16 TAC §402.602
The Texas Lottery Commission proposes new 16 TAC §402.602,
relating to unit accounting. Specifically, the new section defines certain
terms applicable to a unit arrangement, identifies the appropriate means by
which a unit may distribute proceeds from the conduct of bingo, and provides
for the notification of the Commission when there is a change in information
relating to a unit. In addition, the new section identifies how a unit may
participate in certain bingo related transactions, and provides the record
keeping requirements that a unit must employ in order to substantiate compliance
with the Bingo Enabling Act and the Charitable Bingo Administrative Rules.
Lee Deviney, Financial Administration Director, has determined for the
first five year period the new rule is in effect, there will be no fiscal
impact to units of state or local government as a result of enforcing this
rule. Any costs to the State could be absorbed by current resources. For each
year of the first five years the section will be in effect, the fiscal impact
is the following: FY 04, $0; FY 05, $0; FY 06, $0; FY 07, $0 and FY 08, $0.
Additionally, there will be no significant effect on small businesses, micro
businesses or local or state employment.
William L. Atkins, Director, Charitable Bingo Operations Division, has
determined that for each of the first five years the section as proposed is
in effect, licensees will benefit from the adoption of this section. The anticipated
benefit as a result of the proposed new section is to provide interested parties
with a uniform standard for accounting, reporting and operating units.
Written comments on the proposed new rule may be submitted to Kevin Oldham,
Assistant General Counsel, Texas Lottery Commission, P.O. Box 16630, Austin,
Texas 78761-6630. Written comments must be received no later than 30 days
from the date of publication of this proposed new rule in the
Texas Register
. The Texas Lottery Commission will also conduct a hearing
to receive comment on the proposed new rule on Wednesday, April 28, 2004,
at 3:00 p.m. at the Texas Lottery Commission, Commission Auditorium, First
Floor, 611 East Sixth Street, Austin, Texas.
The new rule is proposed under Occupations Code, §2001.054
which authorizes the Commission to adopt rules to enforce and administer the
Bingo Enabling Act, under Government Code, §467.102 which authorizes
the Commission to adopt rules for the enforcement and administration of the
laws under the Commission's jurisdiction, under Occupations Code, §2001.051(b)
which grants the Commission broad authority to exercise strict control and
close supervision over all bingo conducted in Texas so that bingo is fairly
conducted and the proceeds derived from bingo are used for an authorized purpose,
and under Occupations Code, §§2001.431 - 2001.439 which provide
the statutory basis for unit accounting between two or more licensed authorized
organizations conducting bingo at the same location.
The new rule implements Occupations Code, Chapter 2001.
§402.602.Unit Accounting.
(a)
The provisions of this rule relate only to the accounting,
reporting and operation of units in accordance with Occupations Code, Chapter
2001 and this chapter. Nothing in this rule shall be construed as a grant
of authority or waiver of responsibility under federal law, including tax
law, and other state law.
(b)
Definitions. In addition to the definitions provided in §402.541
of this title (relating to General Definitions), and unless the context in
this section otherwise requires, the following definitions apply:
(1)
Unit's net proceeds--means the unit's gross receipts less
prizes awarded and authorized expenses.
(2)
Default--The term used to describe the status of a licensed
authorized organization that does not timely pay for the sale or lease of
bingo supplies or equipment as provided in Occupations Code, §2001.218.
(c)
Licensed authorized organizations forming a unit, must
notify the commission in writing prior to operating as a unit.
(d)
Each unit will be assigned an identification number by
the Texas Lottery Commission.
(e)
A licensed authorized organization joining or withdrawing
from a unit at any time other than at the beginning or ending of a reporting
quarter is responsible for filing a separate quarterly report for bingo activities
conducted apart from the unit.
(f)
Any change in the membership of a unit will require the
unit to notify the commission within 15 days.
(g)
Unit's Use of Proceeds.
(1)
All distributions of net proceeds of the unit shall be
paid from the unit's bingo account to the unit members' bingo bank accounts.
Each unit member organization shall then make its charitable use of net proceeds
from its bingo bank account.
(2)
All prize fees collected in accordance with Occupation
Code, §2001.502 must be deposited in the unit's bingo bank account and
paid from the unit's bingo bank account.
(3)
All funds remaining in a unit member organization's bingo
bank account shall be used in accordance with Occupations Code, §2001.454
and this title.
(h)
Unit Transactions.
(1)
Upon prior written consent by the commission:
(A)
a licensed authorized organization may make a sale of bingo
cards, instant bingo tickets, or a used bingo flash board or blower to a unit;
(B)
a unit may make a sale of bingo cards, instant bingo tickets,
or a used bingo flash board or blower to a licensed authorized organization;
or
(C)
a unit may make a sale of bingo cards, instant bingo tickets,
or a used bingo flash board or blower to another unit.
(2)
If a member of a unit is in default, a person may not sell
or transfer bingo equipment or supplies to the unit on terms other than immediate
payment on delivery, unless otherwise authorized by the commission.
(i)
Unit Recordkeeping.
(1)
Each unit must file a quarterly report, on a form prescribed
by the commission and maintain records to substantiate the contents of the
report.
(2)
A member of a unit which is also licensed as a commercial
lessor must continue to file the "Texas Bingo Lessor's Quarterly Report" and
remit the taxes on rental income.
(3)
Each member of a unit must file a quarterly report, on
a form prescribed by the commission, and maintain records to substantiate
the contents of the report.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State on April 12, 2004.
TRD-200402437
Kimberly L. Kiplin
General Counsel
Texas Lottery Commission
Earliest possible date of adoption: May 23, 2004
For further information, please call: (512) 344-5408