TITLE economic-regulation

Part I. Railroad Commission of Texas

Chapter 3. Oil and Gas Division

Conservation Rules and Regulations

16 TAC §3.57, §3.76

The Railroad Commission of Texas proposes amendments to §3.57 of this title (relating to reclaiming tank bottoms, other hydrocarbon wastes, and other waste materials) and §3.76 of this title (relating to fees, performance bonds and alternate forms of financial security required to be filed).

The commission proposes to delete §3.57(c)(7) and renumber the subsequent paragraphs of subsection (c) because the requirements of paragraph (c)(7) would be replaced by the changes proposed in amendments to §3.76. The commission proposes to add §3.57(c)(10) to provide a cross-reference to §3.76(q) to indicate that financial responsibility requirements for reclamation plants will be governed by §3.76(q).

The commission proposes to amend §3.76(a) to change paragraph (3) which defines the term "an acceptable record of compliance" to allow one violation of commission rules provided that the violation was settled through an agreed order with the commission.

The commission proposes to further amend §3.76(a) to add a new paragraph (4) which defines the term "commercial facility" as any facility whose owner or operator receives compensation from others for the storage, reclamation, treatment, or disposal of oil field fluids or oil and gas wastes that are wholly or partially trucked or hauled to the facility and whose primary business purpose is to provide these services if: (1) the facility is permitted under §3.8 of this title; (2) the facility is permitted under §3.57 of this title; (3) the facility is permitted under §3.9 of this title and a collecting pit permitted under §3.8 is located at the facility; or (4) the facility is permitted under §3.46 of this title and a collecting pit permitted under §3.8 is located at the facility.

The commission proposes to further amend §3.76 by adding a new subsection (q) which would require commercial facilities to provide financial security.

Proposed new subsection (q) describes requirements for submission of financial security information to the commission for review for both new and existing commercial facilities and provides for notice and hearing in certain situations.

The proposed new subsection (q) also requires that a bond or letter of credit, in an amount approved by the commission or its delegate and meeting the requirements of the subsection as to form and issuer, be filed with the commission prior to receipt of waste at a new facility. After one year from the effective date of the subsection, an existing facility may not continue to receive waste unless financial security has been filed with the commission. An extension of the time for filing financial security may be granted upon written request and for good cause shown. In addition, the time period for filing financial security is automatically extended pending final commission action on review of proposed financial security.

The proposed subsection (q) specifies that the amount of financial security be estimated by or under supervision of a licensed professional engineer. The amount of financial security must be equal to or greater than the maximum amount necessary to close the facility at any time during the permit term, exclusive of plugging costs, but no less than $10,000. The amount of financial security required may be reduced by $25,000, an amount equivalent to the minimum commission form P-5 financial assurance amount. Subsection (q) also provides that proceeds from financial security provided under the subsection may be used to plug a well or wells at the facility if the P-5 financial assurance provided by the operator for plugging wells is insufficient to cover the costs of plugging such well or wells.

The proposed subsection also specifies that bonds and letters of credit must be issued by a corporate surety or bank, respectively, authorized to do business in the State of Texas.

Rita Percival, planner, Oil and Gas Division, has determined that for the first five-year period the proposed amendments to §3.57 are in effect there will be no fiscal implications to state or local governments as a result of enforcing or administering them. Ms. Percival has also determined that for the first five-year period the amendments to §3.76 are in effect, there will be fiscal implications to state government as a result of enforcing or administering them; there are no fiscal implications to local governments. The effect on state government for the first five-year period the amendments to §3.76 are in effect will be $20,875 in fiscal year 1998 and $2,269 annually in fiscal years 1999 through 2002. These costs are associated with staff review and approval of the bonds.

Terri Eaton, assistant director, Office of General Counsel, has determined that for each year of the first five years the amendments to §3.57 are in effect, there will be no cost of compliance to small businesses, individuals, and other affected operators.

