Texas Proposition 7, Financial Institutions to Offer Prizes to Promote Savings Amendment (2017)
| Texas Proposition 7 | |
|---|---|
 | |
| Election date November 7, 2017 | |
| Topic Banking and Gambling | |
Status Approved | |
| Type Constitutional amendment | Origin State legislature |
| 2017 measures |
|---|
 |
| November 7, 2017 |
| Texas Proposition 7 |
| Texas Proposition 4 |
| Texas Proposition 6 |
| Texas Proposition 3 |
| Texas Proposition 5 |
| Texas Proposition 1 |
| Texas Proposition 2 |
Texas Proposition 7, the Financial Institutions to Offer Prizes to Promote Savings Amendment, was on the ballot in Texas as a legislatively referred constitutional amendment on November 7, 2017. It was approved.[1]
| A "yes" vote supported this amendment to authorize the legislature to allow banks, credit unions, and other financial institutions to promote savings by offering their customers prizes drawn at random. |
| A "no" vote opposed this amendment to authorize the legislature to allow financial institutions to promote savings by offering their customers prizes drawn at random. |
Election results
| Proposition 7 | ||||
|---|---|---|---|---|
| Result | Votes | Percentage | ||
| Yes | 511,806 | 59.7% | ||
| No | 345,556 | 40.3% | ||
- Election results from Texas Elections Office
Overview
Status of raffles in Texas
As of 2017, the Texas Constitution bans lotteries in the state. To make an exception to this ban, the legislature needed to refer a constitutional amendment providing for an exception to the ballot for voter approval. Since voters approved this amendment, the legislature was authorized to allow financial institutions to conduct savings promotion raffles.
HJR 37 and HB 471
Proposition 7 authorized the Texas State Legislature to allow financial institutions to conduct raffles to promote savings. Proposition 7 did not itself legalize these raffles. Rather, House Bill 471 (HB 471), which the legislature approved, allows savings promotion raffles and provide rules for them since voters approved HJR 37. HB 471 was referred to as the implementing legislation for HJR 37. If voters had rejected this amendment, HB 471 would not have gone into effect.
Text of measure
Ballot title
The ballot title was as follows:[1]
| “ | The constitutional amendment relating to legislative authority to permit credit unions and other financial institutions to award prizes by lot to promote savings.[2] | ” |
Constitutional changes
- See also: Article 3, Texas Constitution
The measure added a Subsection (d-2) to Section 47 of Article III of the Texas Constitution. The following underlined text was added:[1]
...
(d-2) Subsection (a) of this section does not prohibit the legislature from authorizing credit unions and other financial institutions to conduct, under the terms and conditions imposed by general law, promotional activities to promote savings in which prizes are awarded to one or more of the credit union ’s or financial institution ’s depositors selected by lot.[2]
Readability score
- See also: Ballot measure readability scores, 2017
| Using the Flesch-Kincaid Grade Level (FKGL and Flesch Reading Ease (FRE) formulas, Ballotpedia scored the readability of the ballot title and summary for this measure. Readability scores are designed to indicate the reading difficulty of text. The Flesch-Kincaid formulas account for the number of words, syllables, and sentences in a text; they do not account for the difficulty of the ideas in the text. The Texas State Legislature wrote the ballot language for this measure.
|
House Bill 471
The implementing legislation for HJR 37 was House Bill 471 (HB 471).[3] An implementing bill, such as HB 471, provides the details of how a constitutional amendment will operate. HB 471 went into effect upon voter approval of this amendment. If voters had rejected this amendment, HB 471 would not have gone into effect.[4]
Design
HB 471 was designed to call raffles legalized under this amendment savings promotion raffles. The bill prescribed specific rules for savings promotion raffles conducted by credits unions and other financial institutions, such as banks, savings banks, and savings associations. The bill was designed to require a deposit of a specific amount into a savings account or savings program to qualify for savings promotion raffles. HB 471 established the following rules for savings promotion raffles:[4]
- Each entry in a raffle would have an equal chance of being drawn.
- A raffle would not be permitted to jeopardize a financial institution's safe and sound operation.
- A raffle would not be allowed to mislead customers or depositors.
- A financial institution would not be allowed to require additional fees to enter a savings promotion raffle.
