Texas 2009 - 81st Regular

Texas House Bill HB222 Compare Versions

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1	1	81R20333 YDB-F
2	2	By: Menendez, et al. H.B. No. 222
3	3	Substitute the following for H.B. No. 222:
4	4	By: Gutierrez C.S.H.B. No. 222
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the authorization and regulation of poker gaming and
10	10	the duties of the Texas Lottery Commission; providing civil and
11	11	criminal penalties.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	SECTION 1. Subtitle A, Title 13, Occupations Code, is
14	14	amended by adding Chapter 2004 to read as follows:
15	15	CHAPTER 2004. POKER GAMING
16	16	SUBCHAPTER A. GENERAL PROVISIONS
17	17	Sec. 2004.001. SHORT TITLE; APPLICABILITY. (a) This
18	18	chapter may be cited as the Poker Gaming Act of 2009.
19	19	(b) This chapter does not apply to the conduct of bingo,
20	20	charitable raffles, the state lottery, or video poker.
21	21	Sec. 2004.002. PUBLIC POLICY. (a) All poker gaming
22	22	conducted in this state and authorized by law shall be regulated and
23	23	licensed under this chapter unless state or federal law
24	24	specifically provides otherwise.
25	25	(b) The legislature finds and declares it to be the public
26	26	policy of this state that:
27	27	(1) poker is a game of skill and not a lottery or gift
28	28	enterprise prohibited by the Texas Constitution;
29	29	(2) unregulated poker gaming conducted by unlicensed
30	30	operators in public establishments is inimical to the public
31	31	health, safety, welfare, and good order. A person in this state may
32	32	not offer and has no right to offer the game of poker for profit
33	33	except as expressly permitted by the laws of this state;
34	34	(3) the development of regulated poker gaming in this
35	35	state will benefit the general welfare of the people of this state
36	36	by enhancing investment, development, and tourism in this state,
37	37	resulting in new jobs and additional revenue to this state;
38	38	(4) the conduct of regulated poker gaming by licensed
39	39	operators in authorized establishments will not harm the people of
40	40	this state;
41	41	(5) the regulation of poker gaming in this state is
42	42	important to ensure that poker gaming:
43	43	(A) is conducted honestly and competitively; and
44	44	(B) is free from criminal and other corruptive
45	45	elements;
46	46	(6) public confidence and trust can be maintained only
47	47	by strict regulation of all persons, locations, practices,
48	48	associations, and activities related to the conduct of poker gaming
49	49	and the poker gaming service industry;
50	50	(7) persons owning any interest in an operator
51	51	licensed to conduct poker gaming and in distributing materials and
52	52	specific equipment relating to poker gaming must be licensed and
53	53	controlled to protect the public health, safety, morals, good
54	54	order, and general welfare of the people of this state;
55	55	(8) certain operators and employees of establishments
56	56	authorized to conduct poker gaming and certain manufacturers and
57	57	distributors in the poker gaming service industry must be
58	58	regulated, licensed, and controlled to accomplish and promote these
59	59	public policies while protecting the public health, safety, morals,
60	60	good order, and general welfare of the people of this state; and
61	61	(9) it is the intent of this chapter, where possible,
62	62	to use the resources, goods, labor, and services of the people of
63	63	this state in the operation of poker gaming-related amenities to
64	64	the extent allowable by law.
65	65	Sec. 2004.003. DEFINITIONS. In this chapter:
66	66	(1) "Alcoholic beverage" has the meaning assigned by
67	67	Section 1.04, Alcoholic Beverage Code.
68	68	(2) "Badge" means a form of identification issued by
69	69	the commission to identify the holder of a license issued under this
70	70	chapter.
71	71	(3) "Bet" means an agreement to win or lose chips or
72	72	tokens, or an electronic facsimile of either, in a game of poker.
73	73	(4) "Bonus program" means a local promotion bonus
74	74	program or a statewide bad beat bonus program.
75	75	(5) "Cage manager" means an individual who creates and
76	76	maintains player accounts, provides cash-in and cash-out of chips
77	77	or player accounts, and determines and maintains the amount of
78	78	gross receipts tax due and payable to the comptroller by a licensed
79	79	operator on each day's gross receipts. The cage manager may be
80	80	assisted by an electronic method to perform any of these duties.
81	81	(6) "Charitable operator" means a person who holds a
82	82	charitable operator's license issued by the commission to conduct a
83	83	charitable poker tournament for a licensed nonprofit organization.
84	84	(7) "Charitable poker tournament" means a poker
85	85	tournament conducted by a charitable operator or commercial
86	86	operator to benefit a licensed nonprofit organization.
87	87	(8) "Collection fee" means the amount charged on the
88	88	communal pot for each poker hand played in accordance with Section
89	89	2004.462.
90	90	(9) "Commercial operator" means a person who holds a
91	91	commercial operator's license issued by the commission under this
92	92	chapter.
93	93	(10) "Commission" means the Texas Lottery Commission.
94	94	(11) "Communal pot" means the total amount of wagers
95	95	collectively made during one hand of poker.
96	96	(12) "Company" means a corporation, partnership,
97	97	limited partnership, trust, association, joint stock company,
98	98	joint venture, limited liability company, or other form of business
99	99	organization, but does not include a sole proprietorship or natural
100	100	person.
101	101	(13) "Creditor interest" means a right or claim of any
102	102	character against a person for the payment of money borrowed,
103	103	whether secured or unsecured, matured or unmatured, liquidated or
104	104	absolute, or fixed or contingent, and includes an obligation based
105	105	on the person's profits or receipts.
106	106	(14) "Dealer" means an individual who deals cards to
107	107	players at a poker gaming table on the premises of a licensed
108	108	operator.
109	109	(15) "Director" means the director of poker gaming
110	110	operations of the commission.
111	111	(16) "Distilled spirits" has the meaning assigned by
112	112	Section 1.04, Alcoholic Beverage Code.
113	113	(17) "Electronic poker table" means a poker gaming
114	114	table, including its components, that provides multiple player
115	115	positions and allows players to play against other players in the
116	116	same poker game using electronic representations of cards and
117	117	chips.
118	118	(18) "Equity interest" means a proprietary interest,
119	119	right, or claim in a company that allows the holder either to vote
120	120	with respect to matters of organizational governance or to
121	121	participate in the profits and residual assets of the company,
122	122	including common and preferred stock in a corporation, a general or
123	123	limited partnership interest in a partnership, a similar interest
124	124	in any other form of business organization, or a warrant, right, or
125	125	similar interest convertible into, or to subscribe for, a
126	126	proprietary right or claim, with or without the payment of
127	127	additional consideration.
128	128	(19) "Executive director" means the executive
129	129	director of the commission.
130	130	(20) "Fidelity bond" means insurance against a
131	131	licensed operator's financial loss resulting from theft or
132	132	embezzlement by an employee.
133	133	(21) "Gross receipts" means the total amount
134	134	accumulated from:
135	135	(A) the collection fees charged from the communal
136	136	pot from each poker hand; and
137	137	(B) the promotion bonus fees charged from the
138	138	communal pot from each poker hand played.
139	139	(22) "Licensed nonprofit organization" means a
140	140	nonprofit organization that holds a license issued by the
141	141	commission authorizing the organization to benefit from charitable
142	142	poker tournaments conducted on its behalf.
143	143	(23) "Licensed operator" means a charitable operator
144	144	or a commercial operator.
145	145	(24) "Manufacturer" means:
146	146	(A) a person who assembles from raw materials or
147	147	subparts a completed piece of poker gaming equipment or supplies
148	148	for use in poker gaming in this state; or
149	149	(B) a person who converts, modifies, adds to, or
150	150	removes parts from any poker gaming equipment, item, or assembly to
151	151	further its promotion or sale for or use in poker gaming in this
152	152	state.
153	153	(25) "Net proceeds" means, in relation to the gross
154	154	receipts from a charitable poker tournament, the amount remaining
155	155	after deducting the reasonable amounts necessarily and actually
156	156	expended by a licensed operator to conduct the charitable poker
157	157	tournament.
158	158	(26) "Nonprofit organization" means an unincorporated
159	159	association or a nonprofit corporation formed under the Texas
160	160	Nonprofit Corporation Law, as described by Section 1.008, Business
161	161	Organizations Code, that:
162	162	(A) does not distribute any of its income to its
163	163	members, officers, or governing body, other than as reasonable
164	164	compensation for services; and
165	165	(B) has tax-exempt status under Section
166	166	501(c)(3), Internal Revenue Code of 1986.
167	167	(27) "Pari-mutuel license holder" means a person
168	168	licensed to conduct wagering on a greyhound race or a horse race
169	169	under the Texas Racing Act (Article 179e, Vernon's Texas Civil
170	170	Statutes).
171	171	(28) "Player" means a patron who participates in poker
172	172	gaming on the premises of a licensed operator.
173	173	(29) "Poker" or "poker game" means a card game in which
174	174	players place a bet based on the highest or lowest ranking hand of
175	175	cards held or combination of highest and lowest cards held. For
176	176	purposes of this chapter, the term includes the game known as Texas
177	177	Hold'em or any variation or combination of Texas Hold'em, but does
178	178	not include blackjack, hearts, pinochle, rummy, Internet poker,
179	179	video poker, or Asian card games such as Pai Gow.
180	180	(30) "Poker card deck" means a set of 52 cards with 13
181	181	values and with each card value represented once in each of four
182	182	suits: spades, hearts, diamonds, and clubs. The term includes
183	183	actual cards or an electronic facsimile of cards.
184	184	(31) "Poker gaming" means the conduct of poker games.
185	185	(32) "Poker gaming equipment" means any equipment or
186	186	mechanical, electromechanical, or electronic contrivance,
187	187	component, machine, or device, expendable supply, or other
188	188	paraphernalia used in conjunction with poker gaming, including a
189	189	computerized system or software for enabling poker gaming or
190	190	monitoring poker gaming revenue or a device for weighing or
191	191	counting money. The term includes playing cards, gaming chips or
192	192	tokens, or a card shuffling device, or an electronic version of any
193	193	of those items, including a poker game.
194	194	(33) "Premises" means the area subject to the direct
195	195	control of and actual use by a licensed operator to conduct poker
196	196	gaming. The term includes a location or place.
197	197	(34) "Principal manager" means a person who, in
198	198	accordance with commission rules, holds or exercises managerial,
199	199	supervisory, or policy-making authority over the management or
200	200	operation of a poker gaming activity that, in the commission's
201	201	judgment, warrants employee licensing as a principal manager for
202	202	the protection of the public interest. The term includes a key
203	203	executive of a holder of a license under this chapter that is a
204	204	company and each person controlling the holder that is a company.
205	205	(35) "Promotion bonus fee" means the amount charged
206	206	from the communal pot for bonus programs from each poker hand played
207	207	in accordance with Section 2004.461.
208	208	(36) "Wager" means a bet.
209	209	Sec. 2004.004. STATUS OF POKER AS CLASS II GAMING. Poker
210	210	gaming authorized under this chapter is considered Class II gaming
211	211	under the Indian Gaming Regulatory Act (Pub. L. No. 100-497).
212	212	[Sections 2004.005-2004.050 reserved for expansion]
213	213	SUBCHAPTER B. COMMISSION POWERS AND DUTIES
214	214	Sec. 2004.051. CONTROL AND SUPERVISION OF POKER GAMING;
215	215	POKER DIVISION. (a) The commission shall administer this chapter.
216	216	(b) The commission has broad authority and shall exercise
217	217	strict control and close supervision over all poker gaming
218	218	conducted in this state to ensure that poker gaming is fairly
219	219	conducted.
220	220	(c) The commission shall execute its authority through a
221	221	poker gaming division established by the commission to administer
222	222	this chapter.
223	223	Sec. 2004.052. DIRECTOR OF POKER GAMING OPERATIONS. (a)
224	224	The commission shall employ a director of poker gaming operations.
225	225	(b) The director shall administer the poker gaming division
226	226	under the direction of the commission.
227	227	Sec. 2004.053. OFFICERS AND INVESTIGATORS. The commission
228	228	may employ officers or investigators the commission considers
229	229	necessary to administer this chapter.
230	230	Sec. 2004.054. RULEMAKING AUTHORITY. The commission shall
231	231	adopt rules as necessary to enforce and administer this chapter.
232	232	Sec. 2004.055. APPROVAL OF POKER GAMING EQUIPMENT. (a) The
233	233	commission by rule shall provide procedures for the approval of
234	234	poker gaming equipment for use in poker gaming in this state.
235	235	(b) The commission may approve an electronic poker table
236	236	only if the table:
237	237	(1) is certified by an independent gaming equipment
238	238	testing lab recognized by the commission as meeting the standards
239	239	prescribed by Section 2004.454;
240	240	(2) is commercially available;
241	241	(3) is in use in other commercial gaming operations;
242	242	and
243	243	(4) is not a video lottery terminal or an interactive
244	244	electronic device that is capable of displaying an
245	245	electromechanically or electronically simulated game the outcome
246	246	of which is determined solely by chance based on a
247	247	computer-generated random selection of winning combinations of
248	248	symbols or numbers displaying symbols that appear to roll on drums
249	249	to simulate a classic casino slot machine or themes of other card
250	250	games and keno.
251	251	(c) The holder of a license issued under this chapter may
252	252	not use, sell, or distribute poker gaming equipment that has not
253	253	been approved by the commission.
