority under

Section 452.110, Transportation Code;

(22) an investigator commissioned by the attorney

general under Section 402.009, Government Code;

(23) a security officer or investigator commissioned

as a peace officer under Section 2001.051, Occupations [ Chapter

466, Government ] Code;

(24) an officer appointed by an appellate court under

Subchapter F, Chapter 53, Government Code;

(25) an officer commissioned by the state fire marshal

under Chapter 417, Government Code;

(26) an investigator commissioned by the commissioner

of insurance under Section 701.104, Insurance Code;

(27) an officer appointed by the inspector general of

the Texas Juvenile Justice Department under Section 242.102, Human

Resources Code;

(28) an officer commissioned by the inspector general

under Section 493.019, Government Code;

(29) an investigator commissioned by the Texas

Commission on Law Enforcement under Section 1701.160, Occupations

Code;

(30) a fire marshal or any related officer, inspector,

or investigator commissioned by a county under Subchapter B,

Chapter 352, Local Government Code;

(31) a fire marshal or any officer, inspector, or

investigator commissioned by an emergency services district under

Chapter 775, Health and Safety Code;

(32) a fire marshal or any officer, inspector, or

investigator of a municipality who holds a permanent peace officer

license issued under Chapter 1701, Occupations Code;

(33) an officer commissioned by the State Board of

Dental Examiners under Section 254.013, Occupations Code, subject

to the limitations imposed by that section;

(34) an Alamo complex ranger commissioned by the

General Land Office under Section 31.0515, Natural Resources Code,

subject to the limitations imposed by that section; [ and ]

(35) an inspector employed by the Texas Education

Agency under Section 37.1031, Education Code, subject to the

limitations imposed by that section; and

(36) [ (34) ] an officer commissioned and employed by

the Health and Human Services Commission's office of inspector

general.

SECTION 3. Section 411.093, Government Code, is amended by

amending Subsections (a), (b), (c), and (d) and adding Subsections

(a-1) and (d-1) 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 466;

[ (C) ] a license under Chapter 202, Occupations

Code;

(C) [ (D) ] a license under Chapter 401,

Occupations Code;

(D) [ (E) ] a license under Chapter 402,

Occupations Code;

(E) [ (F) ] a license under Chapter 2001,

Occupations Code; or

(F) [ (G) ] 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).

(a-1) The Texas Department of Licensing and Regulation is

entitled to obtain criminal history record information as provided

by Subsection (b) that relates to a person described by Section

2001.3025, Occupations Code.

(b) Subject to Section 411.087 of this code and Section

2001.3025, Occupations Code, and consistent with the public policy

of this state, the Texas Department of Licensing and Regulation 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) .

(c) The Texas Department of Licensing and Regulation may not

release or disclose to any person criminal history record

information obtained from the Federal Bureau of Investigation under

Subsection (b)(1). Criminal history record information obtained by

the Texas Department of Licensing and Regulation under Subsection

(b)(2) may not be released or disclosed to any person except on

court order, with the written consent of the person who is the

subject of the criminal history record information, or as provided

by Subsection (d) or (d-1) .

(d) The Texas Department of Licensing and Regulation is not

prohibited from disclosing to the person who is the subject of the

criminal history record information obtained under Subsection

(b)(2) the dates and places of arrests, offenses, and dispositions

contained in the information.

(d-1) The Texas Department of Licensing and Regulation is

not prohibited from disclosing criminal history record information

obtained under Subsection (b)(2) in a criminal proceeding or in a

hearing conducted by the Texas Department of Licensing and

Regulation or the State Office of Administrative Hearings.

SECTION 4. Section 411.467(d), Government Code, is amended

to read as follows:

(d) The department shall also send the alert to:

(1) any appropriate law enforcement agency;

(2) the Texas Department of Transportation; and

(3) [ the Texas Department of Licensing and Regulation;

and

[ (4) ] the Independent Bankers Association of Texas.

