HIGHLIGHTS OF…

HOUSE BILL 1474 relating to the operation and regulation of

charitable bingo and the use of bingo proceeds

81st Legislative Session

As of 08/25/2009

Bingo Chairperson• Officer or director of licensed organization

• Designated in writing by the organization

• Responsible for overseeing the organization’s bingo activities

• Responsible for reporting to the organization’s membership relating to those activities

• Shall complete the Bingo Training Program

Citations:Sec. 2001.002(4-a), Sec. 2001.102(b)(6), Sec. 2001.107(a), Rule 402.103, Rule 402.406

Bingo Chairperson•These forms, as well the annual renewal application are used to designate the Bingo Chairperson and for the required Bingo Chairperson statement of responsibility

•Designated in writing by the Organization

•Statement signed by the Bingo Chairperson that they will be responsible for the conduct of bingo under the terms of the license and this chapter.

BINGO OCCASION•Redefines the definition of an “occasion”

• “a single gathering or session at which a bingo game or a series of bingo games, including the selling and redeeming of pull-tab bingo tickets, are conducted on the day and at the times listed on the license issued to a licensed authorized organization”.

• The occasion no longer includes preparatory or concluding activities incidental to the conduct of bingo such as selling bingo paper.

CitationsSec. 2001.002(6), Sec.2001.419, Rule 402.201

Sec. 2001.419 BINGO OCCASION• Deletes reference to a 24-hour period

• a licensed authorized organization may not conduct more than three bingo occasions during a calendar week under an annual license.

• A bingo occasion may not exceed four hours.

• No more than two bingo occasions may be conducted at the same premises during one day except that a third bingo occasion may be conducted under a temporary license held by a licensed authorized organization at the premises.

CitationsSec. 2001.002(6), Sec.2001.419, Rule 402.201

Sec. 2001.419 BINGO OCCASION• Deletes the requirement to observe a 10-minute intermission

• If more than one bingo occasion is conducted at the same premises on the same day:

• The bingo occasions must be announced separately

• The licensed times may not overlap

• Bingo cards may be sold• during a bingo occasion • for play during a subsequent bingo occasion that is

scheduled to begin at the same premises in not more than eight hours after the sale of the bingo cards for the subsequent occasion begins.

• Bingo paper for a bingo occasion may be sold at the licensed premises before the bingo occasion begins.

CitationsSec. 2001.002(6), Sec.2001.419, Rule 402.201

Intermission

New

Term!

“REGULAR LICENSE”

“A license to conduct bingo that is issued by the commission and that expires on the first or second anniversary of the date of issuance unless revoked or suspended before that date by the commission. The term includes an annual license.”

Citation: Sec. 2001.002(25-a), Sec. 2001.104(d)

Licensing Changes !• Standardizes the required “time in existence in Texas” to 3

years

• Adds “voluntary emergency medical services provider” as a type of organization eligible for a license to conduct bingo.

• Requires the names and addresses of the applicant’s officers and directors in applications.

• Clarifies that the criminal background check applies to all officers , directors , operators and workers of the organization.

• Clarifies the need for IRS Form 990, letter of good standing from parent organization, organizing instruments, verification of good standing with TX Secretary of State and information necessary for criminal background checks of officers and directors.

• Increases from 12 to 24 the number of temporary licenses for authorized organizations which hold an annual license.

Licensing Changes! (Continued)

• Specifies the issued license must list the name and address of the bingo chairperson and the address of the premises where bingo will be conducted.

• Deletes the requirement for the use of Schedule B2 (Statement of Operator Responsibility) and Schedule B3 (Registered Workers for License to Conduct Bingo).

• Extends from 10 to 14 days the time the Commission must act on an amendment filed under Sec. 2001.108 (Change of Bingo Premises or Occasions)

• Allows licensed organizations to file their renewal of license application after the expiration date by paying a pro-rated late license renewal fee up to the 60th day after expiration.

Citations: Sec. 2001.101(a)(3)-(6)

KEY POINT!Organizations must:

• Keep the Commission informed of all current Officers & Directors

• Keep each individual’s contact information current

LATE Renewal of Annual License Options

Past license renewal date…• Up to 14 days late---license fee(LF) + 10% LF• 15-28 days late---license fee + 20%• 29-42 days late---license fee + 30%• 43-57 days late---license fee + 40%• 58-60 days late---license fee + 50%• >60 days---reapply for original license

Licensing Changes! (Continued)

• Allows a licensed organization to conduct bingo• In the county where it has it’s primary business office, or

another county contiguous to that county;• In the county of the principal residence of it’s chief

executive officer, or a contiguous county to that county.

Travis County withContiguous counties marked in blue: Williamson, Bastrop, Caldwell, Hays, Blanco and Burnet counties

HB 1474 Major Change

Accounting Changes!•Commission by rule shall adopt procedures to determine if the appropriate regular license fee was paid for conductor and lessor licenses.

•Deletes the extra $25 previously charged for a two year license in addition to the regular license amount.

•Deletes the requirement for loan approval to move money into the bingo account. No more use of Schedule F form.

• Allows a partial pay option for a two year license—with balance of license fee due on or before the first anniversary of license issuance.

•Formally adopts an “escrow account” option to pay for license fees, amendments or temporary licenses.

Citations: Sec. 2001.104(b),(d); Sec. 2001.158(b),(d)

Accounting Changes!