254	254	Sec. 2004.056. PUBLIC INFORMATION. (a) The commission
255	255	shall provide to any person on request a printed copy of this
256	256	chapter and the rules applicable to the enforcement of this
257	257	chapter.
258	258	(b) The commission may charge a reasonable fee for a copy
259	259	provided under this section.
260	260	Sec. 2004.057. ADVISORY OPINIONS. (a) A person may request
261	261	from the commission an advisory opinion regarding compliance with
262	262	this chapter and commission rules.
263	263	(b) The commission shall respond to a request under
264	264	Subsection (a) not later than the 60th day after the date a request
265	265	is received, unless the commission determines that the request does
266	266	not contain sufficient facts to provide an answer on which the
267	267	requestor may rely. The commission shall request any additional
268	268	information required from the requestor not later than the 10th
269	269	business day after the date the request is received. If the
270	270	commission requests additional information, the commission shall
271	271	respond to the request not later than the 60th day after the date
272	272	additional information is received pursuant to the request for
273	273	additional information.
274	274	(c) A person who requests an advisory opinion under
275	275	Subsection (a) may act in reliance on the opinion in the conduct of
276	276	any activity under any license issued under this chapter if the
277	277	conduct is substantially consistent with the opinion and the facts
278	278	stated in the request.
279	279	(d) An advisory opinion issued under this section is not a
280	280	rule under Subchapter B, Chapter 2001, Government Code, and the
281	281	rulemaking requirements of that subchapter do not apply to a
282	282	request for an advisory opinion or any advisory opinion issued by
283	283	the commission under this chapter.
284	284	(e) Nothing in this section precludes the commission from
285	285	requesting an attorney general's opinion under Section 402.042,
286	286	Government Code. In the event the commission requests an attorney
287	287	general's opinion on a matter that is the subject of an advisory
288	288	opinion request under this section, the deadlines established under
289	289	Subsection (b) are tolled until the 30th day following the date the
290	290	attorney general's opinion is issued.
291	291	Sec. 2004.058. GENERAL LICENSE PROHIBITION. A person
292	292	described by Section 243.007(a), Local Government Code, who holds a
293	293	license or other permit issued by a municipality or county as
294	294	provided by that section may not:
295	295	(1) conduct poker gaming in this state; or
296	296	(2) hold a license issued under this chapter.
297	297	[Sections 2004.059-2004.100 reserved for expansion]
298	298	SUBCHAPTER C. LICENSE TO CONDUCT POKER GAMING
299	299	Sec. 2004.101. OPERATOR'S LICENSE. (a) A person may not
300	300	conduct poker gaming in the state unless the person holds a
301	301	charitable operator's license or a commercial operator's license
302	302	issued by the commission. Poker gaming conducted by a commercial
303	303	operator, including a charitable poker tournament conducted by the
304	304	operator to benefit a licensed nonprofit organization, may be
305	305	conducted only on premises operating in accordance with the
306	306	operator's license. Poker gaming conducted by a charitable
307	307	operator may be conducted only at a location specified in a permit
308	308	authorizing the conduct of a charitable poker tournament.
309	309	(b) Subsection (a) does not prohibit a person from playing a
310	310	poker game authorized by other state law.
311	311	(c) A person may not own an equity interest in a location in
312	312	this state on which poker gaming is conducted by a commercial
313	313	operator and for which a commercial operator's license is not in
314	314	effect.
315	315	(d) A separate commercial operator's license must be
316	316	obtained for each location at which poker gaming is conducted by a
317	317	commercial operator. If the commercial operator is an Indian tribe
318	318	that holds a license issued under Section 2004.103(a)(1)(B), the
319	319	location at which poker gaming is conducted under the license must
320	320	be on the tribe's reservation in this state.
321	321	(e) The commission by rule shall prescribe the maximum
322	322	number of poker gaming tables a commercial operator may operate at a
323	323	single location licensed by the commission.
324	324	(f) A separate permit must be obtained for each charitable
325	325	poker tournament conducted by a licensed operator.
326	326	Sec. 2004.102. COMMERCIAL OPERATOR'S LICENSE APPLICATION.
327	327	(a) In accordance with commission rules, an applicant for a
328	328	commercial operator's license shall file with the commission an
329	329	application that contains the information identified in
330	330	Subsections (b) and (c), and any additional information the
331	331	commission requires to determine the suitability and eligibility of
332	332	the applicant to conduct poker gaming in this state.
333	333	(b) The application must include:
334	334	(1) the name and address of the applicant;
335	335	(2) the names and addresses of the officers of a
336	336	company applicant;
337	337	(3) the name and address of the person that owns the
338	338	premises where the applicant intends to conduct poker gaming under
339	339	the license sought;
340	340	(4) the address of the premises where the applicant
341	341	intends to conduct poker gaming under the license sought;
342	342	(5) the name and address of the lessor of the building
343	343	in which the premises are located, if the applicant leases or will
344	344	lease the premises at which the applicant intends to conduct poker
345	345	gaming;
346	346	(6) for a pari-mutuel license holder applicant, the
347	347	number of poker tables requested for the holder's racetrack,
348	348	including the number of tables that are electronic poker tables;
349	349	and
350	350	(7) a financial statement certified by a certified
351	351	public accountant demonstrating that the applicant holds gross
352	352	capital assets, including land and buildings, of at least $1
353	353	million.
354	354	(c) An applicant, other than an applicant described by
355	355	Section 2004.103(a)(1)(B), must attach to the application a copy
356	356	of:
357	357	(1) each license or permit the applicant holds issued
358	358	by the Texas Alcoholic Beverage Commission authorizing the
359	359	applicant to sell or serve distilled spirits for on-premises
360	360	consumption; or
361	361	(2) the person's pari-mutuel license.
362	362	Sec. 2004.103. MANDATORY ISSUANCE OF COMMERCIAL OPERATOR'S
363	363	LICENSE. (a) The commission shall issue a commercial operator's
364	364	license to an applicant that:
365	365	(1) meets one of the following requirements:
366	366	(A) holds:
367	367	(i) an alcoholic beverage license or permit
368	368	issued by the Texas Alcoholic Beverage Commission authorizing the
369	369	applicant to sell or serve distilled spirits for on-premises
370	370	consumption; or
371	371	(ii) a pari-mutuel license issued by the
372	372	Texas Racing Commission authorizing the applicant to conduct
373	373	wagering on a greyhound race or a horse race; or
374	374	(B) is a federally recognized Indian tribe that
375	375	has a reservation in this state;
376	376	(2) files the application in accordance with this
377	377	chapter;
378	378	(3) signs the application;
379	379	(4) pays the required application fee; and
380	380	(5) meets any additional requirements prescribed by
381	381	the commission.
382	382	(b) A person may not apply for a license under Subsection
383	383	(a)(1)(A)(i) unless for at least one of the three months preceding
384	384	the date of the application the person paid mixed beverage taxes
385	385	under Subchapter B, Chapter 183, Tax Code, on the gross receipts for
386	386	the premises where the person intends to conduct poker gaming in an
387	387	amount of at least:
388	388	(1) $7,500 for premises located in a municipality with
389	389	a population of at least 100,000; or
390	390	(2) $2,500 for premises to which Subdivision (1) does
391	391	not apply.
392	392	(c) Subsection (b) does not prohibit a person from applying
393	393	for and receiving a commercial operator's license if the person is
394	394	otherwise eligible for the license under Subsection (a)(1)(A)(ii)
395	395	or Subsection (a)(1)(B).
396	396	(d) The commission shall revoke a commercial operator's
397	397	license issued under Subsection (a)(1)(A) if the operator's
398	398	alcoholic beverage license or permit or pari-mutuel license, as
399	399	applicable, expires or is canceled or revoked. The Texas Alcoholic
400	400	Beverage Commission shall notify the commission of any expiration
401	401	or cancellation of an alcoholic beverage license or permit held by a
402	402	licensed operator. The Texas Racing Commission shall notify the
403	403	commission of any expiration or revocation of a pari-mutuel license
404	404	held by a licensed operator.
405	405	(e) If video surveillance is required under Section
406	406	2004.469, the commission may not issue a commercial operator's
407	407	license to an applicant unless the applicant provides the video
408	408	surveillance equipment required by that section.
409	409	(f) The commission may adopt rules providing for a person's
410	410	continued suitability to hold a commercial operator's license.
411	411	(g) The opportunity to hold a commercial operator's license
412	412	is a revocable privilege and not a right or property under the
413	413	United States Constitution or the Texas Constitution. An applicant
414	414	for or holder of a commercial operator's license does not have a
415	415	vested interest or right in a license granted under this chapter.
416	416	Sec. 2004.104. CHARITABLE OPERATOR'S LICENSE. (a) In
417	417	accordance with commission rules, an applicant for a charitable
418	418	operator's license shall file with the commission an application
419	419	that contains the information identified in Subsection (b) and any
420	420	additional information the commission requires to determine the
421	421	suitability and eligibility of the applicant to conduct poker
422	422	gaming in this state.
423	423	(b) The application must include:
424	424	(1) the name and address of the applicant;
425	425	(2) the names and addresses of the officers of an
426	426	applicant;
427	427	(3) the name and address of the person that owns the
428	428	premises where the applicant intends to conduct charitable poker
429	429	gaming under the license sought;
430	430	(4) the address of the premises where the applicant
431	431	intends to conduct charitable poker gaming under the license
432	432	sought; and
433	433	(5) the name and address of the lessor of the building
434	434	in which the premises are located, if the applicant leases or will
435	435	lease the premises at which the applicant intends to conduct
436	436	charitable poker gaming.
437	437	Sec. 2004.105. DETERMINATION OF SUITABILITY TO HOLD
438	438	CHARITABLE OPERATOR'S LICENSE. (a) The commission shall determine
439	439	the suitability of an applicant for or holder of a charitable
440	440	operator's license based on suitability criteria prescribed by the
441	441	commission. The commission shall adopt the rules and standards
442	442	necessary to ensure that an applicant for a charitable operator's
443	443	license or a charitable operator uses the revenue from a charitable
444	444	poker tournament for bona fide charitable purposes.
445	445	(b) The burden of proving suitability to receive or hold a
446	446	charitable operator's license is on the applicant or license
447	447	holder.
448	448	(c) The commission shall issue a charitable operator's
449	449	license to an eligible applicant if the commission determines that
450	450	the applicant is suitable under the commission's criteria.
451	451	(d) The commission may adopt rules providing for a person's
452	452	continued suitability to hold a charitable operator's license and
453	453	providing for the imposition of sanctions and penalties against a
454	454	person who does not comply with this chapter or rules adopted under
455	455	this chapter.
456	456	(e) The opportunity to hold a charitable operator's license
457	457	is a revocable privilege and not a right or property under the
458	458	United States Constitution or the Texas Constitution. An applicant
459	459	for or holder of a charitable operator's license does not have a
460	460	vested interest or right in a license granted under this chapter.
461	461	Sec. 2004.106. NONTRANSFERABILITY. A commercial
462	462	operator's license applies only to the specific premises location
463	463	identified in the license and is not transferable to another person
464	464	or location.
465	465	Sec. 2004.107. REGISTRATION OF INTEREST IN OPERATOR. (a)
466	466	Except as provided by Subsection (b), a person who directly or
467	467	indirectly owns an equity interest or creditor interest in an
468	468	applicant for or holder of a commercial operator's license shall:
469	469	(1) register and qualify with the commission under
470	470	commission rules; and
471	471	(2) provide information the commission finds
472	472	necessary to determine the suitability and eligibility of the
473	473	person to retain the interest.
474	474	(b) The following persons are not required to register or
475	475	qualify under this section:
476	476	(1) an employee of a licensed operator who is required
477	477	to apply for an employee's license under Subchapter E;
478	478	(2) an institutional investor; or
479	479	(3) any other group or class of persons that the
480	480	commission by rule exempts from registration or qualification.
481	481	(c) The commission shall adopt rules to implement this
482	482	section, including rules establishing procedures for registration
483	483	application, qualification, and renewal. A registration filed
484	484	under this section must be accompanied by the required application
485	485	fee.
486	486	[Sections 2004.108-2004.150 reserved for expansion]
487	487	SUBCHAPTER D. NONPROFIT ORGANIZATION LICENSE; CHARITABLE POKER
488	488	TOURNAMENT PERMIT
489	489	Sec. 2004.151. LICENSE REQUIRED. (a) A licensed operator
490	490	may not conduct a charitable poker tournament to benefit a
491	491	nonprofit organization unless the organization holds a license
492	492	issued under this subchapter.
493	493	(b) A licensed operator shall ensure that each nonprofit
494	494	organization receiving any portion of the net proceeds of a
495	495	charitable poker tournament conducted by the operator holds a
496	496	license issued by the commission under this subchapter.
497	497	Sec. 2004.152. LICENSE APPLICATION. (a) An applicant for a
498	498	nonprofit organization license must:
499	499	(1) submit an application to the commission on the
500	500	form prescribed by the commission and in accordance with commission
501	501	rules;
502	502	(2) present sufficient facts relating to the
503	503	applicant's incorporation and organization to enable the
504	504	commission to determine whether the applicant may be licensed under
505	505	this subchapter; and
506	506	(3) submit the required application fee.
507	507	(b) An applicant for a nonprofit organization license
508	508	shall:
509	509	(1) sign the application; and
510	510	(2) attest under penalties of perjury that the
511	511	information contained in the application is true, correct, and
512	512	complete.