SECTION 5. Section 434.017(a), Government Code, is amended

to read as follows:

(a) The fund for veterans' assistance is a special fund in

the state treasury outside the general revenue fund. The fund is

composed of:

(1) money transferred to the fund at the direction of

the legislature;

(2) gifts and grants contributed to the fund;

(3) the earnings of the fund;

(4) [ money transferred to the fund from proceeds of

the lottery game operated under Section 466.027 or transferred to

the fund under Section 466.408(b);

[ (5) ] money deposited to the credit of the fund under

Section 502.1746, Transportation Code;

(5) [ (6) ] money deposited to the credit of the fund

under Sections 521.008 and 522.0295, Transportation Code;

(6) [ (7) ] money deposited to the credit of the fund

under Section 12.007, Parks and Wildlife Code; and

(7) [ (8) ] money deposited to the credit of the fund

under Section 411.1741.

SECTION 6. Section 466.020, Government Code, is transferred

to Subchapter B, Chapter 2001, Occupations Code, redesignated as

Section 2001.051, Occupations Code, and amended to read as follows:

Sec. 2001.051. [ 466.020. ] SECURITY. (a) The executive

director shall maintain an office of security within the

department. The office of security shall assist the executive

director in addressing any security-related matter arising under

this chapter [ or Chapter 2001, Occupations Code. The office may

coordinate as necessary with the financial crimes intelligence

center established under Chapter 2312, Occupations Code, for

assistance with investigations, to receive guidance on

security-related matters, and to provide information relevant to

the office's operations ].

(b) [ (c) A security officer or investigator employed by the

office of security or a peace officer who is working in conjunction

with the department or the Department of Public Safety in the

enforcement of this chapter, without a search warrant, may search

and seize a lottery vending machine, lottery computer terminal, or

other lottery equipment that is located on premises for which a

person holds a sales agent license issued under this chapter.

[ (d) ] The Department of Public Safety, at the department's

request, shall perform a full criminal background investigation of

a prospective investigator of the office of security. The

department shall reimburse the Department of Public Safety for the

actual costs of an investigation.

[ (e) At least once every two years, the executive director

shall employ an independent firm that is experienced in security,

including computer security and systems security, to conduct a

comprehensive study of all aspects of lottery security, including:

[ (1) lottery personnel security;

[ (2) sales agent security;

[ (3) lottery operator and vendor security;

[ (4) security against ticket counterfeiting and

alteration and other means of fraudulent winning;

[ (5) security of lottery drawings;

[ (6) lottery computer, data communications, database,

and systems security;

[ (7) lottery premises and warehouse security;

[ (8) security of distribution of tickets;

[ (9) security of validation and payment procedures;

[ (10) security involving unclaimed prizes;

[ (11) security aspects of each lottery game;

[ (12) security against the deliberate placement of

winning tickets in lottery games that involve preprinted winning

tickets by persons involved in the production, storage,

transportation, or distribution of tickets; and

[ (13) other security aspects of lottery operations.

[ (f) The executive director shall provide the commission

with a complete report of the security study conducted under

Subsection (e). The commission shall provide the governor and the

legislature, before the convening of each regular legislative

session, with a summary of the security study that shows the overall

evaluation of the lottery's security. ]

SECTION 7. Section 466.023, Government Code, is transferred

to Subchapter B, Chapter 2001, Occupations Code, and redesignated

as Section 2001.0507, Occupations Code, to read as follows:

Sec. 2001.0507 [ 466.023 ]. DEPARTMENT OF PUBLIC SAFETY

RECORDS. (a) Except as otherwise provided by this chapter, all

files, records, information, compilations, documents, photographs,

reports, summaries, and reviews of information and related matters

collected, retained, or compiled by the Department of Public Safety

in the discharge of its duties under this chapter are confidential

and are not subject to public disclosure. Each of those items is

subject to discovery by a person that is the subject of the item.

(b) An investigation report or other document submitted by

the Department of Public Safety to the department becomes part of

the investigative files of the department and is subject to

discovery by a person that is the subject of the investigation

report or other document.

(c) Information that is in the form available to the public

is not privileged or confidential under this section and is subject

to public disclosure.

