Part 2. PUBLIC UTILITY COMMISSION OF TEXAS
Chapter 26. SUBSTANTIVE RULES APPLICABLE TO TELECOMMUNICATIONS SERVICE PROVIDERS
Subchapter P. TEXAS UNIVERSAL SERVICE FUND
The Public Utility Commission of Texas (commission) adopts an amendment to §26.403, relating to the Texas High Cost Universal Service Plan (THCUSP) without changes to the proposed text as published in the April 27, 2007 issue of the Texas Register (32 TexReg 2347).
This rule amendment is necessary and appropriate in order to allow the commission to determine in a contested proceeding, the appropriate eligible lines to be supported, and the benchmark or benchmarks to be used to calculate the support from the THCUSP, based upon current information and conditions in the telecommunications industry, law, and policy.
The amendment deletes existing rule language as to the specific eligible lines to be supported and the specific methodology of determining benchmarks. With the flexibility provided to the commission by this amendment, after notice and opportunity for hearing, the commission will determine which eligible lines should receive support under this section and will also determine benchmark(s) to be used to calculate the support amounts from the THCUSP. This amendment is adopted under Project Number 34060.
A public hearing, if requested, was scheduled for Monday, June 4, 2007. No request for the public hearing was received; therefore, no public hearing was conducted.
The commission received initial comments on the proposed amendment from AT&T Texas, Verizon Southwest, and Texas Cable & Telecommunications Association and Time Warner Telecom of Texas, L.P. (Coalition) and reply comments from Embarq and the Coalition. A summary of the stakeholders' filed comments and commission responses are set forth hereafter.
All parties filing comments supported the amendments to this section; however, parties sought clarifications of the amendments. The commentors expressed approval of the proposed amendments to the rule and approval of the flexibility and range these amendments afforded the commission in the subsequent contested proceeding in which benchmarks and lines to be supported by the THCUSP will be determined. The Coalition noted that the proposed amendments would remedy any constraints that the current rule language might impose on the commission's ability to decide and implement policy changes, and urged expeditious adoption.
AT&T Texas, Verizon, and Embarq expressed concern that the effect of this rulemaking may create a risk of invalidating the current THCUSP and disrupting the support flows to the eligible telecommunications providers (ETPs) who receive support from the THCUSP. Verizon noted that it is reasonable to assume that whatever changes are made will be prospectively implemented upon issuance of a final order in the follow-on substantive proceeding. These commentors requested that language be included in either the Adoption Order in this project or in the rule amendment that clarifies the continuation of the status quo pending notice and opportunity for hearing on the substantive issues. AT&T specifically requested that the commission clarify that ETPs be permitted to continue to submit their monthly claims for reimbursement pursuant to the Texas Universal Service Fund (TUSF) rules currently in effect until the commission provides notice and opportunity for a hearing on any possible changes.
Commission response
Notwithstanding changes to §26.403, all companies currently participating in the THCUSP operate under, and are subject to, the provisions of the Final Order in Docket Number 18515 until such time as, after notice and opportunity for hearing, the order from Docket Number 18515 is superseded by a subsequent commission order.
In reply comments, the Coalition agreed with AT&T and Verizon that the commission must provide notice and an opportunity for a hearing prior to implementing any change in the THCUSP and that such changes must be prospective, not retroactive. However, the Coalition noted that such requirement for notice and opportunity for hearing would be satisfied at the conclusion of Phase I of a contested case. Therefore, the Coalition disagreed with the concept that the commission must wait until it has issued a final order in the future contested case to implement changes to the support amounts disbursed pursuant to the THCUSP. The Coalition also urged the commission to make decisions that affect the policies of §26.403 during Phase 1 of the future contested proceeding.
Commission response
Decisions regarding what may or may not be implemented by the commission during a contested proceeding are unrelated to this rule change, and would be addressed in the context of the contested proceeding. Also, the administrative schedule for the forthcoming contested proceeding has yet to be established. Decisions regarding how many phases there will be in the contested case, and what issues are covered at what point in the contested case, will be made in the contested case proceeding.
The Coalition argued that the commission's decisions in the TUSF contested case may eventually require further revisions to this section in order to conform the final language of the rule to the policy, cost methodology, and other determinations made by the commission in the contested case. The Coalition pointed out this fact because it believed that these initial changes should not be interpreted as precluding or otherwise hampering the commission's ability to make policy changes in the contested case that may ultimately require additional rule changes.
Commission response
It would be premature at this time to stipulate a priori regarding results from the future proceeding and any potential impact on this Rule. The commission will make any changes to this rule section as necessary in the future, based on the outcome of the contested proceeding. The amendments to this rule broaden the guidelines regarding the THCUSP, and therefore enhance the commission's ability to make policy changes in a subsequent contested case, rather than hamper them.
This amendment is adopted under the Public Utility Regulatory Act, Texas Utilities Code Annotated §14.002 (Vernon 1998, Supplement 2006) (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 and specifically, PURA §56.021 which requires the commission to adopt and enforce rules to establish a universal service fund to assist local exchange companies in providing basic local telecommunications services at reasonable rates in high cost rural areas of the state.
Cross Reference to Statutes: Public Utility Regulatory Act §§14.002 and 56.021.
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.
Filed with the Office of the Secretary of State on June 27, 2007.
TRD-200702693
Adriana A. Gonzales
Rules Coordinator
Public Utility Commission of Texas
Effective date: July 17, 2007
Proposal publication date: April 27, 2007
For further information, please call: (512) 936-7223
The Texas Racing Commission adopts an amendment to §301.1, concerning Definitions without changes to the proposed text as published in the April 13, 2007, issue of the Texas Register (32 TexReg 2085).