- A financial institution would not be allowed to limit how much money a customer can withdraw from a savings account subject to a raffle, unless the limit would have been applied without a raffle. However, an institution may require that a deposit subject to a raffle be in a savings account for a specific period of time to be counted as an entry in a raffle.
- A financial institution would be required to pay interest or dividends on a savings account subject to a raffle at a similar rate to what would be paid if there was no raffle.
- A financial institution would be required to maintain records on savings promotion raffles.
Legislature
Rep. Eric Johnson (D-100), who filed HJR 37, also filed HB 471. He filed the bill in the state legislature on November 30, 2016. The Texas House of Representatives approved the bill on May 4, 2017, in a 144-0 vote. An additional six members did not vote or were absent. The Texas Senate approved the bill on May 19, 2017, in a 30-1 vote. Sen. Konni Burton (R-10) was the one vote against HB 471.[3]
Gov. Greg Abbott (R) to signed the bill on June 15, 2017.[3]
Representatives of Texas Impact, the Texas Credit Union Association, Independent Bankers Association of Texas, Credit Union Coalition of Texas, Center for Public Policy Priorities, United Ways of Texas, and RAISE Texas registered or testified in support of HB 471.[3]
Support
Yes on Prop 7 for Texas, which was sponsored by the Texas Credit Union Association Legislative Action Fund, led the campaign in support of Proposition 7.[5]
Arguments
The Texas House Research Organization (HRO) provided arguments supporting and arguments opposing the amendment. The following was the HRO's supporting arguments:[6]
| “ | HJR 37 would authorize the Legislature to allow banks and credit unions to host savings promotion raffles, also known as prize-linked savings accounts (PLSAs), which offer incentives to save rather than spend or gamble away earnings. Savings incentives are needed in the state, as more than one-third of Texas households lack a savings account, and about half do not have a three-month emergency fund.
Many states have removed legal barriers to PLSAs and seen millions of dollars in consumer savings and thousands of new accounts as a result. These savings can allow households to weather financial emergencies such as car repairs or medical bills or to accumulate wealth over time to pursue retirement, higher education, or home ownership. Savings also reduce reliance on sometimes destructive short-term lending. Savings promotion raffles are not gambling, as they require no form of payment or consideration. They are unlike other raffles, in that they directly benefit the consumer even if the consumer does not win a prize. Depositors could withdraw their money at any time and thus could not lose as in a raffle in any other industry. While the enabling legislation, HB 471 by E. Johnson, probably would not be subject to constitutional challenge, HJR 37 is nonetheless necessary and would finally resolve any constitutional questions. Last session, HB 1628 by E. Johnson was vetoed by the governor on the grounds that it would violate Art. 3, sec. 47 of the Texas Constitution.[2] |
” |
Opposition
Arguments
The Texas House Research Organization (HRO) provided arguments supporting and arguments opposing the amendment. The following was the HRO's opposing arguments:[6]
| “ | HJR 37, if accompanied by the enabling legislation, HB 417 by E. Johnson, would be a carve-out for one industry to do a raffle and would be the only non-charitable raffle allowed in the state. The Legislature should consider the equity of allowing a single industry to conduct raffles.
