Part 2.
PUBLIC UTILITY COMMISSION OF TEXAS
Chapter 25.
SUBSTANTIVE RULES APPLICABLE TO ELECTRIC SERVICE PROVIDERS
Subchapter D. RECORDS, REPORTS, AND OTHER REQUIRED INFORMATION
16 TAC §25.88
The Public Utility Commission of Texas (commission) proposes
new §25.88, relating to Retail Market Performance Measure Reporting.
This section was originally published in the October 11, 2002,
Texas Register
(27 TexReg 9525). The commission has withdrawn that
rule and is republishing the rule. Project Number 24462,
Proceeding to Establish Performance Measures Relating to the Competitive Retail
Electric Market
, is assigned to this proceeding.
Proposed new §25.88 will establish reporting requirements for the
Electric Reliability Council of Texas (ERCOT), retail electric providers (REPs),
and transmission and distribution utilities (TDUs). The reporting requirements
will allow the commission to obtain information to evaluate the performance
of the retail electric market. The performance measures focus on key indicators
relating to competitive activity and the technical systems necessary to enable
customers to enroll with alternative providers and receive timely electric
service with accurate and timely bills for that service. The proposed new
section also outlines penalties for failure to timely file an accurate performance
measures report or for continued failure of an entity to meet reasonable standards
of performance.
In the proposed section, the commission attempts to balance its need for
information with the time and cost of reporting. Accordingly, the commission
directs its focus to those transactions with the most customer impact. The
commission realizes that penalties for poor performance may not be appropriate
in a developing market or for a new entrant; however, consideration in this
rulemaking is proper given that the commission may need to impose penalties
at a later date if necessary.
The standard format for reporting is established as a commission prescribed
form in accordance with Procedural Rule §22.80 of this title (relating
to Commission Prescribed Forms). This will permit the commission to review
and revise the performance measures or the reporting format as necessary to
address changing market conditions without the necessity of a full rule amendment.
This rule differs from the rule originally published on October 11, 2002,
in four main aspects. First, the rule does not apply to competitive affiliates
of a municipally owned utility or electric cooperative that have chosen to
participate in customer choice pursuant to the Public Utility Regulatory Act
(PURA) §40.051(b) or PURA §41.051(b) and are providing electric
energy at retail to consumers in Texas outside their certificated retail service
areas. Second, the rule requires reporting entities to file as confidential
any information relating specifically to any other entity unless the commission
has determined that such information is not competitively sensitive or the
disclosing entity has given the reporting entity express written permission
to release such information publicly. Third, the rule prohibits reporting
entities from failing to complete within the parameters set forth in the ERCOT
Protocols and/or the Standard Tariff for Retail Delivery Service pursuant
to §25.214 of this title (relating to Terms and Conditions of Retail
Delivery Service Provided by Investor Owned Transmission and Distribution
Utilities) at least 98% of all its technical market transactions in each transaction
category. Finally, the commission may evaluate the reporting requirements
as necessary to determine if modifications to the performance measures are
necessary due to changing market conditions and the evaluation process shall
include notice and opportunity for public comment.
In addition, the reporting requirements in the form differ from those originally
published in four main aspects. First, TDUs are mandated to report data concerning
meter read transactions. Second, TDUs are mandated to report the number of
safety net move-ins executed in which the Electronic Data Interchange (EDI)
transaction is still outstanding. Third, TDUs are required to report inter-company
invoices, or the total number of 810_02 transactions, including the percentage
of 810_02 cancel transactions as a percentage of the total number of 810_02s
sent. Fourth, REPs are required to report information on billing.
Angela Hurdle, Retail Industry Analyst, Retail Market Oversight Division,
has determined that for each year of the first five-year period the proposed
section is in effect there will be no fiscal implications for state or local
government as a result of enforcing or administering the section.
Angela Hurdle has determined that for each year of the first five years
the proposed section is in effect the public benefit anticipated as a result
of enforcing this section will be increased transparency of the performance
of the retail electric market which will lead to more effective oversight
by the commission. There will be no adverse economic effect on small businesses
or micro-businesses as a result of enforcing this section. Entities required
to comply with the proposed section may experience some economic costs from
the time and resources necessary to report the performance measures. These
costs are likely to vary between entities and are not possible to quantify
at this time. However, the benefit to competition in the retail electric market
is expected to far outweigh any costs of reporting the performance measures.
Angela Hurdle has also determined that for each year of the first five
years the proposed section is in effect there should be no effect on a local
economy, and therefore no local employment impact statement is required under
Administrative Procedure Act 2001.022.
Commission staff will conduct a public hearing on this rulemaking under
Government Code §2001.029 at the commission's offices located in the
William B. Travis Building, 1701 North Congress Avenue, Austin, Texas 78701,
if one is requested by 25 or more persons, a governmental subdivision or agency,
or an association having at least 25 members. A request for public hearing
must be received no later than March 7, or 21 days after this proposed section
is published in the
Texas Register
.
The commission seeks comments on the proposed new section from interested
persons. Comments on the proposed section (16 copies) may be submitted to
the Filing Clerk, Public Utility Commission of Texas, 1701 North Congress
Avenue, PO Box 13326, Austin, Texas 78711-3326. The deadline for submission
of comments is March 7, 2003, or 21 days after publication. Comments should
be organized in a manner consistent with the organization of the proposed
rule. The commission invites specific comments regarding the costs associated
with, and benefits that will be gained by, implementation of the proposed
section. The commission will consider the costs and benefits in deciding whether
to adopt the sections. Commenters may, if they so choose, incorporate their
previously filed comments by reference. All comments should refer to Project
Number 24462.
In addition to the new section, the commission is proposing a new form
for the reporting of performance measures under §25.88. The commission
is also requesting comments concerning the new form. Copies of the proposed
form can be obtained from the commission's Central Records, the commission's
Interchange, and the commission's website under Project Number 24462.
