84R11641 YDB-D
By: Thompson of Harris H.B. No. 2642
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of charitable bingo and amusement
redemption machine game rooms; requiring an occupational permit;
authorizing fees; creating civil and administrative penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. REGULATION OF CHARITABLE BINGO
SECTION 1.01. Sections 2001.002(13) and (18), Occupations
Code, are amended to read as follows:
(13) "Gross gaming revenue [receipts]" means the total
amount received from the sale, rental, transfer, or use of bingo
cards and entrance fees charged at premises at which bingo is
conducted less the amount of cash prizes paid to winners of bingo
games.
(18) "Net proceeds" means:
(A) in relation to the total [gross] receipts
from the conduct of bingo during one or more bingo occasions, the
amount remaining after deducting the reasonable sums necessarily
and actually expended for expenses under Section 2001.458 and the
fee on prizes under Section 2001.502; and
(B) in relation to the gross rent or other
consideration received by a licensed authorized organization for
the use of its premises, fixtures, or equipment by another license
holder, the amount remaining after deducting the reasonable sums
necessarily and actually expended for any janitorial services and
utility supplies directly attributable to the use of the premises,
fixtures, or equipment.
SECTION 1.02. Section 2001.057(a), Occupations Code, is
amended to read as follows:
(a) The commission shall [may] appoint a bingo advisory
committee consisting of nine members. The commission shall appoint
members representing a balance of interests including
representatives of:
(1) the public;
(2) charities that operate bingo games; [and]
(3) commercial and charity lessors that participate in
the bingo industry; and
(4) distributors.
SECTION 1.03. Sections 2001.060(a) and (c), Occupations
Code, are amended to read as follows:
(a) On or before June 1 of each even-numbered year, the
commission shall prepare and deliver to the governor, the
lieutenant governor, the speaker of the house of representatives,
and the chairs of the standing committees of the senate and house of
representatives with primary jurisdiction over charitable bingo a
report stating for each of the preceding two calendar years:
(1) the total amount of [adjusted] gross gaming
revenue [receipts] reported by licensed authorized organizations
from their bingo operations;
(2) the total amount of net proceeds reported by
licensed authorized organizations from their bingo operations; and
(3) a comparison of the amounts reported under
Subdivisions (1) and (2), including the percentage that the net
proceeds represents of the [adjusted] gross gaming revenue
[receipts].
(c) For purposes of Subsection (a), the commission shall
determine the total amount of net proceeds in a manner that does not
include [reduce gross receipts by] the amount of rent paid for the
rental of bingo premises by a licensed authorized organization to
another licensed authorized organization if the other organization
pays rent for the premises to a licensed commercial lessor.
SECTION 1.04. Section 2001.104, Occupations Code, is
amended by amending Subsections (a) and (d) and adding Subsection
(d-1) to read as follows:
(a) The commission shall set the fees for a license to
conduct bingo based on the amount of the licensed authorized
organization's total receipts derived from the conduct of bingo and
in an amount reasonable to defray administrative costs but not less
than the following:
(1) Class A (annual [gross] receipts of $25,000 or
less)-$100;
(2) Class B (annual [gross] receipts of more than
$25,000 but not more than $50,000)-$200;
(3) Class C (annual [gross] receipts of more than
$50,000 but not more than $75,000)-$300;
(4) Class D (annual [gross] receipts of more than
$75,000 but not more than $100,000)-$400;
(5) Class E (annual [gross] receipts of more than
$100,000 but not more than $150,000)-$600;
(6) Class F (annual [gross] receipts of more than
$150,000 but not more than $200,000)-$900;
(7) Class G (annual [gross] receipts of more than
$200,000 but not more than $250,000)-$1,200;
(8) Class H (annual [gross] receipts of more than
$250,000 but not more than $300,000)-$1,500;
(9) Class I (annual [gross] receipts of more than
$300,000 but not more than $400,000)-$2,000; and
(10) Class J (annual [gross] receipts of more than
$400,000)-$2,500.
(d) Except as provided by Subsection (d-1), an [An]
applicant shall pay the fees established under Subsection (a)
annually.
(d-1) An applicant for a license or renewal of a license may
obtain a license that is effective for two years by paying [an
amount equal to two times the amount of] the annual license fee
before the beginning of each year of the two-year license.
SECTION 1.05. Section 2001.307, Occupations Code, is
amended to read as follows:
Sec. 2001.307. MAXIMUM LICENSE TERM. A [Except as
otherwise provided by this chapter, a] license issued under this
chapter may not be effective for more than two years [one year].