The amendment to §301.1(b)(46) changes the term "odds board" to "tote board" and amends the definition of race meeting under §301.1(b)(59).
The Commission proposed the amendment in conjunction with its review of Chapter 301, Definitions, in accordance with Government Code, §2001.039. As a result of the amendment, the definitions will be clearer and will more closely align with industry standard terms.
The Commission received no comments in response to the proposed amendment.
The amendment is adopted under the Texas Racing Act, Texas Civil Statutes, Article 179e, §3.02, which authorizes the Commission to adopt rules for conducting greyhound and horse racing and rules to administer the Act.
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.
Filed with the Office of the Secretary of State on June 26, 2007.
TRD-200702659
Mark Fenner
General Counsel
Texas Racing Commission
Effective date: July 16, 2007
Proposal publication date: April 13, 2007
For further information, please call: (512) 833-6699
Subchapter B. TREATMENT OF HORSES
16 TAC §§319.102, 319.108, 319.111
The Texas Racing Commission adopts amendments to §319.102 and §319.111 and adopts new §319.108 without changes to the proposed text as published in the April 13, 2007, issue of the Texas Register (32 TexReg 2086).
The Commission proposed the amendments and new rule in conjunction with the Commission's review of Chapter 319, Veterinary Practices and Drug Testing, under Government Code, §2001.039.
The change to §319.102 clarifies that, for the purpose of removing a horse from the veterinarian's list, the commission will accept the report of a satisfactory workout or examination conducted by a commission veterinarian employed by a pari-mutuel regulatory authority outside of Texas.
New §319.108 regulates the use of Extracoporeal Shock Wave Therapy and Radial Pulse Wave Therapy. The provisions of this new rule are consistent with the provisions of the Association of Racing Commissioners International's model rule regarding these therapies.
The changes to §319.111 accomplish five purposes.
First, §319.111(a)(1) is amended by the insertion of the word "occurs." This is a technical correction only.
Second, the creation of new §319.111(a)(2) provides an opportunity for a trainer to seek reconsideration of a commission veterinarian's diagnosis of an EIPH event.
Third, the changes to §319.111(e) align the requirements for withdrawing from the furosemide program to match the requirements for entering the program. In addition, they will paperwork and streamline the process of withdrawing horses from the furosemide program.
Fourth, the change to §319.111(f)(2) corrects a typographical error.
Finally, the changes to §319.111(g) clarify the minimum lengths of time that a horse will remain on the veterinarian's list after Exercise Induced Pulmonary Hemorrhage events. The changes to §319.111(g) do not change the substance of the existing rule, but only present the rule in a format that is easier to understand.
The Commission received no comments in response to the proposed amendments and new rule.
The amendments and new rule are adopted under the Texas Racing Act, Texas Civil Statutes, Article 179e, §3.02, which authorizes the Commission to adopt rules for conducting greyhound and horse racing and rules to administer the Act.
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.
Filed with the Office of the Secretary of State on June 26, 2007.
TRD-200702660
Mark Fenner
General Counsel
Texas Racing Commission
Effective date: July 16, 2007
Proposal publication date: April 13, 2007
For further information, please call: (512) 833-6699
The Texas Racing Commission adopts amendments to §§319.202 - 319.204 without changes to the proposed text as published in the April 13, 2007, issue of the Texas Register (32 TexReg 2086).
The Commission proposed the amendments in conjunction with the Commission's review of Chapter 319, Veterinary Practices and Drug Testing, under Government Code, §2001.039.
The change to §319.202(b) provides the commission veterinarian with the flexibility of notifying either the owner or the trainer that the veterinarian is placing one of the kennel's greyhounds on the veterinarian's list.
The changes to §319.203 distinguishes between the monitoring efforts and the inspection efforts made by commission veterinarians at greyhound racetracks. The proposed changes reflect the different natures of these efforts and the different timetables. In addition, the changes to §319.203 specify how often kennels should be inspected.
The change to §319.204(c) deletes an ineffective reference to rules of the Texas Animal Health Commission (TAHC).
The Commission received no comments in response to the proposed amendments.
The amendments are adopted under the Texas Racing Act, Texas Civil Statutes, Article 179e, §3.02, which authorizes the Commission to adopt rules for conducting greyhound and horse racing and rules to administer the Act.
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.
Filed with the Office of the Secretary of State on June 26, 2007.
TRD-200702661
Mark Fenner
General Counsel
Texas Racing Commission
Effective date: July 16, 2007
Proposal publication date: April 13, 2007
For further information, please call: (512) 833-6699
Subchapter C. REGULATION OF LIVE WAGERING
Division 2. DISTRIBUTION OF PARI-MUTUEL POOLS
The Texas Racing Commission adopts an amendment to §321.313, relating to the distribution of the pari-mutuel pool for winners of the Select Three, Four or Five wager without changes to the proposed text as published in the April 13, 2007, issue of the Texas Register (32 TexReg 2088).
This amendment will change the calculation of the Select Three pool to a "Profit Split" payout, meaning that the payouts in a dead heat will be weighted according to the actual amount of money wagered on the winning combinations. The amendment will not change the payouts for the Select Four or Five wagers.
The Commission received no comments in response to the proposed amendment.
The amendment is adopted under the Texas Racing Act, Texas Civil Statutes, Article 179e, §3.02, which authorizes the Commission to adopt rules for conducting greyhound and horse racing and rules to administer the Act, and §11.01, which requires the Commission to adopt rules regulating pari-mutuel wagering on greyhound and horse racing.