513	513	(c) The following are adequate evidence of an applicant's
514	514	tax-exempt status:
515	515	(1) a copy of an Internal Revenue Service letter that
516	516	approves the applicant's exemption from taxation under Section
517	517	501(c)(3), Internal Revenue Code of 1986; or
518	518	(2) a letter of good standing from a parent
519	519	organization of the applicant that holds an exemption from taxation
520	520	under Section 501(c)(3), Internal Revenue Code of 1986, for both
521	521	the parent organization and the applicant as its affiliate.
522	522	(d) Not later than the 30th day after the date the
523	523	commission grants an application for a nonprofit organization
524	524	license, the commission shall issue the license to the applicant.
525	525	Sec. 2004.153. DETERMINATION OF SUITABILITY OF NONPROFIT
526	526	ORGANIZATION LICENSE APPLICANT OR HOLDER. (a) The commission
527	527	shall determine the suitability of an applicant for or holder of a
528	528	nonprofit organization license based on suitability criteria
529	529	prescribed by the commission to ensure that the applicant is a bona
530	530	fide nonprofit organization and that revenue from a charitable
531	531	poker tournament will be used for bona fide charitable purposes.
532	532	(b) The burden of proving suitability to receive or hold a
533	533	license is on the applicant or license holder.
534	534	(c) The commission shall issue a nonprofit organization
535	535	license to an eligible applicant if the commission determines that
536	536	the applicant is suitable under the commission's criteria.
537	537	(d) The commission may adopt rules providing for a nonprofit
538	538	organization's continued suitability to hold a license under this
539	539	chapter and providing for the imposition of sanctions and penalties
540	540	against an organization that does not comply with this chapter or
541	541	rules adopted under this chapter.
542	542	(e) The opportunity to hold a nonprofit organization
543	543	license is a revocable privilege and not a right or property under
544	544	the United States Constitution or the Texas Constitution. An
545	545	applicant for or holder of a nonprofit organization license does
546	546	not have a vested interest or right in a license granted under this
547	547	chapter.
548	548	Sec. 2004.154. PERMIT FOR CHARITABLE POKER TOURNAMENT. (a)
549	549	A licensed operator may conduct a charitable poker tournament only
550	550	for which the operator holds a permit issued under this section.
551	551	(b) A licensed operator may apply for a permit to conduct a
552	552	charitable poker tournament by filing an application with the
553	553	commission on a form prescribed by the commission accompanied by
554	554	the required fee not less than 30 days before the date of the
555	555	charitable poker tournament.
556	556	(c) The application must include the location, date, and
557	557	hours of the charitable poker tournament and the name of the
558	558	licensed nonprofit organization the tournament will benefit.
559	559	(d) The application for a charitable poker tournament
560	560	permit must:
561	561	(1) be submitted in accordance with commission rules;
562	562	(2) include the address and dimensions of the facility
563	563	where the tournament will occur;
564	564	(3) include the date and hours of the tournament;
565	565	(4) include the name of each licensed nonprofit
566	566	organization the tournament will benefit; and
567	567	(5) include the number of poker tables requested for
568	568	the tournament, including the number of electronic poker tables.
569	569	(e) An applicant for a charitable poker tournament permit
570	570	shall:
571	571	(1) sign the application; and
572	572	(2) attest under penalties of perjury that the
573	573	information contained in the application is true, correct, and
574	574	complete.
575	575	(f) Not later than the 10th day after the date the
576	576	commission grants an application for a permit, the commission shall
577	577	deliver the permit to the licensed operator. The permit must state
578	578	the location, date, hours, and number of tables authorized for the
579	579	charitable poker tournament. The operator must prominently display
580	580	the permit at the charitable poker tournament.
581	581	(g) The permit is valid only for the hours, date, and
582	582	location specified by the permit.
583	583	(h) A licensed operator may only operate the number of poker
584	584	gaming tables specified in the permit at the charitable poker
585	585	tournament.
586	586	Sec. 2004.155. CHARITABLE POKER TOURNAMENT; NET PROCEEDS.
587	587	(a) A licensed operator may conduct a charitable poker tournament
588	588	for the benefit of a licensed nonprofit organization.
589	589	(b) A licensed operator shall pay to a licensed nonprofit
590	590	organization all net proceeds from a charitable poker tournament
591	591	not later than the 30th day after the date of the tournament. The
592	592	expenses of conducting the tournament deducted by a licensed
593	593	operator may not exceed 30 percent of gross receipts. The expenses
594	594	must be reasonable or necessary to conduct the poker gaming and may
595	595	include expenses for:
596	596	(1) advertising, including the cost of printing poker
597	597	gaming gift certificates;
598	598	(2) security;
599	599	(3) repairs to equipment and the premises where the
600	600	tournament is conducted;
601	601	(4) poker gaming equipment and supplies used during
602	602	the tournament;
603	603	(5) prizes;
604	604	(6) taxes in accordance with Subchapter I;
605	605	(7) rental or mortgage and insurance expenses;
606	606	(8) bookkeeping, legal, or accounting services
607	607	related to the tournament;
608	608	(9) fees for dealers, cashiers, janitorial services,
609	609	and utility supplies and services;
610	610	(10) the permit fee; and
611	611	(11) debit card transaction fees.
612	612	(c) A licensed nonprofit organization must use the proceeds
613	613	from the charitable poker tournament for its charitable purposes.
614	614	Sec. 2004.156. DENIAL OR REVOCATION OF NONPROFIT
615	615	ORGANIZATION LICENSE. (a) The commission may deny an application
616	616	for or suspend, limit, or revoke a nonprofit organization's license
617	617	for any reasonable cause.
618	618	(b) If the commission determines that it has reasonable
619	619	grounds to believe that a licensed nonprofit organization might be
620	620	unsuitable to continue to hold the license, for protection of the
621	621	public health, safety, morals, and general welfare of the people of
622	622	this state and of the reputation of this state's poker gaming
623	623	industry, the commission shall conduct an investigation and hearing
624	624	in accordance with Subchapter K and, based on the commission's
625	625	determination, may deny, suspend, limit, or revoke the license.
626	626	(c) A nonprofit organization that has had a license
627	627	suspended or revoked may not receive, directly or indirectly, any
628	628	proceeds, compensation, consideration, or payment of any kind
629	629	relating to the conduct of a charitable poker tournament, other
630	630	than a tournament that took place before the suspension or
631	631	revocation.
632	632	[Sections 2004.157-2004.200 reserved for expansion]
633	633	SUBCHAPTER E. EMPLOYEE'S LICENSES
634	634	Sec. 2004.201. DEALER'S LICENSE REQUIRED. A person may not
635	635	act as a dealer unless the person holds a dealer's license.
636	636	Sec. 2004.202. ISSUANCE OF DEALER'S LICENSE. (a) A
637	637	licensed operator shall ensure that each dealer employed by the
638	638	operator holds a dealer's license issued by the commission.
639	639	(b) A dealer's license application must:
640	640	(1) be submitted in accordance with commission rules;
641	641	(2) contain the information the commission requires to
642	642	determine the applicant's suitability and eligibility to act as a
643	643	dealer; and
644	644	(3) be accompanied by the required application fee.
645	645	(c) An applicant for a dealer's license shall:
646	646	(1) sign the application; and
647	647	(2) attest under penalties of perjury that the
648	648	information contained in the application is true, correct, and
649	649	complete.
650	650	(d) The commission shall conduct a criminal background
651	651	check on each applicant for a dealer's license.
652	652	(e) Not later than the 60th day after the date the
653	653	commission grants an application for a dealer's license, the
654	654	commission shall issue a dealer's badge to the applicant. A
655	655	licensed dealer must prominently display on the dealer's person the
656	656	badge issued by the commission at all times when the dealer is on
657	657	the premises of a licensed operator as an employee of the licensed
658	658	operator.
659	659	Sec. 2004.203. RESIDENCY. A person is eligible to apply for
660	660	and hold a dealer's license without regard to the applicant's
661	661	residency in this state.
662	662	Sec. 2004.204. DETERMINATION OF SUITABILITY OF DEALER'S
663	663	LICENSE APPLICANT OR HOLDER. (a) The commission shall determine
664	664	the suitability of an applicant for or holder of a dealer's license
665	665	based on suitability criteria prescribed by the commission to
666	666	ensure that the applicant or dealer:
667	667	(1) has not been convicted of a felony;
668	668	(2) has not had a complaint alleging physical
669	669	intimidation filed against the applicant or dealer with a law
670	670	enforcement authority;
671	671	(3) has sufficient business probity, competence, and
672	672	training or experience in the poker gaming industry to act as a
673	673	dealer; and
674	674	(4) is otherwise qualified to be licensed.
675	675	(b) The burden of proving suitability to receive or hold a
676	676	dealer's license is on the applicant or license holder.
677	677	Sec. 2004.205. DENIAL OR REVOCATION OF DEALER'S LICENSE.
678	678	(a) The commission may deny an application for or suspend, limit,
679	679	or revoke a dealer's license for any reasonable cause.
680	680	(b) If the commission determines that it has reasonable
681	681	grounds to believe that a licensed dealer might be unsuitable to
682	682	continue to hold the license, for protection of the public health,
683	683	safety, morals, and general welfare of the people of this state and
684	684	of the reputation of this state's poker gaming industry, the
685	685	commission shall conduct an investigation and hearing as provided
686	686	by Subchapter K and, based on the commission's determination, may
687	687	deny, suspend, limit, or revoke a dealer's license.
688	688	(c) On the suspension or revocation of a dealer's license,
689	689	the license holder may not provide services in any capacity
690	690	requiring a license under Section 2004.201.
691	691	(d) A holder of a dealer's license that has been suspended
692	692	or revoked may not:
693	693	(1) receive, directly or indirectly, any
694	694	compensation, consideration, or payment of any kind relating to the
695	695	conduct of gaming in any capacity requiring a license under Section
696	696	2004.201, other than payment for services rendered before the
697	697	suspension or revocation; or
698	698	(2) serve or function in a capacity that would require
699	699	a license under Section 2004.201.
700	700	(e) The receipt and holding of a dealer's license is a
701	701	privilege and is not a right or property under the United States
702	702	Constitution or the Texas Constitution. An applicant for or holder
703	703	of a dealer's license does not have a vested interest or right in a
704	704	license granted under this chapter.
705	705	Sec. 2004.206. TRAINING PROGRAM FOR LICENSED DEALERS. (a)
706	706	A licensed dealer shall complete a training program in accordance
707	707	with commission rule.
708	708	(b) A training program approved by the commission must
709	709	include training related to:
710	710	(1) the conduct of poker gaming;
711	711	(2) the administration and operation of poker gaming;
712	712	(3) the promotion of poker gaming; and
713	713	(4) gaming awareness, including:
714	714	(A) problem or compulsive gambling;
715	715	(B) cheating techniques;
716	716	(C) underage gaming; and
717	717	(D) criminal awareness.
718	718	(c) The commission by rule shall establish:
719	719	(1) the content and time frame of the training
720	720	program;
721	721	(2) information related to training that must be
722	722	reported to the commission; and
723	723	(3) other training program requirements the
724	724	commission determines are necessary to promote the fair conduct of
725	725	poker gaming and compliance with this chapter.
726	726	Sec. 2004.207. OTHER EMPLOYEE'S LICENSES. (a) The
727	727	commission by rule may establish other employee's licenses the
728	728	commission determines are necessary to protect the public health,
729	729	safety, morals, and general welfare of the people of this state,
730	730	including licenses for principal managers, cage managers, owners,
731	731	and card room service personnel.
732	732	(b) A person may not engage in any conduct for which the
733	733	commission requires a person to hold a license under this section
734	734	unless the person holds the applicable license.
735	735	(c) The commission by rule shall prescribe procedures
736	736	governing licenses issued under this section as the commission
737	737	determines appropriate.
738	738	[Sections 2004.208-2004.250 reserved for expansion]
739	739	SUBCHAPTER F. MANUFACTURER'S AND DISTRIBUTOR'S LICENSES
740	740	Sec. 2004.251. MANUFACTURER'S LICENSE. (a) A person may
741	741	not engage in any activity related to the poker gaming equipment
742	742	manufacturing industry in this state for which a manufacturer's
743	743	license is required unless the person holds a manufacturer's
744	744	license for that activity.
745	745	(b) The commission shall adopt rules identifying activities
746	746	related to the design, manufacture, assembly, production, sale,
747	747	lease, marketing, distribution, or repair of poker gaming equipment
748	748	in this state for use in poker gaming authorized under this chapter
749	749	that the commission determines appropriate for licensing under this
750	750	section.
751	751	(c) A manufacturer's license is personal to the license
752	752	holder and allows the holder to conduct business related to the
753	753	licensed activity with any premises licensed to operate electronic
754	754	poker tables and poker gaming in this state.
755	755	Sec. 2004.252. DISTRIBUTOR'S LICENSE. (a) A person may not
756	756	distribute or offer to distribute poker gaming equipment for use in
757	757	poker gaming authorized under this chapter in this state, including
758	758	electronic poker tables, unless the person holds a distributor's
759	759	license under this subchapter.
760	760	(b) A person must obtain a distributor's license to
761	761	distribute poker gaming equipment in this state to a licensed
762	762	operator for use on premises at which poker gaming is conducted for
763	763	profit.
764	764	(c) A distributor's license is personal to the license
765	765	holder and allows the holder to conduct business with any premises
766	766	licensed to operate poker gaming in this state. The license is not
767	767	transferable.