Ms. Eaton has also determined that for each year of the first five years the amendments to §3.76 are in effect, there will be some cost of compliance for small businesses, individuals, and other affected operators. For the first year the proposed amendments are in effect, the anticipated cost of compliance will be approximately $395,000. For the second year the proposed amendments are in effect, the cost of compliance for all affected operators will be approximately $270,000. Costs of compliance will increase at a rate of $21,250 per year thereafter, for a total cost of compliance in the fifth year after adoption of the amendments of $334,000. The cost of compliance was estimated in the following manner.

There are currently 30 reclamation plants permitted under §3.57 and 38 commercial surface disposal facilities permitted under §3.8 of this title that would be required to provide financial assurance for facility closure costs under these proposed amendments. It is anticipated that closure costs for each of these facilities are $100,000 and that each operator owns or operates only one facility.

The total bond amount for each of these facilities would therefore be $75,000, or $100,000 minus the $25,000 credit allowed under the amendments to reflect the fact that each of these operators has already provided financial assurance in the amount of $25,000 to the commission. The initial cost per facility of obtaining a $75,000 bond is estimated to be $3,000 (five percent of the total bond amount) plus $2,000 to cover services of a licensed professional engineer, or a total of $5,000 per facility for the first year. The annual fee for renewal of the bond would be $3,000 per facility (five percent of the total bond amount).

There are currently 94 commercial facilities permitted under §3.9 and §3.46 (relating to disposal wells and to fluid injection into productive reservoirs). It is estimated that the cost to close each of these facilities, exclusive of plugging costs, is $25,000. It is further estimated that half of the facilities are operated by operators having only one commercial facility. Therefore, 47 operators would not be required to provide additional financial assurance and would incur no costs under these amendments. The remaining half of the facilities are assumed to be operated by persons operating two facilities each. These operators would be required to provide the full $25,000 financial assurance for one of their two facilities, for a total of 23.5 (rounded up to 24) facilities. The initial cost of obtaining a bond for each of these 24 facilities would be $1,250 (five percent of the bond amount) plus $1,000 for the services of a licensed professional engineer. Thereafter, the annual cost per operator would be the bond renewal fee, estimated to be $1,250.

It is further estimated that five new commercial facilities permitted under §3.57 or §3.8 (relating to reclaiming tank bottoms, other hydrocarbon wastes, and other materials and to water protection) and five new commercial facilities permitted under §3.9 or §3.46 (relating to disposal wells and to fluid injection into productive reservoirs) will be opened annually and that each of these 10 facilities will be required to provide financial assurance.

Ms. Eaton has also determined that the public benefit from adoption of the proposed amendments will be assurance that funds are available to close commercial facilities permitted under §§3.8, 3.57, 3.9, and 3.46 of this title (relating to water protection, to reclaiming tank bottoms, other hydrocarbon wastes, and other materials, to disposal wells and to fluid injection into productive reservoirs) in the event the owners or operators of such facilities are unable or unwilling to pay closure costs.

Ms. Percival has determined that the cost of compliance for small businesses as a result of enforcing or administering the proposed amendments will be comparable to the costs incurred by oil and gas operators.

Comments on the proposal should be submitted to Mark H. Barnett, Staff Attorney, Office of General Counsel, Railroad Commission of Texas, P. O. Box 12967, Austin, TX 78711-2967. Comments will be accepted until 5:00 p.m. on the 13th day after publication in the Texas Register . For further information, please call Mark H. Barnett at (512) 463-6801.

The amendments are proposed under Texas Water Code, §§27.001 et seq., which authorizes the commission to adopt and enforce rules relating to oil and gas waste disposal wells; Texas Natural Resources Code, §91.101, which authorizes the commission to adopt rules for the prevention of pollution of surface or subsurface water associated with the management of oil field fluids in oil and gas waste; and Texas Natural Resources Code, §91.109, which authorizes the commission to require performance bonds or other forms of financial security from a person permitted to manage oil and gas waste.

The Texas Water Code, §§27.001 et seq., and the Texas Natural Resources Code, §91.101 and §91.109, are affected by the proposed amendments.

§3.57.Reclaiming Tank Bottoms, Other Hydrocarbon Wastes, and Other Waste Materials.

