Relating to regulating charitable bingo and authorizing the establishment of a nonprofit corporation to advertise and promote charitable bingo.

89(R) HB 4172 - Engrossed version - Bill Text

By: Thompson, Louderback

H.B. No. 4172

A BILL TO BE ENTITLED

AN ACT

relating to regulating charitable bingo and authorizing the

establishment of a nonprofit corporation to advertise and promote

charitable bingo.

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

SECTION 1. Section 2001.407, Occupations Code, is amended

by amending Subsection (c) and adding Subsections (c-1), (c-2),

(c-3), and (c-4) to read as follows:

(c)
Except as provided by Subsection (c-1), a
[
A
] licensed

distributor may not receive by purchase or otherwise bingo

equipment or supplies from a person other than a licensed

manufacturer or another licensed distributor.

(c-1)

A licensed distributor may receive bingo equipment or

supplies from a licensed authorized organization if:

(1)

the distributor delivered the equipment or

supplies to the organization; and

(2) the equipment or supplies were:

(A) defective;

(B) not ordered by the organization; or

(C)

delivered in a quantity that exceeds the

quantity the organization ordered.

(c-2)

A licensed authorized organization that returns bingo

equipment or supplies to the licensed distributor as provided by

Subsection (c-1) shall:

(1)

maintain a record specifying for each returned

equipment or supply:

(A)

a reason for the return from the reasons

listed in Subsection (c-1)(2); and

(B) the quantity returned; and

(2) provide a copy of the record to the distributor.

(c-3)

A licensed distributor that receives returned

equipment or supplies from a licensed authorized organization as

provided by Subsection (c-1) shall:

(1)

maintain a record showing receipt of the returned

equipment or supplies; and

(2) provide a copy of the record to the organization.

(c-4)

A licensed authorized organization may transfer a

card-minding device from the premises of the organization to the

premises of another licensed authorized organization if each

licensed authorized organization agrees to the transfer.

SECTION 2. Section 2001.415, Occupations Code, is amended

to read as follows:

Sec. 2001.415. ADVERTISEMENTS. (a) A person other than a

licensed authorized organization, licensed commercial lessor,

nonprofit corporation formed under Section 2001.4151,
or the

commission may not advertise bingo.

(b) A licensed authorized organization, licensed commercial

lessor,
nonprofit corporation formed under Section 2001.4151,
or

the commission may include in an advertisement or promotion
:

(1)

the total amount of bingo prizes offered

statewide; or

(2)
the amount of a prize or series of prizes offered

at a bingo occasion.

SECTION 3. Subchapter I, Chapter 2001, Occupations Code, is

amended by adding Section 2001.4151 to read as follows:

Sec.

2001.4151.

ESTABLISHMENT OF NONPROFIT CORPORATION.

(a)

A statewide organization in existence before January 1, 2024,

that as of that date has as its principal purpose assisting licensed

authorized organizations, units as defined by Subchapter I-1,

licensed commercial lessors, and licensed bingo distributors and

licensed bingo manufacturers in furthering the interests of

charitable bingo may form a nonprofit corporation governed by

Chapter 22, Business Organizations Code, to carry out the purposes

described in this section. For purposes of this subsection, an

organization is a statewide organization if the organization's

membership includes multiple licensed authorized organizations

that collectively have primary business offices in at least 15

counties in this state.

(b)

A nonprofit corporation formed under this section may

accept money remitted to the corporation by a licensed authorized

organization under Section 2001.502(b-1).

(c)

Subject to Subsection (d), a nonprofit corporation

formed under this section may spend money accepted under Subsection

(b) for purposes that include:

(1)

advertising and promotional activities to inform

the public about charitable bingo, including:

(A)

the purposes for which charitable bingo is

conducted;

(B)

the types of charities benefiting from

charitable bingo;

(C)

the locations where and times when charitable

bingo is conducted;

(D)

the types of games conducted at charitable

bingo locations; and

(E)

the amount of a prize or series of prizes that

may be offered at a bingo occasion;

(2) legal and accounting services;

(3) labor;

(4) utilities;

(5) office space; and

(6)

other necessary expenses related to the purposes

of this section.

(d) A nonprofit corporation formed under this section:

(1)

may only spend money under this section in

accordance with the plan adopted by the board of the corporation

under Subsection (e); and

(2)

may not spend any money until the date the

corporation provides the notice required by Subsection (j).

(e)

At least annually, the board of a nonprofit corporation

formed under this section shall adopt a plan for the corporation to

spend money.

(f)

A nonprofit corporation established under this section

is exempt from taxation under:

(1) Chapter 151, Tax Code; and

(2) Chapter 171, Tax Code.