SECTION 1.06. Section 2001.313, Occupations Code, is
amended by amending Subsections (a) and (b-2) and adding
Subsections (j) and (k) to read as follows:
(a) To minimize duplicate criminal history background
checks by the commission and the costs incurred by organizations
and individuals, the commission shall maintain a registry of
individuals on whom the commission has conducted a criminal history
background check, or another person authorized under Subsection (j)
has conducted a criminal history background check and has submitted
the background check to the commission, and who are approved to be
involved in the conduct of bingo or to act as a bingo operator.
(b-2) The commission by rule may impose a fee for an initial
registration application and renewal application submitted under
this section and on an individual for whom the commission conducts a
criminal history background check. The commission shall set the
fees [fee] in amounts [an amount] sufficient to cover the
application processing costs, including the [a] criminal history
background check, identification card, and other administrative
costs the commission considers appropriate.
(j) A person other than an individual whose name is included
on an initial or renewal license application under this chapter may
obtain a criminal history background check to submit under this
section from:
(1) the Department of Public Safety, including through
the use of the department's online criminal history background
check service;
(2) a local law enforcement agency, including through
the use of the agency's online criminal history background check
service; or
(3) the commission.
(k) A criminal history background check for an individual
whose name is included on an initial or renewal license application
under this chapter must be performed by the commission.
SECTION 1.07. Section 2001.314(b), Occupations Code, is
amended to read as follows:
(b) The commission may [shall] provide the identification
card and [shall provide] a form to be completed by an individual
that allows the individual to prepare the identification card. The
commission may collect a reasonable charge to cover the cost of
providing the card or form.
SECTION 1.08. Section 2001.409, Occupations Code, is
amended by adding Subsection (b) to read as follows:
(b) Nothing in this chapter shall be construed as
authorizing any game using a video lottery machine or machines. In
this section "video lottery machine" or "machine" means any
electronic video game machine that, on insertion of cash, is
available to play or simulate the play of a video game, including
but not limited to video poker, keno, and blackjack, utilizing a
video display and microprocessor in which the player may receive
free games or credits that can be redeemed for cash, coins, or
tokens or that directly dispenses cash, coins, or tokens.
SECTION 1.09. Section 2001.414, Occupations Code, is
amended to read as follows:
Sec. 2001.414. BINGO RECORDS. (a) The commission by rule
may provide for different recordkeeping procedures for licensed
authorized organizations by class based on the amount of the
organization's total [gross] receipts derived from the conduct of
bingo [of the organization].
(b) An organization conducting bingo must record on a cash
register all transactions for which it receives total [bingo gross]
receipts derived from the conduct of bingo in conformance with
commission rules relating to transaction recording specifications.
SECTION 1.10. Section 2001.420, Occupations Code, is
amended by adding Subsections (b-1), (d), (e), (f), and (g) to read
as follows:
(b-1) For purposes of Subsections (a) and (b), the value of
a merchandise bingo prize is the amount paid for the merchandise by
the licensed authorized organization. A merchandise bingo prize
includes bingo cards, bingo pull-tabs, the use of a card-minder,
bingo daubers, and other bingo merchandise awarded as a prize for
winning a bingo game.
(d) The commission may adopt for a bingo market region in
this state rules that affect the percentage of total receipts
derived from the conduct of bingo that is paid by licensed
authorized organizations within that market region as prizes for
bingo games if the commission determines that the percentages of
the total receipts paid for the prizes by the organizations within
that market region unreasonably reduce the amount of the
organizations' net proceeds in that market region.
(e) A rule adopted under Subsection (d):
(1) may establish a minimum price charged for a bingo
card or pull-tab or for use of a card-minding device;
(2) must allow flexibility in compliance with the rule
by the licensed authorized organizations within the affected bingo
market region to allow the organizations to achieve substantial
compliance without undue burden on the organizations or their
customers; and
(3) must apply equally to each licensed authorized
organization operating at a bingo premises within the bingo market
region.
(f) An individual bingo market region set by the commission
must include all the territory in a single county and may include
part of the territory in an adjacent county as necessary for the
commission to define a bingo market region under Subsection (d).
(g) The commission shall annually review the impact of a
rule adopted under Subsection (d) on the conduct of bingo within the
bingo market region and may amend or repeal the rule if the rule
does not serve the purposes of Subsection (d).
SECTION 1.11. Sections 2001.451(d), (e), and (g),
Occupations Code, are amended to read as follows:
(d) Except as permitted by Subsection (c), a licensed
authorized organization may not commingle [gross] receipts derived
from the conduct of bingo with other funds of the organization.
(e) Except as permitted by Subsection (c) of this section
and by Section 2001.453(2), a licensed authorized organization may
not transfer [gross] receipts derived from the conduct of bingo to
another account maintained by the organization.
(g) The bingo operations of a licensed authorized
organization must:
(1) result in net proceeds in the amounts provided by
Section 2001.460 over the calendar year in which the license is in
effect [the organization's license period]; or
(2) if the organization has a two-year license, result
in net proceeds in the amounts provided by Section 2001.460 over
each calendar year in which [12-month period that ends on an
anniversary of the date] the two-year license is in effect [was
issued].