This new section is proposed under the Public Utility Regulatory
Act, Texas Utilities Code Annotated (Vernon's 1998 and Supplement 2003) (PURA) §14.002,
which provides the Public Utility Commission with authority to make and enforce
rules reasonably required in the exercise of its powers and jurisdiction;
and specifically, PURA §14.001, which provides authority to regulate
and supervise the business of each public utility within its jurisdiction
and to do anything specifically designated or implied by PURA that is necessary
and convenient to the exercise of that power; §14.003, which provides
authority to require reports of a public utility; §15.023, which provides
for commission imposition of an administrative penalty against a person regulated
under PURA who violates PURA or a rule adopted under PURA; §31.003, which
requires the commission to report to the Legislature on the scope of competition
in electric markets and the effect of competition and industry restructuring
on customers in both competitive and noncompetitive markets; §39.001,
which sets forth the legislative policy and purpose of PURA Chapter 39, Restructuring
of Electric Utility Industry; §39.101, which sets forth customer safeguards; §39.151,
which subjects to commission review procedures established by an independent
operator relating to the reliability of the regional electrical network and
accounting for the production and delivery of electricity among generators
and all other market participants; §39.352, which sets forth standards
for certification of REPs; §39.356, which provides for suspension, revocation,
or amendment of a REP's certificate; and §39.357, which provides for
the imposition of administrative penalties on a REP for violations described
by §39.356.
Cross Reference to Statutes: Public Utility Regulatory Act §§14.001,
14.002, 14.003, 15.023, 31.003, 39.001, 39.101, 39.151, 39.352, 39.356, and
39.357.
§25.88.Retail Market Performance Measure Reporting.
(a)
Purpose. This section establishes reporting requirements
to allow the commission to obtain information to be used for evaluation of
the performance of the retail electric market in Texas.
(b)
Application. This section applies to:
(1)
Electric Reliability Council of Texas (ERCOT) as defined
in Public Utility Regulatory Act (PURA) §31.002(5) and §25.5 of
this title (relating to Definitions);
(2)
Retail electric providers (REPs) as defined in PURA §31.002(17)
and §25.5 of this title (relating to Definitions); and
(3)
Transmission and distribution utilities (TDUs) operating
in a qualifying power region in the State of Texas as defined in PURA §31.002(19)
and §25.5 of this title (relating to Definitions).
(c)
Filing requirements. Using forms prescribed by the commission,
a reporting entity shall report activities as required by this section. Such
reports shall be filed with the commission under the project number assigned
by the commission's Central Records Office for all filings required each calendar
year.
(1)
Each entity shall file with the filing clerk of Central
Records at the commission offices in Austin, Texas, four copies of the printed
report and any attachments in accordance with §22.71 of this title (related
to Filing of Pleadings, Documents, and Other Material). Additionally, entities
shall file an electronic version consistent with the commission's electronic
filing standards set forth in §22.72(h) of this title (relating to Formal
Requisites of Pleadings and Documents to be Filed with the Commission);
(2)
A quarterly report shall be filed no later than the 45th
day following the end of the preceding quarterly reporting period. Quarterly
periods shall begin on January 1, April 1, July 1, and October 1.
(3)
The reporting entity may designate information that it
considers to be confidential. A reporting entity must file as confidential
any information relating specifically to any other entity unless the commission
has determined that such information is not competitively sensitive or the
disclosing entity has given the reporting entity express written permission
to release such information publicly. Information designated as confidential
shall be processed in accordance with commission policy set forth in §22.71
of this title (relating to Filing of Pleadings, Documents, and Other Material)
and the requirements of commission rules pertaining to information received
from ERCOT.
(d)
Key performance indicators. Reporting entities shall report
on the following key performance indicators on a quarterly basis:
(1)
Competitive market indicators. These measures will allow
the commission to assess the activity in the competitive market through the
number of customers and corresponding load served by non-affiliated REPs and
the number of active REPs.
(2)
Technical market mechanics. These measures will allow the
commission to assess whether the technical systems of the reporting entities
are functioning properly to perform market transactions necessary for customers
to choose REPs and to receive timely electric service with accurate and timely
bills for that service.
(e)
Supporting documentation. Each performance measures report
shall include:
(1)
Analysis. The reporting entity shall include an analysis
of its data and performance for the reporting period with a comparison to
performance in the previous period.
(2)
Report attestation. All reports submitted to the commission
shall be attested to by an owner, partner, officer, or manager of the reporting
entity under whose direction the report is prepared. The attestation shall
also verify that an internal review was conducted to confirm the accuracy
of the information contained in the performance measures report.
(3)
Supporting documents available for inspection. All supporting
documents, including records, books, and memoranda shall be made available
at the reporting entity's main office for inspection by the commission or
its designee upon request. Supporting documents shall be maintained for a
period of 24 months after the report date. Supporting documents may be kept
outside the State of Texas so long as those records are returned to the State
for any inspection requested by the commission or its designee.
(4)
Waiver of certain information. The commission may waive
the reporting of any information required in this subchapter if it determines
that it is either impractical or unduly burdensome for the reporting entity
to furnish the requested information. If any such information is omitted by
commission waiver, a written explanation of the omission and copy of the waiver
must be included in the report.
(f)
Other reports. Reporting entities may be required to submit
special reports to allow the commission to analyze the changing dynamics of
the retail electric market or to obtain information on specific issues that
may require additional diagnostic review.
(1)
Supplemental information requested by the commission. Upon
request by the commission or its designee, a reporting entity shall provide
any special and additional information that relates to the performance measures
report. Such request shall specify a time for the reporting entity to respond
that is reasonable in consideration of the information requested.
(2)
Additional reports requested through ERCOT. Reporting entities
may be required to provide to ERCOT, or groups operating under the authority
of ERCOT, special and additional information that relates to market performance
for specific or diagnostic purposes.
(g)
Enforcement by the commission.
(1)
Failure to timely file accurate report. The commission
may impose all applicable administrative penalties pursuant to PURA, Chapter
15, Subchapter B, consistent with §22.246 of this title (relating to
Administrative Penalties) for failure of a reporting entity to timely file
an accurate performance measures report.
(2)
Technical market mechanics.