SECTION 8. Sections 466.201, 466.202, 466.203, 466.204, and

466.205, Government Code, are transferred to Subchapter B, Chapter

2001, Occupations Code, redesignated as Sections 2001.0502,

2001.0503, 2001.0504, 2001.0505, and 2001.0506, Occupations Code,

respectively, and amended to read as follows:

Sec. 2001.0502 [ 466.201 ]. ACCESS TO CRIMINAL HISTORY

RECORD INFORMATION. (a) The department 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) [ a sales agent or an applicant for a sales agent

license;

[ (2) a person required to be named in a license

application;

[ (3) a lottery operator or prospective lottery

operator;

[ (4) an employee of a lottery operator or prospective

lottery operator, if the employee is or will be directly involved in

lottery operations;

[ (5) a person who manufactures or distributes lottery

equipment or supplies, or a representative of a person who

manufactures or distributes lottery equipment or supplies offered

to the lottery;

[ (6) ] a person who has submitted a written bid or

proposal to the department in connection with the procurement of

goods or services by the department, if the amount of the bid or

proposal exceeds $500;

(2) [ (7) an employee or other person who works for or

will work for a sales agent or an applicant for a sales agent

license;

[ (8) ] a person who proposes to enter into or who has a

contract with the department to supply goods or services to the

department; or

(3) [ (9) ] if a person described in Subdivision

[ Subdivisions ] (1) or (2) [ through (8) ] is not an individual, an

individual who:

(A) is an officer or director of the person;

(B) holds more than 10 percent of the stock in the

person;

(C) holds an equitable interest greater than 10

percent in the person;

(D) is a creditor of the person who holds more

than 10 percent of the person's outstanding debt;

(E) [ is the owner or lessee of a business that the

person conducts or through which the person will conduct

lottery-related activities;

[ (F) ] shares or will share in the profits, other

than stock dividends, of the person; or

(F) [ (G) ] participates in managing the affairs

of the person[ ; or

[ (H) is an employee of the person who is or will

be involved in:

[ (i) selling tickets; or

[ (ii) handling money from the sale of

tickets ].

(b) The department shall conduct an investigation of and

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) a prospective executive director; or

(2) a prospective employee of the department who the

executive director determines:

(A) has or will have access to sensitive or

confidential data relating to this chapter [ or Chapter 2001,

Occupations Code ]; or

(B) has or will have as the employee's or

prospective employee's primary role the administration of this

chapter [ or Chapter 2001, Occupations Code ].

[ (c) Not later than the first anniversary after the date of

each renewal, the department shall obtain criminal history record

information maintained by the Department of Public Safety on a

sales agent whose license is renewed under Section 466.158. ]

Sec. 2001.0503 [ 466.202 ]. FINGERPRINTS. [ (a) ] The

executive director may discharge from employment or refuse to

consider, as applicable, an employee or prospective employee of the

department who fails to provide a complete legible set of

fingerprints for purposes of conducting an investigation and

obtaining criminal history record information under Section

2001.0502(b)(2) [ 466.201(b)(2) ].

[ (b) The executive director may deny an application for a

license or the department may suspend or revoke a license if the

applicant or sales agent fails on request to provide a complete

legible set of fingerprints of a person required to be named in a

license application. ]

Sec. 2001.0504 [ 466.203 ]. DEPARTMENT OF PUBLIC SAFETY

ASSISTANCE; COSTS OF INVESTIGATION. (a) The executive director

may request the cooperation of the Department of Public Safety to

perform a background investigation of a person listed in Section

2001.0502 [ 466.201(a) or (b) ]. The executive director shall

reimburse the Department of Public Safety for the actual cost of an

investigation.

(b) The executive director may require a person who is

subject to investigation to pay all costs of the investigation and

to provide any information, including fingerprints, necessary to

carry out the investigation or facilitate access to state or

federal criminal history record information. Payments made to the

executive director under this subsection shall be deposited in the

general revenue fund and may be used to reimburse the Department of

Public Safety for the actual costs of an investigation.

(c) Unless otherwise prohibited by law, the Department of

Public Safety may retain any record or information submitted to it

under this section. The Department of Public Safety shall notify

the executive director of any change in information provided to the

executive director when the Department of Public Safety learns of

the change.

