HBA-KMH, MPM H.B. 2571 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2571
By: Junell
Public Education
4/5/1999
Introduced



BACKGROUND AND PURPOSE 

Currently, the Texas Lottery Commission (commission) maintains a pooled
bond  fund (also known as the reserve fund) of $20 million in the event
that one or more of their retail sales agents is unable to remit the
proceeds from the lottery sale.  The fund is presently maintained in a
lottery account within the state's general revenue fund.  When it exceeds
$20 million, the remainder is transferred to the foundation school fund.
The total average weekly sales of lottery tickets for these retailers is
$9.5 million.  Actual losses to the pooled bond fund have ranged from
$10,462 in the 1995 fiscal year to $742,012 in 1996.  The average loss has
been less than $350,000 per year since 1992.  Given the historical record
of actual losses since the commission was established, it would appear that
the pooled bond fund is over-insured at the current level.   

H.B. 2571 lowers the reserve level of the pooled bond fund to $1 million
and channels excess funds over this amount to the foundation school fund. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 466.156(a), Government Code, to prohibit the
total amount retained in a pooled bond established under this subsection
from exceeding $1 million.  Prohibits the executive director of the Texas
Lottery Commission from requiring a sales agent to make a contribution of
cash to the fund in an amount that would cause the fund to exceed that
amount. 

SECTION 2.  Effective date:  September1, 1999.  Requires on that date any
amount in the pooled bond fund established under Section 466.156 (Bond;
Insurance), Government Code, in excess of the maximum amount allowed to be
retained in the fund under Section 466.156(a), Government Code, as amended
by this Act, to be deposited to the credit of the foundation school fund. 

SECTION 3.Emergency clause.
  Effective date: 90 days upon adjournment.