(a)-(b)

(No change.)

(c)

Permitting process.

(1)-(6)

(No change.)

[ (7)

It shall be a permit condition that a reclamation plant operator maintain financial responsibility and resources to operate and close the reclamation site in accordance with the state law, Commission rules, and the permit. The operator shall show evidence of financial responsibility by submitting a bond or letter of credit in the amount of $100,000 in a form prescribed by the Commission. The bond or letter of credit may be in a lesser amount provided the operator shows that the lesser amount will be sufficient to operate and close the reclamation site in accordance with state law, Commission rules, and the permit. The bond or letter of credit shall be renewed and continued in effect until its conditions have been met or release is authorized by the Commission. ]

(7)

[ (8) ] Except as provided in subparagraphs (A) and (B) of this paragraph, a permit to operate a reclamation plant shall remain in effect until canceled at the request of the operator. Existing permits subject to annual renewal may be renewed so as to remain in effect until canceled. Such renewal shall be subject to the requirements of paragraph (10) [ (7) ] of this subsection. A reclamation plant permit may be canceled by the commission after notice and opportunity for hearing, if:

(A)

the permitted facility has been inactive for 12 months; or

(B)

there has been a violation, or a violation is threatened, of any provision of the permit, the conservation laws of the state, or rules or orders of the commission.

(8)

[ (9) ] If the operator objects to the cancellation, the operator must file, within 15 days of the date shown on the notice, a written objection and request for a hearing to determine whether the permit should be canceled. If such written request is timely filed, the cancellation will be suspended until a final order is issued pursuant to the hearing. If such request is not received within the required time period, the permit will be canceled. In the event of an emergency which presents an imminent pollution, waste, or public safety threat, the commission may suspend the permit until an order is issued pursuant to the hearing.

(9)

[ (10) ] A permit to operate a reclamation plant is not transferable. A new permit must be obtained by the new operator.

(10)

Reclamation plants permitted under this section shall file financial security as required under §3.76(q) of this title (relating to fees, performance bonds and alternate forms of financial security required to be filed).

(d)-(h)

(No change.)

§3.76.Fees, Performance Bonds and Alternate Forms of Financial Security Required to be Filed.

(a)

Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise:

(1)-(2)

(No change.)

(3)

An acceptable record of compliance : [ --a record of compliance showing: ]

(A)

A record of compliance showing:

(i)

No referrals to the Commission's enforcement section relating to a violation;

(ii)

No pending legal enforcement action relating to a violation; and

(iii)

No outstanding violations; or

(B)

A record of compliance showing:

(i)

Only one enforcement order, provided the order specifies that it shall not be considered to meet the elements of subparagraph (A) of this definition and provided the requirements of the order are met;

(ii)

No referrals to enforcement other than those that are resolved in the order referenced in clause (i) of this subparagraph;

(iii)

No pending enforcement actions other than those resolved in the order referenced in clause (i) of this subparagraph; and

(iv)

No outstanding violations other than those resolved in the order referenced in clause (i) of this subparagraph.

[ (A)

No referrals to the Commission's legal enforcement section relating to a violation; ]

[ (B)

No pending legal enforcement action relating to a violation; and ]

[ (C)

No outstanding violations. ]

(4)

Commercial facility - A facility whose owner or operator receives compensation from others for the storage, reclamation, treatment, or disposal of oil field fluids or oil and gas wastes that are wholly or partially trucked or hauled to the facility and whose primary business purpose is to provide these services if:

(A)

the facility is permitted under §3.8 of this title (relating to water protection);

(B)

the facility is permitted under §3.57 of this title (relating to reclaiming tank bottoms, other hydrocarbon wastes, and other waste materials);

(C)

the facility is permitted under §3.9 of this title (relating to disposal wells) and a collecting pit permitted under §3.8 is located at the facility; or

(D)

the facility is permitted under §3.46 of this title (relating to fluid injection into productive reservoirs) and a collecting pit permitted under §3.8 is located at the facility.

(b)-(p)

(No change.)