768	768	Sec. 2004.253. LICENSE APPLICATION. (a) In accordance
769	769	with commission rules, an applicant for a manufacturer's license or
770	770	distributor's license shall file with the commission an application
771	771	that contains information the commission requires to determine the
772	772	suitability and eligibility of the applicant.
773	773	(b) The application must be signed by an applicant that is
774	774	an individual or by the presiding officer and the secretary of an
775	775	applicant that is a company. Each signatory shall attest under
776	776	penalties of perjury that the information contained in the
777	777	application is true, correct, and complete.
778	778	(c) An application for a manufacturer's license or
779	779	distributor's license must be accompanied by the required
780	780	application fee.
781	781	Sec. 2004.254. SUITABILITY DETERMINATION. (a) In
782	782	considering the suitability of a company applying for or holding a
783	783	manufacturer's license or distributor's license, the commission
784	784	shall consider the suitability of each principal manager and each
785	785	holder of an equity interest or creditor interest in the company
786	786	applicant to individually receive and hold a manufacturer's license
787	787	or distributor's license based on the suitability standards that
788	788	apply to the company applicant. A person may not hold a
789	789	manufacturer's license or distributor's license if that person
790	790	would be found unsuitable to hold an operator's license.
791	791	(b) If the commission determines that it has reasonable
792	792	grounds to believe an applicant or license holder is unsuitable to
793	793	hold a manufacturer's license or distributor's license, the
794	794	commission shall conduct an investigation and hearing under
795	795	Subchapter K and, based on the commission's determination, may
796	796	deny, suspend, limit, or revoke the license. If the applicant is an
797	797	entity other than an individual, the commission may investigate
798	798	equity owners of the applicant who have at least a 10 percent
799	799	ownership in the applicant.
800	800	(c) On suspension or revocation of a license, the license
801	801	holder may not perform any manufacturing activity or distribution
802	802	activity requiring a license under this chapter. A holder of a
803	803	manufacturer's or distributor's license that has been suspended or
804	804	revoked may not receive, directly or indirectly, compensation,
805	805	consideration, or payment of any kind relating to any manufacturing
806	806	or distribution activity in any capacity requiring a license under
807	807	this chapter, other than payment for goods provided before the
808	808	suspension or revocation.
809	809	(d) A licensed operator who has entered into a lease with a
810	810	manufacturer or distributor whose license has been suspended or
811	811	revoked may continue to make payments on the lease based on the
812	812	original terms of the lease without modification or may accelerate
813	813	the lease and pay it off, at the sole option of the operator.
814	814	(e) The burden of proving suitability to receive or hold a
815	815	manufacturer's or distributor's license is on the applicant or
816	816	license holder.
817	817	[Sections 2004.255-2004.300 reserved for expansion]
818	818	SUBCHAPTER G. LICENSE RENEWAL
819	819	Sec. 2004.301. TEMPORARY LICENSE. (a) Before issuing a
820	820	license under this chapter, the commission may issue a temporary
821	821	license for a period not to exceed six months and may renew the
822	822	temporary license as many times as the commission determines
823	823	appropriate on the payment of the fee and execution of the bond, if
824	824	required.
825	825	(b) The commission may issue a temporary license only to a
826	826	person the commission believes will be qualified to hold the
827	827	license based on:
828	828	(1) the commission's review of the background
829	829	investigations conducted by other state agencies or other
830	830	government agencies in United States or Canadian jurisdictions with
831	831	regulated poker gaming activities; and
832	832	(2) the commission's determination that the background
833	833	investigations of the applicant failed to reveal anything that
834	834	would cause the applicant not to qualify for a license in this
835	835	state.
836	836	Sec. 2004.302. TERM; RENEWAL. (a) A license issued under
837	837	this chapter expires on the first anniversary of the date of
838	838	issuance.
839	839	(b) A license holder may annually renew a license by meeting
840	840	the commission's licensing requirements and paying the annual
841	841	license fee.
842	842	(c) A commercial operator, other than an operator described
843	843	by Section 2004.103(a)(1)(B), must at all times hold:
844	844	(1) an active alcoholic beverage license or permit
845	845	issued by the Texas Alcoholic Beverage Commission authorizing the
846	846	operator to sell or serve distilled spirits for on-premises
847	847	consumption; or
848	848	(2) a pari-mutuel license issued by the Texas Racing
849	849	Commission authorizing the applicant to conduct wagering on a
850	850	greyhound race or a horse race.
851	851	(d) The operator shall submit with each license renewal fee
852	852	a renewal application on a form developed by the commission.
853	853	(e) A commercial operator shall immediately notify the
854	854	commission on suspension or cancellation by the Texas Alcoholic
855	855	Beverage Commission of any license or permit authorizing the
856	856	operator to sell or serve alcoholic beverages on the premises
857	857	licensed by the commission. The Texas Alcoholic Beverage
858	858	Commission shall notify the commission when it cancels a license or
859	859	permit authorizing an operator to sell or serve alcoholic
860	860	beverages.
861	861	(f) A commercial operator shall immediately notify the
862	862	commission on cancellation or revocation by the Texas Racing
863	863	Commission of any pari-mutuel license held by the commercial
864	864	operator authorizing the operator to conduct wagering on a
865	865	greyhound race or a horse race. The Texas Racing Commission shall
866	866	notify the commission when the Texas Racing Commission cancels or
867	867	revokes a pari-mutuel license authorizing an operator to conduct
868	868	wagering on a greyhound race or a horse race.
869	869	(g) A commercial operator's license under this chapter is
870	870	suspended at any time when any alcoholic beverage license or permit
871	871	held by the operator is suspended.
872	872	(h) The commission shall adopt rules for temporary
873	873	suspension of a commercial operator's license pending reissuance of
874	874	the license or permit to sell or serve alcoholic beverages on the
875	875	premises licensed by the commission.
876	876	[Sections 2004.303-2004.350 reserved for expansion]
877	877	SUBCHAPTER H. APPLICATION AND LICENSE FEES
878	878	Sec. 2004.351. APPLICATION FEES. (a) Except as provided by
879	879	Subsection (b), an applicant for a license required by this chapter
880	880	shall pay an application fee in the amount of:
881	881	(1) $1,000 for a commercial operator's license;
882	882	(2) $1,000 for a charitable operator's license;
883	883	(3) $100 for a nonprofit organization license;
884	884	(4) $100 for a dealer's license;
885	885	(5) $250 for a manufacturer's license; or
886	886	(6) $250 for a distributor's license.
887	887	(b) The commission may increase an application fee if the
888	888	amount prescribed by Subsection (a) does not cover the commission's
889	889	cost of evaluating the application and issuing a license.
890	890	(c) Application fees are nonrefundable and must:
891	891	(1) be in the form prescribed by the commission; and
892	892	(2) be payable to the commission.
893	893	(d) The commission shall apply an application fee toward the
894	894	cost of investigating the applicant's suitability for licensing or
895	895	qualification under this chapter. The applicant shall pay any
896	896	costs of investigation incurred in excess of the assessed
897	897	application fee.
898	898	Sec. 2004.352. LICENSE FEES. A holder of a license issued
899	899	under this chapter shall annually pay the commission a license fee
900	900	in the amount of:
901	901	(1) $1,000 for a charitable or commercial operator's
902	902	license;
903	903	(2) $100 for a dealer's license;
904	904	(3) $250 for a manufacturer's license;
905	905	(4) $250 for a distributor's license; or
906	906	(5) $100 for a nonprofit organization license.
907	907	[Sections 2004.353-2004.400 reserved for expansion]
908	908	SUBCHAPTER I. TAXES
909	909	Sec. 2004.401. GROSS RECEIPTS TAX. (a) A tax is imposed on
910	910	the gross receipts received in connection with the premises of a
911	911	commercial operator conducting poker gaming under this chapter.
912	912	(b) Except as provided by Subsections (c) and (d), the tax
913	913	rate is 18 percent of the gross receipts received for poker gaming
914	914	by a commercial operator.
915	915	(c) Except as provided by Subsection (d), the tax rate is 16
916	916	percent of the gross receipts received for poker gaming by a
917	917	commercial operator who holds a pari-mutuel license described by
918	918	Section 2004.103(a)(1)(A)(ii).
919	919	(d) The tax rate is five percent of the gross receipts
920	920	received by a licensed operator during a charitable poker
921	921	tournament.
922	922	Sec. 2004.402. PAYMENT AND REPORTING OF TAX. (a) A
923	923	licensed operator must electronically submit a report of each day's
924	924	total gross receipts to the comptroller not later than 5 p.m. on the
925	925	day following the day the gross receipts were collected.
926	926	(b) The tax is due and payable by the licensed operator to
927	927	the comptroller not later than the deadline provided by Subsection
928	928	(a) for the report required by that subsection. The depository used
929	929	by a licensed operator for deposit of gross receipts taxes due to
930	930	the comptroller must be a licensed financial institution located in
931	931	this state. The comptroller may sweep or debit the licensed
932	932	operator's bank account on a daily basis to collect the gross
933	933	receipts tax due and payable. A licensed operator may not continue
934	934	to conduct any poker gaming activity on the operator's premises if,
935	935	at the time the comptroller sweeps the account, the amount reported
936	936	under Subsection (a) is not available for collection.
937	937	(c) The report of a tax must be filed under oath on forms
938	938	prescribed by the commission.
939	939	(d) The comptroller and the commission shall adopt rules for
940	940	the payment of the tax.
941	941	(e) A licensed operator required to file a tax return with
942	942	the comptroller shall provide a copy of the tax return to the
943	943	commission in the manner prescribed by commission rule.
944	944	(f) The comptroller shall deposit the revenue collected
945	945	under this section to the credit of the poker gaming revenue fund.
946	946	Sec. 2004.4025. POKER GAMING REVENUE FUND. (a) The poker
947	947	gaming revenue fund is established as an account held outside the
948	948	treasury.
949	949	(b) Money in the poker gaming revenue fund may be used only
950	950	for the following purposes:
951	951	(1) the payment of costs incurred by this state in the
952	952	regulation of poker gaming under this chapter; and
953	953	(2) after a sufficient amount is retained in the fund
954	954	to cover the costs provided by Subdivision (1), the balance to be
955	955	transferred on or before the 15th day of each month to the Texas
956	956	Department of Housing and Community Affairs to be used only as
957	957	follows:
958	958	(A) 50 percent for grants to municipalities,
959	959	counties, and nonprofit organizations to support activities
960	960	relating to:
961	961	(i) shelter and services for the homeless
962	962	and the prevention of homelessness;
963	963	(ii) renovation of shelters for use as
964	964	homeless shelters;
965	965	(iii) assistance to the homeless in
966	966	obtaining permanent housing;
967	967	(iv) medical and psychological counseling
968	968	for the homeless; and
969	969	(v) the supervision, development, and
970	970	implementation of homeless prevention activities; and
971	971	(B) the remainder to the housing trust fund
972	972	established under Section 2306.201, Government Code.
973	973	Sec. 2004.403. PENALTIES FOR FAILURE TO PAY OR REPORT TAX.
974	974	(a) A licensed operator that fails to deposit gross receipts tax
975	975	due and payable to the comptroller for the gross receipts collected
976	976	at the operator's premises by the deadline for payment of the tax
977	977	prescribed by Section 2004.402 may not conduct poker gaming at
978	978	those premises until the tax is paid.
979	979	(b) For an electronic poker table, the comptroller shall:
980	980	(1) electronically communicate with each electronic
981	981	poker table daily to verify that the software for the table is
982	982	functioning properly;
983	983	(2) electronically verify that this state has
984	984	collected the gross receipts tax imposed on the gross receipts of
985	985	the electronic poker table;
986	986	(3) develop rules providing minimum standards for
987	987	electronic poker tables used for charitable gaming activities; and
988	988	(4) electronically communicate with the table to
989	989	permit the table to be operational that day.
990	990	(c) If the gross receipts tax for an electronic poker table
991	991	has not been collected or the software for the electronic poker
992	992	table is not functioning properly, the comptroller shall prohibit
993	993	the operation of the electronic poker table by ensuring the table
994	994	does not receive the necessary communication from the comptroller
995	995	to be operational that day. The licensed operator must give the
996	996	comptroller and the commission assurances that the electronic poker
997	997	table will not open for play on that day or any subsequent day until
998	998	all gross receipts tax, interest, and penalties have been paid. The
999	999	comptroller shall adopt rules related to the assurances that a
1000	1000	licensed operator must give to the comptroller and commission under
1001	1001	this subsection.
1002	1002	(d) If a person fails to report gross receipts as required
1003	1003	by this subchapter or fails to pay to the comptroller taxes imposed
1004	1004	under this subchapter later than the second day after the date the
1005	1005	report or payment is due, the commission shall compute and
1006	1006	determine the amount of taxes required to be paid and shall assess a
1007	1007	penalty equal to five percent of the taxes owed. If the payment is
1008	1008	not received by the 30th day after the date the gross receipts tax
1009	1009	is due, the commission shall assess an additional penalty equal to
1010	1010	five percent of the gross receipts tax.
1011	1011	(e) A delinquent tax accrues interest at the rate provided
1012	1012	by Section 111.060, Tax Code, beginning on the 60th day after the
1013	1013	tax due date.
1014	1014	(f) Interest at the rate of 10 percent a year attaches to a
1015	1015	delinquency penalty imposed under Subsection (d), beginning on the
1016	1016	60th day after the date the penalty is imposed.