35% OLD: • Required disbursement of 35% of the

organization’s adjusted gross receipts is deleted!

NEW:

• All net proceeds from previous quarter, in excess of authorized operating capital amounts

Animal Kingdom

Shelter

Calculating Authorized Operating Capital

Current License Period:May 8, 2009-May 7, 2010

20082 20083 20084 20091 4 Quarter Average Bingo Expenses

$15,400 $17,097 $13,980 $15,098 $15,373

“Organization’s actual average bingo expense per quarter based on the preceding license period …”

Bingo expense per quarter

Organization’s (maximum) authorized operating capital. Must disburse all other funds in excess of this amount. Recalculated annually at renewal time.

****Hypothetical Example Only****

Preceding License Period:May 8, 2008-May 7, 2009

License Period will mean the four (4) calendar quarters preceding the license end date.

Too Much Money In Your Bingo Account?

We have $38,987 in our account….based on the previous example, we might have to drop down to $15,373?

Yes-but over time! Based on the bank account reconciliation amounts as of September 30, 2009, the licensed organization may have one, two or three years to distribute amounts in excess of their authorized capital amounts!

REGISTRY Issues!• Licensed Authorized Organizations may employ individuals awaiting

the results of criminal background checks on a “provisional basis”• state residents--for no more than 14 days. • out-of-state residents---to be established by Commission rule

• Adds bingo chairperson and bookkeeper as positions requiring the individual to be on the Registry of Approved Bingo Workers

• Requires licensed organizations to report to the Commission discovery of any conduct which might constitute grounds for removal from the registry or refusal to add the individual’s name to the registry.

You’re Hired! We faxed in your Registry paperwork to the Commission. Can you work TONIGHT’S Bingo session?

KEY DATES• October 1, 2009 HB 1474 takes effect

• Some provisions of this bill will require the adoption of administrative rules before implementation.

• Implementation date designed to support quarterly requirements of bingo

• April 1, 2010 Texas Lottery Commission required to write / adopt any Administrative Rules needed for implementation of HB 1474.

Repealed Provisions of the Bingo Enabling Act

• 2001.002(3)• 2001.002(10)• 2001.057(b)• 2001.160(c)• 2001.161(a)• 2001.303• 2001.402(b)

Repealed Provisions of the Bingo Enabling Act (continued)

• 2001.406(c)• 2001.417• 2001.457(d)• 2001.505(c)• 2001.553(b)and• Subchapter F, Chapter 2001

Dual Notification From TLC

Lessor Bingo Chairperson

All notices to charity licensees from the Texas Lottery Commission will be sent to both the bingo chairperson and the lessor to facilitate timely communications as applicable.

Crime of Moral Turpitude

Means:

• A felony• A gambling offense• Criminal fraud• Forgery• Theft• An offense that involves filing false information with a government

agency• Any offense that

– Is classified in this state as a Class A misdemeanor, and– Puts the honesty and integrity of the individual who committed the

offense in question.

Bingo Training Program Requirement

• Bingo Chairperson must be current on training requirement

• No longer required to be eight hours of training

• OPTIONAL for an organization’s officers, directors, operators and / or workers

• NEW training modules being developed for October 2009 implementation

HB 1474 Major Change

Bingo Chairperson responsibilities:• Report to the Organization

Who can be a MEMBER?Clarifies that the licensed organization may designate individuals as members of the organization for purposes of Section 2001.411(c)(1) designating an individual as an operator for the conducting, promoting and administering of bingo on behalf of a licensed authorized organization.

Training of the designated operator(s) is highly recommended, but no longer mandatory.

Welcome Ladies & Gentlemen!

On behalf of Red Sky Lodge

2309, I am your Operator on

duty, Jimmie Jack. Let’s Play

some Bingo!

Rent & Other Separate Expenses

• Rent cannot exceed $600.00 per occasion• Rent cannot be based on attendance.• Rent cannot be based on gross receipts collected.

• The licensed authorized organization or unit may pay the lessor, as a separate expense, a pro-rated amount for property taxes, water, electricity, gas and property insurance.

$600

Conductor

Lessor

HB 1474 Major Change

PRIZE FEE Collection!HB 1474 Major

Change

A licensed authorized organization shall:

• Collect the 5% prize fee on bingo prizes of more than $5

• Remit to the commission a fee in the amount of 5% of the value of all bingo prizes awarded.

Electronic Funds Transfer• Performing financial transactions electronically• NOW authorized for use with bingo account!• Implementing details to be worked out by Administrative Rule

What Else In HB 1474?• Limits who can request an Advisory Opinion

• Requires Bi-Annual Bingo Report to Governor and Legislature

• Generally increase Commission response time from 10 to 14 days

• Bingo Chairperson & Bookkeepers—New requirement to be on REGISTRY

• Quarterly Report form to be redesigned

What Can You Expect?

• New Bingo Chairperson training modules in October 2009 timeframe

• Bingo Website announcements alerting licensees to new information and changes-especially newly adopted administrative rules!

• Timely news articles in the Bingo Bulletin to assist licensees with new information

• Envelope stuffers and/or mail out of new forms to assist licensees transition to new changes

Need a copy of HB 1474 ?

Go to our website: www.txbingo.org

Click on

HB 1474

END OF PRESENTATION

HAVE QUESTIONS ? For Assistance, Contact us at:Telephone: 1-800-246-4677Fax: 512-344-5142 / 5316 E-mail: bingo.services@lottery.state.tx.us