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.
Filed with the Office of the Secretary of State on June 26, 2007.
TRD-200702662
Mark Fenner
General Counsel
Texas Racing Commission
Effective date: July 16, 2007
Proposal publication date: April 13, 2007
For further information, please call: (512) 833-6699
Chapter 402. CHARITABLE BINGO ADMINISTRATIVE RULES
Subchapter B. CONDUCT OF BINGO
The Texas Lottery Commission (Commission) adopts new 16 TAC §402.204 (relating to Prohibited Price Fixing), with changes to the proposed text as published in the April 20, 2007, issue of the Texas Register (32 TexReg 2227).
Prior to proposal of the rule, the Commission received extensive input from members of the Bingo Advisory Committee and other interested persons that there was a need for a rule providing guidance on Occupations Code, §2001.556, regarding prohibited price fixing. A workgroup composed of Commission staff and public members involved in charitable bingo identified, gathered, and reviewed information relevant to drafting a rule on price fixing. The proposed rule was a result of the workgroup's efforts. The purpose of the new rule is to provide information to manufacturers, distributors, and authorized organizations relating to Occupations Code, §2001.556, regarding prohibited price fixing. Licensees will benefit because the new rule provides clarification on matters related to prohibited price fixing.
A public comment hearing was held on May 2, 2007. There were no members of the public present at the hearing. One written comment was received during the comment period. The Commission also considered the comments submitted for a previously proposed rule related to price fixing. The earlier proposal was withdrawn.
The Bingo Interest Group and others commented in support of the proposed rule.
Two comments concerned the definition of "supplier" in subsection (a)(3). One comment stated that the definition of "supplier" should not be adopted because it makes no sense, is not mentioned elsewhere, and will be difficult to enforce. The second comment stated that, if the definition is included, it should be used also in the definition of vertical price fixing because it is used in the definition of horizontal price fixing; however, the definition should be removed because it will cause trouble and does not enhance the rule.
Agency Response: The definition of "supplier" enhances the rule because it provides guidance on the meaning of the term "supplier" in Occupations Code, §2001.556, regarding prohibited price fixing. "Supplier" is used in an example included in the definition of "horizontal price fixing." The examples in the definition of "vertical price fixing" do not need to mirror those given in the definition of "horizontal price fixing." The Commission has modified the definition of "supplier" to include those with an interest of 10% or greater, rather than 5% or greater, to be consistent with the provisions in Occupations Code, §2001.203 and §2001.208, that require an applicant for a manufacturer or distributor's license to include information pertaining to each person owning 10% or more of a class of stock.
A comment made a drafting suggestion on subsection (c)(7) for clarification.
Agency Response: The Commission agrees and has changed "this paragraph and" to "this subsection or" in subsection (c)(7).
The new section is adopted under Occupations Code, §2001.054, which authorizes the Commission to adopt rules to enforce and administer the Bingo Enabling Act.
§402.204.Prohibited Price Fixing.
(a) Definitions.
(1) horizontal price fixing--a price fixing agreement:
(A) between competitors on the same level of distribution, such as a price fixing agreement between two or more bingo equipment or supplies manufacturers; or
(B) between two or more bingo equipment or supplies distributors; or
(C) between two or more suppliers.
(2) price fixing agreement--an express or implied agreement to fix, set, control, maintain, or stabilize prices at any level.
(3) supplier--a licensed or unlicensed manufacturer or distributor of bingo equipment or supplies or any person, group, or entity with an ownership interest of 10% or greater in a manufacturer or distributor of bingo equipment or supplies.
(4) vertical price fixing--a price fixing agreement between parties on different levels of the same chain of distribution regarding the price that one of the parties will charge further down the distribution chain, such as an agreement between a bingo equipment or supplies manufacturer and a bingo equipment or supplies distributor regarding the price that the bingo equipment or supplies distributor will charge to the licensed authorized organization.
(b) Horizontal Price Fixing Prohibited.
(1) Horizontal price fixing agreements are prohibited.
(2) Evidence of uniform prices or exchange of past or historical price information alone shall not be sufficient to establish a violation of paragraph (1) of this subsection or Texas Occupations Code §2001.556.
(c) Vertical Price Fixing Prohibited.
(1) Vertical price fixing agreements are prohibited.
(2) Each distributor shall have full discretion in setting the distributor's sales or lease prices for bingo equipment or supplies to authorized organizations.
(3) A manufacturer may not set or control the sales or lease price that a distributor charges a licensed authorized organization for bingo equipment or supplies.
(4) A manufacturer may not set a minimum price on any sales or lease price that a distributor charges a licensed authorized organization for bingo equipment or supplies.
(5) A manufacturer may not prohibit a distributor from offering price discounts, rebates, credits, promotional allowances, or any other arrangement affecting the price paid by the purchaser or lessee of bingo equipment or supplies, to a licensed authorized organization.
(6) A manufacturer may not terminate a distributor's contract for failure to charge the manufacturer's suggested retail price.
(7) Discussions, suggestions, or the exchange of information between a manufacturer and a distributor regarding the sales or lease price charged by a distributor to a licensed authorized organization are not, in and of themselves, violations of this subsection or Texas Occupations Code §2001.556, so long as the distributor retains discretion to establish its sales or lease price to licensed authorized organizations.
(8) Nothing in Texas Occupations Code §2001.556 shall prevent a manufacturer and distributor from negotiating or establishing the sales or lease price that the distributor will pay to the manufacturer for bingo equipment or supplies.
