Part 9. TEXAS LOTTERY COMMISSION
Chapter 401. ADMINISTRATION OF STATE LOTTERY ACT
Subchapter D. LOTTERY GAME RULES
The Texas Lottery Commission (Commission) proposes amendments to 16 TAC §401.310 (relating to Payment of Prize Payments Upon Death of Prize Winner). The purpose of the proposed amendments is to clarify current agency practices and procedures to be followed if a lottery installment prize winner, who claimed the prize in an individual capacity, dies before all the unassigned lottery prize installment payments have been paid and to clarify how the remaining unassigned lottery prize installment payments would be made in accordance with the rule.
Existing subsection (a) has been deleted in this proposal.
New subsection (a) sets forth provisions by which the personal representative of the estate of a deceased prize winner may petition the executive director of the Commission to pay the net present value of all remaining lottery prize installment payments, not previously assigned, in a lump sum payment.
New subsection (a)(1) relates to the valuation process of securities and/or cash held for a deceased prize winner.
New subsection (a)(2) states that the determination of valuation of securities, net present value of unassigned remaining installment payments shall be at the sole discretion of the Executive Director of the Commission.
New subsection (a)(3) relates to the distribution of the net present value amounts of the future lottery prize payments to the estate by payment into the registry of the proper Probate Court upon the Executive Director's confirmation of compliance with subsection (b).
Subsection (b) has been amended throughout to make uniform the term, "unassigned lottery prize", deletes the language, "as part of the appropriate judicial order", and adds the language, "of the Probate Court to include, at a minimum" and adds the language, "language and findings:"
Subsection (b)(2) has been amended to include new language regarding investigation, and clarifies that the payment of the remaining lottery prize installment payments is based on the attorney ad litem's investigation and findings.
Subsection (b)(3) has been amended to include the new language "and including any offsets or deductions required by the State Lottery Act"; and the deletion of "of the lesser of the commission's book value or fair market value". The amendments also add the language, "estate", "inheritance", "and including any offsets or deductions required by the State Lottery Act,", and "net present value of the".
Subsection (b)(4) has been amended by deleting, "lump sum" and "of the lesser of the commission's book value or fair market value". The amendments also add "including the representatives" and "or claimants to the estate, whether known or unknown; further, a proposed indemnification and release, approved by the Commission and representatives of the estate, will be submitted for approval by the Probate Court prior to entry of the Probate Court's order and will be fully executed by all representatives and beneficiaries or heirs of the estate prior to distribution of the lump sum payment into the registry of the Probate Court;"
Subsection (b)(5) has been amended by deleting, "and".
Subsection (b)(6) has been amended by deleting, "indicating" and adding the following language, "providing that the Probate Court found by competent evidence", "net present value of the unassigned lottery", "or inheritance", and "; and".
New subsection (b)(7) states, "Based upon the facts and circumstances of the underlying probate matter, the Commission may require additional language or findings to be set forth in the judicial order."
Kathy Pyka, Controller, has determined that for the first five-year period there will be no significant fiscal impact for state or local government as a result of enforcing these amendments. There will be no adverse effect on small businesses, micro businesses, or local or state employment. There will be no additional economic cost to individuals who are required to comply with the rule as proposed.
Kimberly L. Kiplin, General Counsel, has determined that for each of the first five years the proposed amendments are in effect, the public benefit anticipated is clarification of current agency practices and procedures to be followed if a lottery installment prize winner, who claimed the prize in an individual capacity, dies before all the unassigned prize installment payments have been paid and clarification of how the remaining unassigned lottery prize installment payments would be made in accordance with the rule.
Comments on the proposed amendments may be submitted to Deanne Rienstra, Assistant General Counsel, by mail at Texas Lottery Commission, P.O. Box 16630, Austin, Texas 78761-6630; by facsimile at (512) 344-5189; or by email at www.txlottery.org. Comments must be received within 30 days after publication of the proposed amendments in the Texas Register in order to be considered.
The amendments are proposed under Texas Government Code, §466.015, which provides the Texas Lottery Commission with the authority to adopt rules governing the operation of the lottery. The section is also proposed under Texas Government Code, §467.102, which provides the Commission with the authority to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction.