SECTION 1.12. Subchapter J, Chapter 2001, Occupations Code,
is amended by adding Section 2001.460 to read as follows:
Sec. 2001.460. REQUIRED MINIMUM NET PROCEEDS. (a) If the
combined gross gaming revenue of the licensed authorized
organizations located at a single bingo premises exceeds $500,000
in a calendar year, the combined net proceeds of those
organizations for that calendar year may not be less than 10 percent
of the combined gross gaming revenue of those organizations.
(a-1) Notwithstanding Subsection (a), if the combined gross
gaming revenue of the licensed authorized organizations located at
a single bingo premises exceeds $500,000 in a calendar year, the
combined net proceeds of those organizations may not be:
(1) in 2016, less than six percent of the combined
gross gaming revenue of those organizations; and
(2) in 2017, less than eight percent of the combined
gross gaming revenue of those organizations.
(b) If the combined gross gaming revenue of the licensed
authorized organizations located at a single bingo premises is
equal to $500,000 or less in a calendar year, the combined net
proceeds of those organizations for that calendar year may not be
less than five percent of the combined gross gaming revenue of those
organizations.
(b-1) Notwithstanding Subsection (b) and subject to
Subsection (c), if the combined gross gaming revenue of the
licensed authorized organizations located at a single bingo
premises is equal to $500,000 or less in a calendar year, the
combined net proceeds of those organizations for that calendar year
may not be:
(1) in 2016, less than three percent of the combined
gross gaming revenue of those organizations; and
(2) in 2017, less than four percent of the combined
gross gaming revenue of those organizations.
(c) A licensed authorized organization located at a bingo
premises described by Subsection (b) that conducts not more than
two bingo occasions during any week during a calendar year is exempt
from the requirements of Subsection (b). The commission by rule may
impose minimum net proceeds requirements in amounts less than the
amounts required under Subsection (b) on the organizations located
at a premises to which this subsection applies.
(c-1) This subsection applies only to a bingo premises that
on January 1, 2015, was operated under an active lessor license and
was located in a county any part of which is within 75 miles of a
casino that has electronic gaming. Notwithstanding any other
subsection of this section, the minimum net proceeds requirement
for a single bingo premises described by this subsection during a
calendar year is:
(1) for a single bingo premises at which the licensed
authorized organizations have a combined gross gaming revenue that
exceeds $500,000, the lesser of:
(A) the amount determined using the percentage
required by this section; or
(B) $12,000 multiplied by the number of licensed
authorized organizations conducting bingo at that premises; and
(2) for a single bingo premises at which the licensed
authorized organizations have a combined gross gaming revenue equal
to $500,000 or less, the lesser of:
(A) the amount determined using the percentage
required by this section; or
(B) $6,000 multiplied by the number of licensed
authorized organizations conducting bingo at that premises.
(c-2) This subsection and Subsections (a-1), (b-1), and
(c-1) expire December 31, 2019.
(d) The commission shall waive or reduce the minimum net
proceeds required by this section if:
(1) bingo has been conducted at the bingo premises for
less than 12 months;
(2) circumstances beyond the control of the licensed
authorized organizations operating at the bingo premises,
including force majeure, prevented the organizations from
satisfying the minimum net proceeds percentage;
(3) the licensed authorized organizations present a
business plan that the commission determines reasonably
establishes procedures to satisfy the minimum net proceeds
percentage in the next calendar year; or
(4) legal or illegal gaming in the area of the bingo
premises affected the ability of the organizations to satisfy the
minimum net proceeds percentage.
(e) If the commission waives or reduces the minimum net
proceeds percentage required by this section because of illegal
gaming, the commission shall notify the county commissioners court
of the county in which each affected bingo premises is located and
the governing body of any municipality in which the premises is
located of the commission's action and the reasons for that action.
SECTION 1.13. Section 2001.502, Occupations Code, is
amended to read as follows:
Sec. 2001.502. PRIZE FEE. (a) A licensed authorized
organization shall:
(1) collect from a person who wins a cash bingo prize
of more than $5 a fee in the amount of five percent of the amount [or
value] of the prize; [and]
(2) remit to the comptroller [commission] a fee in the
amount of 2.5 [five] percent of the amount collected under this
section for distribution as required by Section 2001.503; and
(3) deposit the remainder of the fees collected under
this section in the general charitable fund of the organization [or
value of all bingo prizes awarded].
(b) The fee required under Subsection (a) does not apply to
a merchandise prize, including bingo cards, bingo pull-tabs, use of
a card-minder, bingo daubers, and other bingo merchandise awarded
as a prize for winning a bingo game.