(d) It is not a defense to horizontal or vertical price fixing that the fixed or agreed upon price is reasonable.
(e) Recordkeeping Requirements. Manufacturers and distributors shall retain contracts, invoices or other documents sufficient to show wholesale and retail pricing information for a period of three years. This documentation shall be made available to the Commission upon request, in accordance with §2001.216, Texas Occupations Code.
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.
Filed with the Office of the Secretary of State on June 27, 2007.
TRD-200702685
Kimberly L. Kiplin
General Counsel
Texas Lottery Commission
Effective date: July 17, 2007
Proposal publication date: April 20, 2007
For further information, please call: (512) 344-5113
The Texas Lottery Commission (Commission) adopts amendments to 16 TAC §402.300 (relating to Pull-Tab Bingo) with changes to the proposed text as published in the December 29, 2006, issue of the Texas Register (31 TexReg 10495).
Prior to the proposal of amendments to 16 TAC §402.300 (relating to Pull-Tab Bingo), the Commission received comments, suggestions, and questions about manufacture, style of play, flexibility in sale of pull-tabs by licensed authorized organizations, accountability, and related matters pertaining to pull-tab games from members of the Bingo Advisory Committee and other persons involved in charitable bingo. In response, the Commission adopted these amendments to: (1) provide manufacturers with more specific information on pull-tab ticket construction and packaging standards; (2) provide information on a new jackpot pull-tab game; (3) provide for additional flexibility and accountability for sale and redemption of pull-tab tickets; (4) clarify permissibility of video confirmation of winners; and (5) clarify existing language. Licensees will benefit because the adopted amendments will provide licensees with additional information to assist them in remaining in compliance with the Bingo Enabling Act and the Charitable Bingo Administrative Rules.
The Commission received comments on the proposed rule. The Board of Texas Charity Advocates and the Bingo Interest Group supported adoption of the proposed rule. The Christian Life Commission of the Baptist General Convention was against adoption of the rule. The National Association of Fundraising Ticket Manufacturers commented against some provisions of the proposed rule. Numerous other comments supported the proposed rule in its entirety, and several others raised questions or concerns about some provisions.
Some comments expressed concern that the proposed amendments relating to "video confirmation" and "digital representation" caused confusion and would permit an expansion of gambling.
Agency Response: The Commission does not have the statutory authority to expand gambling or authorize slot machines, gambling devices, or, more specifically, electronic pull-tab bingo, as that term was described by Senate Floor Amendment No. 24 to HB 3, 79th Regular Legislative Session. A recent Texas Attorney General's Opinion, GA-541 (2007) concluded that the constitutional authorization for charitable bingo does not include "electronic pull-tab bingo," as described by Floor Amendment No. 24. Therefore, the adopted amendments can not and do not authorize slot machines, gambling devices, or electronic pull-tab bingo. By providing that video confirmation shall be subject to Commission approval, the adopted rule amendment clarifies that, although video confirmation is permissible, the Commission retains oversight authority. The adopted rule amendment further clarifies that video confirmation is a graphic and dynamic representation of the outcome of a bingo event ticket that will have no effect on the result of the winning or losing event ticket.
The references to "digital representation" have been deleted so that the Commission may conduct further review to consider developing guidelines for permissible use of digital representation. The rule as adopted does not include in subsection (a)(3) the proposed language ", or digital representation".
Comments stated that the definitions of "face" and "reverse" should be retained and expressed concern that allowing required information to be printed on the back of the ticket could create problems if some or all of the information were removed as tabs are torn off.
Agency Response: The Commission agrees. The definitions for "face" and "reverse" are retained in subsections (a)(3) and (15) and subsequent paragraphs are renumbered accordingly. In addition, language in subsections (a)(6), (b)(2), (b)(3)(B), (C), (D), (E), and (F) requiring information to be on the face of a pull-tab ticket is retained.
Comments suggested adding language that would permit a manufacturer to sell games in the State contemporaneously with the submittal of the sample deal because the approval process is time consuming and causes significant delays for distributors and manufacturers.
Agency Response: The Commission disagrees and has determined that no pull-tab game should be available in Texas until it has undergone complete testing and received final approval in accordance with Occupations Code, §2001.056(b). Section 2001.056(b) provides that a "license holder may not use or distribute a bingo card unless the card has been approved by the commission."
Comments suggested including an approval time frame of five to seven days to give the manufacturers and distributors certainty as to when a decision on a game would be issued.
Agency Response: Although the Commission agrees that a five to seven day approval time is reasonable in most cases, the Commission needs flexibility to manage fluctuations in workload. During the past six months, the Commission has approved new product submissions within three to five days of receipt with rare exceptions. Inclusion of a time frame in the rule would necessitate limiting the number of products submitted during a given period of time in order to ensure compliance with the time frame requirement.
A comment stated that the proposed amendment to subsection (d)(6) seems to eliminate the requirement that a flare accompany each deal.
Agency Response: The Commission did not intend to eliminate the requirement that a flare accompany each deal and has inserted new language in subsection (d)(6) for clarification. The succeeding paragraphs have been renumbered accordingly.
One comment stated that the jackpot pull-tab game language would allow for types of pull-tab games that would absolutely destroy traditional bingo.
Agency Response: Jackpot pull-tab is another style of pull-tab bingo game, and its prize payouts must be within statutory limits. The Commission has no information to indicate the jackpot pull-tab game would destroy traditional bingo. Additionally, the comments did not provide an explanation or basis for such a conclusion.