Sec. 2001.0505 [ 466.204 ]. ACCESS TO INTERNAL REVENUE

SERVICE INFORMATION. The executive director may obtain information

relating to a person's qualification for [ licensing, ]

employment[ , ] or contracting under this chapter from the Internal

Revenue Service under a contract between the comptroller and the

Internal Revenue Service on:

(1) [ a sales agent or an applicant for a sales agent

license;

[ (2) ] an employee or prospective employee of the

department;

(2) [ (3) a person required to be named in a license

application;

[ (4) a lottery operator or prospective lottery

operator;

[ (5) an employee of a lottery operator or prospective

lottery operator, if the employee is or will be directly involved in

lottery operations;

[ (6) a person who manufactures or distributes lottery

equipment or supplies, or a representative of a person who

manufactures or distributes lottery equipment or supplies offered

to the lottery;

[ (7) ] a person who has submitted a written bid or proposal

to the department in connection with the procurement of goods or

services by the department;

[ (8) an employee or other person who works for or will

work for a sales agent or an applicant for a sales agent license; ]

or

(3) [ (9) ] a person who proposes to enter into or who

has a contract with the department to supply goods or services to

the department.

Sec. 2001.0506 [ 466.205 ]. CONFIDENTIAL INFORMATION. (a)

All information received by the executive director from the

Internal Revenue Service is confidential and may only be used as

provided by the contract between the comptroller and the Internal

Revenue Service under which the information was obtained.

(b) The commission shall adopt rules governing the custody

and use of criminal history record information obtained under this

subchapter. The comptroller shall adopt necessary rules governing

the custody and use of information obtained from the Internal

Revenue Service under this subchapter.

SECTION 9. Section 2113.102(a), Government Code, is amended

to read as follows:

(a) A state agency may not use appropriated money to

contract with a person to audit the financial records or accounts of

the agency except as provided by:

(1) Subsections (b), (c), and (d);

(2) [ Chapter 466, pertaining to the state lottery;

[ (3) ] Chapter 2306, pertaining to the Texas Department

of Housing and Community Affairs; and

(3) [ (4) ] Chapter 361, Transportation Code,

pertaining to the Texas Turnpike Authority division of the Texas

Department of Transportation.

SECTION 10. Section 51.061(a), Occupations 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 11. Section 51.062(b), Occupations Code, is amended

to read as follows:

(b) The department shall 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 relating to an individual the department employs or intends

to employ who has or will have access to sensitive or confidential

data relating to this chapter[ , Chapter 466, Government Code, ] or

Chapter 2001 [ of this code ].

SECTION 12. Section 51.2011, Occupations Code, is amended

to read as follows:

Sec. 51.2011. POWERS AND DUTIES OF COMMISSION REGARDING

[ STATE LOTTERY AND ] BINGO REGULATION. (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[ ; and

[ (2) Chapter 466, Government Code ].

(b) The commission shall ensure that bingo games are

conducted fairly and in compliance with the law.

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

under[ :

[ (1) ] Chapter 2001[ ; and

[ (2) Chapter 466, Government Code ].

SECTION 13. Section 51.212(a), Occupations Code, is amended

to read as follows:

(a) Except as otherwise provided by law, all commission

records relating to the [ state lottery under Chapter 466,

Government Code, and the ] regulation of charitable bingo under

Chapter 2001 are subject to public inspection in accordance with

Chapter 552, Government Code.

SECTION 14. Section 51.216(a), Occupations Code, is amended

to read as follows:

(a) A former commission member or former executive director

may not[ :

[ (1) for compensation, represent a person that has made

or intends to make a bid to operate the lottery before the

department or commission before the second anniversary of the date

that the person's service in office or employment with the

department or commission ceases;

[ (2) ] represent any person or receive compensation for

services rendered on behalf of any person regarding a particular

matter in which the former officer or employee participated during

the period of service or employment with the department or

commission, either through personal involvement or because the

matter was within the scope of the officer's or employee's official

responsibility[ ; or

[ (3) for compensation communicate directly with a

member of the legislative branch to influence legislation on behalf

of a person that has a significant financial interest in the

lottery, before the second anniversary of the date that the

person's service in office or employment with the department or

commission ceases ].