Texas Government Code, Chapter 466, is affected by this proposal.
§401.310.Payment of Prize Payments Upon Death of Prize Winner.
(a) The personal representative of the estate of a deceased prize winner entitled to payment of lottery prize installment payments pursuant to the State Lottery Act §466.406(b), may petition the executive director to pay the net present value all of the remaining lottery prize installment payments, not previously assigned, in a lump sum payment to the estate. For this rule, "prize winner" means an individual who claimed the prize as an individual and not as a representative of a legal entity and does not include a legal entity. The personal representative of the estate must present with the petition to the executive director an order from the proper Probate Court in compliance with the requirements set out in part (b), below.
(1) The net present value lump sum payment to be distributed shall represent the lesser of the commission's book value or fair market value of that portion of the unassigned future installment payments that are to be paid to the estate, less any applicable taxes or other offsets required by the State Lottery Act, Texas Government Code Chapter 466. The commission's book value is the daily recalculated amortized cost of investments under the interest method. The fair market value is the value of investments at any point in time as determined by the market place.
(2) The valuation of the securities at the lower of the commission's book value or fair market value and the determination of the net present value of the remaining unassigned installment payments shall be at the sole determination and discretion of the executive director.
(3) The securities and/or cash representing the future lottery prize installment payments held for the deceased prize winner, not previously assigned, shall be distributed to the estate of the deceased prize winner by payment into the registry of the proper Probate Court upon confirmation by the executive director of the Probate Court's order's compliance with part (b) below.
[
(a)
In the event of the death of a
prize winner (an individual claimant who has a valid ticket) who is
entitled to a prize which is paid in installments, the executive director,
upon petition of the estate of the deceased prize winner to the commission,
will pay the payment of all the remaining installments to the estate.
If the executive director pays the payment of all the remaining installments,
then securities and/or cash held for the deceased prize winner, which
represents the lesser of the commission's book value (the daily recalculated
amortized cost of investments under the interest method) or fair market
value (the value of investments at any point in time as determined
by the market place) of that portion of the future installment payments
that are to be paid, less any applicable taxes and administrative
costs incurred by the commission associated with paying the remaining
installment payments, shall be distributed to the estate. The valuation
of the securities at the lower of the commission's book value or fair
market value and determination of the net present value of the remaining
installment payments shall be at the sole determination and discretion
of the executive director.
]
(b) The commission shall require an [
appropriate
judicial
] order from the proper Probate Court, in order to facilitate
the payment of the remaining
unassigned lottery
prize installment
payments. The commission shall require[
, as part of the appropriate
judicial order,
]
the order of the Probate Court to include,
at a minimum,
the following
language and findings
:
(1) Language approving the form and substance of the order by all representatives of the estate of the deceased prize winner, whether such representatives are executors or administrators and by all beneficiaries and/or heirs known and existing at the time the order is signed by the Probate Judge;
(2) Language indicating that an attorney ad litem was
appointed by the court to represent
and investigate
the
interests of any unknown heirs, beneficiaries or claimants to the
estate, and a finding by the court, after
full consideration
of
[
considering
] the attorney ad litem's report
documenting
the investigation and findings
, that the payment of the remaining
unassigned lottery
prize installment payments is appropriate
based
on the attorney ad litem's findings
;
(3) Language providing for indemnification and holding
the commission harmless by all representatives of the estate of the
deceased prize winner from any and all liability of the estate of
the deceased prize winner for federal
estate
and state
inheritance
[
estate
] taxes, or other tax liability,
and including any offsets or deductions required by the State Lottery Act,
and from any claim known or unknown, existing now or arising
in the future, that may be made by a third party as a result of the
lump sum payment [
of the lesser of the commission's book value
or fair market value
] of the
net present value of the
remaining
unassigned lottery prize
installment payments;
(4) Language providing that, upon [
lump sum
]
payment [
of the lesser of the commission's book value or fair
market value
] of the
net present value of the
remaining
unassigned lottery prize
installment payments, the commission
has satisfied in full its obligations to the estate of the deceased
prize winner
, including the representatives,
[
and
]
beneficiaries
,
[
or
] heirs
, and any claimants
to the estate,
and shall be released from any further liability
to either the estate of the deceased prize winner or to the beneficiaries,
[
or
] heirs
, or claimants to the estate, whether known
or unknown; further, a proposed indemnification and release, approved
by the commission and representatives of the estate, will be submitted
for approval by the Probate Court prior to entry of the Probate Court's
order and will be fully executed by all representatives and beneficiaries
or heirs of the estate prior to distribution of the lump sum payment
into the registry of the Probate Court
;
(5) Language requiring the commission to pay the lump
sum payment into the registry of the court within 30 days after the
securities are liquidated, such liquidation being required by signed
order of the Probate Court. In the event there is a delay of time
between the sale of the securities and the payment into the registry
of the court, any interest earned during this period of time shall
be kept by the State of Texas; [
and
]
(6) Language [
indicating
]
providing
that the Probate Court found by competent evidence
that the
payment of the remaining
net present value of the unassigned
lottery
prize installment payments is necessary to pay the estate
or inheritance
tax burden imposed on the estate by federal and/or
state taxing authorities[
.