HJR 37 is unnecessary, as the Texas Constitution only requires the prohibition of lotteries, which require some form of payment or consideration to enter. Because a savings promotion raffle merely requires a deposit into an ordinary savings account, it would not be subject to the constitutional prohibition or challenge, and thus HJR 37 would have no functional effect.[2] |
” |
Campaign finance
As of January 16, 2018, the Texas Credit Union Association Legislative Action Fund was registered to support Proposition 2 and Proposition 7; therefore, the committee was spending funds on campaigns for both amendments. The committee had raised $481,345 from credit unions and spent $481,335.04.[7]
| Cash Contributions | In-Kind Contributions | Total Contributions | Cash Expenditures | Total Expenditures | |
|---|---|---|---|---|---|
| Support | $457,589.86 | $23,755.36 | $481,345.22 | $457,579.68 | $481,335.04 |
| Oppose | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 |
| Total | $457,589.86 | $23,755.36 | $481,345.22 | $457,579.68 | $481,335.04 |
Support
The following table includes contribution and expenditure totals for the committees in support of the measure.[7]
| Committees in support of Proposition 7 | |||||
|---|---|---|---|---|---|
| Committee | Cash Contributions | In-Kind Contributions | Total Contributions | Cash Expenditures | Total Expenditures |
| Texas Credit Union Association Legislative Action Fund | $457,589.86 | $23,755.36 | $481,345.22 | $457,579.68 | $481,335.04 |
| Total | $457,589.86 | $23,755.36 | $481,345.22 | $457,579.68 | $481,335.04 |
Donors
The following were the top donors to the committee.[7]
| Donor | Cash Contributions | In-Kind Contributions | Total Contributions |
|---|---|---|---|
| Credit Union National Association | $325,000.00 | $9,381.32 | $334,381.32 |
| American Airlines FCU | $25,000.00 | $0.00 | $25,000.00 |
| Randolph-Brooks FCU | $25,000.00 | $0.00 | $25,000.00 |
| Cornerstone Credit Union League | $6,789.86 | $14,374.04 | $21,163.90 |
| TEXAR FCU | $10,000.00 | $0.00 | $10,000.00 |
Media editorials
- See also: 2017 ballot measure media endorsements
Support
- The Dallas Morning News said: "We're all for this innovative way to encourage residents to save money. That's especially needed in a state where more than one-third of households lack a savings account and have little put back for emergencies."[8]
- The San Antonio Express-News said: "The legislation is deemed necessary because the Texas Constitution generally bans lotteries by such institutions. But there is some debate about whether these prize-linked accounts are, in fact, a lottery since they don’t require a payment to enter. Money in a savings account belongs to the account holder; it is not a payment to the bank or credit union. But it is better to remove any doubt. Proposition 7 merits approval."[9]
Opposition
- The Austin Chronicle said: "The amendment would allow credit unions (and other financial institutions) to create “savings lotteries” (i.e., awarding a random prize to some depositor(s) who have “entered” the lottery by depositing a certain amount in a savings account). It’s not quite “gambling” – instead, a promotional gimmick to encourage savings, which is not lost. Does it belong in a Constitution? Well, neither do the rest of these effluvia."[10]
Background
Constitutional prohibition of lotteries
As of 2017, Section 47 of Article III of the Texas Constitution banned lotteries in the state. To make an exception to this ban, the legislature needed to refer a constitutional amendment providing for an exception to the ballot for voter approval. In 2015, the legislature referred and voters approved an amendment, titled Proposition 4, making an exception for professional sports team charitable foundations.
Referred amendments on the ballot
From 1995 through 2015, the state legislature referred 152 constitutional amendments to the ballot. Voters approved 138 and rejected 14 of the referred amendments. Most of the amendments (136 of 152) were referred to the ballot for elections during odd-numbered election years. The average number of amendments appearing on an odd-year ballot was between 13 and 14. The approval rate at the ballot box was 90.8 percent during the 20-year period from 1995 through 2015. The rejection rate was 9.2 percent. In 2015, there were seven referred amendments on the ballot, the lowest number for an odd-year ballot between 1995 and 2015.
| Legislatively-referred constitutional amendments, 1995-2015 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Total number | Approved | Percent approved | Defeated | Percent defeated | Odd-year average | Odd-year median | Odd-year minimum | Odd-year maximum | |
| 152 | 138 | 90.79% | 14 | 9.21% | 13.6 | 14.0 | 7 | 22 | |
Path to the ballot
- See also: Amending the Texas Constitution
In Texas, a two-thirds vote in both chambers of the Texas State Legislature during one legislative session is required to refer a constitutional amendment to the ballot. Texas is one of 16 states that require a two-thirds supermajority vote in both chambers.
