(a) The provisions of this rule relate only to the accounting, reporting and operation of units in accordance with the Bingo Enabling Act 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 §402.100 of this chapter, and unless the context in this section otherwise requires, the following definitions apply:
  (1) 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.
  (2) Net proceeds--The unit's gross receipts from bingo and gross rental income, if applicable, less prizes awarded and authorized expenses.
(c) Each unit will be assigned an identification number by the Commission.
(d) If a unit dissolves and starts another unit with the same organizations, for all intent and purposes, it is the same unit and is responsible for all liabilities and distributions owed by the prior unit.
(e) Unit Representation.
  (1) All units, with the exception of a unit with a Unit Manager, must name a designated agent who is responsible for providing the Commission access to all inventory and financial records of the unit on request by the Commission.
  (2) It is the responsibility of the unit's designated agent to provide information to the Commission on:
    (A) the unit agreement or trust agreement;
    (B) submission of all required forms;
    (C) unit Quarterly Report; and
    (D) unit's bingo records.
  (3) The designated agent will make available all unit accounting records to any member of a licensed authorized organization whose organization is a member of the accounting unit within thirty (30) calendar days of the request.
  (4) The designated agent will provide a copy of all unit accounting records to the bingo chairperson of a licensed authorized organization whose organization was a member of the accounting unit within thirty (30) calendar days of the date of separation.
(f) 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 account designated by the unit member. Each unit member is required to maintain adequate records establishing that the use of such net proceeds is in accordance with Occupations Code §2001.454.
  (2) All prize fees collected in accordance with Occupation Code, §2001.502 must be deposited in the unit's bingo account and paid from the unit's bingo account.
(g) Unit Transactions.
  (1) Upon prior written consent by the Commission:
    (A) a licensed authorized organization may make a sale of bingo cards, pull-tab bingo tickets, or a used bingo flash board or blower to a unit;
    (B) a unit may make a sale of bingo cards, pull-tab 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, pull-tab bingo tickets, or a used bingo flash board or blower to another unit.
    (D) Within thirty (30) calendar days of initially joining a unit, the licensed authorized organization shall notify the Commission of the bingo cards and pull-tab bingo tickets transferred to the 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.
(h) Unit Recordkeeping.
  (1) Each unit must file a quarterly report and any required supplements on forms prescribed by the Commission and maintain records to substantiate the contents of the reports.
  (2) The unit must adhere to all applicable recordkeeping requirements in the Bingo Enabling Act and Charitable Bingo Administrative Rules.
  (3) A member of a unit which is also licensed as a commercial lessor must report its rental income on the unit quarterly report.
  (4) Each unit must maintain a log for each bingo occasion indicating the following:
    (A) date of the occasion;
    (B) licensed authorized organization conducting the bingo occasion; and
    (C) operator on duty.
(i) Unit Bingo Account.
  (1) The unit must establish and maintain one checking account designated as the "bingo account." The unit must maintain the "bingo account" in compliance with the same provisions of the Bingo Enabling Act and Charitable Bingo Administrative Rules applicable to a licensed authorized organization.
  (2) The face of the checks must list the name of the unit, the words "Bingo Account", and the unit's identification number.
  (3) Only the following may be deposited into the unit's bingo account:
    (A) proceeds from the conduct of bingo;
    (B) rent payments received by a unit member that is also a licensed commercial lessor; and
    (C) funds transferred by new members or funds transferred in accordance with §402.202 of this subchapter (relating to Transfer of Funds).
  (4) A separate deposit must be made for each bingo occasion conducted. Additionally, all sales and prizes must be recorded in accordance with the rules.
  (5) All prize fees must be paid from the unit bingo account.
(j) Transfer of Funds to the Unit Account by new Members.
  (1) A licensed authorized organization joining a unit may transfer funds from its previous bingo account into the unit bingo account at the time:
    (A) the unit is formed;
    (B) within 60 days of joining an existing unit;
  (2) Any additional funds transferred to the unit bingo account must comply with §402.202 of this subchapter.
  (3) Funds previously reported on a bingo quarterly report as charitable distributions may not be transferred to the unit bingo account.
  (4) All net proceeds remaining in the organization's former bingo account at the time it joins a unit must:
    (A) be disbursed by the last day of the quarter following the date the organization joined the unit; or
    (B) transferred to the unit bingo account in accordance with paragraph (1) of this subsection.
  (5) At the time an organization joins a unit, all of its bingo expenses must be paid from the unit bingo account including outstanding bingo expenses and subsequent expenses. The total amount of outstanding bingo expenses should be included in the amount of funds transferred at the time the unit is formed or at the time of joining an existing unit.
  (6) If a unit member does not have sufficient funds to cover outstanding bingo expenses or the amount required to join the unit, the unit member's portion of the charitable distribution may be reduced until these obligations have been satisfied. This business practice may be used provided that:
    (A) the exact terms are reflected in the unit agreement;
    (B) a copy of the unit agreement is provided to the Commission; and
    (C) the unit meets the charitable distribution requirement.
  (7) If the organization transferred funds from its previous bingo account into the unit bingo account, the funds must be reported on the unit's "Texas Bingo Quarterly Report" for the quarter they were transferred and on the last "Texas Bingo Quarterly Report" the organization filed as a non-unit member.
  (8) An organization that is required to file a Texas Bingo Quarterly Report for a period prior to joining a unit must file a Final Disposition of Bingo Proceeds in Bank Account reporting the final disposition of all proceeds in its bingo account. The form must be submitted with the unit's "Texas Bingo Quarterly Report" for that quarter and would be subject to all "Texas Bingo Quarterly Report" filing deadlines, requirements and penalties.
(k) Distribution of Funds Upon Withdrawal or Dissolution.
  (1) An organization receiving a distribution of funds from the unit's bingo account upon leaving the unit, must classify the distribution as a charitable distribution on the unit's "Texas Bingo Quarterly Report".
  (2) Funds distributed as a charitable distribution must be used for the charitable purpose of the organization in accordance with the Bingo Enabling Act and Charitable Bingo Administrative Rules and may not be used to join another unit.
Cont'd...
(3) 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.
(l) Responsibilities of Unit Members.
  (1) Each unit member organization is responsible for administering its own bingo occasions and for any violations of the Bingo Enabling Act or Charitable Bingo Administrative Rules that may take place.
  (2) Each unit member organization is responsible for maintaining and retaining the bingo records relating to all aspects of its occasions up to and including the point at which the deposit is made into the unit's bingo account.
  (3) Each unit member organization is liable for any bingo cash shortages, inventory shortages, or missing or deficient occasion deposits occurring in association with its bingo occasion conducted.
  (4) Each unit member organization is responsible for distributing the bingo proceeds received from the unit for its authorized charitable purposes.
  (5) If a unit demonstrates that a violation of this subchapter or commission rules is wholly attributable to a specific licensed authorized organization member or members of the unit, a penalty for the violation may not be imposed on a unit member to which the violation is not attributable and the penalty imposed on a unit member to which the violation is attributable may not be in an amount greater than the amount initially assessed against each unit member.

Source Note: The provisions of this §402.203 adopted to be effective March 21, 2005, 30 TexReg 1630; amended to be effective March 9, 2010, 35 TexReg 1996; amended to be effective April 24, 2011, 36 TexReg 2384; amended to be effective September 13, 2012, 37 TexReg 7091; amended to be effective August 1, 2016, 41 TexReg 5505; amended to be effective January 2, 2020, 44 TexReg 8292; amended to be effective January 4, 2024, 48 TexReg 8369