1017	1017	Sec. 2004.404. RECOMPUTATION OF TAX. (a) If the commission
1018	1018	is not satisfied with a tax return or the amount of tax required to
1019	1019	be remitted under this chapter to this state by a licensed operator,
1020	1020	the commission or the comptroller may compute and determine the
1021	1021	amount required to be paid on the basis of:
1022	1022	(1) the facts contained in the return or report of
1023	1023	receipts; or
1024	1024	(2) any information that the commission or comptroller
1025	1025	possesses, or that may come into the possession of the commission,
1026	1026	without regard to the period covered by the information.
1027	1027	(b) A licensed operator subject to a tax computed under this
1028	1028	section may request an investigation and hearing under Subchapter
1029	1029	K, at which the person may present evidence on the amount of tax
1030	1030	due.
1031	1031	(c) The commission shall conduct an audit of the person's
1032	1032	accounts as part of the investigation under Section 2004.501.
1033	1033	Sec. 2004.405. DETERMINATION IF RETURN NOT MADE. (a) If a
1034	1034	licensed operator fails to make a required return or if a person
1035	1035	conducts poker gaming without a license issued under this chapter,
1036	1036	the commission shall estimate the gross receipts received by the
1037	1037	operator or person. The estimate must cover the period:
1038	1038	(1) for which the operator failed to make a return; or
1039	1039	(2) during which the person conducted poker gaming
1040	1040	without a license.
1041	1041	(b) An estimate under this section must be based on any
1042	1042	information covering any period that the commission possesses or
1043	1043	that may come into the possession of the commission.
1044	1044	(c) On the basis of the commission's estimate, the
1045	1045	commission shall compute and determine the amount of taxes imposed
1046	1046	by this subchapter on those gross receipts and assess a penalty
1047	1047	equal to 10 percent of that tax amount.
1048	1048	(d) One or more determinations may be made under this
1049	1049	section for one or more periods.
1050	1050	Sec. 2004.406. JEOPARDY DETERMINATION. (a) If the
1051	1051	commission believes that the collection of a gross receipts tax
1052	1052	required to be paid or the amount of a determination under Section
1053	1053	2004.405 will be jeopardized by delay, the commission shall make a
1054	1054	determination of the amount of the tax required to be collected,
1055	1055	noting the finding of jeopardy on the determination. The
1056	1056	determined amount is due and payable immediately.
1057	1057	(b) If a license holder does not pay the amount specified by
1058	1058	a determination on or before the 20th day after the date of service
1059	1059	of the determination on the license holder, the amount becomes
1060	1060	final at the end of the 20th day unless the license holder files a
1061	1061	petition for redetermination on or before the 20th day after
1062	1062	service of notice of the determination.
1063	1063	(c) A delinquency penalty of 10 percent of the tax and
1064	1064	interest at the rate of 10 percent a year attaches to the amount of
1065	1065	the tax required to be collected.
1066	1066	Sec. 2004.407. APPLICATION OF TAX LAWS. Subtitle B, Title
1067	1067	2, Tax Code, applies to the administration, collection, and
1068	1068	enforcement of the gross receipts tax imposed under Section
1069	1069	2004.401 except as modified by this chapter.
1070	1070	Sec. 2004.408. DELINQUENCY: SEIZURE AND SALE. (a) At any
1071	1071	time before the third anniversary of the date a person becomes
1072	1072	delinquent in the payment of a gross receipts tax imposed under this
1073	1073	subchapter, the commission may collect the amount under this
1074	1074	section.
1075	1075	(b) The commission may order the sheriff or constable for
1076	1076	the jurisdiction in which licensed poker gaming tables for which a
1077	1077	gross receipts tax is delinquent to conduct the seizure and sale
1078	1078	authorized by this section. The sheriff or constable may deduct
1079	1079	reasonable expenses from any amount realized by sale of the
1080	1080	property.
1081	1081	(c) The commission or sheriff or constable shall seize
1082	1082	personal or real property of the license holder that is not exempt
1083	1083	from execution under the laws of this state and sell the property at
1084	1084	public auction to pay the amount of taxes due, any interest or
1085	1085	penalties due on those taxes, and any expense incurred in
1086	1086	connection with the seizure and sale. Personal property must be
1087	1087	seized and sold first, and real property may be seized and sold only
1088	1088	if the sale of personal property does not produce an amount
1089	1089	sufficient to pay the total amount of taxes, interest, or penalties
1090	1090	due. The seizure and sale must be conducted in accordance with
1091	1091	applicable state law.
1092	1092	Sec. 2004.409. SECURITY. (a) Not later than the fifth day
1093	1093	after the date the licensed operator receives notice from the
1094	1094	commission of an order approving the application for an operator's
1095	1095	license, each operator, to secure payment of the gross receipts tax
1096	1096	imposed under this subchapter, shall furnish to the commission
1097	1097	security in the form and amount the commission considers
1098	1098	appropriate, which may be in the form of:
1099	1099	(1) a cash bond;
1100	1100	(2) a bond from a surety company chartered or
1101	1101	authorized to conduct business in this state;
1102	1102	(3) certificates of deposit;
1103	1103	(4) certificates of savings;
1104	1104	(5) United States treasury bonds; or
1105	1105	(6) subject to the approval of the commission, an
1106	1106	assignment of negotiable stocks or bonds.
1107	1107	(b) The commission shall set the amount of the security,
1108	1108	taking into consideration the amount of money that has or is
1109	1109	expected to become due from the licensed operator, based on the
1110	1110	number of poker gaming tables to be operated on the operator's
1111	1111	premises. The commission may adjust the amount of security
1112	1112	required after the licensed operator begins conducting poker gaming
1113	1113	on the premises and paying gross receipts taxes.
1114	1114	(c) If a license holder fails to pay the gross receipts tax
1115	1115	imposed under this subchapter, the commission may notify the
1116	1116	license holder and any surety of the delinquency by jeopardy or
1117	1117	deficiency determination. If payment is not made when due, the
1118	1118	commission may order the forfeit of all or part of the security to
1119	1119	cover the amount due.
1120	1120	(d) If the licensed operator ceases to conduct poker gaming
1121	1121	and relinquishes the operator's license, the commission shall
1122	1122	authorize the release of all security on a determination that no
1123	1123	amounts of the gross receipts tax remain due and payable under this
1124	1124	subchapter.
1125	1125	[Sections 2004.410-2004.450 reserved for expansion]
1126	1126	SUBCHAPTER J. REGULATION OF POKER GAMING OPERATIONS
1127	1127	Sec. 2004.451. REGULATION OF POKER GAMING OPERATIONS. The
1128	1128	commission shall adopt rules applicable to the operation of poker
1129	1129	gaming at a licensed operator's premises as the commission
1130	1130	determines necessary for the protection of the public health,
1131	1131	safety, morals, and general welfare of the people of this state and
1132	1132	of the reputation of this state's poker gaming industry.
1133	1133	Sec. 2004.452. HOURS OF OPERATION. A licensed operator
1134	1134	that holds a license or permit issued by the Texas Alcoholic
1135	1135	Beverage Commission to sell or serve alcoholic beverages for
1136	1136	on-premises consumption may conduct poker gaming on the premises
1137	1137	covered by the operator's license only during the hours in which the
1138	1138	license holder may sell or serve alcoholic beverages under the
1139	1139	alcoholic beverage license or permit. A licensed operator that
1140	1140	does not hold a license or permit issued by the Texas Alcoholic
1141	1141	Beverage Commission to sell or serve alcoholic beverages for
1142	1142	on-premises consumption may conduct poker gaming on the premises
1143	1143	covered by the operator's license at any time. The hours of
1144	1144	operation for poker gaming must be clearly posted in the poker
1145	1145	gaming area. The hours of operation for a charitable poker
1146	1146	tournament shall be determined by the commission and be specified
1147	1147	in the permit.
1148	1148	Sec. 2004.453. TABLE LIMITS; TOURNAMENTS. (a) A licensed
1149	1149	operator shall establish table limits for each poker gaming table.
1150	1150	(b) The licensed operator may conduct tournaments at any
1151	1151	time and charge a buy-in fee not to exceed $100 and a tournament
1152	1152	registration fee not to exceed $30.
1153	1153	Sec. 2004.454. ELECTRONIC POKER TABLE. (a) An electronic
1154	1154	poker table must:
1155	1155	(1) include not fewer than 8 and not more than 10
1156	1156	player positions that each have:
1157	1157	(A) a central processing unit;
1158	1158	(B) a touch screen;
1159	1159	(C) an International Standards Organization 7816
1160	1160	smart card reader;
1161	1161	(D) a bill validator with currency verification
1162	1162	and counterfeit detection to allow players to deposit bank notes or
1163	1163	vouchers to play a poker game;
1164	1164	(E) a ticket printer to print a voucher with a bar
1165	1165	code that must be validated to allow a player to redeem the player's
1166	1166	winnings; and
1167	1167	(F) access to the cash collection box and ticket
1168	1168	printer without allowing access to any of the table's electronic
1169	1169	components that contain a central processing unit or any game logic
1170	1170	components;
1171	1171	(2) allow each player to:
1172	1172	(A) view cards dealt to the player and the
1173	1173	remaining chips and other game information; and
1174	1174	(B) input game decisions;
1175	1175	(3) include a video screen in the center of the table
1176	1176	that displays game information, chips bet by each player, every
1177	1177	action of the player in real time, and cards dealt to all players;
1178	1178	(4) maintain a complete hand history for a period of 30
1179	1179	days that is accessible to the commission by remote connection or
1180	1180	from the table with a secure access card from any player position;
1181	1181	(5) to quickly settle any dispute, provide a method
1182	1182	for viewing a visual snapshot of the previous 10 hands dealt at the
1183	1183	table with a view that includes the players' seats, individual
1184	1184	cards, wagers, net wins or losses for each hand, collection fees,
1185	1185	and communal cards;
1186	1186	(6) display the collection fee for the game in a
1187	1187	central location viewable by all players;
1188	1188	(7) provide a feature that enables complete recovery
1189	1189	of a complete game if a power disruption occurs during the hand;
1190	1190	(8) allow the commission, at the table or remotely, to
1191	1191	audit every event and action, including hand history, cash-in,
1192	1192	cash-out, and rake collection, that has occurred on the electronic
1193	1193	poker table within the period prescribed by the commission; and
1194	1194	(9) allow the commission, using a unique
1195	1195	commission-controlled access card, to verify at any time the status
1196	1196	and integrity of the table software to ensure that a modification or
1197	1197	deletion of a file located on any part of the electronic table has
1198	1198	not occurred, including on the server, at player positions, or on
1199	1199	the table's central processing unit.
1200	1200	(b) An electronic poker table must use:
1201	1201	(1) a controlled central server to deal electronic
1202	1202	cards to each player in a poker hand and to maintain the player's
1203	1203	virtual chip stacks, wagers placed, and house fees collected;
1204	1204	(2) a cashier system that logs and records all cash
1205	1205	flows, including each cash-in, cash-out, and house collection, and
1206	1206	that is used to report that information to the commission; and
1207	1207	(3) a remote lock-down function that allows the
1208	1208	commission to remotely lock down and prevent play indefinitely on
1209	1209	the table if the operator is delinquent in money owed to the
1210	1210	commission or is noncompliant with any law of this state.
1211	1211	Sec. 2004.455. BANK. A licensed operator shall establish
1212	1212	on the operator's premises a bank to convert legal United States
1213	1213	tender into chips or tokens and to convert chips or tokens into
1214	1214	cash.
1215	1215	Sec. 2004.456. USE OF CHIPS OR TOKENS. (a) All poker
1216	1216	gaming conducted by a licensed operator shall be conducted using
1217	1217	chips or tokens approved by the commission or be conducted on an
1218	1218	electronic poker table approved by the commission.
1219	1219	(b) All chips or tokens must bear the logo of the licensed
1220	1220	operator's premises and must be manufactured in a manner designed
1221	1221	to substantially decrease the chips' or tokens' susceptibility to
1222	1222	counterfeiting. The commission may inspect a licensed operator's
1223	1223	chips or tokens to confirm compliance with this section.
1224	1224	Sec. 2004.457. USE OF PLAYING CARDS. (a) Poker gaming
1225	1225	conducted by a licensed operator shall be played with one or more
1226	1226	poker industry standard poker card decks or, for an electronic
1227	1227	poker table, on an electronic poker table approved by the
1228	1228	commission that displays cards.
1229	1229	(b) Each poker card deck used in poker gaming must be sealed
1230	1230	with a label indicating the deck was manufactured or distributed by
1231	1231	a licensed manufacturer or distributor.
1232	1232	(c) Not more than 50 separate poker hands may be played with
1233	1233	the same poker card deck.
1234	1234	(d) Each poker card deck must be monitored and cataloged in
1235	1235	a log that documents the exact location of the cards on a licensed
1236	1236	operator's premises.
1237	1237	Sec. 2004.458. RULES OF PLAY. All poker rules used in poker
1238	1238	gaming conducted by a licensed operator shall be submitted to and
1239	1239	approved by the commission.
1240	1240	Sec. 2004.459. BOND REQUIREMENT. (a) Each employee of a
1241	1241	licensed operator who handles cash, other than an employee employed
1242	1242	to sell or serve alcoholic beverages, must be bonded.