SECTION 1.14. Section 2001.503, Occupations Code, is
amended to read as follows:
Sec. 2001.503. [LOCAL SHARE OF] PRIZE FEE DISTRIBUTION.
(a) Except as provided by Subsection (c), a county that imposed a
gross receipts tax on the conduct of bingo as of January 1, 1993, is
entitled to [50 percent of] the fee remitted to the comptroller
[collected] under Section 2001.502(2) [2001.502 on a prize awarded
at a game conducted in the county].
(b) Except as provided by Subsection (c), a municipality
that imposed a gross receipts tax on the conduct of bingo as of
January 1, 1993, is entitled to [50 percent of] the fee remitted to
the comptroller [collected] under Section 2001.502(2) [2001.502 on
a prize awarded at a game conducted in the municipality].
(c) If a county and municipality are both entitled to [a
share of] the fee remitted to the comptroller under [imposed by]
Section 2001.502(2) [2001.502]:
(1) the county is entitled to 50 [25] percent of the
fee [on a prize awarded at a game conducted in the county]; and
(2) the municipality is entitled to 50 [25] percent of
the fee [on a prize awarded at a game conducted in the
municipality].
SECTION 1.15. Section 2001.505(a), Occupations Code, is
amended to read as follows:
(a) A licensed authorized organization conducting bingo
shall submit quarterly to the commission a report under oath
stating:
(1) the amount of the [gross] receipts derived from
the conduct of bingo;
(2) each item of expense incurred or paid;
(3) each item of expenditure made or to be made, the
name and address of each person to whom each item has been paid or is
to be paid, and a detailed description of the merchandise purchased
or the services rendered;
(4) the net proceeds derived from bingo;
(5) the use to which the proceeds have been or are to
be applied; and
(6) a list of prizes offered and given, with their
respective values.
SECTION 1.16. Section 2001.507, Occupations Code, is
amended to read as follows:
Sec. 2001.507. COLLECTION AND DISBURSEMENT OF PRIZE FEE.
(a) The comptroller [commission] shall deposit the revenue
collected from the fee on prizes imposed by Section 2001.502 to the
credit of a special account in the general revenue fund.
(b) The comptroller [commission] shall determine the total
amount of revenue deposited in the account from prizes awarded at
games in a county or municipality entitled to a fee [share] under
Section 2001.503.
(c) The comptroller [commission] shall send quarterly to a
county or municipality entitled to [a share of] the fee on prizes
the amount required [county's or municipality's share as provided]
by Section 2001.503.
(d) [The commission shall transfer any remaining amounts in
the account to a nondedicated account in the general revenue fund.
[(e)] The comptroller [commission] shall transmit a
jurisdiction's [share of the] fee on prizes to the treasurer or the
officer of the jurisdiction performing the functions of the
treasurer's office payable to the jurisdiction. The amount
transmitted may be used by the jurisdiction for any purpose for
which the general funds of the jurisdiction may be used.
(e) [(f)] The comptroller [commission] may retain in a
jurisdiction's suspense account a portion of the jurisdiction's
[share of the] fee on prizes collected under this chapter. The
amount retained in the suspense account may not exceed five percent
of the amount remitted to the jurisdiction. The comptroller
[commission] may make refunds from the suspense account of a
jurisdiction for overpayments made to those accounts and may redeem
dishonored checks and drafts deposited to the credit of the
jurisdiction's suspense account.
(f) [(g)] If a jurisdiction entitled to a [share of the] fee
on prizes prohibits the conduct of bingo under Sections
2001.651-2001.656, the comptroller [commission] may retain in the
suspense account of the jurisdiction for one year five percent of
the final remittance to that jurisdiction. The amount retained in
the suspense account may be used to cover possible overpayment of
the jurisdiction's portion of the fee and to redeem dishonored
checks and drafts deposited to the credit of the account. One year
after the effective date of the prohibition of bingo in the
jurisdiction, the comptroller [commission] shall remit the balance
in the account to the jurisdiction and close the account.
(g) [(h)] Interest earned on all fees on prizes collected by
the comptroller [commission] under this chapter before
distribution to a local jurisdiction, including interest earned
from the suspense accounts retained under this section, shall be
credited to the general revenue fund.
SECTION 1.17. Section 2001.554(a), Occupations Code, is
amended to read as follows:
(a) A person commits an offense and the person's license is
subject to revocation under this chapter if the person:
(1) makes a false statement or material omission in an
application for a license under this chapter;
(2) fails to maintain records that fully and
accurately record each transaction connected with the conducting of
bingo, the leasing of premises to be used for bingo, or the
manufacture, sale, or distribution of bingo supplies or equipment;
(3) falsifies or makes a false entry in a book or
record if the entry relates to bingo, the disposition of bingo
proceeds, the application of rent received by a licensed authorized
organization, or the gross gaming revenue [receipts] from the
manufacture, sale, or distribution of bingo supplies or equipment;
(4) diverts or pays a portion of the net proceeds of
bingo to a person except in furtherance of one or more of the lawful
purposes provided by this chapter; or
(5) violates this chapter or a term of a license issued
under this chapter.