One comment stated: "Lottery Commissioner Tom Clowe publicly stated his support for 'link games', 'prize maximum increase' and 'electronic pull tabs' and discussed the possibility of having to recuse himself from any future discussions on this subject before the Commission. . . . These public statements concerning subjects contemplated in this proposed rule, raises concern on at least the appearance of Commissioner Clowe's ability to be objective on the merits of this rule. . . . Please provide rationale and justification for Commissioner Tom Clowe's participation and or recusal from decisions on issues before the Commission that involve bingo link games, bingo prize maximum increase, and bingo electronic pull tabs."
Agency Response: The rule does not address link games, prize maximum increase, and electronic pull-tabs. Moreover, Commissioner Clowe has no personal or private interest of any type in decisions related to the proposed rule except as a Commissioner performing his duties as set out in the statutes. Therefore, there is no basis or justification for recusal by Commissioner Clowe.
One comment suggested that a distributor should be required to take back disapproved pull-tab tickets and give credit for them to the licensed authorized organizations so that organizations are not burdened with pull-tabs that are not allowed to be sold.
Agency Response: Purchase agreements between a distributor and licensed authorized organization are private contractual matters that the Commission does not regulate.
A comment stated that subsection (e)(9) should be modified to allow a licensed authorized organization to use its own form to record required information about the sale of pull-tab tickets.
Agency Response: The Commission agrees and has deleted language in subsection (e)(9) requiring use of a form prescribed by the Commission.
A comment stated that the word "winning" should not be deleted from subsection (g)(5) because keeping a winning pull-tab is proof that it has been paid.
Agency Response: The Commission disagrees. "Winning" is not needed because subsection (g)(5) states that all "redeemed" pull-tab bingo tickets must be retained. Redeemed tickets are winning tickets.
One comment stated that charities not involved in a unit should be able to sell their pull-tabs in either session.
Agency Response: The Commission agrees and provides for this in subsection (e)(4) as proposed and adopted so long as the licensed authorized organization conducts bingo on two consecutive sessions within one twenty-four hour period.
The amendments are adopted under Occupations Code, §2001.054, which authorizes the Commission to adopt rules to enforce and administer the Bingo Enabling Act.
§402.300.Pull-Tab Bingo.
(a) Definitions. The following words and terms, shall have the following meanings, unless the context clearly indicates otherwise:
(1) Bingo Ball Draw--A pulling of a bingo ball(s) to determine the winner of an event ticket by either the number or color on the ball(s).
(2) Deal--A separate and specific game of pull-tab bingo tickets of the same serial number and form number.
(3) Face--The front of a pull-tab bingo ticket, which displays the artwork of a specific game. The front of the pull-tab bingo ticket includes, but is not limited to, the name of the game, the price of the game and the payout structure of the game.
(4) Flare--A poster or placard that must display:
(A) a form number of a specific pull-tab bingo game;
(B) the name of the pull-tab bingo game;
(C) the total card count of the pull-tab bingo game;
(D) the cost per pull-tab bingo ticket;
(E) the number of prizes to be awarded and the corresponding prize amounts of the pull-tab bingo game; and
(F) the name of the manufacturer or trademark.
(5) Form Number--The unique identification number assigned by the manufacturer to a specific pull-tab bingo game. A form number may be numeric, alpha, or a combination of numeric and alpha characters.
(6) High Tier--The two highest paying prize amounts as designated on the face of the pull-tab bingo ticket and on the game's flare.
(7) Last Sale--The purchaser of the last pull-tab bingo ticket(s) sold in a deal with this feature is awarded a prize or a registration for the opportunity to win a prize.
(8) Merchandise--Any non-cash item(s) provided to a licensed authorized organization that is used as a prize.
(9) Wheels--Devices that determine event ticket winner(s) by a spin of a wheel.
(10) Pay-Out--The total sum of all possible prize amounts in a pull-tab bingo game.
(11) Payout Schedule--A printed schedule prepared by the manufacturer that displays:
(A) the name of the pull-tab bingo game;
(B) the form number of the pull-tab bingo game;
(C) the total card count of the pull-tab bingo game;
(D) the cost per pull-tab bingo ticket;
(E) the number of prizes to be awarded and the corresponding prize amount or jackpot for each category of the pull-tab bingo game;
(F) the number of winners for each category of prize;
(G) the profit of the pull-tab bingo game;
(H) the percentage of payout or the percentage of profit of the pull-tab bingo game; and
(I) the payout(s) of the pull-tab bingo game.
(12) Payout Structure--The printed information that appears on the face of a pull-tab bingo ticket. This display shows the winnable prize amounts, the winning patterns required to win a prize, and the number of winners for each category of prize.
(13) Prize--An award of collectible items, merchandise, cash, bonus pull-tabs, and additional pull-tab bingo tickets, individually or in any combination.
(14) Prize Amount--The value of cash and/or the fair market value of merchandise which is awarded as a prize. A collectable item is considered merchandise for determining allowable prize amounts. If a manufacturer or distributor supplies a merchandise prize, the manufacturer or distributor must determine the fair market value of the merchandise prize, otherwise the fair market value of a merchandise prize must be determined by the authorized organization.
(15) Reverse--The back of a pull-tab bingo ticket that has a perforated break-open tab(s) that when opened reveals one or more numbers and/or symbols that appear under the tab(s).
(16) Serial Number--The unique identification number assigned by the manufacturer identifying a specific deal of pull-tab bingo tickets. A serial number may be numeric, alpha, or a combination of numeric and alpha characters.
(17) Subset--A part of a deal that is played as a game to itself or combined with more subsets and played as a game. Each subset may be designed to have:
(A) a designated payout; or
(B) a series of designated payouts. Subsets must be of the same form and serial number to have a combined designated payout or a series of designated payouts.