]
; and
(7) Based upon the facts and circumstances of the underlying probate matter, the commission may require additional language or findings to be set forth in the judicial order.
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.
Filed with the Office of the Secretary of State on June 27, 2007.
TRD-200702684
Kimberly L. Kiplin
General Counsel
Texas Lottery Commission
Earliest possible date of adoption: August 12, 2007
For further information, please call: (512) 344-5113
Subchapter A. ADMINISTRATION
The Texas Lottery Commission (Commission) proposes for public comment an amendment to 16 TAC §402.100 (relating to Definitions). The purpose of the proposed amendment is to add a definition for "bingo chairperson" in order to clarify the term as used in other proposed rules that are being drafted. The existing definitions are renumbered accordingly.
Kathy Pyka, Controller, has determined that for each year of the first five-years the proposed amendment will be in effect, there will be no fiscal impact for state or local government as a result of this amendment. There will be no adverse effect on small businesses, micro businesses, or local or state employment. There will be no adverse effect on individuals required to comply with the rule.
Philip D. Sanderson, Director of the Charitable Bingo Operations Division, has determined that for each year of the first five years that the proposed amendment is in effect, licensees will benefit because the new definition provides clarification and guidance relating to identifying an individual who will be the contact person for any bingo related activities between the organization and the Commission.
The Commission requests comments on the proposed rule from any interested person. Comments on the proposed rule may be submitted to Sandra Joseph, Assistant General Counsel, by mail at P.O. Box 16630, Austin, Texas 78711; by facsimile at (512) 344-5189; or by email at www.txlottery.org. The Commission will hold a public hearing on this proposal at 10:00 a.m. on Monday, July 16, 2007, at 611 E. 6th Street, Austin, Texas 78701. Comments must be received within 30 days after publication of this proposed rule in order to be considered.
The amendment is proposed pursuant to Occupations Code §2001.054, which authorizes the Commission to adopt rules necessary to enforce and administer the Bingo Enabling Act.
The proposed amendment implements Occupations Code, Chapter 2001.
§402.100.Definitions.
The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.
(1) Bingo chairperson--An officer of a licensed authorized organization who is designated in writing by the organization as responsible for overseeing the organization's bingo activities and reporting to the membership relating to those activities.
(2)
[
(1)
] Bingo premises--The
area subject to the direct control of, and actual use by, a licensed
authorized organization for the purpose of conducting a game of bingo.
(3)
[
(2)
] Break-open bingo ticket--An
instant bingo card commonly known as an instant bingo ticket, pull-tab
bingo game or instant bingo card as defined by §402.300 of this
chapter.
(4)
[
(3)
] Calendar week--A period
of seven consecutive days commencing with Sunday and ending with Saturday.
(5)
[
(4)
] Calendar year--A period
of 12 consecutive months commencing with January 1 and ending with
December 31.
(6)
[
(5)
] Card-minding device--Any
mechanical, electronic, electromechanical or computerized device,
and including related hardware and software, that is interfaced with
or connected to equipment used to conduct a game of bingo and which
allows a player to store, display, and mark a bingo card face five
spaces wide by five spaces long, the center space free, and the other
spaces containing pre-printed numbers between 1 and 75, inclusive.
