Adopted Sections An agency may take final action on a section 30 days after a proposal has been published in the Texas Register. The section becomes effective 20 days after the agency files the correct document with the Texas Register, unless a later date is specified or unless a federal statute or regulation requires implementation of the action on shorter notice. If an agency adopts the section without any changes to the proposed text, only the preamble of the notice and statement of legal authority will be published. If an agency adopts the section with changes to the proposed text, the proposal will be republished with the changes. TITLE 16. ECONOMIC REGULATION Part IV. Texas Motor Vehicle Commission Chapter 105. Advertising 16 TAC sec.sec.105.1-105.13, 105.15-105.17, 105.19-105.25 The Texas Motor Vehicle Commission adopts amendments to sec.sec.105.1-105.3, 105.5-105.9, 105.11-105.13, 105.15-105.17, 105.19-105.24, and new sec.sec.105.4, 105.10, and 105.25, concerning a comprehensive revision of the commission's rules pertaining to the advertising of motor vehicles by new motor vehicle dealers, manufacturers, distributors, and other persons. Sections 105.1, 105.2, 105.4, 105.5, 105.9-105.12, 105.15, and 105.23-105.25 are adopted with changes to the proposed text as published in the December 24, 1991, issue of the Texas Register (16 TexReg 7616). Sections 105.3, 105.6-105.8, 105.13, and 105.16- 105.22 are adopted without changes and will not be republished. New sec.105.4 adds a section of definitions necessary and pertinent to the advertising rules, including a definition of bait advertising, contained in the former sec.105.4 which has been repealed. New sec.105.10 sets forth specific requirements for new vehicle price advertising by dealers, replacing the existing dealer price advertising section which has been repealed. New sec.105.25 contains specific disclosure requirements for advertisements of payments and other financing terms. The commission declined to adopt the proposed sec.105.26, and 105.27 is now proposed to be adopted as sec.105.31 in a separate submission. The amendments and new sections are adopted by the commission in response to a petition requesting the adoption of amendments to the commission's advertising rules filed by the Texas Automobile Dealers Association pursuant to the Administrative Procedure and Texas Register Act, sec.11. The amendments and new sections are intended to provide clarification of the sections and greater certainty in the requirements of the sections for compliance purposes by licensees and others subject to the sections, as well as aiding the commission in enforcing the sections and prohibiting the false, deceptive, and misleading advertising of motor vehicles. The commission received comments on the proposed rules published December 24, 1991 from the following: Loomis Productions, an advertising agency in Dallas; Homsey Advertising and Public Relations in Dallas; chief legal counsel and chairman of the Advertising Committee of Texas Automobile Dealers Association; senior attorney, Ford Motor Company, Dearborn, Michigan; assistant commissioner, Office of Consumer Credit Commissioner, Austin. The commenter representing Loomis Productions had three comments. First, he suggested the definition of clear and conspicuous in sec.105.4 as proposed would be confusing and unworkable because different newspapers count column inches different and different type sets produce varying degrees of legibility within the same type size. Second, he suggested that sec.105.11 might be too strict limiting illustrations solely to the vehicle being advertised. Finally, he suggested adding a rule to require the Federal Trade Commission disclosures for lease advertisements. The commission staff agreed with all the suggestions and the first two were adopted and the third is a pending proposal. The commenter representing Homsey Advertising and Public Relations suggested that the proposed sec.105.4 definition of clear and conspicuous did not obtain the best results. The commission staff agreed and the commission adopted an revised version. Two commenters representing the Texas Automobile Dealers Association (TADA) had a number of comments. They suggested that in sec.105.4 the definition of clear and conspicuous be revised; that the definition of demonstrator be narrowed; and that the definition of factory executive/official vehicle be deleted. The commission staff agreed that the sec.105.4 definition of clear and conspicuous should be revised and a revised version was adopted by the commission, however, the staff did feel that there is enough significant difference between a demonstrator and factory executive/official vehicle that this definition should not be deleted. The commission adopted the definition as proposed. In reference to sec.sec.105.5, 105.9, 105.11, 105.23 and 105.25 TADA suggested some changes in the language for clarity and consistency. The staff and the commission agreed with these changes. TADA suggested that language be added to sec.105.10 to deal with rebates not available to all segments of the public. The staff agreed this is needed and the commission is proposing such an amendment in a separate submission. Further TADA suggested a sentence be added to sec.105.14 that requires an advertiser to use the terms "used" or "preowned," with reference to used vehicles. The staff agreed and the commission is proposing such an amendment in a separate submission. A further suggestion by TADA was to amend sec.105.15 to be consistent with their earlier suggestion of eliminating factory executive/official vehicles. The staff disagreed for the same reason as in sec.105.4 and the commission adopted the staff recommendation. TADA suggested sec.105.26 be amended to make the definition of tax more specific. The staff recommended against the adoption of the rule at all because this is already regulated by another state agency. The commission rejected this rule. Finally, TADA suggested a new rule which has been published as sec.105.27 of the published pending proposed rules. The commenter representing Ford Motor company suggested that the definition of clear and conspicuous in sec.105.4 was not workable. The staff agreed and the commission adopted a revised version. The commenter representing the Office of Consumer Credit Commissioner suggested that allowing dealers to participate in a factory initiated and authorized rebate program may violate the Texas Credit Code, sec.7.09. After receiving this comment the staff on March 3, 1992, discussed this position with him by telephone and was assured that he would review this position and notify the staff. Not having received any further communication from him, the staff