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.