SECTION 1.18. (a) The following provisions of the
Occupations Code are repealed:
(1) Section 2001.060(b);
(2) Section 2001.305;
(3) Section 2001.436(c); and
(4) Section 2001.459(b).
(b) Section 10, Chapter 1057 (H.B. 3021), Acts of the 74th
Legislature, Regular Session, 1995, is repealed.
SECTION 1.19. (a) Not later than December 1, 2015, the Texas
Lottery Commission shall:
(1) adopt the rules necessary to implement the changes
in law made by this Act; and
(2) send to the comptroller a report on the prize fees
collected by the commission under Section 2001.502, Occupations
Code, as that section existed before amendment by this Act, in the
two years preceding the effective date of this Act and specify the
licensed authorized organizations that have paid the fee in a
timely or untimely manner.
(b) A licensed authorized organization that is listed on the
report required under Subsection (a)(2) of this section as paying
timely is exempt from posting any bond required under Section
151.254, Tax Code.
(c) Section 2001.451, Occupations Code, as amended by this
Act, applies beginning January 1, 2016.
(d) Section 2001.502, Occupations Code, as amended by this
Act, applies to prize fees collected on and after the effective date
of this Act. Prize fees collected before that date are governed by
the law in effect on the date the fees were collected and that law
continues in effect for that purpose.
ARTICLE 2. REGULATION OF AMUSEMENT REDEMPTION MACHINE GAME ROOMS
SECTION 2.01. Section 234.131, Local Government Code, as
added by Chapter 1284 (H.B. 2123), Acts of the 83rd Legislature,
Regular Session, 2013, is amended by adding Subdivisions (1-a),
(1-b), (1-c), (5), (6), (7), and (8) to read as follows:
(1-a) "Applicant" means a person, owner, corporation,
partnership, or other business entity required to submit a game
room application.
(1-b) "Current fire inspection report" means a fire
inspection report issued by a fire department not earlier than the
60th day immediately preceding the date an application for issuance
or renewal of a game room is filed.
(1-c) "Gambling device" has the meaning assigned by
Section 47.01, Penal Code.
(5) "Peace officer" has the meaning assigned by
Article 2.12, Code of Criminal Procedure.
(6) "Public building" means a building used by
federal, state, or local government that is open to the general
public.
(7) "Regulation" means a regulation adopted by a
county in this state for the operation of a game room.
(8) "School" means a facility, including all attached
playgrounds, dormitories, stadiums, and other appurtenances that
are part of the facility, used for the primary purpose of
instruction or education, including primary or secondary schools,
colleges, and universities, both public and private.
SECTION 2.02. Section 234.134, Local Government Code, as
added by Chapter 1284 (H.B. 2123), Acts of the 83rd Legislature,
Regular Session, 2013, is amended to read as follows:
Sec. 234.134. [LICENSES OR] PERMITS. (a) A county may
require that an owner or operator of a game room obtain a [license
or] permit or renew a [license or] permit on a periodic basis to own
or operate a game room in the county. An application for a [license
or] permit must be made in accordance with regulations adopted by
the county.
(b) Regulations adopted under this section may provide for
the denial, suspension, or revocation of a [license or] permit.
(c) A district court has jurisdiction of a suit that arises
from the denial, suspension, or revocation of a [license or other]
permit by a county.
SECTION 2.03. Subchapter E, Chapter 234, Local Government
Code, as added by Chapter 1284 (H.B. 2123), Acts of the 83rd
Legislature, Regular Session, 2013, is amended by adding Sections
234.1341 and 234.1342 to read as follows:
Sec. 234.1341. PERMIT APPLICATION. (a) An owner or
operator of a game room may not operate, use, or maintain any game
room in a county that requires an owner or operator to obtain a
permit under Section 234.134 unless the owner or operator holds a
permit issued under this subchapter.
(b) An applicant shall file a completed application with the
county sheriff's office of the county in which the proposed game
room will be located. The application shall be filed on the form
provided by the office or on an accurate and legible copy of that
form. The applicant must apply in person at the office.
(c) The sheriff's office shall post a copy of the
application form and the permit fee amount on the county's Internet
website. The office shall establish the hours for submission of
applications under this section.
(d) The game room administrator of the sheriff's office
shall mail notice of receipt of a completed application or notice of
deficiencies in an application to the applicant not later than the
10th day after the date the application is received by the office.