(q)

Financial security for commercial facilities. The provisions of this subsection shall apply to the holder of any permit for a commercial facility.

(1)

Application.

(A)

New permits. Any application for a new or amended commercial facility permit filed after the effective date of this subsection shall include:

(i)

a written estimate of the maximum dollar amount necessary to close the facility prepared in accordance with the provisions of paragraph (4) of this subsection that shows all assumptions and calculations used to develop the estimate;

(ii)

a copy of the form of the bond or letter of credit that will be filed with the commission; and

(iii)

information concerning the issuer of the bond or letter of credit as required under paragraph (5) of this subsection including the issuer's name and address and evidence of authority to issue bonds or letters of credit in Texas.

(B)

Existing permits. Within 180 days of the effective date of this subsection, the holder of any commercial facility permit issued on or before the effective date of this subsection shall file with the commission the information specified in subparagraph (A)(i)-(iii) of this paragraph.

(2)

Notice and hearing.

(A)

New permits. For commercial facility permits issued after the effective date of this subsection, the provisions of §3.8 or §3.57 of this title (relating to water protection and to reclaiming tank bottoms, other hydrocarbons wastes, and other waste materials), as applicable, regarding notice and opportunity for hearing, shall apply to review and approval of financial security proposed to be filed to meet the requirements of this subsection.

(B)

Existing permits. Notice of filing of information required under paragraph (1)(B) of this subsection shall not be required. In the event approval of the financial security proposed to be filed for a commercial facility operating under a permit in effect as of the effective date of this subsection is denied administratively, the applicant shall have the right to a hearing upon written request. After hearing, the examiner shall recommend a final action by the commission.

(3)

Filing of instrument.

(A)

New Permits. A commercial facility permitted after the effective date of this subsection may not receive oil field fluids or oil and gas waste until a bond or letter of credit in an amount approved by the commission under this subsection and meeting the requirements of this subsection as to form and issuer has been filed with the commission.

(B)

Existing permits. Except as otherwise provided in this subsection, after one year from the effective date of this section, a commercial facility permitted on or before the effective date of this subsection may not continue to receive oil field fluids or oil and gas waste unless a bond or letter of credit in an amount approved by the commission under this subsection and meeting the requirements of this subsection as to form and issuer has been filed with and approved by the commission.

(C)

Extensions for existing permits. On written request and for good cause shown, the commission or its delegate may authorize a commercial facility permitted before the effective date of this subsection to continue to receive oil field fluids or oil and gas waste after one year after the effective date of this section even though financial security required under this subsection has not been filed. In the event the commission or its delegate has not taken final action to approve or disapprove the amount of financial security proposed to be filed by the owner or operator under this subsection one year after the effective date of the section, the period for filing financial security under this subsection is automatically extended to a date 45 days after such final commission action.

(4)

Amount.

(A)

Except as provided in subparagraphs (B) or (C) of this paragraph, the amount of financial security required to be filed under this subsection shall be an amount approved by the commission or its delegate as being equal to or greater than the maximum amount necessary to close the commercial facility, exclusive of plugging costs for any well or wells at the facility, at any time during the permit term in accordance with all applicable state laws, commission rules and orders, and the permit, but shall in no event be less than $10,000.

(B)

The owner or operator of a commercial facility may reduce the amount of financial security required under this subsection by $25,000 if the owner or operator holds only one commercial facility permit.

(C)

The owner or operator of more than one commercial facility may reduce the amount of financial security required under this subsection for one such facility by $25,000. The full amount of financial security required under subparagraph (A) of this paragraph shall be required for the remaining commercial facilities.

(D)

A qualified professional engineer licensed by the State of Texas shall prepare or supervise the preparation of a written estimate of the maximum amount necessary to close the commercial facility as provided in subparagraph (A) of this paragraph. The owner or operator of a commercial facility shall submit the written estimate under seal of a qualified licensed professional engineer to the commission as required under paragraph (1) of this subsection.