assumed this position had been abandoned and the commission adopted the rule as proposed. The new sections and amendments are adopted under the Texas Motor Vehicle Commission Code, sec.3.06, which provides the commission with authority to adopt rules necessary and convenient to effectuate the provisions of the Act. sec.105.1. Objective. The objective of these sections is to implement the intent of the legislature as declared in the Texas Motor Vehicle Commission Code by regulating the advertising of persons under the jurisdiction of the Motor Vehicle Commission Code by requiring truthful and accurate advertising practices for the benefit of the citizens of this state. sec.105.2. General Prohibition. A licensee shall not use false, deceptive, unfair, or misleading advertising. Nor shall any other person advertising new motor vehicles use false, deceptive, unfair, or misleading advertising. sec.105.4. Definitions. The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise. Advertisement-An oral, written, graphic, or pictorial statement made in the course of soliciting business, including, without limitation, a statement or representation made in a newspaper, magazine, or other publication, or contained in a notice, sign, poster, display, circular, pamphlet, or letter, or on radio or on television. Bait advertisement -An alluring but insincere offer to sell a product of which the primary purpose is to obtain leads to persons interested in buying merchandise of the type advertised and to switch consumers from buying the advertised product in order to sell some other product at a higher price or on a basis more advantageous to the advertiser. Buyers guide-A form as required by the Federal Trade Commission under 16 Code of Federal Regulations, Part 455. This form is to be completed and displayed on the side window of a vehicle that has been driven more than the limited use necessary in moving or road testing a new vehicle prior to delivery to a consumer. Clear and conspicuous -The statement, representation, or term being disclosed is of such size, color, contrast, and audibility and is presented so as to be readily noticed and understood. All language and terms, including abbreviations, shall be used in accordance with their common or ordinary usage and meaning. Dealership addendum -A form which is to be displayed on a window of a motor vehicle when the dealership installs special features, equipment, parts or accessories, or charges for services not already compensated by the manufacturer or distributor for work required to prepare a vehicle for delivery to a buyer. The addendum is to disclose: (A) that it is supplemental; (B) any added feature, service, equipment, part, or accessory charged and added by the dealership and the retail price therefore; (C) any additional charge to the selling price such as additional dealership markup; and (D) the total dealer selling price. The dealership addendum form shall not be deceptively similar in appearance to the manufacturer's label, which is required to be affixed by every manufacturer to the windshield or side window of each new motor vehicle under the Automobile Information Disclosure Act. Demonstrator-A new motor vehicle that is currently in the inventory of the automobile dealership and used or has been used primarily for test drives by customers and other dealership purposes and so designated by the dealership. Disclosure-Required information that is clear, conspicuous, and accurate. Factory executive/official vehicle-A new motor vehicle that has been used exclusively by an executive or official of the dealer's franchising manufacturer, distributor, or their subsidiaries. Licensee-Any person required to obtain a license from the Texas Motor Vehicle Commission. Manufacturer's label -The label required by the Automobile Information Disclosure Act, 15 United States Code 1231-1233, to be affixed by the manufacturer to the windshield or side window of each new automobile delivered to the dealer. Rebate or cash back-A sum of money refunded to a purchaser or for the benefit of the purchaser after full payment has been rendered. The purchaser may choose to reduce the amount of the purchase price by the sum of money or the purchaser may opt for the money to be returned to himself or for his benefit subsequent to payment in full. sec.105.5. Availability of Vehicles. (a) A licensee may advertise a specific vehicle or line-make of vehicles for sale if: (1) the specific vehicle or line is in the possession of the licensee at the time the advertisement is placed, or the vehicle may be obtained from the manufacturer or distributor or some other source, and this information is clearly and conspicuously disclosed in the advertisement; and (2) the price advertisement sets forth the number of vehicles available at the time the advertisement is placed or a dealer can show he has available a reasonable expectable public demand based on prior experience. In addition, if an advertisement pertains to only one specific vehicle, then the advertisement must also disclose the vehicle's stock number. (b) This section does not prohibit general advertising of vehicles by a manufacturer, dealer advertising association, or distributor and the inclusion of the names and addresses of the dealers selling such vehicles in the particular area. sec.105.9. Manufacturer's Suggested Retail Price. The suggested retail price of a new motor vehicle when advertised by a manufacturer or distributor shall include all costs and charges for the vehicle advertised, except that destination and dealer preparation charges, and state and local taxes, title, deputy fees, documentary fees, and license fees may be excluded from such price, provided that the advertisement clearly and conspicuously states that such costs and charges are excluded. However, with respect to advertisements placed with local media in Texas by a manufacturer or distributor which include the names of the local dealers for the vehicles advertised, if the price of a vehicle is stated in the advertisement, such price must include all costs and charges for the vehicle advertised, including destination and dealer preparation charges and may exclude only state and local taxes, license, title fees, deputy fees, and documentary fees. sec.105.10. Dealer Price Advertising. (a) The featured price of a new motor vehicle, when advertised, must be the full cash price for which the vehicle will be sold to any and all members of the buying public. The only charges that may be excluded from the advertised price are: (1) state and local taxes; (2) license; (3) title; (4) deputy; and (5) documentary fee. (b) A qualification may not be used when advertising the price of a vehicle such as "with