(e) Each application must be accompanied by:
(1) an annual inspection report that includes
documentation of compliance with any previous correction ordered by
the sheriff's office or a fire safety official;
(2) a copy of the certification of occupancy or
certification of compliance issued by a building official as
appropriate for the proposed game room premises;
(3) a diagram or the game room floor plan prepared by a
licensed architect or engineer that includes the designed occupancy
load and has been reviewed by the county clerk;
(4) for a game room operating under an assumed name, a
copy of the assumed name certificate filed in the county clerk's
office that includes the file mark or stamp evidencing its filing;
(5) a nonrefundable application fee in the amount
established by the county commissioners court; and
(6) a copy of the applicant's government-issued photo
identification.
(f) An applicant's failure to provide the information or
documents required by this section or pay the fee required by
Section 234.135 or a determination by the sheriff's office that
inaccurate, erroneous, or incomplete information has been
submitted is grounds for denial or revocation of the application.
(g) If the sheriff's office denies a game room permit, the
office shall give the applicant written notice of the basis for
denial.
Sec. 234.1342. PERMIT RENEWAL. A permit holder may
annually renew the permit not earlier than 60 days before the date a
permit expires by filing a completed application for the permit
with the game room permit administrator of the sheriff's office and
paying the applicable fee. A renewal application is subject to the
same requirements as a permit application.
SECTION 2.04. Section 234.135, Local Government Code, as
added by Chapter 1284 (H.B. 2123), Acts of the 83rd Legislature,
Regular Session, 2013, is amended to read as follows:
Sec. 234.135. FEES; ISSUANCE OF PERMIT; PREMISES
REQUIREMENTS. (a) A county may impose a fee not to exceed $1,000 on
an applicant for a [license or] permit or for the renewal of the
[license or] permit required under this subchapter. The fee must be
based on the cost of processing the application and investigating
the applicant.
(b) An applicant shall pay the permit fee imposed under this
section to the sheriff's office. On completion of the application
process, the game room administrator of the sheriff's office shall
give the applicant a signed receipt. The receipt constitutes a
permit to operate the game room that is valid until the first
anniversary of the date the permit is issued.
(c) A person who holds a permit issued under this section
must meet and comply with all requirements of law applicable to the
game room premises or any activity conducted on the game room
premises. The issuance of a permit under this section does not
excuse or provide a defense to the permit holder, the permit
holder's agents or employees, or any patrons of the game room for a
violation of this subchapter or other law.
SECTION 2.05. Section 234.136, Local Government Code, as
added by Chapter 1284 (H.B. 2123), Acts of the 83rd Legislature,
Regular Session, 2013, is amended to read as follows:
Sec. 234.136. INSPECTION BY LAW ENFORCEMENT OFFICER.
(a) A peace officer or county employee may inspect a business in
the county to determine the number of amusement redemption machines
subject to regulation under this subchapter that are located on the
premises of the business. A peace officer is authorized to inspect
any business for a violation of this subchapter.
(a-1) This section does not authorize a right of entry
otherwise prohibited by law. A peace officer may enter a business
under this section with consent, with a warrant, or under exigent
circumstances. A game room permit granted under this subchapter
gives peace officers implied consent under this section to enter
the premises of the game room.
(a-2) A business for which a game room permit has not been
issued under this subchapter that holds itself out as a game room,
by sign, advertisement, word-of-mouth, offering of memberships, or
any other means, is subject to inspection by a peace officer.
Refusal to allow a peace officer entry to inspect the premises of
the game room may be considered in establishing probable cause for
the issuance of a search warrant to inspect for violations of this
subchapter.
(b) A peace officer or county employee may inspect any
business in which six or more amusement redemption machines are
located to determine whether the business is in compliance with
this subchapter or regulations adopted under this subchapter or to
inspect records required under Section 234.1362.
(c) A person violates this subchapter if the person fails to
allow a peace officer or county employee to conduct an inspection of
a game room, an amusement redemption machine, or records required
under Section 234.1362 or this section.
SECTION 2.06. Subchapter E, Chapter 234, Local Government
Code, as added by Chapter 1284 (H.B. 2123), Acts of the 83rd
Legislature, Regular Session, 2013, is amended by adding Sections
234.1361, 234.1362, 234.1363, 234.1364, 234.1365, and 234.1366 to
read as follows:
Sec. 234.1361. DISPLAY OF GAME ROOM PERMITS. An owner or
operator of a game room shall display the valid game room permit
issued to the owner or operator under this subchapter on the game
room premises. The permit must be displayed in plain sight in a
common area accessible to the public without entrance to a
controlled area of the business.