(E)

Notwithstanding the fact that the maximum amount necessary to close the commercial facility as determined under this paragraph is exclusive of plugging costs, the proceeds of financial security filed under this subsection may be used by the commission to pay the costs of plugging any well or wells at the facility if the financial security for plugging costs filed with the commission under subsection (c) of this section is insufficient to pay for the plugging of such well or wells.

(5)

Issuer and form.

(A)

Bond. The issuer of any commercial facility bond filed in satisfaction of the requirements of this subsection shall be a corporate surety authorized to do business in Texas. The form of bond filed under this subsection shall provide that the bond be renewed and continued in effect until the conditions of the bond have been met or its release is authorized by the commission or its delegate.

(B)

Letter of credit. Any letter of credit filed in satisfaction of the requirements of this subsection shall be issued by and drawn on a bank authorized under state or federal law to operate in Texas. The letter of credit shall be an irrevocable, standby letter of credit subject to the requirements of Texas Business and Commerce Code, §§5.101 - 5.117. The letter of credit shall provide that it will be renewed and continued in effect until the conditions of the letter of credit have been met or its release is authorized by the commission or its delegate.

(r)

[ (q) ] Hazardous waste generation fee. A person who generates hazardous oil and gas waste, as that term is defined in § 3.98 of this title (relating to Standards for Management of Hazardous Oil and gas Waste), shall pay to the commission the fees specified in subsection (z) of § 3.98.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Issued in Austin, Texas, on December 18, 1997.

TRD-9716899

Mary Ross McDonald

Deputy General Counsel

Railroad Commission of Texas

Earliest possible date of adoption: February 2, 1998

For further information, please call: (512) 463-7008


Part II. Public Utility Commission of Texas

Chapter 23. Substantive Rules

Customer Service and Protection

16 TAC §23.52, §23.56

(Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Public Utility Commission of Texas or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

The Public Utility Commission of Texas proposes the repeal of §23.52 relating to Tel-Assistance and Lifeline Service and §23.56 relating to Statewide Dual-Party Relay Service. On August 26, 1997 the commission published in the Texas Register proposed new rule §23.142 relating to Lifeline Service and Link Up Service Programs, §23.143 relating to Tel-Assistance Service (both at 22 TexReg 8494), and §23.144 relating to Telecommunications Relay Service (22 TexReg 8513). Upon adoption of these new rules, §23.52 and §23.56 will be duplicative and no longer be necessary. Project Number 18426 has been assigned to the proposed repeal of §23.52 and §23.56.

Diana Zake, senior policy analyst, Office of Policy Development, has determined that for each year of the first five-year period these repeals are in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the repeals.

Diana Zake has determined that for each year of the first five years the repeals are in effect, the public benefit anticipated as a result of the repeals will be the elimination of confusion resulting from duplicative rule sections. There will be no effect on small businesses as result of repealing these sections. There is no anticipated economic cost to persons as a result of repealing these sections.

Diana Zake has also determined that for each year of the first five years the repeals are in effect there will be no impact on employment in the geographical area affected by the repeal of these sections.

Comments on the proposed repeals (16 copies) may be submitted to the Filing Clerk, Public Utility Commission of Texas, 1701 North Congress Avenue, P.O. Box 13326, Austin, Texas 78711- 3326, within 30 days after publication. All comments should refer to Project Number 18426.

These repeals are proposed under the Public Utility Regulatory Act, Texas Utilities Code Annotated, §14.002 (Vernon 1998)) (PURA), which provides the Public Utility Commission with the authority to make and enforce rules reasonably required in the exercise of its powers and jurisdiction.

Cross Index to Statutes: Public Utility Regulatory Act, §14.002.

§23.52.Tel-Assistance and Lifeline Service.

§23.56.Statewide Dual-Party Relay Service.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Issued in Austin, Texas, on December 18, 1997.

TRD-9716922

Rhonda Dempsey

Rules Coordinator

Public Utility Commission of Texas

Earliest possible date of adoption: February 2, 1998

For further information, please call: (512) 936-7308


Part IX. Texas Lottery Commission

Chapter 401. Administration of the State Lottery Act

Subchapter D. Lottery Game Rules

16 TAC §401.311

The Texas Lottery Commission proposes new §401.311, concerning on-line game rules relating to a new on-line game, "Texas Million". The new section is being proposed to provide specific game details and requirements for the new on-line game "Texas Million".