(A)
Prohibited conduct. No entity shall fail to complete within
the parameters set forth in the ERCOT Protocols and/or the Standard Tariff
for Retail Delivery Service pursuant to §25.214 of this title (relating
to Terms and Conditions of Retail Delivery Service Provided by Investor Owned
Transmission and Distribution Utilities) at least 98% of all its technical
market transactions in each transaction category.
(B)
Performance-improvement plan. Prior to imposing any penalty
for a violation of subparagraph (A) of this paragraph, the commission or its
designee shall meet with the reporting entity and develop a performance-improvement
plan. The performance- improvement plan shall contain specific goals and timeframes
for improving performance and shall be reasonable in view of all relevant
circumstances.
(C)
Penalties. If a reporting entity violates subparagraph
(A) of this paragraph and fails to meet the performance required in a performance-improvement
plan, the commission may impose the following penalties, as appropriate:
(i)
Administrative penalties under PURA, Chapter 15, Subchapter
B, consistent with §22.246 of this title;
(ii)
Any penalty against ERCOT as established by commission
rule and as authorized by PURA §39.151; or
(iii)
Suspension, revocation, or amendment of a REP's certificate
or registration as authorized by PURA §39.356 and §25.107 of this
title (relating to Certification of Retail Electric Providers (REPs)).
(D)
Factors to be considered. In assessing penalties, the commission
shall consider the following factors:
(i)
The reporting entity's prior history of performance;
(ii)
The reporting entity's efforts to improve performance;
(iii)
Whether the penalty is likely to improve performance;
and
(iv)
Such other factors deemed appropriate and material to
the particular circumstances.
(h)
Public information. The commission may produce a summary
report on the performance measures using the information collected as a result
of these reporting requirements. Any such report shall be public information.
The commission may provide the reports to any interested entity and post the
reports on the commission's Internet website.
(i)
Commission review. The commission may evaluate the reporting
requirements as necessary to determine if modifications to the performance
measures are necessary due to changing market conditions. Such evaluation
process shall include notice and opportunity for public comment.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on January 31, 2003.
TRD-200300798
Rhonda G. Dempsey
Rules Coordinator
Public Utility Commission of Texas
Earliest possible date of adoption: March 16, 2003
For further information, please call: (512) 936-7308
Chapter 60.
TEXAS COMMISSION OF LICENSING AND REGULATION
Subchapter E. ADMINISTRATION
16 TAC §60.201
The Texas Department of Licensing and Regulation ("Department")
proposes new §60.201, concerning training and education for employees
of the Department.
The proposed new rule provides requirements for use of state funds for
training and education in accordance with the State Employee Training Act,
Government Code, §§656.041 - 656.049.
The rule is necessary to comply with Government Code, §656.048, which
requires state agencies to adopt rules relating to the eligibility of the
agency's administrators and employees for training and education which is
supported by the agency as well as obligations assumed by the administrators
and employees on receiving the training and education.
Chris Kadas, General Counsel, has determined that for the first five-year
period the new rule is in effect there will be no cost to state or local government
as a result of enforcing or administering the new rule.
Mr. Kadas has determined that for each year of the first five-year period
the new rule is in effect, the public benefit will be an adequately trained,
capable, and qualified workforce who can provide necessary services more effectively
which will contribute to the proficiency of the department in delivering the
level of service expected. There will be no effect on small or large businesses.
There is no anticipated economic cost to persons who are required to comply
with proposal.
Comments on the proposal may be submitted to Chris Kadas, General Counsel,
Texas Department of Licensing and Regulation, P.O. Box 12157, Austin, Texas
78711, or facsimile (512) 475-2872, or electronically: chris.kadas@license.state.tx.us.
The deadline for comments is 30 days after publication in the
Texas Register
.
The new rule is proposed under Texas Occupations Code, Chapter
51, which authorizes the Department to adopt rules as necessary to implement
this chapter and any other law establishing a program regulated by the Department
and Texas Government Code, §656.048, which provides that each state agency
shall adopt rules relating to the eligibility of the agency's administrators
and employees for training and education supported by the agency and the obligations
assumed by administrators and employees on receiving the training and education.
The statutory provisions affected by the proposal are those set forth in
Texas Occupations Code, Chapter 51 and Texas Government Code, §656.048.
No other statutes, articles, or codes are affected by the proposal.
§60.201.Employee Training and Education.
(a)
With the approval of the Executive Director, the Texas
Department of Licensing and Regulation may make available to its administrators
and employees funds for training and education in accordance with the Employee
Training Act, Government Code §§656.041 - 656.049.
(b)
In order to be eligible for agency supported training and
education, the administrator or employee must demonstrate in writing, to the
satisfaction of the Executive Director, that the training or education is
related to the duties or prospective duties of the administrator or employee.
(c)
Eligible training and education expenses that are approved
by the Executive Director may include, as appropriate, salary, tuition, and
other fees, travel and living expenses, training stipend, expense of training
materials, and other necessary expenses of an instructor, student, or other
participant in a training or education program.
(d)
An employee who completes training and education to obtain
a degree or certification for which the Department has provided all or part
of the required fees must agree in writing to fully repay the Department any
amounts paid for educational assistance if the employee voluntarily terminates
employment with the agency within one year of course completion.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on January 30, 2003.
TRD-200300778
William H. Kuntz, Jr.
Executive Director
Texas Department of Licensing and Regulation
Earliest possible date of adoption: March 16, 2003
For further information, please call: (512) 463-7348
Chapter 401.
ADMINISTRATION OF THE STATE LOTTERY ACT
Subchapter D. LOTTERY GAME RULES
16 TAC §401.305
(Editor's note: The text of the following section proposed for
repeal will not be published. The section may be examined in the offices of
the Texas Lottery Commission or in the Texas Register office, Room 245, James
Earl Rudder Building, 1019 Brazos Street, Austin.)
The Texas Lottery Commission proposes the repeal
of 16 TAC §401.305 relating to Lotto Texas on-line game. The repeal is
proposed because the provisions of the rule are being revised so significantly
that it is more efficient and less confusing to repeal this section and propose
a new section 401.305.