1243	1243	(b) For each employee required to comply with Subsection
1244	1244	(a), a licensed operator shall:
1245	1245	(1) submit to the commission a copy of the certificate
1246	1246	evidencing that the employee has obtained a fidelity bond from a
1247	1247	surety company chartered or authorized to conduct business in this
1248	1248	state; and
1249	1249	(2) post a copy of the certificate in a conspicuous
1250	1250	location on the operator's premises.
1251	1251	Sec. 2004.460. BADGES. (a) During the operation of poker
1252	1252	gaming, each individual licensed under this chapter shall wear in a
1253	1253	prominently visible location on the individual's person a numbered
1254	1254	badge issued by the commission.
1255	1255	(b) An individual who ceases employment with a licensed
1256	1256	operator shall immediately surrender the individual's badge to the
1257	1257	operator. Not later than the 10th day after the date the individual
1258	1258	surrenders the badge, the licensed operator shall:
1259	1259	(1) on a form adopted by the commission notify the
1260	1260	commission in writing of a change in status of the individual; and
1261	1261	(2) submit the surrendered badge to the commission.
1262	1262	(c) The badge must prominently display on the front of the
1263	1263	badge:
1264	1264	(1) capital letters identifying the license held by
1265	1265	the individual;
1266	1266	(2) the first name of the individual;
1267	1267	(3) the picture of the individual submitted with the
1268	1268	individual's license application;
1269	1269	(4) the badge number; and
1270	1270	(5) the expiration date of the license.
1271	1271	(d) The full name of the license holder, along with the type
1272	1272	of license, must be printed on the reverse side of the badge.
1273	1273	Sec. 2004.461. BONUS PROGRAMS. (a) The commission by rule
1274	1274	shall establish promotion bonus programs for bad beat hands and
1275	1275	other bonus programs. The programs may be statewide or limited to
1276	1276	individual premises.
1277	1277	(b) Each licensed operator shall:
1278	1278	(1) collect promotion bonus fees in accordance with
1279	1279	commission rule; and
1280	1280	(2) award a bonus that does not exceed $250 to the
1281	1281	player who wins the bonus.
1282	1282	(c) The amount awarded under Subsection (b)(2) shall be
1283	1283	deducted from the daily promotion bonus fee that would otherwise be
1284	1284	remitted to this state.
1285	1285	(d) The commission shall award to the winning player of a
1286	1286	bonus program any amount that exceeds $250.
1287	1287	(e) A distributor may collect from the commission an
1288	1288	administrative fee, not to exceed 20 percent of the promotion bonus
1289	1289	fee paid to a winning player.
1290	1290	(f) A promotion bonus program for bad beat hands or any
1291	1291	other bonus program may not be offered for a charitable poker
1292	1292	tournament.
1293	1293	Sec. 2004.462. COLLECTION FEE. (a) Each licensed operator
1294	1294	shall collect a collection fee on each poker hand played. The
1295	1295	collection fee may not exceed 10 percent of the communal pot in each
1296	1296	hand of poker played, with a maximum of $4 per hand.
1297	1297	(b) The commission shall adopt rules necessary to
1298	1298	administer this section.
1299	1299	Sec. 2004.463. PROMOTION BONUS FEE. (a) A promotion bonus
1300	1300	fee may not exceed $1 per hand.
1301	1301	(b) The promotion bonus fee shall be remitted to this state,
1302	1302	after deducting the gross receipts tax, the fee used for bonus
1303	1303	programs, and administrative fees not to exceed 20 percent of the
1304	1304	promotion bonus fee.
1305	1305	Sec. 2004.464. CONTRIBUTION TO PURSE FUND. (a) A
1306	1306	pari-mutuel license holder described by Section
1307	1307	2004.103(a)(1)(A)(ii) that conducts poker gaming in this state
1308	1308	shall deposit in a purse fund two percent of the license holder's
1309	1309	gross receipts from that poker gaming.
1310	1310	(b) Money in the purse fund may only be expended in
1311	1311	accordance with rules adopted by the Texas Racing Commission under
1312	1312	Section 18.09, Texas Racing Act (Article 179e, Vernon's Texas Civil
1313	1313	Statutes).
1314	1314	Sec. 2004.465. REPORTING REQUIREMENTS. (a) A licensed
1315	1315	operator shall keep books and records in a manner that clearly shows
1316	1316	the total amount of gross receipts and total deposits made by all
1317	1317	poker gaming players.
1318	1318	(b) The books and records kept by a licensed operator
1319	1319	relating to poker gaming operations are not public information, and
1320	1320	publication and dissemination of the materials by the commission
1321	1321	are prohibited. The commission may publish and disseminate the
1322	1322	total gross receipts of each licensed operator at the frequency and
1323	1323	in the level of detail the commission considers appropriate.
1324	1324	(c) A licensed operator that is not an individual shall file
1325	1325	a report of each change of the operator's officers and directors
1326	1326	with the commission. The commission shall, not later than the 90th
1327	1327	day after the date of the change, approve or disapprove the change.
1328	1328	During the 90-day period, the officer or director is entitled to
1329	1329	exercise the powers of the position to which the officer or director
1330	1330	was elected or appointed.
1331	1331	(d) The commission may require that a licensed operator
1332	1332	provide the commission with a copy of the operator's federal income
1333	1333	tax return not later than the 30th day after the date the return is
1334	1334	filed with the federal government. The federal income tax returns
1335	1335	submitted to the commission are not public information, and
1336	1336	publication and dissemination of the materials by the commission
1337	1337	are prohibited.
1338	1338	Sec. 2004.466. EXCLUSION OF PERSONS. (a) The commission by
1339	1339	rule shall provide for the maintenance of a list of persons who are
1340	1340	to be excluded or ejected from poker gaming premises. The list may
1341	1341	include a person whose presence in poker gaming premises is
1342	1342	determined by the commission to pose a threat to the interests of
1343	1343	this state, to licensed poker gaming, or to both.
1344	1344	(b) In making a determination under this section, the
1345	1345	commission may consider any:
1346	1346	(1) prior conviction of a crime that is a felony in
1347	1347	this state or under the laws of the United States or a crime
1348	1348	involving moral turpitude or a violation of the gaming laws of a
1349	1349	state or the United States; or
1350	1350	(2) violation of or conspiracy to violate the
1351	1351	provisions of this chapter relating to:
1352	1352	(A) the failure to disclose an interest in a
1353	1353	licensed operator;
1354	1354	(B) wilful evasion of a fee or a tax; or
1355	1355	(C) a notorious or unsavory reputation that would
1356	1356	adversely affect public confidence and trust that the poker gaming
1357	1357	industry is free from criminal or corruptive elements.
1358	1358	Sec. 2004.467. INTERNAL AUDIT AND CONTROL SYSTEMS. (a) A
1359	1359	licensed operator shall adopt an internal control system that
1360	1360	provides for:
1361	1361	(1) the safeguarding of its assets and revenues, which
1362	1362	must include means for the recording of cash transactions and
1363	1363	balances and evidences of indebtedness; and
1364	1364	(2) the provision of reliable records, accounts, and
1365	1365	reports of transactions, operations, and events, including reports
1366	1366	to the director and the commission.
1367	1367	(b) The internal control system must be designed to
1368	1368	reasonably ensure that:
1369	1369	(1) assets are safeguarded;
1370	1370	(2) financial records are accurate and reliable;
1371	1371	(3) transactions are performed only in accordance with
1372	1372	management's general or specific authorization;
1373	1373	(4) transactions are recorded adequately to permit
1374	1374	proper reporting of poker gaming revenue and of fees and taxes and
1375	1375	to maintain accountability for assets;
1376	1376	(5) access to assets is permitted only in accordance
1377	1377	with the licensed operator's specific authorization;
1378	1378	(6) recorded accountability for assets is compared
1379	1379	with actual assets at reasonable intervals and appropriate action
1380	1380	is taken with respect to any discrepancies; and
1381	1381	(7) functions, duties, and responsibilities are
1382	1382	appropriately segregated and performed in accordance with sound
1383	1383	practices by competent, qualified personnel.
1384	1384	(c) A licensed operator or an applicant for an operator's
1385	1385	license shall describe, in a manner approved or required by the
1386	1386	director, the licensed operator's or applicant's administrative and
1387	1387	accounting procedures in detail in a written system of internal
1388	1388	control. A licensed operator or applicant for an operator's
1389	1389	license shall submit a copy of the written system. A written system
1390	1390	must include:
1391	1391	(1) an organizational chart depicting appropriate
1392	1392	segregation of duties and responsibilities;
1393	1393	(2) a description of the duties and responsibilities
1394	1394	of each position shown on the organizational chart;
1395	1395	(3) a detailed narrative description of the
1396	1396	administrative and accounting procedures designed to satisfy the
1397	1397	requirements of Section 2004.402(a);
1398	1398	(4) a written statement signed by the licensed
1399	1399	operator or applicant's chief financial officer or by the licensed
1400	1400	operator or applicant, if an individual, attesting that the system
1401	1401	satisfies the requirements of this section;
1402	1402	(5) if the written system is submitted by an
1403	1403	applicant, a letter from an independent certified public accountant
1404	1404	stating that the applicant's written system has been reviewed by
1405	1405	the certified public accountant and complies with the requirements
1406	1406	of this section; and
1407	1407	(6) other items the director may require.
1408	1408	(d) The commission shall adopt minimum standards for
1409	1409	internal control procedures.
1410	1410	(e) For an electronic poker table, the internal control
1411	1411	system records required under this section must be created and
1412	1412	maintained by the electronic poker table system. The system must:
1413	1413	(1) create an audit trail that records any changes,
1414	1414	modifications, or deletions of any records required by this
1415	1415	section;
1416	1416	(2) allow the commission to audit the accuracy of and
1417	1417	to authenticate any data included in the records; and
1418	1418	(3) allow the commission to verify, remotely and at
1419	1419	the table using a secure access card from any player position,
1420	1420	whether any files associated with the table have been modified,
1421	1421	hidden, compromised, or deleted.
1422	1422	Sec. 2004.468. AGE REQUIREMENTS. A person younger than 21
1423	1423	years of age may not:
1424	1424	(1) play, be allowed to play, place wagers, or collect
1425	1425	a communal pot, personally or through an agent, or be present during
1426	1426	poker gaming at any premises authorized under this chapter; or
1427	1427	(2) be employed as a poker gaming employee.
1428	1428	Sec. 2004.469. VIDEO SURVEILLANCE AND DISPUTE RESOLUTION.
1429	1429	(a) Except as provided by Subsection (b) or by commission rule for
1430	1430	a charitable poker tournament, video surveillance of the poker
1431	1431	gaming conducted at each poker gaming table shall be provided by the
1432	1432	licensed operator. At least two video surveillance cameras must be
1433	1433	dedicated to each poker gaming table. The video cameras must have a
1434	1434	clear, unobstructed view of the communal cards, chips, and dealers'
1435	1435	hands. The video records must be maintained for at least 30 days
1436	1436	unless a notice is received from the commission under Subsection
1437	1437	(d), in which case the video surveillance tape recording must be
1438	1438	maintained until the commission notifies the operator that the
1439	1439	dispute has been resolved.
1440	1440	(b) Video surveillance is not required if all the poker
1441	1441	gaming tables used on the premises licensed by the commission are
1442	1442	electronic poker tables approved by the commission.
1443	1443	(c) If a player at a poker gaming table disputes the
1444	1444	decision of the dealer regarding the final disposition of an
1445	1445	individual game, the player may file a complaint with the licensed
1446	1446	operator. The licensed operator shall attempt to resolve a gaming
1447	1447	dispute immediately on receiving a complaint.
1448	1448	(d) Players in a poker game must make a formal complaint of
1449	1449	the dispute to the commission by the end of the next business day
1450	1450	following the date of the poker game. The commission shall notify
1451	1451	the licensed operator immediately of the complaint, and the
1452	1452	operator shall send to the commission a copy of any video recording
1453	1453	related to the complaint.
1454	1454	(e) The commission shall adopt rules and develop forms for
1455	1455	use by players for resolution of complaints submitted by players
1456	1456	under this section.
1457	1457	(f) The commission shall establish rules for surveillance
1458	1458	at charitable poker tournaments.
1459	1459	Sec. 2004.470. QUESTIONING AND DETENTION OF PERSONS. A
1460	1460	licensed operator or an employee of the operator may question any
1461	1461	person on the poker gaming premises who is suspected of violating
1462	1462	this chapter. The licensed operator or the operator's employee is
1463	1463	not criminally or civilly liable:
1464	1464	(1) as a result of the questioning; or
1465	1465	(2) for reporting the person suspected of the
1466	1466	violation to the director or law enforcement authorities.
1467	1467	Sec. 2004.471. SERVICE OF COMPLIMENTARY ALCOHOLIC
1468	1468	BEVERAGES PROHIBITED. A licensed operator may not serve
1469	1469	complimentary alcoholic beverages to a player on the operator's
1470	1470	poker gaming premises.
1471	1471	[Sections 2004.472-2004.500 reserved for expansion]
1472	1472	SUBCHAPTER K. ENFORCEMENT
1473	1473	Sec. 2004.501. INVESTIGATION. The commission may conduct
1474	1474	an appropriate investigation to:
1475	1475	(1) determine whether this chapter or a commission
1476	1476	rule was violated;
1477	1477	(2) determine facts, conditions, practices, or
1478	1478	matters the commission considers necessary or proper to aid in the
1479	1479	enforcement of a law or rule;
1480	1480	(3) aid in adopting rules;
1481	1481	(4) secure information as a basis for recommending
1482	1482	legislation relating to this chapter; and
1483	1483	(5) determine whether a license holder is able to meet
1484	1484	the license holder's financial obligations, including all
1485	1485	financial obligations imposed by this chapter, as they become due.
