TITLE economic-regulation

Part VIII. Texas Racing Commission

Chapter 303. General Provisions

Subchapter D. Texas Bred Incentive Programs

Programs for Horses

16 TAC §303.96

The Texas Racing Commission adopts new §303. 96, concerning the rules for the Texas Bred Incentive Program for paint horses without changes to the proposed text as published in the October 11, 1996, issue of the Texas Register (21 TexReg 9752). The new section is adopted to ensure the Texas Bred Incentive Program for paint horses will be administered fairly, efficiently, and effectively.

The new section adopts by reference the rules of the Texas Paint Horse Breeders Association, the official horse breed registry in Texas for paint horses.

No comments were received regarding adoption of the new section.

The new section is adopted under the Texas Civil Statutes, Article 179e, §3.02, which authorize the commission to adopt rules for conducting racing with wagering and for administering the Texas Racing Act; and §6.08, which authorizes the commission to adopt rules relating to the accounting, audit, and distribution of all amounts set aside for the Texas-bred program.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Issued in Austin, Texas, on January 14, 1997.

TRD-9700522

Paula C. Flowerday

General Counsel

Texas Racing Commission

Effective date: February 4, 1997

Proposal publication date: October 11, 1996

For further information, please call: (512) 833-6699

Chapter 313. Officials and Rules of Horse Racing

Subchapter B. Entries, Declarations, and Allowances

Entries

16 TAC §313.103

The Texas Racing Commission adopts an amendment to §313.103, concerning eligibility requirements without changes to the proposed text as published in the November 15, 1996, issue of the Texas Register (21 TexReg 11152). The amendment is adopted to increase the number of horses eligible to compete in pari-mutuel races, thereby encouraging full fields.

The amendment modifies the requirements relating to official workouts for horses for eligibility to participate in a race.

No comments were received regarding adoption of the amendment.

The amendment is adopted under the Texas Civil Statutes, Article 179e, §3.02, which authorize the commission to adopt rules for conducting racing with wagering and for administering the Texas Racing Act; and §6.06, which authorizes the commission to adopt rules on all matters relating to the operation of racetracks.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Issued in Austin, Texas, on January 14, 1997.

TRD-9700521

Paula C. Flowerday

General Counsel

Texas Racing Commission

Effective date: February 4, 1997

Proposal publication date: November 15, 1996

For further information, please call: (512) 833-6699

Chapter 321. Pari-mutual Wagering

Subchapter C. Simulcast Wagering

General Provisions

16 TAC §321.204

The Texas Racing Commission adopts an amendment to §321.204, concerning the approval of simulcasting without changes to the proposed text published in the November 15, 1996, issue of the Texas Register (21 TexReg 11154). The amendment is adopted to ensure the Commission's regulatory approval procedures will be efficient and effective.

The amendment eliminates the procedure for approving single simulcasts of national or historic races. The Commission has determined that this procedure is unnecessary as all racetracks that offer simulcast races do so as full cards, or programs of simulcasts, rather than as single races.

No comments were received regarding adoption of the amendment.

The amendment is adopted under the Texas Civil Statutes, Article 179e, §3.02, which authorize the commission to adopt rules for conducting racing with wagering and for administering the Texas Racing Act; §11.01, which authorizes the commission to adopt rules regulating pari-mutuel wagering; and §11.011, which authorizes the commission to adopt rules regulating wagering on simulcast races.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Issued in Austin, Texas, on January 14, 1997.

TRD-9700520

Paula C. Flowerday

General Counsel

Texas Racing Commission

Effective date: February 4, 1997

Proposal publication date: November 15, 1996

For further information, please call: (512) 833-6699

Simulcasting at Horse Racetracks

16 TAC §§321.232-321.234

The Texas Racing Commission adopts amendments to §§321.232- 321.234, concerning simulcasting at horse racetracks without changes to the proposed text as published in the November 15, 1996, issue of the Texas Register (21 TexReg 11154). The amendments are adopted to ensure that simulcasting will serve as an appropriate supplement to the pari-mutuel wagering program offered at Texas horse racetracks, thereby encouraging live racing with all its ancillary benefits to agribusiness in this state.