Bart Sanchez, Financial Administration Director, has determined for the
first five year period the repeal is in effect, there will be fiscal implications
for state or local government as a result of enforcing these rules. For each
year of the first five years the section will be in effect, the fiscal impact
is the following: FY 03, $59,510,000; FY 04, $153,892,860; FY 05, $132,655,646;
FY 06, $132,655,646; and FY 07, $132,655,646. The negative fiscal impact as
a result of the proposed repeal will be offset by the positive fiscal impact
anticipated as a result of the concurrent proposal of new rule 401.305. There
will be no adverse effect on small businesses, micro businesses or local or
state employment as a result of implementing this repeal because of the concurrent
anticipated implementation of new rule 401.305.
Robert Tirloni, On-line Products Manager, Marketing has determined that
for each year of the first five-year period the repeal is in effect, the public
benefit anticipated as a result of enforcing this rule will be more efficiency
and less redundancy.
Comments on the proposal may be submitted to Kimberly L. Kiplin, General
Counsel, Texas Lottery Commission, P.O. Box 16630, Austin, Texas 78761-6630.
The Texas Lottery Commission will also conduct a hearing to receive comment
on the proposed new rule and the proposed repeal of rule 16 TAC §401.305
on February 26, 2003 at 9:00 a.m. at the Commission auditorium, 611 E. Sixth
Street, Austin, Texas. Comments must be received within 30 days after publication
of the proposed rule in the Texas Register to be considered.
The repeal is proposed pursuant to the provisions of Texas Government
Code, Section 466.015 which authorizes the Texas Lottery Commission to adopt
rules necessary to administer the State Lottery Act and Texas Government Code,
Section 467.102 which authorizes the Commission to adopt rules for the enforcement
and administration of the laws under the Commission's jurisdiction.
§401.305."Lotto Texas" On-Line Game Rule.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State on February 3, 2003.
TRD-200300802
Kimberly L. Kiplin
General Counsel
Texas Lottery Commission
Earliest possible date of adoption: March 16, 2003
For further information, please call: (512) 344-5113
16 TAC §401.305
The Texas Lottery Commission proposes new rule 16 TAC §401.305
relating to Lotto Texas on-line game rule. The proposed new rule is being
proposed concurrently with the proposal of the repeal of 16 TAC §401.305.
The Commission is proposing the new rule rather than proposing amendments
to the existing rule to lessen confusion regarding the proposed changes to
the Lotto Texas on-line game rule. The proposed new rule provides for an on-line
game that has a different game matrix than the current Lotto Texas game. The
proposed new rule contains a two field matrix of 44 numbers in each field,
establishes the prize pool for Lotto Texas prizes to be a minimum of 52% of
Lotto Texas sales, explains the type and method of play for the game, creates
eight prize categories, specifies the jackpot amount for a Lotto Texas drawing
in a roll cycle, and eliminates redundant or obsolete language.
Bart Sanchez, Financial Administration Director, has determined that for
each year of the first five years the sections are in effect there will be
foreseeable additional fiscal implications for state or local government as
a result of enforcing or administering these rules. For each year of the first
five years the section will be in effect, the fiscal impact is the following:
FY 03, $65,400,000; FY 04, $210,319,280; FY 05, $201,493,751; FY 06, $193,031,014;
and FY 07, $184,923,711. There is no anticipated negative fiscal impact on
small businesses, micro businesses or local or state employment as a result
of implementing these sections.
Robert Tirloni, On-line Products Manager, Marketing Division, has determined
that for each of the first five years the sections as proposed are in effect,
the public benefit anticipated as a result of the proposed amendments is to
generate additional revenue for the state of Texas, clarify that the jackpot
amount for a Lotto Texas drawing within the first four Lotto Texas drawings
in a roll cycle will be the greater of the advertised jackpot amount or the
jackpot amount based on sales determined in part by the applicable interest
rate factor, clarify that the jackpot amount for a Lotto Texas drawing that
is not within the first four Lotto Texas drawings in a roll cycle is the jackpot
based on sales determined in part by the applicable interest rate factor,
and eliminates redundant or obsolete language.
Written comments on the proposed amendments may be submitted to Kimberly
L. Kiplin, General Counsel, Texas Lottery Commission, P.O. Box 16630, Austin,
Texas 78761-6630. The Texas Lottery Commission will also conduct a hearing
to receive comment on the proposed new rule and the proposed repeal of rule
16 TAC §401.305 on February 26, 2003 at 9:00 a.m. at the Commission auditorium,
611 E. Sixth Street, Austin, Texas. Comments must be received within 30 days
after publication of the proposed rule in the Texas Register to be considered.
The amendments are proposed under Government Code, §466.015
which authorizes the Commission to adopt all rules necessary to administer
the State Lottery Act and to adopt rules governing the establishment and operation
of the lottery, and under Government Code, §467.102 which authorizes
the Commission to adopt rules for the enforcement and administration of the
laws under the Commission's jurisdiction.
The amendments, repeal, and new rules affect Government Code, Chapter 466.
§401.305."Lotto Texas" On-Line Game Rule.
(a)
Lotto Texas. A Texas Lottery on-line game to be known as
"Lotto Texas" is authorized to be conducted by the executive director under
the following rules and under such further instructions and directives as
the executive director may issue in furtherance thereof. If a conflict arises
between this section and §401.304 of this title (relating to On-Line
Game Rules (General)), this section shall have precedence.
(b)
Definitions. In addition to the definitions provided in §401.301
of this title (relating to General Definitions), and unless the context in
this section otherwise requires, the following definitions apply.
(1)
Advertised jackpot--The jackpot amount the commission estimates
for each Lotto Texas drawing and authorizes commission vendors to publicize.
The advertised jackpot or share of the advertised jackpot is the amount the
commission may pay as the annual payment option in 25 annual payments consistent
with the provisions of this rule. The advertised jackpot is determined by
the indirect prize category and by estimating the direct prize category and
may be increased prior to the draw by the commission based on sales projections.