Rep. Eric Johnson (D-100) filed the amendment in the state legislature as House Joint Resolution 37 on November 30, 2016. The Texas House of Representatives approved the amendment 141 to 0 with nine members not voting on May 3, 2017. Rep. Scott Sanford (R-70) said that while he voted yes during the roll call, he intended to vote no on the amendment. The Texas Senate passed the amendment 30 to 1 on May 19, 2017. Sen. Konni Burton (R-10) was the only legislator to vote against referring the amendment to the ballot.[11]
The measure was enrolled with the secretary of state on May 24, 2017.[11]
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State profile
| Demographic data for Texas | ||
|---|---|---|
| Texas | U.S. | |
| Total population: | 27,429,639 | 316,515,021 |
| Land area (sq mi): | 261,232 | 3,531,905 |
| Race and ethnicity** | ||
| White: | 74.9% | 73.6% |
| Black/African American: | 11.9% | 12.6% |
| Asian: | 4.2% | 5.1% |
| Native American: | 0.5% | 0.8% |
| Pacific Islander: | 0.1% | 0.2% |
| Two or more: | 2.5% | 3% |
| Hispanic/Latino: | 38.4% | 17.1% |
| Education | ||
| High school graduation rate: | 81.9% | 86.7% |
| College graduation rate: | 27.6% | 29.8% |
| Income | ||
| Median household income: | $53,207 | $53,889 |
| Persons below poverty level: | 19.9% | 11.3% |
| Source: U.S. Census Bureau, "American Community Survey" (5-year estimates 2010-2015) Click here for more information on the 2020 census and here for more on its impact on the redistricting process in Texas. **Note: Percentages for race and ethnicity may add up to more than 100 percent because respondents may report more than one race and the Hispanic/Latino ethnicity may be selected in conjunction with any race. Read more about race and ethnicity in the census here. | ||
Presidential voting pattern
- See also: Presidential voting trends in Texas
Texas voted Republican in all seven presidential elections between 2000 and 2024.
Pivot Counties (2016)
Ballotpedia identified 206 counties that voted for Donald Trump (R) in 2016 after voting for Barack Obama (D) in 2008 and 2012. Collectively, Trump won these Pivot Counties by more than 580,000 votes. Of these 206 counties, one is located in Texas, accounting for 0.5 percent of the total pivot counties.[12]
Pivot Counties (2020)
In 2020, Ballotpedia re-examined the 206 Pivot Counties to view their voting patterns following that year's presidential election. Ballotpedia defined those won by Trump won as Retained Pivot Counties and those won by Joe Biden (D) as Boomerang Pivot Counties. Nationwide, there were 181 Retained Pivot Counties and 25 Boomerang Pivot Counties. Texas had one Retained Pivot County, 0.55 percent of all Retained Pivot Counties.
More Texas coverage on Ballotpedia
- Elections in Texas
- United States congressional delegations from Texas
- Public policy in Texas
- Endorsers in Texas
- Texas fact checks
- More...
See also
- Texas 2017 ballot measures
- 2017 ballot measures
- Texas Legislature
- Banking policy ballot measures
- Gambling on the ballot
External links
Recent news
The link below is to the most recent stories in a Google news search for the terms Texas 2017 Financial Savings Prizes Amendment. These results are automatically generated from Google. Ballotpedia does not curate or endorse these articles.
Footnotes
- ↑ 1.0 1.1 1.2 Texas Legislature, "House Joint Resolution 37," accessed May 7, 2017
- ↑ 2.0 2.1 2.2 2.3 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source. Cite error: Invalid
<ref>tag; name "quotedisclaimer" defined multiple times with different content Cite error: Invalid<ref>tag; name "quotedisclaimer" defined multiple times with different content Cite error: Invalid<ref>tag; name "quotedisclaimer" defined multiple times with different content - ↑ 3.0 3.1 3.2 3.3 Texas Legislature, "HB 471 Overview," accessed May 19, 2017
- ↑ 4.0 4.1 Texas Legislature, "House Bill 471," accessed May 19, 2017
- ↑ Yes on Prop 7 for Texas, "Homepage," accessed October 21, 2017
- ↑ 6.0 6.1 Texas Legislature, "House Research Organization HJR 37 Analysis," May 3, 2017
- ↑ 7.0 7.1 7.2 Texas Ethics Commission, "Campaign Finance Reports Search & Lists," accessed August 31, 2025
- ↑ The Dallas Morning News, "We recommend a 'yes' vote on statewide Propositions 4, 5, 6 and 7," October 19, 2017
- ↑ [Prop. 7 useful tool to encourage savings San Antonio Express-News, "Prop. 7 useful tool to encourage savings," October 31, 2017]
- ↑ "The Austin Chronicle, "Our endorsements on local bond packages and state constitutional amendments," October 20, 2017
- ↑ 11.0 11.1 Texas Legislature, "HJR 37 Overview," accessed May 19, 2017
- ↑ The raw data for this study was provided by Dave Leip of Atlas of U.S. Presidential Elections.
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