A card-minding device shall not be a video lottery machine as defined
by H.B. 3021, §10, 74th Leg. R.S., 1995.
(7)
[
(6)
] Commission--The Texas
Lottery Commission, the agency created by H.B. 54, 72nd Leg., 1st
C.S. (1991), as amended by H.B. 1587 and H.B. 1013, 73rd Leg. R.S.,
1993.
(8)
[
(7)
] Conductor--A licensed authorized organization.
(9)
[
(8)
] Director--The Director
of the Charitable Bingo Operations Division, commonly known as the
bingo division, of the Commission.
(10)
[
(9)
] Executive Director--The
Executive Director of the Commission.
(11)
[
(10)
] Instant bingo card--An
instant bingo ticket, pull-tab bingo game, break-open bingo ticket
or instant bingo card as defined by §402.300 of this chapter.
(12)
[
(11)
] Instant bingo ticket--An
instant bingo card commonly known as a break-open bingo ticket, a
pull-tab bingo game or an instant bingo card as defined by §402.300
of this chapter.
(13)
[
(12)
] Location--The area
subject to the direct control of, and actual use by, a licensed authorized
organization for the purpose of conducting a game of bingo.
(14)
[
(13)
] Operator--A natural
person designated pursuant to authority of the Bingo Enabling Act.
(15)
[
(14)
] Place--The area subject
to the direct control of, and actual use by, a licensed authorized
organization for the purpose of conducting a game of bingo.
(16)
[
(15)
] Primary business
office--The physical location at which all records relating to the
primary purpose(s) of a licensed authorized organization are maintained
in the ordinary course of business.
(17)
[
(16)
] Pull-tab bingo game--An
instant bingo card commonly known as a break-open bingo ticket, an
instant bingo ticket or an instant bingo card as defined by §402.300
of this chapter.
(18)
[
(17)
] 24-hour period--A
period of 24 consecutive hours commencing at 12:00 midnight.
(19)
[
(18)
] Working day--Other
than a Saturday, Sunday or holiday authorized by law, a period of
nine consecutive hours commencing at 8:00 a.m. and ending at 5:00
p.m.
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.
Filed with the Office of the Secretary of State on June 27, 2007.
TRD-200702682
Kimberly L. Kiplin
General Counsel
Texas Lottery Commission
Earliest possible date of adoption: August 12, 2007
For further information, please call: (512) 344-5113
(Editor's note: The text of the following section proposed for repeal will not be published. The section 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 (Commission) proposes the repeal of Title 16, Part 9, Chapter 402, Subchapter A, §402.102 (relating to Bingo Advisory Committee). By separate action, the Commission will publish proposed new Title 16, Part 9, Chapter 402, Subchapter A, §402.102 (relating to Bingo Advisory Committee). The Commission is proposing the repeal of the current rule and the adoption of a new rule, rather than an amendment of the current rule, because the format of the rule is being changed significantly. The proposed new rule is written in a question and answer format.
Kathy Pyka, Controller, has determined that for each year of the first five-year period there will be no significant fiscal impact for state or local government as a result of this repeal. There will be no adverse effect on small businesses, micro businesses, or local or state employment. There will be no additional economic cost to individuals who are required to comply with the repeal as proposed.
Philip D. Sanderson, Director of the Charitable Bingo Operations Division, has determined that for each year of the first five-year period the repeal of the existing Bingo Advisory Committee rule and subsequent proposed new Bingo Advisory Committee rule will be in effect, the public benefit anticipated is a more reader friendly rule for interested parties to obtain answers to their questions about the Bingo Advisory Committee.
The Commission requests comments on the proposed repeal from any interested person. Comments may be submitted to Sandra Joseph, Assistant General Counsel, by mail at Texas Lottery Commission, P.O. Box 16630, Austin, Texas 78761-6630; by facsimile at (512) 344-5189; or by email at www.txlottery.org. The Commission will hold a public hearing on this proposal at 10:00 a.m. on July 16, 2007, at 611 E. 6th Street, Austin, Texas 78701. Comments must be received within 30 days after publication of this proposed repeal in order to be considered.