trade," "with acceptable trade," "with dealer-arranged financing," "rebate assigned to dealer" or "with down payment." (c) If a price advertisement discloses a rebate, cash back, discount savings claim, or other incentive, the full cash price of the vehicle must be disclosed as well as the price of the vehicle after deducting the incentive. The following is an acceptable format for advertising a price with rebates and other deductions. [graphic] sec.105.11. Identification. (a) When the price of a vehicle is advertised, the following must be disclosed: (1) model year; (2) make; (3) model line and style or model designation; and (4) whether the vehicle is a used, demonstrator, or a factory executive/official vehicle. (b) Expressions such as "fully equipped," "factory equipped," "loaded," and other such terms shall not be used in any advertisement that contains the price of a vehicle unless the optional equipment of the vehicle is listed in the advertisement. (c) An illustration of a motor vehicle used in an advertisement must be substantially the same as that of the motor vehicle advertised. sec.105.12. Advertising at Cost or Invoice. (a) The term "dealer's cost" or other reference to the cost of the vehicle shall not be used. (b) The use of the term "invoice" or "invoice price" in advertising must be in reference to the manufacturer's or distributor's total invoice price on a vehicle without dealer added accessories and services and such advertisement shall clearly and conspicuously include one of the following disclosures: (1) "The invoice may not represent actual dealer cost;" or (2) "Actual dealer cost may vary from invoice." sec.105.15. Demonstrators, Factory, Executive/Official Vehicles. If a demonstrator or factory executive/official vehicle is advertised, the advertisement must clearly and conspicuously identify the vehicle as a demonstrator or factory executive/official vehicle. A demonstrator or factory executive/official vehicle may be sold only by a dealer franchised and licensed to sell that line-make of new motor vehicle. sec.105.23. Manufacturer Sales; Wholesale Prices. New vehicles shall not be advertised for sale in any manner that creates the impression that they are being offered for sale by the manufacturer or distributor of the vehicles. Advertisements shall not contain terms such as "factory sale," "fleet prices," "wholesale prices," "factory approved," "factory sponsored," or any other similar terms which indicate sales other than retail sales from the dealer. sec.105.24. Savings Claims; Discounts. (a) A savings claim or discount offer is prohibited except to advertise a new or demonstrator vehicle, and the advertisement must show the difference between the dealer's selling price and the manufacturer's or distributor's total suggested list or retail price. (b) If a dealer has added an option obtained from the manufacturer or distributor of the motor vehicle on which it is installed and disclosed the option and factory suggested retail price of the option on a dealership addendum sticker prior to offering the vehicle for sale at retail, the dealer may advertise a savings claim on that vehicle as long as the difference is shown between the dealer's selling price and the total selling price as disclosed on the dealership addendum sticker and discloses the factory-available options added in the advertisement. If an option that is added by a dealer is not a factory-available option, a savings claim may not be advertised on that vehicle. (c) Statements such as "up to," "as much as," "from," shall not be used in connection with savings or discount claims. sec.105.25. Sales Payment Disclosures. An advertisement that contains any one of the following messages, statements, or terms: (1) the amount of a down payment, in either a percentage or dollar amount; (2) the amount of any payment, in either a percentage or dollar amount; (3) the number of payments; (4) the period of repayment; or (5) the amount of any finance charge must include the following: (A) the amount or percentage of the down payment; (B) the terms of repayment (the number of months to make repayment and the amount per month); and (C) the annual percentage rate or A.P.R. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on May 8, 1992. TRD-9206588 Russell Harding Executive Director Texas Motor Vehicle Commission Effective date: June 3, 1992 Proposal publication date: December 24, 1991 For further information, please call: (512) 476-3587 16 TAC sec.sec.105.4, 105.10, 105.25 The Texas Motor Vehicle Commission adopts the repeal of sec.sec.105.4, 105.10, and 105.25, concerning bait advertising, dealer price advertising, and the findings of violations of the commission's advertising rules, without changes to the proposed text as published in the December 24, 1991, issue of the Texas Register (16 TexReg 7616). The repeals are adopted in conjunction with a separate submission which is a comprehensive revision of the commission's rules pertaining to the advertising of motor vehicles by new motor vehicle dealers, manufacturers, and distributors. The adopted revision includes a definition of "bait advertising" in a new sec.105. 4, which is a section of definitions; and a new sec.105.10, which is clarification of the requirements for new vehicle price advertisements by dealers. A new sec.105.31 is being proposed in another submission, the text of which is substantially identical to the existing sec.105.25. No comments were received regarding adoption of the repeals. The repeals are adopted under the Texas Motor Vehicle Commission Code, Texas Civil Statutes, Article 4413(36), sec.3.06, which provides the commission with authority to adopt rules necessary and convenient to effectuate the provisions of the Act. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on May 8, 1992. TRD-9206587 Russell Harding Executive Director Texas Motor Vehicle Commission Effective date: June 3, 1992 Proposal publication date: December 24, 1991 For further information, please call: (512) 476-3587 Part VIII. Texas Racing Commission Chapter 303. General Provisions Subchapter A. Organization of the Commission 16 TAC sec.303.6 The Texas Racing Commission adopts an amendment to sec.303.6, concerning commission officers, without changes to the proposed text as published in the February 4, 1992, issue of the Texas Register (17 TexReg 898). The section is adopted to ensure that the commission operates in accordance with state law. The amendment changes the procedure for electing a vice-chair for the commission. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 179e, sec.3.02, which authorize the commission to adopt rules for conducting racing with wagering and for administering the Texas Racing Act. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on May 4, 1992. TRD-9206478 Paula Cochran Carter General Counsel Texas Racing Commission Effective date: June 1, 1992 Proposal publication date: February 4, 1992 For further information, please call: (512) 794-8461 Chapter 305. Licenses for Pari-mutuel Racing Subchapter B. Individual Licenses Specific Licensees 16 TAC sec.305.44 The Texas Racing Commission adopts an amendment to sec.305.44, concerning trainer, without changes to the proposed text as published in the March 13, 1992, issue of the Texas Register (17 TexReg 1859). The amendment is adopted to ensure that trainers participating in pari-mutuel racing are highly qualified. The amendment gives authority to the stewards or racing judges to require written testing for certain trainers if the trainers demonstrate an inability to adequately perform the duties of a trainer. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 179e, sec.3.02, which authorize the commission to adopt rules for conducting racing with wagering and for administering the Texas Racing Act and under sec.7.02, which authorize the commission to prescribe the qualifications of various categories of licensees. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on May 4, 1992. TRD-9206480 Paula Cochran Carter General Counsel Texas Racing Commission Effective date: June 1, 1992 Proposal publication date: March 13, 1992 For further information, please call: (512) 794-8461 Chapter 309. Operation of Racetracks Subchapter A. General Provisions Operations 16 TAC sec.309.53 The Texas Racing Commission adopts an amendment to sec.309.53, concerning records, without changes to the proposed text as published in the March 13, 1992, issue of the Texas Register (17 TexReg 1860). The amendment is adopted to ensure that the financial condition of the major participants in pari-mutuel racing is monitored by the commission. The amendment specifies the deadline for licensed pari-mutuel racetracks and their concessionaires, management companies, and totalisator companies to file annual financial statements with the commission. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 179e, sec.3.02, which authorize the commission to adopt rules for conducting racing with pari- mutuel wagering and for administering the Texas Racing Act and sec.6.13, which authorize the commission to adopt rules requiring the filing of annual financial statements by racetracks. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on May 4, 1992. TRD-9206479 Paula Cochran Carter General Counsel Texas Racing Commission Effective date: June 1, 1992 Proposal publication date: March 13, 1992 For further information, please call: (512) 794-8461 Chapter 321. Pari-mutuel Wagering Subchapter C. Simulcast Wagering General Provisions 16 TAC sec.sec.321.201-321.208 The Texas Racing Commission adopts new sec.sec.321.201-321.208, 321.231-321.235, and 321.271-321.277. Sections 321.203, 321.205, 321.232-321.234, and 321.271, concerning simulcast wagering, are adopted with changes to the proposed text as published in the March 13, 1992, issue of the Texas Register (17 TexReg 1860). Sections 321.201, 321.202, 321.204, 321.206-321.208, 321.231, 321.235, and 321.272-321.277 are adopted without changes and will not be republished. The sections are adopted to implement simulcast wagering as authorized by the legislature and to ensure pari-mutuel wagering on simulcast races is regulated effectively while encouraging live racing. The sections describe the purpose of the simulcast rules, the procedures for approving outgoing and incoming simulcasts and simulcasting contracts, the duties of a receiving location and sending racetrack, emergency procedures, fees for simulcasting at a horse racetrack, the requirements for negotiating with the horsemen's and jockeys' representatives, the procedure for allocating revenue to purses for horses, the procedure for allocating funds for Texas bred incentive programs for horses, the priority of signals at horse racetracks, and the procedures for forming, merging, and distributing common pools. The changes from the proposed text clarify that all simulcasting contracts must receive commission approval, clarify the provisions regarding the allocation of Texas Bred monies, require that simulcasting at a horse racetrack must be negotiated with a statewide horsemen's organization and a representative of the jockeys, and that all intrastate simulcasting must be common pooled. The commission received written comments from the Texas Thoroughbred Breeders Association and the Texas Quarter Horse Association on these proposals. Both organizations indicated general support for the rules and suggested some changes to the proposals. The commission agreed with some of the changes and those changes were included in the adoption. Both organizations suggested that a specific formula for allocating Texas bred monies among the various breeds of race horses be included in the proposal. The commission disagreed with this comment on the grounds that flexibility for future negotiations among the breed registries and the racetracks is necessary. Both organizations suggested changing references to "receiving location" to "receiving racetrack." The commission disagreed with this comment on the grounds that "receiving location" is a term defined by the legislature and the commission lacks the authority to change the term. Both organizations suggested modifying the language in sec.321. 202 regarding the non-binding nature of simulcasting approvals for future requests. The commission disagreed with the comments on the grounds that the additional language is unnecessary to carry out that intent. Both organizations suggested that the commission require a racetrack to specify the division of revenue allocated to each racetrack on intrastate common pools. The commission disagreed with the comment on the grounds that the additional language is unnecessary. Both organizations suggested that language relating to the allocation of breakage from interstate common pools be changed to include references to Texas bred incentive programs. The commission disagreed with the comment on the grounds that the proposal on allocation of breakage from interstate common pools is intended to relate solely to breakage and not other Texas bred monies. The Texas Thoroughbred Breeders Association suggested that the proposal regarding priority of signals for horse racetracks be changed to include references to a statewide horsemen's organization, to require simulcasting between Class 1 racetracks on terms agreeable to each track, and to restrict simulcasting at Class 2 racetracks. The commission disagreed with the comments on the grounds that the proposals as written adequately accomplish the purpose. The Texas Thoroughbred Breeders Association also suggested that the commission delete the requirement that a difference in takeout on interstate common pools be absorbed by the Texas racetrack as a part of its profit or loss. The commission disagrees with this comment on the grounds that such a common situation must be adequately addressed in the rules. The Texas Quarter Horse Association suggested the commission include a requirement that a horse racetrack schedule at least 10 live races on each day in a live race meeting that simulcast races are offered. The commission disagreed with the comment on the grounds that the current proposals adequately protect live racing while providing the flexibility necessary to respond to the different racing markets in this state. The new sections are adopted under Texas Civil Statutes, Article 179e, sec.11. 