(a) Net proceeds from the conduct of bingo must result in a positive amount over the organization's license period.     
      (b) Calculation of Net Proceeds for Organizations.      
        (1) The current quarterly report information of the organization or unit will be used to determine if the bingo operations of the organization resulted in net proceeds.       
        (2) The calculation of net proceeds for a regular license will be based on the quarterly reports for the eight (8) calendar quarters immediately preceding the license end date.       
        (3) The calculation of net proceeds for an organization submitting the first renewal of its license to conduct bingo will be based on the quarterly reports for the seven (7) calendar quarters immediately preceding the license end date. If the bingo operations of an organization fail to result in positive net proceeds for the first renewal of a license, the Commission shall recalculate the net proceeds using the quarterly reports for the seven (7) calendar quarters immediately preceding the license end date and the quarterly report for the one (1) calendar quarter in which the license end date falls to determine compliance.       
      (c) Calculation of Net Proceeds for Units.      
        (1) Net proceeds for units will be calculated at the end of each quarter for the prior eight (8) quarter period.       
        (2) Members of units failing to meet the net proceed requirement may subject their license to conduct bingo to administrative action, up to and including revocation.       
        (3) The calculation of net proceeds for a licensed authorized organization that withdraws from a unit will be based on the following for the eight (8) calendar quarters immediately preceding the license end date:                  (A) the amount of distributions received from the unit; and                   (B) the licensed authorized organization's quarterly reports.         
        (4) The Commission may request additional information from a member of a unit to assist in the determination of compliance with this section.       
      (d) Net proceeds may be recalculated for an organization or unit who has filed an original or amended return for a filing period used in the calculation of net proceeds when deemed necessary by the Commission or upon written request of the bingo chairperson of an organization.     
      (e) A licensed authorized organization may apply for a waiver from the net proceeds requirement by showing good cause that compliance is detrimental to the organization's existing or planned charitable purposes. Waiver applications must be submitted in accordance with §402.450 of this chapter (relating to Request for Waiver).     
     Source Note:        The provisions of this §402.452 adopted to be effective July 5, 2010, 35 TexReg 5822; amended to be effective January 6, 2022 46 TexReg 9285; amended to be effective January 4, 2024, 48 TexReg 8369