The repeal is proposed under Occupations Code §2001.054, which authorizes the Commission to adopt rules to administer the Bingo Enabling Act.
The proposed repeal implements Occupations Code, Chapter 2001.
§402.102.Bingo Advisory Committee.
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.
Filed with the Office of the Secretary of State on June 27, 2007.
TRD-200702680
Kimberly L. Kiplin
General Counsel
Texas Lottery Commission
Earliest possible date of adoption: August 12, 2007
For further information, please call: (512) 344-5113
The Texas Lottery Commission (Commission) proposes new Title 16, Part 9, Chapter 402, Subchapter A, §402.102 (relating to Bingo Advisory Committee). By separate action, the Commission will publish the proposed repeal of the current Title 16, Part 9, Chapter 402, Subchapter A, §402.102 (relating to Bingo Advisory Committee). The Commission is proposing the new rule concurrently with proposing the repeal of the old rule, rather than amending the existing rule, because of significant format changes. The proposed rule provides information on the composition and duties of the Bingo Advisory Committee.
Kathy Pyka, Controller, has determined that for each year of the first five-years that the rule will be in effect there will be no significant fiscal impact for state or local government as a result of this new rule. There will be no adverse effect on small businesses, micro businesses, or local or state employment. There will be no additional economic cost to individuals who are required to comply with the rule as proposed.
Philip D. Sanderson, Director of the Charitable Bingo Operations Division, has determined that for each year of the first five-years that the new rule will be in effect, the public benefit anticipated is a more understandable version of the rule for interested parties to obtain answers to their questions about the Bingo Advisory Committee. The new rule also contains new language regarding how Bingo Advisory Committee members are selected.
The Commission requests comments on the proposed rule from any interested person. Comments on the proposed new rule may be submitted to Sandra Joseph, Assistant General Counsel, by mail at Texas Lottery Commission, P.O. Box 16630, Austin, Texas 78761-6630; by facsimile at (512) 344-5189; or by email at www.txlottery.org. The Commission will hold a public hearing on this proposal at 10:00 a.m. on July 16, 2007, at 611 E. 6th Street, Austin, Texas 78701. Comments must be received within 30 days after publication of this proposed new rule in order to be considered.
The new rule is proposed under Occupations Code §2001.054, which authorizes the Commission to adopt rules to enforce and administer the Bingo Enabling Act and under Occupations Code §2001.057, which provides that the Commission may adopt rules to govern the operations of the Bingo Advisory Committee.
The new rule implements Occupations Code, Chapter 2001.
§402.102.Bingo Advisory Committee (BAC).
(a) What is the purpose of the Bingo Advisory Committee (BAC)?
(1) The purpose of the BAC is to:
(A) advise the Commission on the needs and concerns of the State's bingo industry;
(B) report the activities of the BAC to the Commission; and
(C) perform other duties as directed by the Commission.
(2) The BAC's sole duty is to advise the Commission.
(3) The BAC has no executive or administrative powers or duties with respect to the operations of the Charitable Bingo Operations Division.
(b) What is the composition of the Bingo Advisory Committee?
(1) The Commission may appoint nine persons as members of the BAC.
(2) The Commission must appoint members to represent the following interest groups:
(A) the public,
(B) conductors that are not licensed commercial lessors,
(C) conductors that are licensed commercial lessors,
(D) commercial lessors, and
(E) system service providers.
(3) The Commission may appoint members to represent:
(A) licensed manufacturers, and
(B) licensed distributors.
(4) If there is not an individual to represent one of the required interest groups, the Commission may appoint a member from the remaining interest groups.
(c) What are the minimum eligibility requirements to serve on the BAC?
(1) A member may not represent a licensee that is delinquent in payment of any prize fees or gross rental taxes for which a final jeopardy determination has been made by the Commission.
(2) A member may not represent a licensee that has a license denied, revoked or suspended by the Commission.
(3) A member representing the public may not be an individual who is required by statute to be listed on a conductor, commercial lessor, manufacturer, or distributor license application.
(4) A member must meet the criminal history standards in Bingo Enabling Act Sections 2001.105(b), 2001.154(a)(5), 2001.202(1), 2001.207(1), and 2001.252(1).