Sec. 234.1362. RECORDS REQUIRED. (a) An owner or operator
of a game room shall maintain on the premises:
(1) a record for each employee that includes:
(A) the employee's name, address, date of birth,
state identification number or social security number, job
function, and W-2 or W-4 form;
(B) a copy of the employee's application to work
with the game room and a copy of the employee's I-9 filed for
employment eligibility verification with the Department of
Homeland Security; and
(C) a photograph of the employee;
(2) a daily register that includes the name, date of
birth, state identification number or social security number, and
job function of each employee present at the establishment that
day; and
(3) a copy of the county and state tax record forms
required under Chapter 2153, Occupations Code, or other law for
each amusement redemption machine on the premises that includes the
name of the manufacturer, the serial number, the type of machine,
and the serial number of the tax permit for a coin-operated machine
and, if applicable, the serial number for the county tax permit,
with the year of expiration for any tax permit.
(b) An owner or operator who violates Subsection (a) shall
be assessed a civil penalty of not more than $10,000 for each record
required under this section that is missing.
(c) The game room shall preserve the daily register required
by Subsection (a)(2) for at least 90 days after the date the
register was made. An owner or operator who violates this
subsection may be assessed an administrative penalty in the amount
of $500 for each register required to be preserved that is missing.
Sec. 234.1363. PROHIBITED EMPLOYMENT; CIVIL PENALTY. (a)
An owner or operator of a game room may not knowingly employ any
person who has been previously convicted of, or entered a plea of
nolo contendere or guilty or received deferred adjudication for, an
offense involving any conduct involving gambling violations
prohibited under Chapter 47, Penal Code.
(b) An owner or operator of a game room shall conduct a
criminal background check on each potential employee.
(c) Failure to comply with this section is a violation and
punishable by a civil penalty assessed against an owner or operator
not to exceed $10,000 per prohibited employee working at the game
room and per employee working at the game room without being
subjected to a criminal background check.
(d) Each day a violation of this section continues or occurs
constitutes a separate violation for purposes of imposing a penalty
under Section 234.137.
Sec. 234.1364. AMUSEMENT REDEMPTION MACHINES; PERMITS AND
VIOLATIONS. (a) An owner or operator of a game room shall obtain
from the county a permit for each amusement redemption machine on
the game room premises in accordance with Chapter 2153, Occupations
Code.
(b) The owner or operator of a game room shall pay an annual
fee in an amount equal to 25 percent of the state's annual fee per
machine.
(c) Each amusement redemption machine permit application
shall specify on the application the physical location of the
amusement redemption machine.
(d) If a permit is not obtained for an amusement redemption
machine, the county tax assessor-collector's office shall lock the
machine, and it may not be used until the owner purchases a permit
for the machine by paying a $100 permit fee and a $5 release fee per
machine.
(e) If a county compliance officer is not allowed entrance
to a game room during business hours, a civil penalty not to exceed
$10,000 for each date of denial shall be assessed on the owner or
operator of the game room.
(f) A county may assess a civil penalty under Section
234.137 on the owner or operator of a game room for each machine:
(1) that is not registered with a valid current year
video tax stamp decal prominently displayed on the machine; and
(2) used for illegal gambling.
(g) If a law enforcement agency determines through
investigation that a game room is operating in violation of Chapter
47, Penal Code, each amusement redemption machine or gambling
device in the game room is considered in violation. A civil penalty
not to exceed $10,000 per machine or device may be assessed on the
owner or operator of the game room.
(h) It is not a defense to prosecution under this section
that the owner is not doing business in the owner's name, is not
leasing property in the owner's name, or only has an ownership
interest in the business.
Sec. 234.1365. GROUNDS FOR DENIAL, REVOCATION, OR
SUSPENSION OF PERMIT. (a) Any violation of this subchapter or
regulations adopted under this subchapter or failure to meet the
requirements of this subchapter and regulations adopted under this
subchapter is grounds for denial, revocation, or suspension of a
permit to operate a game room. If a game room's permit has been
revoked, denied, or suspended, the game room may not be operated
during the pendency of any appeal from the revocation, denial, or
suspension.
(b) The sheriff shall deny a game room permit on a finding by
the sheriff that the applicant:
(1) has been previously convicted of any of the
following offenses:
(A) gambling, gambling promotion, keeping a
gambling place, communicating gambling information, possession of
gambling devices or equipment, or possession of gambling
paraphernalia under Chapter 47, Penal Code;
(B) forgery, credit card abuse, or commercial
bribery under Chapter 32, Penal Code;
(C) any criminal offense under Chapter 34, Penal
Code;
(D) criminal attempt, conspiracy, or
solicitation to commit any of the offenses listed in Paragraphs
(A)-(C) or any other offense under the laws of another state or of
the United States that, if committed in this state, would have been
punishable as one or more of the offenses; or
(E) a criminal offense under Subchapter B,
Chapter 352, if:
(i) less than two years have elapsed since
the later of the date of conviction or the date of release from
confinement imposed for the conviction of a misdemeanor offense; or
(ii) less than five years have elapsed
since the later of the date of conviction or the date of release
from confinement for the conviction of a felony offense;
(2) makes a misleading statement in the application
for the game room permit;
(3) is younger than 18 years of age;
(4) has had a game room permit revoked within the
180-day period immediately preceding the date the application was
filed;
(5) is delinquent in the payment to the county of
taxes, fees, fines, or penalties assessed or imposed regarding the
operation of a game room;
(6) failed to pay the application or renewal fee
required by this subchapter; or
(7) has not had the required fire and life safety
inspection by a fire safety official within 60 days immediately
preceding the date the application was filed.