(2)
Annual payment option--The option for payment in annual
payments that can be selected by the player at the time of ticket purchase.
This option is chosen automatically for the player if no payment option is
selected by the player at time of ticket purchase. The option is to be paid
the jackpot amount in 25 annual payments, in the event the player has a valid
winning jackpot ticket and consistent with the provisions of the rule.
(3)
Jackpot amount-For the first four Lotto Texas drawings
in the roll cycle, the jackpot amount is the greater of either the advertised
jackpot or the jackpot based on sales determined in part by the applicable
interest rate factor. For all subsequent Lotto Texas drawings in the roll
cycle, the jackpot amount will be the jackpot based on sales determined in
part by the applicable interest rate factor. The amount actually paid will
either be a winner's share of the net present cash value of the jackpot amount
or a winner's share of the jackpot amount, depending on the payment option
and consistent with the provisions of the rule.
(4)
Net Present Cash value option--An election a player must
make at the time the player purchases a ticket in order to be paid the net
present cash value of the player's share of the jackpot amount, in the event
the player has a valid winning jackpot ticket. The net present cash value
is the cost that the Comptroller of Public Accounts informs the commission
is the cost to purchase a 25-year annuity for the jackpot amount on the first
business day after the drawing. The term "net present cash value option" is
synonymous with the terms "cash value option", "cash option", and "net present
value".
(5)
Number--Any play integer from one through 44 inclusive.
(6)
Play--The six numbers selected on each play board and printed
on the ticket. Five numbers are selected from the first field of 44 numbers
and one number is selected from the second field of 44 numbers.
(7)
Play board--Two fields of 44 numbers each found on the
playslip.
(8)
Playslip--An optically readable card issued by the commission
used by players of Lotto Texas to select plays. There shall be five play boards
on each playslip identified at A, B, C, D, and E. A playslip has no pecuniary
value and shall not constitute evidence of ticket purchase or of numbers selected.
(9)
Roll Cycle-Consists of all consecutive drawings in which
no jackpot (first prize) ticket is sold. The first drawing after a jackpot
ticket is sold is considered the first drawing in the roll cycle.
(c)
Price of ticket. The price of each Lotto Texas play shall
be $1.00. A player may purchase up to five plays on one ticket. Multiple draws
are available for up to 10 consecutive draws beginning with the current draw.
(d)
Play for Lotto Texas.
(1)
Type of play. A Lotto Texas player must select five numbers
from the first field of numbers from 1 through 44 and an additional one number
from the second field of numbers from 1 through 44 in each play or allow number
selection by a random number generator operated by the computer, referred
to as Quick Pick. A winning play is achieved only when one, two, three four
or five numbers selected from the first field of 44 numbers match, in any
order, the five numbers drawn from the first field of 44 numbers in addition
to matching the one number drawn from the second field of 44 numbers or when
three, four or five numbers selected from the first field of 44 numbers match,
in any order, the five numbers drawn from the first field of 44 numbers in
addition to matching zero numbers drawn from the second field of 44 numbers.
(2)
Method of play. The player may use playslips to make number
selections. The on-line terminal will read the playslip and issue ticket(s)
with corresponding plays. If a playslip is not available or if a player is
unable to complete a playslip, the on-line retailer may enter the selected
numbers via the keyboard. However, the retailer shall not accept telephone
or mail-in requests to issue a ticket. A player may leave all play selections
to a random number generator operated by the computer, commonly referred to
as Quick Pick.
(3)
One prize per play. The holder of a winning ticket may
win only one prize per play in connection with the winning numbers drawn and
shall be entitled only to the highest prize category won by those numbers.
(e)
Prizes for Lotto Texas.
(1)
Prize amounts. The prize amounts, for each drawing, paid
to each Lotto Texas player who selects a matching combination of numbers will
vary due to a pari-mutuel calculation, with the exception of the sixth, seventh
and eighth prize, which are guaranteed prizes of $5.00, $5.00 and $3.00 respectively.
The calculation of pari-mutuel prize categories 2 through 5 shall be rounded
down so that prizes can be paid in multiples of whole dollars. Each prize
category breakage will carry forward to the next drawing for each respective
prize category. The pari-mutuel prize amounts, except the jackpot prize amount,
are based on the total amount in the prize category for that Lotto Texas drawing
distributed equally over the number of matching combinations in each prize
category. For the first four Lotto drawings in the roll cycle, the jackpot
amount will be the greater of either the advertised jackpot or the jackpot
based on sales determined in part by the applicable interest rate factor.
For all subsequent drawings in the roll cycle, the jackpot amount will be
the jackpot based on sales determined in part by the applicable interest rate
factor. The amount actually paid will either be a winner's share of the net
present cash value of the jackpot amount or a winner's share of the jackpot
amount, depending on the payment option and consistent with the provisions
of the rule. Attached Graphic
(2)
Prize pool. The prize pool for Lotto Texas prizes shall
be a minimum of 52% of Lotto Texas sales.
(3)
Prize categories.
(A)
First prize (jackpot).
(i)
A share is the matching combination, in one play, of all
five numbers drawn (in any order) by the commission from the first field of
44 numbers in addition to matching the number drawn from the second field
of 44 numbers. In the event of a prize winner who does not select the net
present cash value option, the prize winner's share of the jackpot amount
shall be paid in 25 annual installments. To determine the annuitized future
value of each share (prize amount), the annuitized future value of the jackpot
amount is divided by the shares. Each share will be paid in 25 installments.
The initial payment shall be paid only upon completion of all internal validation
procedures. The subsequent 24 payments shall be paid annually by monies generated
by the purchase of securities which shall be purchased through the Comptroller
of Public Accounts-Treasury Operations, State of Texas, after each drawing
for which lottery records reflect the sale of one or more winning Lotto Texas
first prize or jackpot plays, and the value of the 24 installments shall be
determined by the face or market value of said securities at purchase. Annual
installment payments shall be based on the annual maturity value of the securities
purchased. The payment of annual annuities will be made on the 15th day of
the anniversary of the month in which the ticket won. If the net present cash
value of each share is equal to or greater than the amount required to pay
an initial first-year cash installment and 24 subsequent annuitized annual
installments yielding total payments greater than $2 million, each share shall
be paid in 25 installments in the same manner as described in this paragraph.