(5) A nominee for membership must provide complete and accurate information on the nomination form.
(d) How are members nominated to serve on the BAC?
(1) Individuals may submit a nomination form during the nomination period which begins on March 1 and ends on April 30 each year.
(2) Nomination forms are available from the Charitable Bingo Operations Division or the Commission's web site.
(e) What is the appointment process?
(1) Charitable Bingo Operations Division staff verify eligibility of nominees and send all nominations that meet minimum requirements to each Commissioner.
(2) Charitable Bingo Operations Division staff rank the nominations with advice and consultation of the Executive Director as appropriate.
(3) Charitable Bingo Operations Division staff provide to the BAC at the first meeting after June 1 each year the names of those nominees that staff will recommend to the Commissioners.
(4) The BAC may be a resource to the Commission by reviewing nominations, interviewing prospective members, and submitting its recommendations to the Charitable Bingo Operations Division and the Commissioners for consideration. However, the BAC will not act to exclude nominees.
(5) Each Commissioner may interview those nominees recommended by staff or other nominees.
(6) The Commissioners may appoint a nominee based on staff or BAC recommendation or may appoint any other nominee.
(f) How long may members serve on the BAC?
(1) The Commission appoints each member to serve for a three-year term or until the Commission appoints a successor.
(2) Members serve staggered terms of three years so that three members' terms expire August 31 each year.
(3) Each member serves at the pleasure of the Commission.
(g) May a BAC member be removed from the BAC before the member's term has expired?
(1) The Commission may remove a member at any time for failure to meet the eligibility requirements described in subsection (c).
(2) The Commission may remove a member for failure to attend two consecutive, regular scheduled meetings for any reason.
(h) When and where does the BAC meet?
(1) The BAC must meet quarterly but may meet more frequently at the Commission's request.
(2) Quarterly BAC meetings must be held at the Commission headquarters in Austin, Texas, except one quarterly meeting per year may be held at a location in Texas other than Austin, subject to the discretion of the Charitable Bingo Operations Division Director.
(i) Who conducts the BAC meeting?
(1) The BAC must annually select a presiding officer to conduct meetings and general business.
(2) The presiding officer must designate a member of the BAC to conduct meetings and general business in the presiding officer's absence.
(j) Are BAC meetings open to the public? BAC meetings shall be open meetings in accordance with the Texas Public Information Act, Texas Government Code, Chapter 551.
(k) May a member send a substitute person or proxy vote to a BAC Meeting? A member may not send a substitute person or proxy vote to a meeting.
(l) Are minutes kept of BAC meetings?
(1) The BAC must keep minutes of each meeting reflecting all formal action taken.
(2) The BAC may consider a transcript prepared by a court reporter to be the minutes of the meeting.
(3) The BAC must approve the minutes at its next meeting, and file the approved minutes with the Charitable Bingo Operations Division Director.
(m) What is the BAC's annual workplan?
(1) The BAC must submit to the Commission for approval at the first meeting after September 1 each year a workplan to guide the activities of the BAC for the following year.
(2) The workplan will contain those items that the BAC and the Commission determine are relevant to the state of the bingo industry.
(n) What are the BAC's reporting requirements?
(1) The BAC must report their activities quarterly to the Commission, although the Commission may require reporting more frequently.
(2) The BAC will report annually to the Commission the BAC's perspective on the state of the charitable bingo industry in Texas with specific comments on the following:
(A) gross receipts;
(B) net receipts;
(C) charitable distributions;
(D) expenses;
(E) attendance; and
(F) any other matter requested by the Commission.
(3) At the first Commission meeting held after September 1 each year, the BAC will provide to the Commission a report of its activities as they relate to the workplan approved by the Commission the previous year.
(o) When does the BAC cease to exist? The BAC will cease to exist annually on August 31, unless the Commission, prior to August 31, votes to continue the BAC.
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.
Filed with the Office of the Secretary of State on June 27, 2007.
TRD-200702683
Kimberly L. Kiplin
General Counsel
Texas Lottery Commission
Earliest possible date of adoption: August 12, 2007
For further information, please call: (512) 344-5113