(18) Symbol--A graphic representation of an object other than a numeric or alpha character.
(19) Video Confirmation--A graphic and dynamic representation of the outcome of a bingo event ticket that will have no effect on the result of the winning or losing event ticket.
(b) Approval of pull-tab bingo tickets.
(1) A pull-tab bingo ticket may not be sold in the state of Texas, nor furnished to any person in this state nor used for play in this state until that pull-tab bingo ticket has received approval for use within the state of Texas by the Commission. The manufacturer at its own expense must present their pull-tab bingo ticket to the Commission for approval.
(2) All pull-tab bingo ticket color artwork with a letter of introduction including style of play must be presented to the Commission's Austin, Texas location for review. The manufacturer must submit one complete color positive or hardcopy set of the color artwork for each pull-tab bingo ticket and its accompanying flare. The color artwork may be submitted in an electronic format prescribed by the Commission in lieu of the hardcopy submission. The submission must include the payout schedule. The submission must show the face and reverse sides of a pull-tab bingo ticket and must be submitted on an 8 1/2" x 11" size sheet. The color artwork will show the actual size of the ticket and a 200% size of the ticket. The color artwork will clearly identify all winning and non-winning symbols. The color artwork will clearly identify the winnable patterns and combinations.
(3) The color artwork for each individual pull-tab bingo ticket must:
(A) display in no less than 26-point diameter circle, an impression of the Commission's seal with the words "Texas Lottery Commission" engraved around the margin and a five-pointed star in the center;
(B) contain the name of the game in a conspicuous location on the face of the pull-tab bingo ticket;
(C) contain the form number assigned by the manufacturer in a conspicuous location on the face of the pull-tab bingo ticket;
(D) contain the manufacturer's name or trademark in a conspicuous location on the face of the pull-tab bingo ticket;
(E) disclose the prize amount and number of winners for each prize amount, the number of individual pull-tab bingo tickets contained in the deal, and the cost per pull-tab bingo ticket in a conspicuous location on the face of the pull-tab bingo ticket;
(F) display the serial number where it will be printed in a conspicuous location on the face of the pull-tab bingo ticket. The color artwork may display the word "sample" or number "000000" in lieu of the serial number;
(G) contain graphic symbols that preserve the integrity of the Commission. The Commission will not approve any pull-tab bingo ticket that displays images or text that could be interpreted as depicting alcoholic beverages, weapons, profane language, provocative, explicit or derogatory images or text. All images or text are subject to final approval by the Commission; and
(H) be accompanied with the color artwork of the pull-tab bingo tickets reverse side along with a list of all other colors that will be printed with the game.
(4) Upon approval of the color artwork, the manufacturer will be notified by the Commission to submit one deal, for testing. The deal must be submitted for testing to the Commission at the manufacturers own expense. If necessary, the Commission may request that additional deals be submitted for testing.
(5) If the color artwork is approved and the pull-tab bingo deal(s) pass the Commission's testing, the manufacturer will be notified of the approval. This approval only extends to the specific pull-tab bingo game and the specific form number cited in the Commission's approval letter. If the pull-tab bingo ticket is modified in any way, with the exception of the serial number, index color, or trademark(s), it must be resubmitted to the Commission for approval. Changes to symbols require only an artwork approval from the Commission.
(6) The Commission may require resubmission of an approved pull-tab bingo ticket at any time.
(c) Disapproval of pull-tab bingo tickets.
(1) Upon inspection of a pull-tab bingo ticket by the Commission and if it is deemed not to properly preserve the integrity or security of the Commission including compliance with the art work requirements of this rule, the Commission may disapprove a pull-tab bingo ticket. All pull-tab bingo tickets that are disapproved by the Commission will cease to be allowed for sale until such time as the manufacturer complies with the written instructions of the Commission, or until any discrepancies are resolved. Disapproval of and prohibition to use, purchase, sell or otherwise distribute such a pull-tab bingo ticket is effective immediately upon notice to the manufacturer by the Commission. Upon receipt of such notice, the manufacturer must immediately notify the distributor and the distributor must immediately notify affected licensed authorized organizations to cease all use, purchase, sale or other distribution of the disapproved pull-tab ticket. The distributor must provide to the Commission, within 15 days of the Commission's notice to the manufacturer, confirmation that the distributor has notified the licensed authorized organization that the pull-tab ticket has been disapproved and sale and use of the disapproved ticket must cease immediately.
(2) If modified by the manufacturer all disapproved pull-tab bingo tickets may be resubmitted to the Commission. No sale of disapproved tickets will be allowed until the resubmitted deal has passed security testing by the Commission. At any time the manufacturer may withdraw any disapproved pull-tab bingo tickets from further consideration.
(3) The Commission may disapprove a pull-tab bingo game at any stage of review, which includes artwork review and security testing, or at any time in the duration of a pull-tab bingo game. The disapproval of a pull-tab bingo ticket is administratively final.
(d) Manufacturing requirements.
(1) Manufacturers of pull-tab bingo tickets must manufacture, assemble, and package each deal in such a manner that none of the winning pull-tab bingo tickets, nor the location, or approximate location of any winning pull-tab bingo ticket can be determined in advance of opening the deal by any means or device. Nor should the winning pull-tab bingo tickets, or the location or approximate location of any winning pull-tab bingo ticket be determined in advance of opening the deal by manufacture, printing, color variations, assembly, packaging markings, or by use of a light. Each manufacturer is subject to inspection by the Commission, its authorized representative, or designee.