1486	1486	Sec. 2004.502. AUDIT. The commission may conduct an audit
1487	1487	of a license holder's books and records as part of the
1488	1488	investigation. If a recomputation of tax under Section 2004.404 is
1489	1489	at issue, the commission shall conduct an audit.
1490	1490	Sec. 2004.503. COMPLAINT. (a) If after an investigation
1491	1491	the commission is satisfied that a license, registration, finding
1492	1492	of suitability, or prior approval by the commission of a
1493	1493	transaction for which approval was required or permitted under this
1494	1494	chapter should be limited, conditioned, suspended, or revoked, or
1495	1495	that a fine should be imposed, the executive director shall
1496	1496	initiate a hearing by filing a complaint with the commission and
1497	1497	transmit a summary of evidence that bears on the matter and the
1498	1498	transcript of testimony at an investigative hearing conducted by or
1499	1499	on behalf of the executive director regarding the matter. The
1500	1500	complaint must:
1501	1501	(1) be a written statement of charges that sets forth
1502	1502	in ordinary and concise language the acts or omissions with which
1503	1503	the respondent is charged;
1504	1504	(2) specify the statute or rule that the respondent is
1505	1505	alleged to have violated;
1506	1506	(3) contain a factual allegation; and
1507	1507	(4) not consist merely of charges raised on the
1508	1508	language of the statute or rule.
1509	1509	(b) On the filing of the complaint, the executive director
1510	1510	shall serve a copy of the complaint on the respondent either
1511	1511	personally or by registered or certified mail at the respondent's
1512	1512	address on file with the executive director.
1513	1513	(c) The respondent must file an answer with the executive
1514	1514	director not later than the 30th day after the date of the service
1515	1515	of the complaint.
1516	1516	Sec. 2004.504. HEARING. (a) On receipt of a complaint
1517	1517	under this subchapter, the commission shall review all matter
1518	1518	presented in support of the complaint and shall appoint a hearing
1519	1519	examiner to conduct further proceedings.
1520	1520	(b) The hearing examiner shall conduct proceedings under
1521	1521	Chapter 2001, Government Code. After the proceedings, the hearing
1522	1522	examiner may recommend that the commission take any appropriate
1523	1523	action, including revocation, suspension, limitation, or
1524	1524	conditioning of a license, finding of suitability, or prior
1525	1525	approval, or imposition of a fine not to exceed $5,000 for each
1526	1526	violation.
1527	1527	(c) The commission shall review the recommendation. The
1528	1528	commission may remand the case to the hearing examiner for
1529	1529	presentation of additional evidence on a showing of good cause as to
1530	1530	why the evidence could not have been presented at the previous
1531	1531	hearing.
1532	1532	(d) The commission shall accept, reject, or modify the
1533	1533	recommendation.
1534	1534	(e) If the commission limits, conditions, suspends, or
1535	1535	revokes a license, finding of suitability, or prior approval, or
1536	1536	imposes a fine, the commission shall issue a written order.
1537	1537	(f) A limitation, condition, revocation, suspension, or
1538	1538	fine imposed is effective according to its terms until reversed
1539	1539	following judicial review, except that the commission may stay its
1540	1540	order pending a rehearing or judicial review on terms and
1541	1541	conditions the commission considers proper.
1542	1542	Sec. 2004.505. JUDICIAL REVIEW. Judicial review of an
1543	1543	order or decision of the commission may be made under Chapter 2001,
1544	1544	Government Code. Judicial review is under the substantial evidence
1545	1545	rule.
1546	1546	Sec. 2004.506. PRIVILEGED DOCUMENTS. (a) A communication
1547	1547	or document of an applicant or license holder that is required by
1548	1548	law or commission rule or by a subpoena issued by the commission and
1549	1549	that is to be made or transmitted to the commission is privileged
1550	1550	and does not impose liability for defamation or constitute a ground
1551	1551	for recovery in a civil action.
1552	1552	(b) If a document or communication contains information
1553	1553	that is privileged, the privilege is not waived or lost because the
1554	1554	document or communication is disclosed to the commission.
1555	1555	(c) Notwithstanding the powers granted to the commission by
1556	1556	this chapter, the commission:
1557	1557	(1) may not release or disclose privileged
1558	1558	information, documents, or communications provided by an applicant
1559	1559	or license holder and required by a court order after timely notice
1560	1560	of the proceedings has been given to the applicant or license holder
1561	1561	without the prior written consent of the applicant or license
1562	1562	holder;
1563	1563	(2) shall maintain all privileged information,
1564	1564	documents, and communications in a secure place accessible only to
1565	1565	commission members and the executive director; and
1566	1566	(3) shall adopt procedures to protect the privileged
1567	1567	nature of information, documents, and communications provided by an
1568	1568	applicant or license holder.
1569	1569	Sec. 2004.507. RELEASE OF CONFIDENTIAL INFORMATION. (a)
1570	1570	An application to a court for an order requiring the commission to
1571	1571	release any confidential information shall be made only on a
1572	1572	written motion delivered not later than the 10th day before the date
1573	1573	of application to the commission, the attorney general, and all
1574	1574	persons who may be affected by the entry of the order.
1575	1575	(b) Copies of the motion and all papers filed in support of
1576	1576	the motion shall be served with the notice by delivering a copy in
1577	1577	person or by certified mail to the last known address of the person
1578	1578	to be served.
1579	1579	Sec. 2004.508. EMERGENCY ORDERS. (a) The commission may
1580	1580	issue an emergency order to:
1581	1581	(1) suspend, limit, or condition a license or finding
1582	1582	of suitability; or
1583	1583	(2) require a licensed operator to keep an individual
1584	1584	license holder from the premises or to not pay the holder any
1585	1585	remuneration for services or any profits, income, or accruals on
1586	1586	the licensed operator's investment in the premises.
1587	1587	(b) An emergency order may be issued only if the commission
1588	1588	determines that:
1589	1589	(1) a license holder or person found suitable has
1590	1590	wilfully failed to report, pay, or truthfully account for a fee,
1591	1591	tax, or other amount imposed under this chapter or wilfully
1592	1592	attempted in any manner to evade or defeat a fee, tax, or other
1593	1593	payment;
1594	1594	(2) a license holder cheated at a poker game; or
1595	1595	(3) the action is necessary for the immediate
1596	1596	preservation of the public peace, health, safety, morals, good
1597	1597	order, or general welfare.
1598	1598	(c) The emergency order must state the grounds on which it
1599	1599	is issued, including a statement of facts constituting the alleged
1600	1600	emergency necessitating the action.
1601	1601	(d) An emergency order may be issued only with the approval
1602	1602	of and under the signature of a majority of the commission members.
1603	1603	(e) An emergency order is effective immediately on issuance
1604	1604	and service on the license holder or resident agent of the license
1605	1605	holder, an employee, or, in cases involving registration or
1606	1606	findings of suitability, the person or entity involved or resident
1607	1607	agent of the entity involved. An emergency order may suspend,
1608	1608	limit, condition, or take other action in relation to the license,
1609	1609	registration, or suitability finding of one or more persons in an
1610	1610	operation without affecting other individual license holders or
1611	1611	persons subject to a suitability finding. An emergency order
1612	1612	remains effective until further order of the commission or final
1613	1613	disposition of the case.
1614	1614	(f) Not later than the fifth day after the date of issuance
1615	1615	of an emergency order, the executive director shall file a
1616	1616	complaint and serve it on the person involved. The person against
1617	1617	whom the emergency order has been issued and served is entitled to a
1618	1618	hearing before the commission and to judicial review of the
1619	1619	decision and order of the commission under Chapter 2001, Government
1620	1620	Code. Judicial review is under the substantial evidence rule.
1621	1621	Sec. 2004.509. ACCESS TO CRIMINAL HISTORY RECORD
1622	1622	INFORMATION. (a) The commission, the executive director, and the
1623	1623	director are entitled to conduct an investigation of and obtain
1624	1624	criminal history record information maintained by the Department of
1625	1625	Public Safety, the Federal Bureau of Investigation identification
1626	1626	division, or another law enforcement agency to assist in the
1627	1627	investigation of:
1628	1628	(1) a licensed operator or an applicant for an
1629	1629	operator's license;
1630	1630	(2) a person required to be named in a license
1631	1631	application;
1632	1632	(3) an employee of a licensed operator, if the
1633	1633	employee is or will be directly involved in poker gaming
1634	1634	operations;
1635	1635	(4) a person who manufactures or distributes poker
1636	1636	gaming equipment, or a representative of a person who manufactures
1637	1637	or distributes poker gaming equipment or supplies offered to a
1638	1638	poker card room;
1639	1639	(5) a dealer or other employee license holder or
1640	1640	applicant;
1641	1641	(6) a registered owner of an equity or creditor
1642	1642	interest in a licensed operator or an applicant for such a
1643	1643	registration;
1644	1644	(7) a licensed nonprofit organization or an applicant
1645	1645	for a nonprofit organization license; or
1646	1646	(8) if a person described in another subdivision of
1647	1647	this subsection is not an individual, an individual who:
1648	1648	(A) is an officer or director of the person;
1649	1649	(B) holds more than 10 percent of the stock in the
1650	1650	person;
1651	1651	(C) holds an equitable interest greater than 10
1652	1652	percent in the person;
1653	1653	(D) is a creditor of the person who holds more
1654	1654	than 10 percent of the person's outstanding debt;
1655	1655	(E) is the owner or lessee of a business that the
1656	1656	person conducts or through which the person will conduct poker
1657	1657	gaming-related activities;
1658	1658	(F) shares or will share in the profits, other
1659	1659	than stock dividends, of the person;
1660	1660	(G) participates in managing the affairs of the
1661	1661	person; or
1662	1662	(H) is an employee of the person who is or will be
1663	1663	involved in providing services to a poker card room.
1664	1664	(b) On each anniversary of the date of issuance of an
1665	1665	operator's license, the commission shall obtain criminal history
1666	1666	record information maintained by the Department of Public Safety on
1667	1667	the licensed operator and on each holder of a 10 percent or greater
1668	1668	equity or creditor interest in the licensed operator.
1669	1669	(c) Not later than the first anniversary after the date of
1670	1670	each license renewal, the commission shall obtain criminal history
1671	1671	record information maintained by the Department of Public Safety on
1672	1672	each licensed dealer or other employee, manufacturer, or
1673	1673	distributor.
1674	1674	Sec. 2004.510. FINGERPRINTS. The commission may deny an
1675	1675	application for a license or the commission may suspend or revoke a
1676	1676	license or certificate of registration if the applicant fails on
1677	1677	request to provide a complete legible set of fingerprints of a
1678	1678	person required to be named in a license application.
1679	1679	Sec. 2004.511. DEPARTMENT OF PUBLIC SAFETY ASSISTANCE;
1680	1680	COSTS OF INVESTIGATION. (a) The executive director or the director
1681	1681	may request the cooperation of the Department of Public Safety to
1682	1682	perform a background investigation of a person listed in Section
1683	1683	2004.509. The commission shall reimburse the department for the
1684	1684	actual cost of an investigation.
1685	1685	(b) The executive director may require a person who is
1686	1686	subject to investigation to pay all costs of the investigation and
1687	1687	to provide any information, including fingerprints, necessary to
1688	1688	carry out the investigation or facilitate access to state or
1689	1689	federal criminal history record information. Payments made to the
1690	1690	executive director under this subsection shall be deposited in the
1691	1691	general revenue fund and may be used only to reimburse the
1692	1692	commission or the Department of Public Safety for the actual costs
1693	1693	of an investigation.
1694	1694	(c) Unless otherwise prohibited by law, the Department of
1695	1695	Public Safety may retain any record or information submitted to it
1696	1696	under this section. The department shall notify the executive
1697	1697	director or the director of any change in information provided to
1698	1698	the executive director or the director when the department learns
1699	1699	of the change.
1700	1700	[Sections 2004.512-2004.550 reserved for expansion]
1701	1701	SUBCHAPTER L. PENALTIES AND OFFENSES
1702	1702	Sec. 2004.551. FAILURE TO PAY FEES. (a) License fees and
1703	1703	other fees required by this chapter must be paid to the commission
1704	1704	on or before the dates provided by law for each fee.
1705	1705	(b) A person failing to timely pay a fee when due shall pay
1706	1706	in addition a penalty of not less than $50 or 25 percent of the
1707	1707	amount due, whichever is greater. The penalty may not exceed $1,000
1708	1708	if the fee is less than 10 days late and may not exceed $5,000 under
1709	1709	any circumstances. The penalty shall be collected in the same
1710	1710	manner as other charges, license fees, and penalties under this
1711	1711	chapter.
1712	1712	Sec. 2004.552. FAILURE TO REPORT, PAY, OR ACCOUNT FOR FEE.
1713	1713	(a) A person commits an offense if the person wilfully fails to
1714	1714	report, pay, or truthfully account for a fee imposed under this
1715	1715	chapter or wilfully attempts in any manner to evade or defeat a fee.
1716	1716	(b) An offense under this section is a Class A misdemeanor.