Richard Sookiasian, Budget Analyst, has determined that for the first five-year period the section is in effect the fiscal implications for state government as a result of enforcing or administering the section will be:

Figure 1: 16 TAC Preamble

Mr. Sookiasian has determined that for the first five-year period the sections are in effect there will be no fiscal implications for local government as a result of enforcing or administering the section.

Mr. Sookiasian also has determined that for each year of the first five-year period the section is in effect the public benefit anticipated as a result of enforcing the section will be to generate additional revenue for the State of Texas through the sale of the new on-line game's tickets. Mr. Sookiasian has also determined that there will be no cost to small businesses or individuals who are required to comply with the section as proposed, and no effect on local employment is anticipated.

Comments on the proposal may be submitted to Colette Davis Pena, Assistant General Counsel, Texas Lottery Commission, P.O. Box 16630, Austin, Texas 78761-6630.

The new section is proposed under Texas Government Code, §466.016, which provides the Texas Lottery Commission with the authority to adopt rules governing the type of lottery games to be conducted.

Texas Government Code, Chapter 466 is affected by this proposed section.

§401.311."Texas Million" On-Line Game Rule.

(a)

Texas Million. A Texas Lottery on-line game to be known as 'Texas Million' is authorized to be conducted by the executive director under the following rules and under such further instructions and directives that may issue in furtherance thereof. If a conflict arises between this section and §401.301 of this title (relating to Lottery Game Rules (General Definitions)) or between this section and §401.304 of this title (relating to On-Line Game Rules (General)), this section shall have precedence.

(b)

Definitions. In addition to the definitions provided in §401.301 and §401.304 of this title, and unless the context in this section otherwise requires, the following definitions listed in paragraphs (1)-(6) of this subsection apply.

(1)

Number - Any play integer from 00 through 99 inclusive.

(2)

Play - The seven sets of four numbers printed on the ticket. The player can select only the first set of the seven sets of four numbers for the 'million dollar prize'. The terminal will randomly select the remaining six sets of four numbers. The player can also have the terminal randomly select all seven sets of four numbers.

(3)

Multi Draw - A player may purchase a Texas Million ticket for up to ten consecutive drawings beginning with the current draw period.

(4)

Play Board - A field of numbers from 00 through 99 found on the playslip. Each playslip has three play boards on it.

(5)

Playslip- An optically readable card issued by the Texas Lottery used by players of Texas Million to select plays. There shall be three play boards on each playslip identified as Game 1, Game 2, and Game 3.

(6)

A playslip has no pecuniary value and shall not constitute evidence of ticket purchase or of numbers selected.

(c)

Price of ticket. The price of each Texas Million play shall be $2.00. A player may purchase up to three plays on one playslip. A player may also select the Multi Draw feature.

(d)

Play for Texas Million.

(1)

Type of play. A Texas Million player must select one set of four numbers from 00 through 99 for the million dollar cash prize, or select the Quick Pick option. The on-line terminal will randomly select the other six sets of four numbers for other cash prizes. The seven sets of four numbers are divided into three groups. The first group has one set of four numbers, the second group of numbers has two sets of four numbers, and the third group has four sets of four numbers. A winning play is achieved only when two, three or four numbers in one or more of the seven sets of four numbers selected by the player match, in any order, with the four winning numbers drawn by the Texas Lottery. Each set of four numbers is a separate set which must match with the four winning numbers drawn by the Texas Lottery.

(2)

Method of play. The player will use playslips to make number selections for the first set of four numbers. The other six sets of four numbers will be selected by a random number generator operated by the computer, referred to as Quick Pick. The on-line terminal will read the playslip and issue ticket(s) with corresponding plays. If a playslip is not available, the on-line retailer may enter the selected numbers via the keyboard. However, the retailer shall not accept telephone or mail-in requests to manually enter selected numbers. If offered by the lottery, the player may also choose the Quick Pick feature and have the random number generator operated by the on-line terminal randomly select all seven sets of four numbers.