(2) All winning pull-tab bingo tickets as identified on the payout schedule must be randomly distributed and mixed among all other pull-tab bingo tickets of the same serial number in a deal regardless of the number of packages, boxes, or other containers in which the deal is packaged. The position of any winning pull-tab bingo ticket of the same serial numbers must not demonstrate a pattern within the deal or within a portion of the deal. If a deal of pull-tabs is packed in more than one box or container, no individual container may indicate that it includes a winner or contains a disproportionate share of winning or losing tickets.
(3) Each deal of pull-tab bingo tickets must contain a packing slip inside the deal. This packing slip must substantiate the name of the manufacturer, the serial number for the specific deal, the date the deal was packaged, and the name or other identification of the person who packaged the deal.
(4) Each deal's package, box, or other container shall be sealed at the manufacturer's factory with a seal including a warning to the purchaser that the deal may have been tampered with if the package, box, or other container was received by the purchaser with the seal broken.
(5) Each deal's serial number shall be clearly and legibly placed on the outside of the deal's package, box or other container or be able to be viewed from the outside of the package, box or container.
(6) A flare must accompany each deal.
(7) The information contained in subsection (a)(3)(A), (B), (C), (D), and (F) of this section shall be located on the outside of each deal's sealed package, box, or other container.
(8) Manufacturers must seal or tape, with tamper resistant seal or tape, every entry point into a package, box or container of pull-tab bingo tickets prior to shipment. The seal or tape must be of such construction as to guarantee that should the container be opened or tampered with, such tampering or opening would be easily discernible.
(9) All high tier winning instant pull-tab bingo tickets must utilize a secondary form of winner verification.
(10) Each individual pull-tab bingo ticket must be constructed so that, until opened by a player, it is substantially impossible, in the opinion of the Commission, to determine its concealed letter(s), number(s) or symbol(s).
(11) No manufacturer may sell or otherwise provide to a distributor and no distributor may sell or otherwise provide to a licensed authorized organization of this state or for use in this state any pull-tab bingo game that does not contain a minimum prize payout of 65% of total receipts if completely sold out.
(12) A manufacturer in selling or providing pull-tab bingo tickets to a distributor shall seal or shrink-wrap each package, box, or container of a deal completely in a clear wrapping material.
(13) Pull-tab bingo tickets must:
(A) be constructed of cardboard and glued or otherwise securely sealed along all four edges of the pull-tab bingo ticket and between the individual perforated break-open tab(s) on the ticket. The glue must be of sufficient strength and type so as to prevent the separation of the sides of a pull-tab bingo ticket;
(B) have letters, numbers or symbols that are concealed behind perforated window tab(s), and allow such letters, numbers or symbols to be revealed only after the player has physically removed the perforated window tab(s);
(C) prevent the determination of a winning or losing pull-tab bingo ticket by any means other than the physical removal of the perforated window tab(s) by the player;
(D) be designed so that the numbers and symbols are a minimum of 2.5/32 (5/64) inch from the dye-cut window perforations, except for a five window tab which may be 2/32 (4/64) inch from the dye-cut window perforations;
(E) be designed so that the lines or arrows that identify the winning symbol combinations will be a minimum of 5/32 inch from the open edge farthest from the hinge of the dye-cut window perforations;
(F) be designed so that highlighted "pay-code" designations that identify the winning symbol combinations will be a minimum of 3.5/32 inch from the dye-cut window perforations;
(G) be designed so that secondary winner protection codes appear in the left margin of the ticket, unless the secondary winner protection codes are randomly generated serial number-type winner protection codes. Randomly generated serial number-type winner protection codes will be randomly located in either the left or middle column of symbols and will be designed so that the numbers are a minimum of 3.5/32 inch from the dye-cut window perforations. Any colored line or bar or background used to highlight the winner protection code will be a minimum 3.5/32 (7/64) inch from the dye-cut window perforations; and
(H) have the Commission's seal placed on all pull-tab bingo tickets by only a licensed manufacturer.
(14) Wheels must be submitted to the Commission for approval. As a part of the approval process, the following requirements must be demonstrated to the satisfaction of the Commission:
(A) wheels must be able to spin at least four times with reasonable effort;
(B) wheels must only contain the same number or symbols as represented on the event ticket; and
(C) locking mechanisms must be installed on wheel(s) to prevent play outside the licensed authorized organization's licensed time(s).
(e) Sales and redemption.
(1) All winning pull-tab bingo tickets must be presented for payment during the licensed authorized organization's licensed times at which the pull-tab bingo ticket is available. Immediately upon payment a licensed authorized organization must punch a hole with a standard hole punch through or otherwise mark or deface each winning pull-tab bingo ticket of $25.00 or more.
(2) Except as provided by paragraph (3) or (4) of this subsection, a licensed authorized organization may sell or redeem pull-tab bingo tickets on the premises specified in its bingo license only:
(A) during the licensed authorized organization's licensed times; or
(B) during a required intermission between the bingo occasions of two licensed authorized organizations.
(3) For a licensed authorized organization that conducts bingo through a unit created and operated under Texas Occupations Code, Subchapter I-1, any organization in the unit may sell or redeem pull-tab tickets from a deal on the premises specified in their bingo licenses and during such licensed time until the deal is withdrawn under paragraph (6) of this subsection.
(4) For a licensed authorized organization that conducts bingo on consecutive occasions within one 24-hour period, the organization may sell or redeem pull-tab tickets from a deal during either occasion and during an intermission between the two bingo occasions.