If the net present cash value of each share is less than the amount required
to pay an initial first-year cash installment and 24 subsequent installments
yielding total payments of $2 million or less, each share shall be paid the
net present cash value of each share in one payment.
(ii)
In the event of a prize winner who selects the net present
cash value option, the prize winner's share will be paid in a single, lump
sum payment based on the discounted, net present cash value of the prize winner's
share of the jackpot amount on the next business day after the drawing. The
player must make the election of the net present cash value option at the
time of purchasing a Lotto Texas ticket. If the player does not make any election
at the time of purchasing a Lotto Texas ticket, the share will be paid in
accordance with clause (i) of this subparagraph.
(iii)
The jackpot prize must be claimed at the Austin claim
center. The jackpot amount is determined by the indirect prize category and
by estimating the direct prize category. The total prize category contribution
for a drawing will include the following.
(I)
The direct prize category contribution shall be no less
than 75.20% of the prize pool for the drawing.
(II)
The indirect prize category contribution, which may be
increased by the executive director, will include the roll-over from the previous
drawing, if any.
(III)
For the first four Lotto Texas drawings in the roll cycle,
the commission will pay the greater of either the advertised jackpot or the
jackpot based on sales determined in part by the applicable interest rate
factor. For all subsequent drawings in the roll cycle, the commission will
pay the jackpot based on sales determined in part by the applicable interest
rate factor. The amount actually paid will either be a winner's share of the
net present cash value of the jackpot amount or a winner's share of the jackpot
amount, depending on the payment option and consistent with the provisions
of the rule.
(B)
Second Prize. The prize amount shall be calculated by dividing
the prize category contributions by the number of shares for the prize category.
A share is the matching combination, in one play, of all five numbers drawn
(in any order) from the first field of 44 numbers in addition to matching
zero numbers from the second field of 44 numbers drawn by the commission.
The total prize category contribution will include the following.
(i)
The direct prize category contribution shall be 1.73% of
the prize pool for the drawing.
(ii)
The indirect prize category contribution, which may be
increased by the executive director, will include the breakage and/or roll-over
from the previous drawing, if any.
(C)
Third prize. The prize amount shall be calculated by dividing
the prize category contributions by the number of shares for the prize category.
A share is the matching combination, in one play, of any four numbers drawn
(in any order) from the first field of 44 numbers in addition to matching
the number from the second field of 44 numbers drawn by the commission. The
total prize category contribution will include the following.
(i)
The direct prize category contribution shall be 1.57% of
the prize pool for the drawing.
(ii)
The indirect prize category contribution, which may be
increased by the executive director, will include the breakage and/or roll-over
from the previous drawing, if any.
(D)
Fourth Prize. The prize amount shall be calculated by dividing
the prize category contributions by the number of shares for the prize category.
A share is the matching combination, in one play, of any four numbers drawn
(in any order) from the first field of 44 numbers in addition to matching
zero numbers from the second field of 44 numbers drawn by the commission.
The total prize category contribution will include the following.
(i)
The direct prize category contribution shall be 3.37% of
the prize pool for the drawing.
(ii)
The indirect prize category contribution, which may be
increased by the executive director, will include the breakage and/or roll-over
from the previous drawing, if any.
(E)
Fifth Prize. The prize amount shall be calculated by dividing
the prize category contributions by the number of shares for the prize category.
A share is the matching combination, in one play, of any three numbers drawn
(in any order) from the first field of 44 numbers in addition to matching
the number from the second field of 44 numbers drawn by the commission. The
total prize category contribution will include the following.
(i)
The direct prize category contribution shall be 2.98% of
the prize pool for the drawing.
(ii)
The indirect prize category contribution, which may be
increased by the executive director, will include the breakage and/or roll-over
from the previous drawing, if any.
(F)
Sixth Prize. The prize amount is a guaranteed minimum $5.00.
The difference between the prizes won and the direct prize category contribution
will increase or decrease the prize reserve fund. The total prize category
contribution will include the direct prize category contribution of 6.41%
of the prize pool for the drawing.
(G)
Seventh Prize. The prize amount is a guaranteed minimum
$5.00. The difference between the prizes won and the direct prize category
contribution will increase or decrease the prize reserve fund. The total prize
category contribution will include the direct prize category contribution
of 1.84% of the prize pool for the drawing.
(H)
Eighth Prize. The prize amount is a guaranteed minimum
$3.00. The difference between the prizes won and the direct prize category
contribution will increase or decrease the prize reserve fund. The total prize
category contribution will include the direct prize category contribution
of 4.97% of the prize pool for the drawing.
(4)
Prize reserve fund.
(A)
The Lotto Texas prize reserve is 1.93% of the prize pool.
(B)
The Lotto Texas prize reserve fund may be increased or
decreased by paying Lotto Texas prizes. The Lotto Texas prize reserve fund
may be used only for the Lotto Texas game.
(f)
Ticket purchases.
(1)
Lotto Texas tickets may be purchased only at a licensed
location from a lottery retailer authorized by the lottery operations director
to sell on-line tickets.
(2)
Lotto Texas tickets shall show the player's selection of
numbers or Quick Pick (QP) numbers, boards played, drawing date, jackpot payment
option, and validation and reference numbers.
(3)
It shall be the exclusive responsibility of the player
to verify the accuracy of the player's selection(s) and other data printed
on the ticket. A ticket is a bearer instrument until signed.
(4)
Except as provided in subsection (d)(2) of this section,
Lotto Texas tickets must be purchased using official Lotto Texas playslips.
Playslips which have been mechanically completed are not valid. Lotto Texas
tickets must be printed on official Texas lottery paper stock and purchased
at a licensed location through an authorized Texas lottery retailer's on-line
terminal.
(g)
Drawings.