The amendments simplify the process of verifying the allocation of revenue from simulcasting by eliminating the need for numerous complex formulae.

Oral comments were received from the Texas Thoroughbred Horsemen's Benevolent and Protective Association, two pari-mutuel horse racetracks, and the Texas Quarter Horse Association. The commenters from the pari-mutuel horse racetracks suggested that the allocations to purses be reduced to a three-year schedule, rather than a five-year schedule. The commenter from the Texas Thoroughbred Horsemen's Benevolent and Protective Association suggested that the formula included in the amendments was unnecessary and that the percentages to be allocated to purses from simulcasting revenue is better left to be negotiated between the various racetracks and the officially recognized horsemen's organization. The Commission disagrees with the comments to the extent that the formula affects the method of calculating the allocations to purses, not just the percentages allocated. Although the Commission believes that the administrative efficiency that will be gained from the new calculation method warrants adoption of the amendments as proposed, the Commission will consider amending the rules in the future to adjust the formula itself.

The commenter from the Texas Quarter Horse Association opposed the amendments on the grounds that in the initial years the amendments are in effect, the percentage of revenue allocated to purses is reduced from current levels. The Commission disagrees with the comments on the grounds that if implemented as written the five-year plan results in an overall increase of money allocated to purses.

The amendments are adopted under the Texas Civil Statutes, Article 179e, §3.02, which authorize the commission to adopt rules for conducting racing with wagering and for administering the Texas Racing Act; §11.01, which authorizes the commission to adopt rules regulating pari-mutuel wagering; and §11.011, which authorizes the commission to adopt rules regulating wagering on simulcast races.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Issued in Austin, Texas, on January 14, 1997.

TRD-9700519

Paula C. Flowerday

General Counsel

Texas Racing Commission

Effective date: February 4, 1997

Proposal publication date: November 15, 1996

For further information, please call: (512) 833-6699

Part IX. Texas Lottery Commission

Chapter 401. Administration of State Lottery Act

16 TAC §401.307

The Texas Lottery Commission adopts amendment §401.307, concerning "Pick 3" On-Line Game Rule, without changes to the proposed text as published in the October 29, 1996, issue of the Texas Register (21 TexReg 10649).

The amendment ensures consistency with current agency practice in that it clarifies that the executive director conducts "Pick 3" and announces each incentive or bonus program prior to its commencement.

The Texas Lottery Commission received no comments concerning this rule.

This amendment is adopted under Texas Government Code, §466.015 and §467.102 which provide the Texas Lottery Commission with the authority to adopt rules necessary to administer and enforce the State Lottery Act.

The amended section affects Texas Government Code Chapter 466.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Issued in Austin, Texas, on January 15, 1997.

TRD-9700567

Diane W. Morris

Staff Attorney

Texas Lottery Commission

Effective date: February 5, 1997

Proposal publication date: October 29, 1996

For further information, please call: (512) 323-3791

16 TAC §401.362

The Texas Lottery Commission repeals existing rule §401.362, concerning Security Procedures, and adopts new rule §401.362, concerning Retailer's Financial Responsibility for Lottery Tickets Received, for Winning Lottery Tickets Paid and for Lottery-Related Property, without changes to the proposed text as published in the October 29, 1996, issue of the Texas Register (21 TexReg 10649).

The new rule clarifies each lottery retailer's fiduciary duty to properly handle, safeguard and account for lottery tickets received and winning tickets paid, and clarifies the retailer's financial responsibility for lottery-related property. The new rule places on each retailer the risk of loss for all tickets received, expressly limits the applicability of an administrative fee to circumstances of theft, loss and damage of unactivated tickets where the theft, loss or damage is reported within twenty-four hours of discovery and no winning ticket from the stolen, lost or damaged pack has been validated, authorizes an administrative fee where an activated pack of tickets has been lost or damaged by an Act of God and no winning ticket from such pack has been validated, makes each retailer financially responsible for lottery-related property placed at the retailer's location, requires each retailer who pays a winning ticket to physically render the ticket incapable of further use and makes such retailer liable to the Texas Lottery for all prizes subsequently paid on an inadequately defaced winning ticket.