(c) The sheriff may initiate a proceeding to revoke or
suspend a game room permit if:
(1) any person commits on the premises of the game room
an offense listed in Subsection (b)(1);
(2) the applicant provides false, fraudulent, or
untruthful information on the original or renewal application;
(3) the game room permit should not have been issued
under the requirements of this subchapter or regulations adopted
under this subchapter;
(4) the owner or operator of the game room fails to
comply with corrections ordered by a fire safety official with
authority to conduct fire and life safety inspections in the county
in which the game room is located; or
(5) the owner is convicted of an offense listed in
Subsection (b)(1).
(d) The sheriff may not issue a game room permit or
temporary game room permit until final disposition of any case
involving an offense listed in Subsection (b)(1) that is pending or
arises during the application process.
Sec. 234.1366. DENIAL, REVOCATION, OR SUSPENSION OF PERMIT;
HEARING; APPEAL. (a) If an event providing a basis for denial,
revocation, or suspension of a game room permit under this
subchapter occurs, the sheriff shall send to the game room permit
holder or the holder's designated agent a written notice of denial,
revocation, or suspension. The notice must set out the reasons for
the action. The revocation or suspension is final on the fifth day
after the date notice is issued.
(b) The game room permit holder or the holder's designated
agent is entitled to appear before a hearing examiner appointed by
the commissioners court of the county in which the game room is
located on written request submitted to the sheriff not less than
the 10th business day after the date the notice is delivered. The
written request for a hearing stays the revocation or suspension
until the hearing is concluded.
(c) The hearing examiner may not have participated in any
investigation of the alleged grounds for the denial, revocation, or
suspension. The hearing must be held not later than the 14th
business day after the date the request for hearing is submitted.
(d) The game room permit holder and the sheriff are entitled
to present evidence, cross-examine witnesses, and be represented by
legal counsel. The rules of evidence for a civil, nonjury trial
apply to the hearing.
(e) If the facts presented at the hearing support a finding
that grounds exist for revoking or suspending a game room permit,
the hearing examiner may request that the parties present relevant
evidence to show whether suspension or revocation of the game room
permit is more appropriate. Reasonable conditions may be attached
to a game room permit by the hearing examiner based on the evidence
presented at the hearing.
(f) If the hearing examiner determines that a game room
permit should be revoked, the hearing examiner shall issue a
written order revoking the game room permit that is effective
immediately.
(g) If the hearing examiner determines based on the nature
of the violations that a suspension instead of a revocation is
appropriate, operation of the game room permit may be suspended for
a period not to exceed six months. The hearing examiner shall issue
a written order suspending the game room permit and attaching any
applicable conditions that is effective on the date the owner
receives notice.
(h) On a finding that Section 234.1365(c)(3), (4), or (5)
has been violated, the hearing examiner shall revoke the game room
permit.
(i) Revocation takes effect immediately on notice by the
sheriff, subject to reinstatement following an appeal, if:
(1) immediate action is required to protect the public
from injury or imminent danger; or
(2) a game room permit was issued based on a
misrepresentation in the application, and the game room permit
would not have been issued otherwise.
(j) The decision of the hearing examiner is final. The
losing party may appeal the decision by filing a petition in a
district court in the county not later than the 30th day after the
date of the decision. Judicial review is under the substantial
evidence rule, and the judgment of the district court may be
appealed, as in other civil cases.
(k) An applicant whose permit has been denied, revoked, or
suspended may reapply for a game room permit if the applicant makes
the changes necessary for the proposed game room to be in compliance
with this subchapter and regulations adopted under this subchapter.
SECTION 2.07. Section 234.132, Local Government Code, as
added by Chapter 1284 (H.B. 2123), Acts of the 83rd Legislature,
Regular Session, 2013, is repealed.
SECTION 2.08. Subchapter E, Chapter 234, Local Government
Code, as added by Chapter 1377 (H.B. 1127), Acts of the 83rd
Legislature, Regular Session, 2013, is repealed.
ARTICLE 3. EFFECTIVE DATE
SECTION 3.01. This Act takes effect September 1, 2015.