(1)
The Lotto Texas drawings shall be held each week on Wednesday
and Saturday evenings at 10:12 p.m. Central Time except that the drawing schedule
may be changed by the executive director, if necessary.
(2)
Lotto Texas tickets will not be sold during the draw break
for the Lotto Texas game on Wednesday and Saturday nights.
(3)
The drawings will be conducted by lottery officials
(4)
Each drawing shall determine, at random, six winning numbers
in accordance with Lotto Texas drawing procedures. Any numbers drawn are not
declared winning numbers until the drawing is certified by the commission
in accordance with the drawing procedures. The winning numbers shall be used
in determining all Lotto Texas winners for that drawing.
(5)
Each drawing shall be witnessed by an independent certified
public accountant. All drawing equipment used shall be examined by at least
one commission security representative and the independent certified public
accountant immediately prior to a drawing and immediately after the drawing.
(6)
A drawing will not be invalidated based on the financial
liability of the commission.
(h)
Announcement of incentive or bonus program. The executive
director shall announce each incentive or bonus program prior to its commencement.
The announcement shall specify the beginning and ending time, if applicable,
of the incentive or bonus program and the value for the award(s).
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on February 3, 2003.
TRD-200300803
Kimberly L. Kiplin
General Counsel
Texas Lottery Commission
Earliest possible date of adoption: March 16, 2003
For further information, please call: (512) 344-5113
16 TAC §402.540
The Texas Lottery Commission proposes new §402.540,
relating to general licensing provisions. Specifically, the new section identifies
who must submit a license application, what information is required to be
submitted in a license application, what the impact is if an application is
incomplete, what the impact is if a licensee voluntarily surrenders its license,
what the impact is if a licensee places a license in administrative hold,
what the impact is on a licensee for failure to timely renew its license,
sets out the requirement that the licensee notify the commission timely of
changes of information contained in the application, and identifies who may
act as an authorized representative for a licensee.
Bart Sanchez, Financial Administration Director, has determined for each
year of the first five years the section is in effect there will not be fiscal
implications for state or local government as a result of enforcing or administering
the rule. The Commission does not anticipate any cost to the state or local
government as a result of enforcing or administering the rule. There is no
anticipated adverse impact on small businesses, micro businesses or local
or state employment as a result of implementing the section.
William L. Atkins, Director, Charitable Bingo Operations Division, has
determined that for each of the first five years the section as proposed is
in effect, the public benefit anticipated as a result of the proposed new
section is to provide applicants and licensees with a better understanding
of the licensing process and the requirements for obtaining a license.
Written comments on the proposed new rule may be submitted to Kimberly
L. Kiplin, General Counsel, Texas Lottery Commission, P.O. Box 16630, Austin,
Texas 78761-6630. Comments must be submitted within 30 days from the date
the proposal is published in the
Texas Register
to
be considered.
The new rule is proposed under Occupations Code, Section 2001.054
which authorizes the Commission to adopt rules to enforce and administer the
Bingo Enabling Act, under Government Code, Section 467.102 which authorizes
the Commission to adopt rules for the enforcement and administration of the
laws under the Commission's jurisdiction, and under Occupations Code, Section
2001.051(b) which grants the Commission broad authority to exercise strict
control and close supervision over all bingo conducted in Texas so that bingo
is fairly conducted and the proceeds derived from bingo are used for an authorized
purpose.
The new rule implements Occupations Code, Chapter 2001.
§402.540.General Licensing Provisions.
(a)
Any person who wants to engage in a bingo related activity
shall apply to the commission for a license. The application must be on a
form prescribed by the commission and all required information must be legible,
correct and complete. An application is incomplete if the following information
is not provided:
(1)
All information requested on the application form and applicable
schedules;
(2)
All supplemental information requested during the pre-licensing
investigation period;
(3)
The applicable license fee;
(4)
The required bond or other security, if applicable; and
(5)
Authorized signatures as required by the commission.
(b)
Information submitted by an applicant in the form of an
applicable schedule shall be considered to be part of the application. Supplemental
information should be submitted on a form prescribed by the commission and
all information required must be correct and complete.
(c)
Information submitted by an applicant in a format other
than an applicable schedule must be legible and must include the following:
(1)
the name and address of the organization as it appears
on the application;
(2)
the Texas taxpayer identification number; or, if sole owner,
the individual's social security number;
(3)
a statement identifying the information submitted;
(4)
the signature, printed name and telephone number of the
person authorized to submit the information; and,
(5)
All supplemental information requested during the pre-licensing
investigation period.
(d)
Within 14 days after the commission has received the application,
the commission will review the application and;
(1)
notify the applicant if additional information is required;
(2)
notify the applicant in writing why the application is
being denied; or
(3)
issue the license.
(e)
If an application is incomplete, the commission will notify
the applicant. The applicant must provide the requested information within
14 days of such notification. Failure to provide the requested information
within the 14 day time line will result in the denial of the license application.
(f)
Notwithstanding the provisions of subsection (e) of this
section, failure to submit all required information within 45 days from the
date the application is received by the commission will result in the denial
of the application.
(g)
Prior to the issuance of a license, the commission may
require an applicant to attend a pre-licensing interview. The commission will
identify the person or persons for the applicant who must attend the pre-licensing
interview. The pre-licensing interview will consist of, at a minimum, the
following:
(1)
review of the Bingo Enabling Act;
(2)
review of the Charitable Bingo Administrative Rules;
(3)
licensee responsibilities;
(4)
process pertaining to the different types of license application;
(5)
bookkeeping and record keeping requirements as it involves
bingo; and,
(6)
a statement from the person or persons attending the pre-licensing
interview that they understand and the licensee will comply with the provisions
of the Bingo Enabling Act and Charitable Bingo Administrative Rules.
(h)
The commission may deny an application based on information
obtained that indicates non-compliance with the provisions of the Bingo Enabling
Act and/or administrative rules in connection with a pre-licensing interview
and/or location inspection.
(i)
Each licensed organization and organization issued a temporary
authorization is required to file timely and complete required reports, as
applicable to the type of current license held.
(j)
An organization may withdraw an application at any time.