SECTION 15. Section 51.218, Occupations Code, is amended to

read as follows:

Sec. 51.218. ANNUAL REPORT. (a) The department annually

shall submit a report to the governor and the legislature that:

(1) [ includes a summary of lottery revenue, prize

disbursements, and other expenses for the state fiscal year

preceding the report;

[ (2) includes a comprehensive business plan to guide

the department's major lottery initiatives that contains:

[ (A) specific goals for the department; and

[ (B) an evaluation of:

[ (i) the department's overall performance

on lottery operations;

[ (ii) the effectiveness of specific lottery

programs and initiatives;

[ (iii) the efficiency of the department's

lottery operations;

[ (iv) the amount of lottery revenue

generated for state purposes other than the payment of prizes; and

[ (v) the factors affecting the amount of

lottery revenue received and disbursed, including ticket sales and

administrative efficiency;

[ (3) ] addresses the trends and issues related to

violations of state laws under the department's [ lottery and ] bingo

jurisdiction identified:

(A) in complaints submitted under Section 51.252

as analyzed to identify the trends and issues by alleged violation

type and to evaluate the effectiveness of the department's

enforcement process; and

(B) through an inspection, audit, or other means

of regulating [ lottery operations under Chapter 466, Government

Code, and ] bingo under Chapter 2001;

(2) [ (4) ] includes for the preceding calendar year

charitable bingo information on:

(A) the total amount reported by licensed

authorized organizations of adjusted gross receipts from bingo

operations under Chapter 2001;

(B) the total amount reported by licensed

authorized organizations of net proceeds from bingo operations

under Chapter 2001; and

(C) a comparison of the amounts reported under

Paragraphs (A) and (B), including the percentage the net proceeds

represents compared to the adjusted gross receipts; and

(3) [ (5) ] provides biennial recommendations to the

legislature on emerging trends, technological advancements,

regulatory developments, and market dynamics affecting the

[ lottery and ] bingo industry [ industries ].

(b) For purposes of Subsection (a)(2) [ (a)(4) ]:

(1) the term "adjusted gross receipts" means the

amount remaining after deducting prizes paid but excluding prize

fees collected from bingo players; and

(2) the department shall determine the total amount of

net proceeds in a manner that does not reduce gross receipts by the

amount of rent paid for the rental of bingo premises by a licensed

authorized organization to another licensed authorized

organization if the other organization pays rent for the premises

to a licensed commercial lessor.

SECTION 16. Sections 2001.355(b) and (c), Occupations Code,

are amended to read as follows:

(b) Before temporarily suspending a license, the executive

director [ of bingo operations ] must follow any prehearing rules

adopted by the commission to determine if the license holder's

continued operation may constitute:

(1) an immediate threat to the health, safety, morals,

or welfare of the public; or

(2) a financial loss to this state, which includes a

license holder's failure to remit prize fee payments under Section

2001.502 to the commission as required by that section.

(c) Chapter 2001, Government Code, does not apply to the

executive director [ of bingo operations ] or to the commission in

the enforcement and administration of a temporary suspension under

this section.

SECTION 17. Sections 2001.356(a) and (c), Occupations Code,

are amended to read as follows:

(a) A proceeding to temporarily suspend a license issued

under this chapter is initiated by the executive director [ of bingo

operations ] by serving notice to the license holder informing the

holder of:

(1) the alleged violations that constitute grounds for

temporary suspension;

(2) the rules adopted by the commission regarding the

prehearing temporary suspension process; and

(3) the license holder's right to a hearing before the

commission.

(c) If a notice of temporary suspension is served on a

license holder, the executive director [ of bingo operations ] shall

simultaneously serve notice of a hearing, to be held not later than

the 14th day after the date the notice is served, at which the

license holder must show cause why the license should not be

temporarily suspended on the 14th day after the date the notice is

served. If the license holder does not show cause, the license is

suspended.

SECTION 18. Section 2001.451(h), Occupations Code, is

amended to read as follows:

(h) Except as provided by Subsection (j), a licensed

authorized organization or a unit of licensed authorized

organizations may retain operating capital in the organization's or

unit's bingo account in an amount that:

(1) is equal to the organization's or unit's actual

average bingo expenses per quarter based on the preceding license

period, excluding prizes paid; and

(2) does not exceed a total of $100,000 for a single

organization or $100,000 for each member of a unit unless:

(A) the commission by rule establishes a higher

amount for all organizations or units or one or more classes of

organizations or units; or

(B) the executive [ bingo operations ] director,

on request, raises the operating capital limit for one organization

or unit as necessary to facilitate the operation of the

organization or unit.