(g)

A nonprofit corporation formed under this section may

not use money accepted under Subsection (b) to make:

(1)

a campaign contribution, as defined by Section

251.001, Election Code;

(2)

a direct campaign expenditure, as defined by

Section 251.001, Election Code;

(3)

a political expenditure, as defined by Section

251.001, Election Code;

(4)

an expenditure for political advertising, as

defined by Section 251.001, Election Code; or

(5)

an expenditure to influence legislative subject

matter or administrative action as described in Chapter 305,

Government Code, including:

(A)

to compensate or reimburse a person required

to register under Section 305.003, Government Code; or

(B)

for legislative advertising, as defined by

Section 305.027, Government Code.

(h)

Nothing in this section prohibits a nonprofit

corporation formed under this section from accepting and spending

money from sources other than bingo prize fees.

(i)

A nonprofit corporation formed under this section shall

maintain books and records as required by state and federal law.

(j)

A nonprofit corporation formed under this section

commences business on the date the corporation's board adopts an

initial annual plan under Subsection (e). On that date, the

corporation shall provide notification of the corporation's

commencement of business to:

(1) the commission; and

(2)

each licensed authorized organization that

remitted money to a county or municipality under Section

2001.502(b) in 2023.

(k)

A nonprofit corporation formed under this section may

not be licensed:

(1) to conduct bingo; or

(2)

as a commercial lessor, bingo distributor, or

bingo manufacturer.

SECTION 4. Sections 2001.451(h) and (j), Occupations Code,

are 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
[
$50,000
] for a

single organization or
$100,000
[
$50,000
] 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 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.

(j) The commission shall adopt rules allowing a licensed

authorized organization to retain a maximum amount of operating

capital in the bingo account in excess of the amount provided by

Subsection (h) if the organization:

(1) has conducted bingo for less than one year;

(2)
has been closed for at least six months;

(3)
experiences circumstances beyond the control of

the organization, including force majeure, that necessitate an

increase in operating capital; or

(4)
[
(3)
] provides to the commission a credible

business plan for the conduct of bingo or for the organization's

existing or planned charitable purposes that an increase in

operating capital will reasonably further.

SECTION 5. Section 2001.502, Occupations Code, is amended

by amending Subsections (a) and (b) and adding Subsection (b-1) to

read as follows:

(a) A licensed authorized organization or unit as defined by

Section 2001.431 shall:

(1) collect from a person who wins a cash bingo prize

of more than
$100
[
$5
] a fee in the amount of five percent of the

amount of the prize; and

(2) except as otherwise provided by this section,

remit to the commission the amount of the fee collected under

Subdivision (1).

(b) Notwithstanding Subsection (a)(2)
and subject to

Subsection (b-1)
, each quarter, a licensed authorized organization

or unit that collects a prize fee under Subsection (a) for a bingo

game conducted in a county or municipality that was entitled to

receive a portion of a bingo prize fee as of January 1, 2019, shall

remit 50 percent of the amount collected as the prize fee to the

commission and shall remit or deposit the remainder of the amount

collected as the prize fee as follows:

(1) if the county in which the bingo game is conducted

voted before November 1, 2019, to impose the prize fee and the

location at which the bingo game is conducted:

(A) is not within the boundaries of a

municipality, remit 50 percent of the amount collected as the prize

fee to the county; or

(B) is within the boundaries of a municipality

that:

(i) voted before November 1, 2019, to

impose the prize fee, remit 50 percent of the amount collected as

the prize fee in equal shares to the county and municipality; or

(ii) did not vote before November 1, 2019,

to impose the prize fee, remit 25 percent of the amount collected as

the prize fee to the county and deposit the remaining amount in the

manner described by Subdivision (3);

(2) if the county in which the bingo game is conducted

did not vote before November 1, 2019, to impose the prize fee and

the location at which the bingo game is conducted is within the

boundaries of a municipality that voted before November 1, 2019, to

impose the prize fee:

(A) remit 25 percent of the amount collected as

the prize fee to the municipality; and

(B) deposit the remaining amount in the manner

described by Subdivision (3); and

(3) if neither the county or municipality in which the

bingo game is conducted voted before November 1, 2019, to impose the

prize fee, deposit the remainder of the amount collected as the

prize fee in the general charitable fund of the organization or on a

pro rata basis to the general funds of the organizations comprising

the unit, as applicable, to be used for the charitable purposes of

the organization or organizations.

(b-1)

A licensed authorized organization or unit that

collects a prize fee under Subsection (a) for a bingo game conducted

in a county or municipality entitled to receive a portion of a bingo

prize fee as of January 1, 2019, may reduce the amount remitted

under Subsection (b)(1) or (2) by an amount not to exceed 15 percent

of the total amount remitted to the applicable county or

municipality by the licensed authorized organization or unit in

2023. The licensed authorized organization or unit shall remit the

amount remaining after the remittance to the applicable county or

municipality to, and the amount remaining may be accepted by, a

nonprofit corporation formed under Section 2001.4151. If the

nonprofit corporation does not accept the amount remitted under

this subsection, the licensed authorized organization or unit shall

remit the amount in the manner provided by Subsection (b).

SECTION 6. (a) Except as provided by Subsection (b) of this

section, this Act takes effect September 1, 2025.

(b) Section 5 of this Act takes effect October 1, 2025.