(3)

Multiple prizes. The total number of prizes that can be won from one play is seven. The holder of a winning ticket may win only one prize for each set of four numbers and shall only be entitled to the highest prize category won by the set of four numbers.

(e)

Prizes for Texas Million.

(1)

Prize amounts. At the discretion of the executive director, a prize amount may be altered temporarily for marketing or promotional purposes. This temporary alteration of the prize amount will be announced in advance of ticket sales for the affected draw. Prize amounts are a guaranteed amount except in the situation where more than ten prizes are won in the first prize group in a single drawing wherein the prize in the first prize group becomes pari-mutuel for a total prize value of $10,000,000. Otherwise, each Texas Million player who matches two, three or four numbers in any one set of four numbers per play will be guaranteed a set prize amount as follows:

Figure 2: 16 TAC §401.311(e)(1)

(2)

Prize pool. The prize pool for Texas Million prizes shall be 50% of Texas Million sales for each drawing. The amount of actual prizes won may vary since most prize amounts are guaranteed.

(3)

Prize categories.

(A)

First Prize consists of matching all four numbers in the first group of numbers with the winning numbers. This prize must be claimed at the Austin claim center.

(B)

Second Prize consists of matching all four numbers in either one of the two sets of four numbers in the second group of numbers with the winning numbers.

(C)

Third Prize consists of matching all four numbers in any one of the four sets of four numbers in the third group of numbers with the winning numbers.

(D)

Fourth Prize consists of matching any three numbers in any one of the seven sets of four numbers on the ticket with the winning numbers, excluding any situation where a First, Second or Third prize has already been won for that set of four numbers.

(E)

Fifth Prize consists of matching any two numbers in any one of the seven sets of four numbers on the ticket with the winning numbers, excluding any situation where a First, Second, Third or Fourth prize has already been won for that set of four numbers.

(4)

Prize reserve fund. The prize reserve fund may be increased or decreased depending on amounts won by winners as compared to the appropriate percentage of the prize pool. The prize reserve fund may be decreased by any amounts won by winners, due to the guaranteed prize amounts. For example, money may be allocated from the prize reserve fund to the Texas Million prize pool if the prize liability is greater than the 50% prize pool for that drawing. The prize reserve fund will also increase or decrease depending upon the number of times the First Prize is won. If the First Prize of a guaranteed $1,000,000 is not won after each drawing, the amount of money in that prize pool will be designated to the prize reserve fund. If multiple winners claim the First Prize of a guaranteed $1,000,000, the additional million dollar prize money will come from the prize reserve fund, up to ten First Prizes, where upon the First Prize becomes pari-mutuel on a value of $10,000,000. The pari-mutuel prize amount shall be calculated by dividing the prize category contributions of the First Prize pool for that drawing, plus prize reserve monies up to $10,000,000, by the number of shares for the prize category.

(5)

Unclaimed prize fund. In the event any player who has a valid winning ticket does not claim the prize within 180 days after the drawing in which the prize was won, the prize amount shall be added to the unclaimed prize fund and all rights to the prize shall terminate.

(f)

Odds of winning. The following table shown in this subsection sets forth the odds of winning and guaranteed prizes in each prize category, based upon the total number of possible combinations of matching 2, 3 or 4 numbers in one set of four numbers per play. The overall odds of winning are 1:20.

Figure 3: 16 TAC §401.311(f)

(g)

Ticket purchases.

(1)

Texas Million tickets may be purchased only at a licensed location from a lottery retailer authorized by the director to sell on-line tickets.

(2)

Texas Million tickets shall show the player's selection of numbers and numbers selected by Quick Pick, play amount, drawing date(s), validation and reference numbers.

(3)

It shall be the exclusive responsibility of the player to verify the accuracy of the player's selection(s), draw date(s) and other data printed on the ticket. A ticket is a bearer instrument until signed.