011, which authorize the commission to adopt rules to license and regulate pari- mutuel wagering on simulcast races; and sec.6.18 and sec.5.01, which authorize the commission to prescribe reasonable license fees. sec.321.203. Approval of Simulcasts. An association that wishes to simulcast races conducted by the association shall submit all contracts relating to the simulcast for commission approval. The association may not simulcast a race until the commission has approved all contracts relating to the simulcasting. sec.321.205. Simulcasting Contract. (a) All contracts executed by an association regarding simulcasting are subject to the approval of the commission. An association shall submit each contract regarding simulcasting to the commission as soon as possible after the contract is finally executed. (b) A contract submitted under this section must contain provisions relating to: (1) the dedication and distribution of the revenue derived from the simulcast for purses and Texas bred incentive programs at the association's racetrack; and (2) the allocation of the revenue derived from the simulcast for purses and for breakage among the various breeds of race animals participating in live racing at the association's racetrack. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on May 4, 1992. TRD-9206502 Paula Cochran Carter General Counsel Texas Racing Commission Effective date: June 1, 1992 Proposal publication date: March 13, 1992 For further information, please call: (512) 794-8461 Simulcasting at Horse Racetracks 16 TAC sec.sec.321.231-321.235 The new sections are adopted under Texas Civil Statutes, Article 179e, sec.11.011, which authorize the commission to adopt rules to license and regulate pari-mutuel wagering on simulcast races; and sec.6.18 and sec.5.01, which authorize the commission to prescribe reasonable license fees. sec.321.232. Negotiation With Horsemen and Jockeys. (a) An association shall negotiate with the officially recognized horsemen's organization in this state regarding all simulcasting. (b) An association shall negotiate with the organization representing a majority of the jockeys participating in racing at that racetrack regarding all live date simulcasting. (c) If after a good faith effort the association and any organization with which the association must negotiate cannot reach an agreement on simulcasting, either party may petition the commission to decide the issues in dispute. The decision of the commission is binding on all parties. sec.321.233. Purses. (a) For any intrastate simulcast signal, the percentage of the revenue from the simulcast race(s) dedicated to purses in this state shall be equal to or greater than the minimum percentage required by the Act, sec.6.08. (b) For any interstate simulcast signal originating at a racetrack outside the State of Texas, an association shall provide that the percentage of the revenue from the simulcast race(s) dedicated to purses in this state shall be equal to or greater than the minimum percentage required by the Act, sec.6.08, unless a lesser amount is permitted by the officially recognized horsemen's organization in this state or by the commission. If the maximum net total takeout is reduced as a result of a common pool or the election by the association(s), the revenue for purses required under this subsection may be reduced by no more than on a pro-rata basis with that of the association's commission. (c) The funds derived from a simulcast race for purses shall be distributed during the 12-month period immediately following the simulcast. sec.321.234. Allocation of Purses and Funds for Texas Bred Incentive Programs. (a) The funds derived from a simulcast that are dedicated to purses and the Texas bred incentive programs shall be allocated among the various breeds of animals in a manner that is agreed to by the official breed registries and the association. (b) If after a good faith effort the association and the appropriate registries cannot reach an agreement on simulcasting, any party may petition the commission to decide the issues in dispute. The decision of the commission is binding on all parties. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on May 4, 1992. TRD-9206504 Paula Cochran Carter General Counsel Texas Racing Commission Effective date: June 1, 1992 Proposal publication date: March 13, 1992 For further information, please call: (512) 794-8461 Common Pool Wagering 16 TAC sec.sec.321.271-321.277 The new sections are adopted under Texas Civil Statutes, Article 179e, sec.11.011, which authorize the commission to adopt rules to license and regulate pari-mutuel wagering on simulcast races; and sec.6.18 and sec.5.01, which authorize the commission to prescribe reasonable license fees. sec.321.271. General Provisions. (a) With the prior approval of the commission, pari-mutuel pools offered by an association that is participating in a simulcast may be combined with corresponding wagering pools offered by the other racetracks participating in the simulcast to form a common pool. All corresponding pari-mutuel pools offered by two or more associations on an intrastate simulcast shall be combined to form a common pool. (b) A contract governing participation in a common pool must be submitted to the commission for approval. (c) In determining whether to approve an interstate common pool that does not include the sending racetrack, the commission shall consider and may approve use of a type of wager which is not used at the sending racetrack or other factors presented to the commission. (d) All types of wagers that have been approved for the association may be offered, although types of pools which require more races than those included in the simulcast may not become part of the common pool. (e) The content and format of the visual display of racing and wagering information at facilities in other racing jurisdictions in the interstate common pool need not be identical to the information required to be displayed under these rules. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on May 4, 1992. TRD-9206503 Paula Cochran Carter General Counsel Texas Racing Commission Effective date: June 1, 1992 Proposal publication date: March 13, 1992 For further information, please call: (512) 794-8461 TITLE 22. EXAMINING BOARDS Part IV. Texas Cosmetology Commission Chapter 89. General Rules and Regulations 22 TAC sec.89.54 (Editor's note: The Texas Cosmetology Commission filed with the Texas Register on December 4, 1991, to be published in the December 10, 1991, issue of the 23>Texas Register , adopted new sec.89.54. This adoption was inadvertently left out of the issue. The rule is being published in this issue of the 23>Texas Register. The effective date of this adoption is December 25, 1991.) The Texas Cosmetology Commission adopts new sec.89.54, with changes to the proposed text as published in the October 18, 1991, issue of the Texas Register (16 TexReg 5807). New legislation enacted in the 1991 Regular Session of the Texas Legislature provides for the establishment of an independent contractor/booth rental license. This section will regulate and establish guidelines and fees for an independent contractor/booth rental license. The Texas Independent Contractors Association opposed some of the language of the section as proposed and changes were made in the adoption. The agency did not disagree with the comments made and made changes in the adopted version of the section to reflect the comments made. The new section is adopted under Texas Civil Statutes, Article 8451a, which provide the Texas Cosmetology Commission with the authority to issue rules and regulations consistent with the Act that are needed to protect the public's health and welfare. sec.89.54. Independent Contractor/Booth Rental License. (a) To qualify as an independent contractor an applicant must make application for a booth rental salon license and have an area clearly defined that is his/her responsibility as far as sanitation is concerned. (b) Applicant must comply with all state and federal guidelines for independent contractors. (c) To qualify as an independent contractor, the following guidelines apply: (1) independent contractor does not pay a percentage of his/her income to the lessor; (2) independent contractor has sufficient floor space and equipment within his/her juridiction to adequately carry out the duties of his/her license; (3) independent contractor advertises only his/her own services, and or has individual business cards; (4) independent contractor must control his/her own business hours; (5) independent contractor represents himself/herself to the public that he/she is an independent contractor; and (6) a written contract is in effect with the lessor and the lessor does not exercise any control over the independent contractor. (d) Independent contractors may do any service in a licensed beauty salon, or specialities in a licensed speciality salon, provided they are properly licensed. (e) The original and renewal booth rental license fee shall be $25 and shall be valid for two years from date of issue. If a booth rental license is delinquent for less than 30 days, the delinquency fee shall be $10, over 30 days, the delinquency fee shall be $25. (f) Independent contractors practicing cosmetology in more than one location must obtain a booth rental license in each location. Independent contractors changing location must notify the Cosmetology Commission in writing in compliance with sec.89.41 of this title (relating to Change of Location of a Salon or Independent Contractor ). This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on December 2, 1991. TRD-9115142 Ron Resech Executive Director Texas Cosmetology Commission Effective date: December 25, 1991 Proposal publication date: October 18, 1991 For further information, please call: (512) 454-4674 Part XIV. Texas Optometry Board Chapter 275. Continuing Education 22 TAC sec.275.2 The Texas Optometry Board adopts an amendment to sec.275.2, concerning diagnostic and therapeutic continuing education, without changes to the proposed text as published in the February 7, 1992, issue of the Texas Register (17 TexReg 1004). Because of new legislation which allows all optometrists to use diagnostic pharmaceutical agents under the current scope of practice of optometry and allows for therapeutically certified optometrists to use both diagnostic as well as therapeutic pharmaceutical agents, this rule will assure the public that the optometrists are remaining proficient in their practice by obtaining a minimum of six hours per calendar year of continuing education in diagnostic or therapeutic education. Optometrists will be advised that beginning January 1, 1993, a minimum of six hours of the required, mandatory 12 hours of continuing education must be obtained in diagnostic or therapeutic education. A total of nine written comments were received; two of those stated that an additional six hours of education should be required, and the remaining seven felt that continuing education requirements should continue allowing a choice in education to be made according to specific practices. Many interpreted the rule as requiring only therapeutic education and there was no intention on their part to become therapeutically certified. Two thousand six hundred licensees were notified of the proposed rule. No groups or associations responded, just individuals. Of 2,600 licensees who received notice of the proposed rule, only seven commenters were in opposition, and there was some misunderstanding regarding the type of education. After review of all comments, the board adopted the rule without changes as the new law holds all optometrists to the same standard of care and such minimum requirements which allows for a choice of diagnostic or therapeutic education can only serve to enhance the examinations and improve optometrists' proficiency. The amendment is adopted under Texas Civil Statutes, Article 4552, sec.2.14, which provide the Texas Optometry Board with the authority to promulgate procedural and substantive rules. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on May 11, 1992. TRD-9206517 Lois Ewald Executive Director Texas Optometry Board Effective date: June 2, 1992 Proposal publication date: February 7, 1992 For further information, please call: (512) 835-1938 TITLE 34. PUBLIC FINANCE Part I. Comptroller of Public Accounts Chapter 7. Administration of State Lottery Act Subchapter D. Lottery Game Rules 34 TAC sec.7.303 The Comptroller of Public Accounts adopts new sec.7.303, concerning grand prize drawing rule, with changes to the proposed text as published in the April 10, 1992, issue of the Texas Register (17 TexReg 2595). This new section sets forth the procedures to be utilized when an instant ticket game provides for a grand prize drawing. Changes in this section seek to clarify that detailed information relating to lottery drawings will be contained in the draw procedures rather than the game procedures; that a claim form must be completed prior to the drawing; and that a finalist may appoint a proxy. No comments were received regarding adoption of the new section. The new section is adopted under the State Lottery Act, sec.2.02, which provides the comptroller with the authority to adopt all rules necessary to administer the State Lottery Act. sec.7.303. Grand prize Drawing Rule. (a) This section shall not apply to individual games that do not provide for a grand prize drawing. (b) Eligibility for a grand prize drawing shall be determined by, but not limited to, a direct entry to a grand prize drawing or an entry into a preliminary draw as provided in the draw procedures. The director shall determine any prizes to be awarded and the method, manner, and timing of payment which shall be stated in the draw procedures. (c) Preliminary draws and grand prize drawings shall be conducted at times and places and pursuant to the methods stated in the draw procedures. (d) An entry to a preliminary or grand prize drawing submitted by a player in accordance with the applicable draw procedures is eligible to be included in a drawing as provided in the draw procedures. (e) Entries to a preliminary or grand prize drawing shall be delivered to the address designated on the applicable game ticket no later than the last day of the time frame specified in the draw procedures. (f) The number of preliminary draw and grand prize drawing winners selected to advance or to win a prize shall be specified in the draw procedures. The odds of winning an entry into these drawings for a prize of a specific amount need not be uniform throughout the game and are subject to change by the director. (g) Each grand prize drawing finalist shall submit a completed claim form and the winning ticket to the Texas Lottery prior to the grand prize drawing. Failure to timely submit these items and failure to have a valid ticket will be cause for ineligibility to the grand prize drawing. (h) Each grand prize drawing finalist will be notified by the Texas Lottery of the date of his/her appearance on the grand prize drawing. If a finalist is unable to attend, the finalist may appoint a proxy with the approval of the director. (i) If a dispute arises between the Texas Lottery and a ticket claimant concerning whether the ticket is a winning ticket and if the ticket prize has not been paid, the director may, exclusively at his/her determination, reimburse the claimant for the cost of the disputed ticket. This shall be the claimant's exclusive remedy. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on May 13, 1992. TRD-9206591 Charles Johnstone Senior Legal Counsel, General Law Section Comptroller of Public Accounts Effective date: June 3, 1992 Proposal publication date: April 10, 1992 For further information, please call: (512) 463-4028 Subchapter E. Retailer Rules 34 TAC sec.sec.7.351-7.366 The Comptroller of Public Accounts adopts new sec.sec.7.351-7.366, concerning proceeds from ticket sales; settlement procedures; sales commissions; sale of lottery tickets on credit; restricted sales; sales price of tickets; Texas Lottery as retailer; promotional tickets; location of sales; payment of prizes; required purchases of lottery tickets; security procedures; retailer records; training; merchandising; and compliance with all applicable laws. Sections 7.352, 7.355, 7.359-7.362, are adopted with changes to the proposed text as published in the April 10, 1992, issue of the Texas Register (17 TexReg 2596). Sections 7.351, 7.353, 7.354, 7.356-7.358, and 7.363-7.366 are adopted without changes and will not be republished. These new sections establish rules that lottery retailers must be in compliance with in order to maintain their license. A change appears in sec.7.352(a), second sentence, and changes the word "termination" to "revocation." Also, in the last sentence of subsection (a), the word "other" is deleted. A sentence was added to sec.7.355(a) to prohibit retailers from selling tickets or rights to tickets from other jurisdictions. In sec.7.359 the word "locations" is changed to "location" and "license" to "license(s)." In sec.7.360, amounts less and/or greater than $50 are clarified. A sentence was added stipulating that payment must be made by the retailer if the retailer validates a ticket. Changes in sec.7.361 were made to provide that a retailer may be placed on probation if tickets are not ordered or accepted in a 30-day period. A sentence was added allowing the lottery to establish minimum sales requirements. Changes in sec.7.362 were made to provide that retailers are responsible for lottery operator property; that retailers must notify the lottery through the retailer hotline and local law enforcement for lost, stolen, or missing tickets; that retailers will be charged $25 for unactivated packs and full price for activated packs of lost, stolen, or missing tickets; that retailers may be liable for cashing counterfeit tickets; and that retailers will be liable for a twice-paid ticket if they paid the ticket first and failed to deface it. Addition of a phrase to sec.7.365 clarifies redemption of tickets by retailers. No comments were received regarding adoption of the new sections. The new sections are adopted under the State Lottery Act, sec.2.02, which provides the comptroller with the authority to adopt all rules necessary to administer the State Lottery Act. sec.7.352. Settlement Procedures. (a) The Texas Lottery may require a retailer to establish a single separate electronic funds transfer account, where available, for the purpose of receiving monies from ticket sales, making payments to the Texas Lottery, and receiving payments from the Texas Lottery. Failure to have sufficient funds available to cover an electronic funds transfer to the Texas Lottery's account shall be a cause for suspension or revocation of a retailer's license. Further, if a check or electronic transfer of funds to the Texas Lottery is dishonored, the Texas Lottery may take any and all actions authorized by law, including requiring the retailer to pay a service charge and collection and litigation expenses. (b) Retailers shall file with the Texas Lottery, or its designated representative, reports of the retailer's receipts and transactions in the sale of lottery