SECTION 19. Section 2001.602(b), Occupations Code, is

amended to read as follows:

(b) In determining the amount of the penalty, the executive

director shall consider:

(1) the seriousness of the violation, including the

nature, circumstances, extent, and gravity of the prohibited acts;

(2) the history of previous violations;

(3) the amount necessary to deter future violations;

(4) efforts to correct the violation; and

(5) any other matter that justice may require.

SECTION 20. Sections 2001.603(a) and (b), Occupations Code,

are amended to read as follows:

(a) If, after investigating a possible violation and the

facts surrounding that possible violation, the executive director

determines that a violation has occurred, the executive director

may issue a violation report stating the facts on which the

conclusion that a violation occurred is based, recommending that an

administrative penalty be imposed on the person alleged to have

committed the violation, and recommending the amount of the

proposed penalty. The executive director shall base the recommended

amount of the proposed penalty on the seriousness of the violation

determined by consideration of the factors set out in Section

2001.602(b).

(b) Not later than the 21st day after the date on which the

report is issued, the executive director shall give written notice

of the report to the person alleged to have committed the violation.

SECTION 21. Section 2001.604, Occupations Code, is amended

to read as follows:

Sec. 2001.604. PENALTY TO BE PAID OR HEARING REQUESTED. (a)

Not later than the 20th day after the date the person receives the

notice, the person may:

(1) accept the recommendation of the executive

director, including the recommended administrative penalty; or

(2) make a written request for a hearing on the

determination.

(b) If the person accepts the executive director's

determination, the executive director by order shall approve the

determination and impose the proposed penalty.

SECTION 22. Section 2001.605(a), Occupations Code, is

amended to read as follows:

(a) If the person timely requests a hearing or does not

respond to the notice in the time provided by Section 2001.604(a),

the executive director shall set a hearing and give notice of the

hearing to the person.

SECTION 23. Section 2001.606, Occupations Code, is amended

to read as follows:

Sec. 2001.606. DECISION BY EXECUTIVE DIRECTOR. (a) Based

on the findings of fact and conclusions of law and the

recommendations of the hearings examiner, the executive director by

order:

(1) may find that a violation has occurred and may

impose an administrative penalty; or

(2) may find that a violation has not occurred.

(b) The executive director shall give notice of the order to

the person. The notice must include:

(1) separate statements of the findings of fact and

conclusions of law;

(2) the amount of any penalty imposed;

(3) a statement of the right of the person to judicial

review of the order; and

(4) other information required by law.

SECTION 24. Sections 2001.607(b) and (c), Occupations Code,

are amended to read as follows:

(b) Within the 30-day period, a person who acts under

Subsection (a)(3) may:

(1) stay enforcement of the penalty by:

(A) paying the penalty to the court for placement

in an escrow account; or

(B) giving to the court a supersedeas bond

approved by the court for the amount of the penalty that is

effective until all judicial review of the order is final; or

(2) request the court to stay enforcement of the

penalty by:

(A) filing with the court a sworn affidavit of

the person stating that the person is financially unable to pay the

penalty and is financially unable to give the supersedeas bond; and

(B) giving a copy of the affidavit to the

executive director by certified mail.

(c) On receipt of a copy of the affidavit as provided by

Subsection (b)(2), the executive director may file with the court,

not later than the fifth day after the date the copy is received, a

contest to the affidavit. The court shall hold a hearing on the

facts alleged in the affidavit as soon as practicable and shall stay

the enforcement of the penalty on finding that the alleged facts are

true. The person who files an affidavit has the burden of proving

that the person is financially unable to pay the penalty and to give

a supersedeas bond.

SECTION 25. Section 2001.608, Occupations Code, is amended

to read as follows:

Sec. 2001.608. COLLECTION OF PENALTY. If the person does

not pay the administrative penalty and the enforcement of the

penalty is not stayed, the executive director may refer the matter

to the attorney general for collection of the penalty.

SECTION 26. Section 2002.056(b), Occupations Code, is

amended to read as follows:

(b) Except as provided by Subsection [ Subsections ] (b-1)

[ and (c) ], the value of a prize offered or awarded at a raffle that

is purchased by the organization or for which the organization

provides any consideration may not exceed $75,000.