(4)

Except as provided in subsection (d)(2) of this section, Texas Million tickets must be purchased using official Texas Million playslips. Playslips which have been mechanically completed are not valid. Texas Million tickets must be printed on official Texas Lottery on-line game paper stock and purchased at a licensed location through an authorized Texas Lottery retailer's on-line terminal.

(h)

Drawings.

(1)

The Texas Million drawing shall be held every Friday evening at 9:58 p.m. Central Time except that the drawing schedule may be changed by the executive director, if necessary.

(2)

Texas Million tickets will not be sold from 9:45 p.m. Central Time to 10:00 p.m. Central Time on drawing days.

(3)

The drawings will be conducted by Texas Lottery officials.

(4)

Each drawing shall determine, at random, four winning numbers in accordance with Texas Million drawing procedures. Any numbers drawn are not declared winning numbers until the drawing is certified by the lottery in accordance with the drawing procedures. The winning numbers shall be used in determining all Texas Million winners for that drawing.

(5)

Each drawing shall be witnessed by an independent certified public accountant. All drawing equipment used shall be examined by at least one lottery security representative, the drawing supervisor, and the independent certified public accountant immediately prior to a drawing and immediately after a drawing.

(6)

A drawing will not be invalidated based on the financial liability of the lottery.

(i)

Announcement of retailer incentive or bonus program. The director shall announce each retailer incentive or bonus program prior to its commencement. The announcement shall specify the beginning and ending time, if applicable, of the incentive or bonus program and the value of the award(s).

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Issued in Austin, Texas, on December 22, 1997.

TRD-9717069

Kimberly L. Kiplin

General Counsel

Texas Lottery Commission

Earliest possible date of adoption: February 2, 1998

For further information, please call: (512) 344-5113


Chapter 402. Bingo Regulation and Tax

16 TAC §§402.544, 402.550, 402.552, 402.553, 402.557, 402.560-402.562, 402.564, 402.566

(Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Texas Lottery Commission or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

The Texas Lottery Commission proposes the repeal of §§402.544, 402.550, 402.552, 402.553, 402.557, 402.560-402.562, 402.564, and 402.566, concerning bingo regulation and tax. The repeal of these sections is necessary to remove these sections from the Texas Register since the sections have expired by operation of law on April 1, 1995.

Richard Sookiasian, Budget Analyst, has determined that for each year of the first five years the repeals are in effect there will be no fiscal implications for state or local government or small business as a result of the proposed repeals.

Kimberly L. Kiplin, General Counsel, has determined that the public benefit anticipated as a result of the repeals will be to lessen any possible confusion of the public that these sections are still effective since they expired by operation of law on April 1, 1995. The proposed action will not impose any economic costs on individuals since the rules expired by operation of law on April 1, 1995.

Comments on the proposal may be submitted to Colette Davis Pena, Assistant General Counsel, Texas Lottery Commission, P.O. Box 16630, Austin, Texas 78761-6630.

The repeals are proposed under authority of Texas Revised Civil Statutes, Article 179d, §§16(a) and (d), and under Texas Government Code, §467.102, which provide the Texas Lottery Commission with the authority to adopt rules for the enforcement and administration of the Bingo Enabling Act.

Texas Revised Civil Statutes, Article 179d is affected by this action.

§402.544.Definitions.

§402.550.Bingo Reports.

§402.552.Licenses, Fees, and Bonds for Manufacturers and Distributors.

§402.553.Books and Records-Distributor and Manufacturers.

§402.557.Manufacturer's and Distributor's Quarterly Reports.

§402.560.Promotional Bingo.

§402.561.Interview Requirements.

§402.562.Unauthorized Prizes.

§402.564.Number and Type of Bingo Games Allowed.

§402.566.Amendment of Commercial License to Lease Bingo Premises.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Issued in Austin, Texas, on December 22, 1997.

TRD-9717070

Kimberly L. Kiplin

General Counsel

Texas Lottery Commission

Earliest possible date of adoption: February 2, 1998

For further information, please call: (512) 344-5113