tickets on a form or in a manner as prescribed by the director. sec.7.355. Restricted Sales. (a) Retailers shall not sell lottery tickets by mail, phone, fax, or other similar method of communications. Retailers shall not sell a lottery ticket or any other document evidencing a right, privilege, or share in a lottery ticket from another jurisdiction by any means. (b) Retailers shall not sell tickets to persons under the age of 18. Any ticket purchased by or sold to an individual under the age of 18 years shall be void and the prize otherwise payable on the ticket is treated as an unclaimed prize under sec.7.302(j)(3) of this title (relating to Instant Game Rules). (c) Retailers shall not accept a food stamp coupon for the purchase of a lottery ticket. (d) Retailers shall not sell a ticket or pay a lottery prize to another person that the retailer knows is: (1) an officer or an employee of the comptroller; (2) an officer, member, or employee of a lottery operator; (3) an officer, member, or employee of a contractor or subcontractor that is excluded by the terms of its contract from playing lottery games; (4) the spouse, child, brother, sister, or parent of a person described by paragraph (1), (2), or (3) of this subsection who resides within the same household as that person. sec.7.359. Location of Sales. No retailer shall sell a lottery ticket except from the location listed in the retailer's license(s). sec.7.360. Payment of Prizes. Retailers shall pay any lottery prize of less than $50, after complying with established validation procedures. A retailer may pay prizes of $50 or more and less than $600, after complying with proper validation procedures. However, if a retailer validates a ticket of up to $600, that retailer shall pay the prize amount on the ticket. Prizes of $600 or more shall be paid by the Texas Lottery by mail or at a designated lottery claim center. sec.7.361. Required Purchases of Lottery Tickets. Failure of a retailer to order or accept one pack of lottery tickets for any 30-day period may result in the retailer's license being placed on probation, and the Texas Lottery shall notify retailer of such probation. If the retailer does not order or accept one pack of lottery tickets within 30 days after the date the notice of probation is sent by the Texas Lottery, the retailer's license shall be suspended, and the retailer shall pay all debts due the Texas Lottery within 30 days of such suspension. The Texas Lottery may establish minimum sales requirements. sec.7.362. Security Procedures. (a) A retailer shall provide reasonable security for all lottery tickets, Texas Lottery property, and Lottery operator property, and is responsible for all lottery tickets delivered to it upon the retailer's acknowledgement of receipt thereof. A retailer shall notify the Texas Lottery through the retailer hotline and local law enforcement within 24 hours of knowledge of any lost, stolen, missing, or counterfeit tickets. Retailers will be charged $25 for unactivated packs of tickets that are lost, stolen, or missing. Retailers will be charged full price, less the applicable commission, for activated packs of tickets that are lost, stolen, or missing. Retailers may also be held liable for prizes paid on tickets that are obviously counterfeit. (b) Retailers must deface a winning ticket for which they pay a prize. If a retailer fails to deface a winning ticket that is paid at the retailer's location and it is subsequently paid at another retailer location, the retailer who first paid the prize for that ticket will be held financially liable. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on May 13, 1992. TRD-9206592 Charles Johnstone Senior Legal Counsel, General Law Section Comptroller of Public Accounts Effective date: June 3, 1992 Proposal publication date: April 10, 1992 For further information, please call: (512) 463-4028 TITLE 37. PUBLIC SAFETY AND CORRECTIONS Part I. Texas Department of Public Safety Chapter 1. Organization and Administration Public Information Policies 37 TAC sec.1.60 The Texas Department of Public Safety adopts an amendment to sec.1.60, concerning requests for Department of Public Safety press cards, without changes to the proposed text as published in the April 3, 1992, issue of the Texas Register (17 TexReg 2388). The adoption of this amendment will enable the department to issue press cards much faster by eliminating the delay of processing all press cards with a biennial expiration date. The amendment adds language whereby press cards will expire two years from date of issuance instead of being issued biennially. Language is deleted regarding the color of cards being different for each two-year period. No comments were received regarding adoption of this amendment. The amendment is adopted under the Texas Government Code, sec.411.006(4), which provides the director, with the authority to adopt rules, subject to commission approval, considered necessary for the control of the department. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on May 6, 1992. TRD-9206524 James R. Wilson Director Texas Department of Public Safety Effective date: June 2, 1992 Proposal publication date: April 3, 1992 For further information, please call: (512) 465-2000 TITLE 40. SOCIAL SERVICE AND ASSISTANCE Part I. Texas Department of Human Services Chapter 29. Purchased Health Services Subchapter G. Hospital Services 40 TAC sec.29.609 The Texas Department of Human Services (DHS) adopts an amendment to sec.29. 609, without changes to the proposed text as published in the April 10, 1992, issue of the Texas Register (17 TexReg 2600). The justification for the amendment is to specify that hospitals that do not qualify for disproportionate share payments or that believe the amount of payment is incorrect may request and receive a review by the department. This process will apply to the department's first disproportionate share program. Adjustments, if appropriate, will be made when the second lump-sum payment is made to hospitals. The amendment will function by providing continued access to medical care through appropriate reimbursement to disproportionate share hospitals. No comments were received regarding adoption of the amendment. The amendment is adopted under the Human Resources Code, Title 2, Chapters 22 and 32, which provides the department with the authority to administer public and medical assistance programs. (e)-(h) (No change.) This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on May 11, 1992. TRD-9206506 Nancy Murphy Agency liaison, Policy and Document Support Texas Department of Human Services Effective date: June 1, 1992 Proposal publication date: April 10, 1992 For further information, please call: (512) 450-3765