1717	1717	Sec. 2004.553. FRAUD. (a) A person commits an offense if
1718	1718	the person knowingly:
1719	1719	(1) alters or misrepresents the outcome of a poker
1720	1720	game on which wagers have been made after the outcome is made sure
1721	1721	but before it is revealed to the players;
1722	1722	(2) places, increases, or decreases a bet or
1723	1723	determines the course of play after acquiring knowledge, not
1724	1724	available to all players, of the outcome of the game or an event
1725	1725	that affects the outcome of the game or that is the subject of the
1726	1726	bet or aids anyone in acquiring such knowledge for the purpose of
1727	1727	placing, increasing, or decreasing a bet or determining the course
1728	1728	of play contingent on that event or outcome;
1729	1729	(3) claims, collects, or takes, or attempts to claim,
1730	1730	collect, or take, money or anything of value in or from a poker
1731	1731	game, with intent to defraud, without having made a wager
1732	1732	contingent on the poker game, or claims, collects, or takes an
1733	1733	amount greater than the amount won;
1734	1734	(4) induces another to go to a place where poker gaming
1735	1735	is being conducted or operated in violation of this chapter, with
1736	1736	the intent that the other person play or participate in that poker
1737	1737	gaming; or
1738	1738	(5) manipulates, with the intent to cheat, a component
1739	1739	of poker gaming equipment in a manner contrary to the designed and
1740	1740	normal operational purpose for the component, with knowledge that
1741	1741	the manipulation affects the conduct or outcome of a poker game or
1742	1742	with knowledge of an event that affects the outcome of the game.
1743	1743	(b) An offense under this section is a felony of the third
1744	1744	degree.
1745	1745	Sec. 2004.554. USE OF PROHIBITED DEVICES. (a) A person
1746	1746	commits an offense if the person, at a premises of a licensed
1747	1747	operator, uses or possesses with the intent to use a device, other
1748	1748	than a device customarily used in the conduct of poker gaming, to
1749	1749	assist in:
1750	1750	(1) projecting the outcome of a poker game; or
1751	1751	(2) analyzing the probability of the occurrence of an
1752	1752	event relating to the game.
1753	1753	(b) An offense under this section is a felony of the third
1754	1754	degree.
1755	1755	Sec. 2004.555. USE OF COUNTERFEIT OR UNAUTHORIZED CHIPS,
1756	1756	TOKENS, PLAYING CARDS, OR OTHER DEVICES. (a) A person commits an
1757	1757	offense if the person knowingly uses counterfeit chips, tokens, or
1758	1758	playing cards in a poker game.
1759	1759	(b) A person commits an offense if the person, in playing a
1760	1760	poker game designed to be played with chips or tokens approved by
1761	1761	the commission:
1762	1762	(1) knowingly uses a chip or token other than a chip or
1763	1763	token approved by the commission; or
1764	1764	(2) uses any device or other means to violate the
1765	1765	provisions of this chapter.
1766	1766	(c) A person, other than an authorized employee of a
1767	1767	licensed operator acting in furtherance of the person's employment
1768	1768	in an establishment, commits an offense if the person knowingly has
1769	1769	on the person's body or in the person's possession on or off the
1770	1770	premises where poker gaming is conducted a device intended to be
1771	1771	used to violate the provisions of this chapter.
1772	1772	(d) A person, other than an authorized employee of a
1773	1773	licensed operator acting in furtherance of the person's employment
1774	1774	in an establishment, commits an offense if the person knowingly has
1775	1775	on the person's body or in the person's possession on or off the
1776	1776	premises a key or device known to have been designed for the purpose
1777	1777	of and suitable for opening, entering, or affecting the operation
1778	1778	of a poker gaming table, a drop box, or an electronic or mechanical
1779	1779	device connected to the table or box or for removing money or other
1780	1780	contents from the table or box.
1781	1781	(e) Possession of more than one of the devices, equipment,
1782	1782	products, or materials described in this section permits a
1783	1783	rebuttable inference that the possessor intended to use them for
1784	1784	cheating.
1785	1785	(f) An offense under this section is a felony of the third
1786	1786	degree.
1787	1787	Sec. 2004.556. CHEATING. (a) A person commits an offense
1788	1788	if the person knowingly cheats at any poker game.
1789	1789	(b) An offense under this section is a state jail felony.
1790	1790	Sec. 2004.557. UNAUTHORIZED OPERATION OF POKER GAMING
1791	1791	TABLES. (a) A person commits an offense if the person operates
1792	1792	poker gaming tables without a license issued by the commission.
1793	1793	(b) A person commits an offense if the person operates more
1794	1794	than four poker gaming tables at the premises of a licensed
1795	1795	operator.
1796	1796	(c) An offense under this section is a state jail felony.
1797	1797	Sec. 2004.558. POSSESSION OF UNLAWFUL DEVICES. (a) A
1798	1798	person commits an offense if the person knowingly possesses any
1799	1799	poker gaming device that has been manufactured, sold, or
1800	1800	distributed in violation of this chapter.
1801	1801	(b) An offense under this section is a Class A misdemeanor.
1802	1802	Sec. 2004.559. UNLAWFUL MANUFACTURE, SALE, OR DISTRIBUTION
1803	1803	OF POKER GAMING EQUIPMENT. (a) A person commits an offense if the
1804	1804	person manufactures, sells, or distributes electronic poker
1805	1805	tables, cards, chips, or a device intended for use in violating this
1806	1806	chapter.
1807	1807	(b) A person commits an offense if the person marks, alters,
1808	1808	or otherwise modifies any electronic poker tables, cards, chips,
1809	1809	tokens, or poker gaming device in a manner that:
1810	1810	(1) affects the result of a wager by determining win or
1811	1811	loss; or
1812	1812	(2) alters the normal criteria of random selection
1813	1813	that affect the operation of a game or determine the outcome of a
1814	1814	game.
1815	1815	(c) A person commits an offense if the person instructs
1816	1816	another person in cheating or in the use of a device for cheating at
1817	1817	any poker game authorized to be conducted at the premises of a
1818	1818	licensed operator, with the knowledge or intent that the
1819	1819	information or use may be employed to violate this chapter.
1820	1820	(d) An offense under this section is a felony of the third
1821	1821	degree.
1822	1822	Sec. 2004.560. REPORTING PENALTIES. (a) A person commits
1823	1823	an offense if the person, in a license application, in a book or
1824	1824	record required to be maintained by this chapter or a rule adopted
1825	1825	under this chapter, or in a report required to be submitted by this
1826	1826	chapter or a rule adopted under this chapter:
1827	1827	(1) makes a statement or entry that the person knows to
1828	1828	be false or misleading; or
1829	1829	(2) knowingly fails to maintain or make an entry the
1830	1830	person knows is required to be maintained or made.
1831	1831	(b) A person commits an offense if the person knowingly
1832	1832	refuses to produce for inspection by the executive director a book,
1833	1833	record, or document required to be maintained or made by this
1834	1834	chapter or a rule adopted under this chapter.
1835	1835	(c) An offense under this section is a Class A misdemeanor.
1836	1836	Sec. 2004.561. GAMING BY MINORS. (a) A person commits an
1837	1837	offense if the person knowingly permits an individual that the
1838	1838	person knows is younger than 21 years of age to participate in poker
1839	1839	gaming at premises at which poker gaming is conducted under a
1840	1840	license issued under this chapter.
1841	1841	(b) An individual younger than 21 years of age commits an
1842	1842	offense if the individual participates in poker gaming at premises
1843	1843	at which poker gaming is conducted under a license issued under this
1844	1844	chapter.
1845	1845	(c) An offense under this section is a Class C misdemeanor.
1846	1846	Sec. 2004.562. GENERAL PENALTY; CONSPIRACY. (a) A person
1847	1847	commits an offense if the person knowingly or wilfully violates,
1848	1848	attempts to violate, or conspires to violate a provision of this
1849	1849	chapter specifying a prohibited act.
1850	1850	(b) Unless another penalty is specified for the offense, an
1851	1851	offense under this section is a Class A misdemeanor.
1852	1852	SECTION 2. Section 47.02(c), Penal Code, is amended to read
1853	1853	as follows:
1854	1854	(c) It is a defense to prosecution under this section that
1855	1855	the actor reasonably believed that the conduct:
1856	1856	(1) was permitted under Chapter 2001, Occupations
1857	1857	Code;
1858	1858	(2) was permitted under Chapter 2002, Occupations
1859	1859	Code;
1860	1860	(3) consisted entirely of participation in the state
1861	1861	lottery authorized by the State Lottery Act (Chapter 466,
1862	1862	Government Code);
1863	1863	(4) was permitted under the Texas Racing Act (Article
1864	1864	179e, Vernon's Texas Civil Statutes); [or]
1865	1865	(5) consisted entirely of participation in a drawing
1866	1866	for the opportunity to participate in a hunting, fishing, or other
1867	1867	recreational event conducted by the Parks and Wildlife Department;
1868	1868	or
1869	1869	(6) was permitted under Chapter 2004, Occupations
1870	1870	Code.
1871	1871	SECTION 3. Section 47.06(f), Penal Code, is amended to read
1872	1872	as follows:
1873	1873	(f) It is a defense to prosecution under Subsection (a) or
1874	1874	(c) that the person owned, manufactured, transferred, or possessed
1875	1875	the gambling device, equipment, or paraphernalia for the sole
1876	1876	purpose of shipping it:
1877	1877	(1) to the premises of a licensed operator under
1878	1878	Chapter 2004, Occupations Code, at which poker gaming may be
1879	1879	conducted under the license; or
1880	1880	(2) to another jurisdiction where the possession or
1881	1881	use of the device, equipment, or paraphernalia was legal.
1882	1882	SECTION 4. Section 47.09(a), Penal Code, is amended to read
1883	1883	as follows:
1884	1884	(a) It is a defense to prosecution under this chapter that
1885	1885	the conduct:
1886	1886	(1) was authorized under:
1887	1887	(A) Chapter 2001, Occupations Code;
1888	1888	(B) Chapter 2002, Occupations Code; [or]
1889	1889	(C) the Texas Racing Act (Article 179e, Vernon's
1890	1890	Texas Civil Statutes); or
1891	1891	(D) Chapter 2004, Occupations Code;
1892	1892	(2) consisted entirely of participation in the state
1893	1893	lottery authorized by Chapter 466, Government Code; or
1894	1894	(3) was a necessary incident to the operation of the
1895	1895	state lottery and was directly or indirectly authorized by:
1896	1896	(A) Chapter 466, Government Code;
1897	1897	(B) the lottery division of the Texas Lottery
1898	1898	Commission;
1899	1899	(C) the Texas Lottery Commission; or
1900	1900	(D) the director of the lottery division of the
1901	1901	Texas Lottery Commission.
1902	1902	SECTION 5. Subchapter H, Chapter 151, Tax Code, is amended
1903	1903	by adding Section 151.356 to read as follows:
1904	1904	Sec. 151.356. ELECTRONIC AND ELECTROMECHANICAL GAMING
1905	1905	DEVICES. An electronic or electromechanical gaming device that is
1906	1906	intended to be used to conduct poker gaming under Chapter 2004,
1907	1907	Occupations Code, is exempt from the tax imposed by this chapter and
1908	1908	from the other provisions of this chapter.
1909	1909	SECTION 6. Section 411.108, Government Code, is amended by
1910	1910	adding Subsection (a-1) and amending Subsection (b) to read as
1911	1911	follows:
1912	1912	(a-1) The Texas Lottery Commission is entitled to obtain
1913	1913	from the department criminal history record information maintained
1914	1914	by the department that relates to a person for whom the commission
1915	1915	may request criminal history record information under Section
1916	1916	2004.509, Occupations Code.
1917	1917	(b) Criminal history record information obtained by the
1918	1918	commission under Subsection (a) or (a-1) may not be released or
1919	1919	disclosed to any person except on court order or as provided by
1920	1920	Subsection (c).
1921	1921	SECTION 7. Section 467.035(a), Government Code, is amended
1922	1922	to read as follows:
1923	1923	(a) The commission may not employ or continue to employ a
1924	1924	person who owns a financial interest in:
1925	1925	(1) a bingo commercial lessor, bingo distributor, or
1926	1926	bingo manufacturer; [or]
1927	1927	(2) a lottery sales agency or a lottery operator; or
1928	1928	(3) a licensed operator or other license holder under
1929	1929	Chapter 2004, Occupations Code.
1930	1930	SECTION 8. Article 18, Texas Racing Act (Article 179e,
1931	1931	Vernon's Texas Civil Statutes), is amended by adding Section 18.09
1932	1932	to read as follows:
1933	1933	Sec. 18.09. POKER GAMING PURSE PROCEEDS. (a) To protect the
1934	1934	public and ensure continued support for the racing industry in this
1935	1935	state, the commission shall adopt rules to establish procedures
1936	1936	governing the deposit, accounting, audit, investment, and use of
1937	1937	money required to be deposited into a purse fund under Section
1938	1938	2004.464, Occupations Code.
1939	1939	(b) Other than limited administrative expenses authorized
1940	1940	by commission rule, the money deposited into a purse fund under
1941	1941	Section 2004.464, Occupations Code, may be used only to promote the
1942	1942	racing industry in this state by providing money for competitive
1943	1943	purses.
1944	1944	SECTION 9. Not later than January 1, 2010, the Texas Lottery
1945	1945	Commission shall adopt the rules, develop the applications and
1946	1946	forms, and establish the procedures necessary to implement Chapter
1947	1947	2004, Occupations Code, as added by this Act.
1948	1948	SECTION 10. This Act takes effect September 1, 2009.