SECTION 27. Section 47.02(c), Penal Code, is amended to

read as follows:

(c) It is a defense to prosecution under this section that

the actor reasonably believed that the conduct:

(1) was permitted under Chapter 2001, Occupations

Code;

(2) was permitted under Chapter 2002, Occupations

Code;

(3) was permitted under Chapter 2004, Occupations

Code;

(4) [ consisted entirely of participation in the state

lottery authorized by the State Lottery Act (Chapter 466,

Government Code);

[ (5) ] was permitted under Subtitle A-1, Title 13,

Occupations Code (Texas Racing Act); or

(5) [ (6) ] consisted entirely of participation in a

drawing for the opportunity to participate in a hunting, fishing,

or other recreational event conducted by the Parks and Wildlife

Department.

SECTION 28. Section 47.09(a), Penal Code, is amended to

read as follows:

(a) It is a defense to prosecution under this chapter that

the conduct[ :

[ (1) ] was authorized under:

(1) [ (A) ] Chapter 2001, Occupations Code;

(2) [ (B) ] Chapter 2002, Occupations Code;

(3) [ (C) ] Chapter 2004, Occupations Code;

(4) [ (D) ] Subtitle A-1, Title 13, Occupations Code

(Texas Racing Act); or

(5) [ (E) ] Chapter 280, Finance Code[ ;

[ (2) consisted entirely of participation in the state

lottery authorized by Chapter 466, Government Code; or

[ (3) was a necessary incident to the operation of the

state lottery and was directly or indirectly authorized by:

[ (A) Chapter 466, Government Code;

[ (B) the Texas Department of Licensing and

Regulation; or

[ (C) the executive director of the Texas

Department of Licensing and Regulation ].

SECTION 29. (a) The following provisions of Chapter 466,

Government Code, are repealed:

(1) the heading to Chapter 466;

(2) Subchapter A;

(3) the heading to Subchapter B;

(4) Section 466.014;

(5) Section 466.015;

(6) Section 466.0161;

(7) Section 466.017;

(8) Section 466.0171;

(9) Section 466.018;

(10) Section 466.019;

(11) Section 466.021;

(12) Section 466.022;

(13) Section 466.024;

(14) Section 466.026;

(15) Section 466.027;

(16) Section 466.029;

(17) Section 466.030;

(18) Subchapter C;

(19) Subchapter D;

(20) the heading to Subchapter E;

(21) Subchapter F;

(22) Subchapter G;

(23) Subchapter H;

(24) Subchapter I; and

(25) Subchapter J.

(b) The following provisions are repealed:

(1) Section 9.406(k), Business & Commerce Code;

(2) Section 2054.007, Government Code;

(3) Section 51.001(4-d), Occupations Code;

(4) Section 51.214, Occupations Code;

(5) Section 51.215, Occupations Code;

(6) Section 51.217, Occupations Code; and

(7) Section 2002.056(c), Occupations Code.

SECTION 30. (a) Notwithstanding the amendment or repeal by

this Act of a provision of Chapter 466, Government Code, that

chapter as it existed immediately before the effective date of this

Act continues in effect for the payment of lottery prizes and the

assessment and enforcement of penalties until each lottery prize

and installment prize payment is made to the lottery prize winner

entitled to the payment and each penalty assessment is finally

determined as required by that chapter and rules adopted under that

chapter as they existed immediately before the effective date of

this Act.

(b) On or after the effective date of this Act, a lottery

sales agent may not sell or offer to sell a lottery ticket for a

lottery game authorized under a provision of Chapter 466,

Government Code, as amended or repealed by this Act.

(c) An offense or other violation of Chapter 466, Government

Code, committed before the effective date of this Act is covered by

the law in effect when the offense or violation was committed, and

the former law is continued in effect for that purpose.

SECTION 31. On or after the effective date of this Act, the

lottery advisory committee established under Section 51.217,

Occupations Code, as repealed by this Act, is abolished and the term

of any advisory committee member expires.

SECTION 32. To the extent of any conflict, this Act prevails

over another Act of the 90th Legislature, Regular Session, 2027,

relating to nonsubstantive additions to and corrections in enacted

codes.

SECTION 33. 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, 2027.