(5) Licensed authorized organizations may not display or sell any pull-tab bingo ticket which has in any manner been marked, defaced, tampered with, or which otherwise may deceive the public or affect a person's chances of winning.
(6) A licensed authorized organization may not withdraw a deal of pull-tab bingo tickets from play until the entire deal is completely sold out or all winning pull-tab bingo tickets of $25.00 prize winnings or more have been redeemed, or the bingo occasion ends.
(7) A licensed authorized organization may not commingle different serial numbers of the same form number of pull-tab bingo tickets.
(8) A licensed authorized organization may bundle pull-tab bingo tickets of different form numbers and may sell these bundled pull-tab bingo tickets during their licensed times.
(9) The licensed authorized organization's gross receipts from the sale of pull-tab bingo tickets must be included in the reported total gross receipts for the organization. Each deal of pull-tab bingo tickets must be accounted for in sales, prizes or unsold cards.
(10) A licensed authorized organization may use video confirmation to display the results of an event ticket pull-tab bingo game(s). Video confirmation will have no effect on the play or results of any ticket or game.
(f) Inspection. The Commission, its authorized representative or designee may examine and inspect any individual pull-tab bingo ticket or deal of pull-tab bingo tickets and may pull all remaining pull-tab bingo tickets in an unsold deal.
(g) Records.
(1) Any licensed authorized organization selling pull-tab bingo tickets must maintain a purchase log showing:
(A) the date of the purchase, the form number and corresponding serial number of the purchased pull-tab bingo tickets; and
(B) the name, address, and taxpayer number of the distributor from whom the pull-tab bingo tickets were purchased.
(2) Licensed authorized organizations must show the sale of pull-tab bingo tickets, prizes that were paid and the serial number of the pull-tab bingo tickets on the daily cash report. The aggregate total sales for the licensed authorized organization must be recorded on the cash register.
(3) Licensed authorized organizations must maintain a perpetual inventory of all pull-tab bingo games. They must account for all sold and unsold pull-tab bingo tickets and pull-tab bingo tickets designated for destruction. The licensed authorized organization will be responsible for the gross receipts, prizes and prize fee associated with the unaccounted for pull-tab bingo tickets.
(4) As long as a specific pull-tab bingo game serial number is in play, all records, reports, receipts and redeemed winning pull-tab bingo tickets of $25.00 or more relating to this specific pull-tab bingo game serial number must be retained on the licensed premises for examination by the Commission.
(5) If a deal is removed from play and marked for destruction then all redeemed and unsold pull-tab bingo tickets of the deal must be retained by the licensed authorized organization for a period of four years from the date the deal is taken out of play or until the destruction of the deal is witnessed by the Commission, its authorized representative or designee.
(6) Manufacturers and distributors must provide the following information on each invoice and other document used in connection with a sale of pull-tab bingo tickets:
(A) date of sale;
(B) quantity sold;
(C) cost per each deal of pull-tab bingo game sold;
(D) serial number of each pull-tab bingo game's deal;
(E) name and address of the purchaser; and
(F) Texas taxpayer number of the purchaser.
(7) All licensed organizations must retain these records for a period of four years.
(h) Style of Play. The following pull-tab bingo tickets are authorized by this rule. A last sale feature can be utilized on any pull-tab bingo ticket.
(1) Sign-up Board. A form of pull-tab bingo that is played with a sign-up board. Sign-up board tickets that contain a winning numeric, alpha or symbol instantly win the stated prize or qualify to advance to the sign-up board. The sign-up board that serves as the game flare is where identified winning sign-up board ticket holders may register for the opportunity to win the prize indicated on the sign-up board.
(2) Sign-up Board Ticket. A sign up board ticket is a form of pull-tab bingo played with a sign-up board. A single window or multiple windows sign-up board ticket reveals a winning (or losing) numeric, alpha or symbol that corresponds with the sign-up board.
(3) Tip Board. A form of pull-tab game where perforated tickets attached to a placard that have a predetermined winner under a seal.
(4) Coin Board. A placard that contains prizes consisting of coin(s). Coin boards can have a sign-up board as part of its placard.
(5) Coin Board Ticket. A form of pull-tab bingo that when opened reveals a winning number or symbol that corresponds with the coin board.
(6) Event Ticket. Pull-tab bingo tickets used as event tickets must contain more than two instant winners. Event ticket winner(s) are determined by some subsequent action such as a drawing of ball(s), spinning wheel, opening of a seal on a flare(s) or any other method approved by the Commission so long as that method has designated numbers, letters, or symbols that conform to the randomly selected numbers or symbols.
(7) Instant Ticket. A form of pull-tab bingo that have pre-determined winners and losers and have immediate recognition of the winners and losers.
(8) Multiple Part Event or Multiple Part Instant Ticket. An event ticket that is broken apart and sold in sections by a licensed authorized organization. Each section of the ticket consists of a separate deal with its own corresponding payout structure, serial number, and winner verification.
(9) Jackpot Pull-Tab Game. A style of pull-tab game that has a stated prize and a chance at a jackpot prize(s). A portion of the stated payout is contributed to the jackpot prize(s). Each jackpot is continuous for the same form number and continues until a jackpot prize(s) is awarded; provided that any jackpot prize(s) must not exceed the statutory limits.
(10) Video Confirmation shall be subject to Commission approval.
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.
Filed with the Office of the Secretary of State on June 27, 2007.
TRD-200702686
Kimberly L. Kiplin
General Counsel
Texas Lottery Commission
Effective date: July 17, 2007
Proposal publication date: December 29, 2006
For further information, please call: (512) 344-5113