No comments were received regarding repeal of the existing rule.

The existing rule is repealed and the new rule is adopted under authority of Texas Government Code, §466.015 and §467.102, which empowers the Lottery Commission to adopt all rules governing the establishment and operation of the lottery, §466.353(a), which holds a retailer as the purchaser of lottery tickets received, §466.352(b), which requires each retailer to maintain records adequate to establish the disposition of lottery tickets and §466.353(b) which settles upon each retailer the fiduciary obligation to preserve and account for all unsold tickets.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Issued in Austin, Texas, on January 15, 1997.

TRD-9700569

Diane W. Morris

Staff Attorney

Texas Lottery Commission

Effective date: February 5, 1997

Proposal publication date: October 29, 1996

For further information, please call: (512) 323-3791

The existing rule is repealed and the new rule is adopted under authority of Texas Government Code, §§466.015 and 467.102, which empowers the Lottery Commission to adopt all rules governing the establishment and operation of the lottery, §466.353(a), which holds a retailer as the purchaser of lottery tickets received, §466.352(b), which requires each retailer to maintain records adequate to establish the disposition of lottery tickets and §466.353(b) which settles upon each retailer the fiduciary obligation to preserve and account for all unsold tickets.

§401.362. Retailer's Financial Responsibility for Lottery Tickets Received, for Winning Lottery Tickets Paid and for Lottery-Related Property.

(a)

Responsibility for Lottery Tickets Received.

(1)

Except as otherwise expressly provided by this subsection, each retailer shall bear the risk of loss for all lottery tickets received. Receipt of tickets by a retailer shall constitute a purchase of such tickets, and each retailer shall be liable to the Texas Lottery for the retail sales price of such tickets, less any applicable commission or credit.

(2)

Notwithstanding paragraph (1) of this subsection, a retailer may return, and receive credit for, full and complete packs of unactivated tickets in original condition. Nothing in this subsection waives the requirements of §401.365 of this title (relating to Merchandising) and §401.367 of this title (relating to Minimum Ticket Sales Criteria).

(3)

Notwithstanding paragraph (1) of this subsection, and where no winning ticket from such pack has been validated, the director may charge a retailer an administrative fee of $25.00 for each pack of unactivated tickets if:

(A)

the pack has been stolen and the retailer has within 24 hours of the discovery of the theft made a formal report of such theft to both:

(i)

appropriate local law enforcement authorities, and

(ii)

the Texas Lottery security division through the retailer hotline;

(B)

the pack has been lost and cannot be located by the retailer and the retailer has made a formal report of the loss to the Texas Lottery security division through the retailer hotline within 24 hours of discovery of the loss; or

(C)

damage to the pack has rendered the tickets unsaleable and the retailer has made a formal report of such damage to the Texas Lottery security division through the retailer hotline within 24 hours of discovery of the damage.

(4)

Notwithstanding paragraph (1) of this subsection, the director may charge a retailer an administrative fee of $25.00 for each activated pack of tickets that are lost or rendered unsaleable by an Act of God where the retailer has made a formal report of such loss or damage to the Texas Lottery security division through the retailer hotline within 24 hours of discovery of the damage.

(b)

Responsibility for Winning Lottery Tickets Paid. After a retailer has paid a prize on a winning ticket, that retailer shall completely deface such ticket and render it physically incapable of being subsequently presented as a winning ticket. A retailer who has failed to deface such a winning ticket and render it physically incapable of being subsequently presented as a winning ticket shall pay to the Texas Lottery the full amount of each subsequent prize that is paid on such ticket.

(c)

Responsibility for Lottery-Related Property. Each retailer shall be financially responsible to the Texas Lottery for all lottery-related property placed at the retailer's location.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Issued in Austin, Texas, on January 15, 1997.

TRD-9700568

Diane W. Morris

Staff Attorney

Texas Lottery Commission

Effective date: February 5, 1997

Proposal publication date: October 29, 1996

For further information, please call: (512) 323-3791