Once the written request for withdrawal is received by the commission, all
processing of the application will cease and the withdrawal is considered
final. If the organization wants to reapply for a license, a complete new
application is required.
(k)
Voluntary surrender of a license. A licensee may surrender
its license for cancellation provided it has completed and submitted to the
commission the "Notice of Surrender of Bingo License". The cancellation of
the license shall be final and effective upon receipt by the division of a
copy of the resolution, or other authoritative statement of the licensee,
requesting cancellation of the license and providing a requested effective
date. The cancellation is effective as of the date identified in the letter.
If no date is identified in the letter, the effective date shall be the date
the commission receives the letter. Notwithstanding cancellation of the license,
the licensee must file all reports, returns and remittances required by law.
The licensee shall surrender the license to the commission on the effective
date of the surrender. The commission will send the licensee a letter confirming
the surrender and resulting cancellation of the license.
(l)
Administrative Hold. A licensee may place its license in
administrative hold. The placement of a license in administrative hold shall
be effective upon receipt by the commission of a copy of the resolution, or
other authoritative statement of the licensee, requesting administrative hold
and citing a requested effective date. The licensee shall submit the license
to the commission on the effective date of the placement of the license in
administrative hold. Once the license has been placed in administrative hold,
all bingo activity (i.e. leasing, conducting bingo) must cease until the licensee
files an amendment and the amended license is issued by the commission and
received by the licensee.
(m)
Notwithstanding placement of the license in administrative
hold, the licensee must file all reports, returns and remittances required
by law. The licensee must also file a timely and complete application for
renewal of the license each time the license is ripe for renewal.
(n)
Each person required to be named in an application for
license under the Bingo Enabling Act will have a criminal record history inquiry
at state and/or national level conducted. Such inquiry may require submission
of fingerprint card(s). FBI fingerprint cards are required for an individual
listed in an application for a distributor, system service provider, or manufacturer's
license and for an individual listed on an application who is not a Texas
resident.
(o)
Timely Renewal of License
(1)
An annual bingo license expires one calendar year from
date of issuance.
(2)
Each licensee is solely responsible for the timely renewal
of its annual license.
(3)
Failure of the licensee to receive the renewal notice(s)
mailed by the commission is not a mitigating circumstance in timely renewal.
The renewal notice is merely a reminder and not a prerequisite to a licensee's
ability to submit a renewal application.
(4)
A licensee that has not submitted a renewal application
timely must cease all bingo activity until properly licensed.
(5)
Notwithstanding any other provision in the commission's
administrative rules, to be considered timely, the renewal application must
be filed with the commission no later than the license expiration date. A
licensee may mail the renewal application but the postmark must clearly show
a date that is no later than the license expiration date. To be timely filed,
the commission must receive the mailed application within seven days of the
postmarked date of the mailed application and the postmarked date must clearly
show a date that is no later than the license expiration date. Additionally,
if the commission does not receive the renewal application within seven days
of the postmarked date of the mailed application, the renewal application
is not timely filed. In computing the period of time for filing renewal applications,
the last day of the period so computed is to be included, unless it is a Saturday,
Sunday, or legal holiday, in which event the period runs until the end of
the next day which is not a Saturday, Sunday, or legal holiday.
(p)
Notification of changes. Each licensee must promptly notify
the commission in writing within 10 working days of any change to information
contained in a filed application regardless of whether the cause of the change
is because information filed with the commission has become inaccurate, or
additions or deletions are necessary to reflect changes in the circumstances
of the licensee. Examples of such changes may include the names of the organizational
officers, the amount of rent charged for leased premises, the name of a member
responsible for the conduct of games, or the name of an individual connected
with a commercial lessor that would affect its eligibility to hold a license
and, in the case of lessors, the name of a new authorized organization that
intends to lease premises from it for the purpose of conducting bingo.
(q)
Representation; personal receipt of documents. For purposes
of this subsection, an individual shall be recognized by the commission as
an applicant or licensee's authorized representative only if the applicant
or licensee has filed with the commission a form prescribed by the commission
identifying the individuals currently listed as directors, officers, or operators,
or if they are identified on the completed form "Schedule E Authorization
of Representation". A person is not an authorized representative of the applicant
or licensee unless specifically named on a form prescribed by the commission
as part of the application, or in the "Schedule E Authorization of Representation"
that is on file with the commission. Only those persons specifically named
on a form prescribed by the commission or in the "Schedule E Authorization
of Representation" as an authorized representative shall be recognized by
the commission concerning any matter relating to the licensing process or
license. Only the applicant or licensee or its authorized representative may
receive from the commission documents relating to the application or license
without being required to submit a request under the Public Information Act.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on February 3, 2003.
TRD-200300813
Kimberly L. Kiplin
General Counsel
Texas Lottery Commission
Earliest possible date of adoption: March 16, 2003
For further information, please call: (512) 344-5113
16 TAC §402.545
(Editor's note: The text of the following section proposed for
repeal will not be published. The section may be examined in the offices of
the Texas Lottery Commission or in the Texas Register office, Room 245, James
Earl Rudder Building, 1019 Brazos Street, Austin.)
The Texas Lottery Commission proposes the repeal
of §402.545, relating to license, fees and bonds for conduct of bingo
occasions and for commercial lessor. The rule sets out requirements for licenses
and applications relating to the conduct of bingo and the lease of bingo premises
and requirements for bonds and other security. Contemporaneous with the proposal
to repeal this section, the Commission is proposing new §402.545, relating
to licenses for conduct of bingo and to lease premises and new §402.583,
relating to bonds or other security because the changes are so substantial
that it is less confusing to the reader of the rules to propose new rules.
Bart Sanchez, Financial Administration Director, Texas Lottery Commission
has determined that for each year of the first five-year period the repeal
is in effect there will be fiscal implications for state or local government
as a result of enforcing or administering the section but that fiscal impact
will be offset by the anticipated fiscal impact of proposing new §§402.545
and 402.583 and contemporaneous with proposing this repeal.
Mr. Sanchez has also determined that for each year of the first five-year
period the repeal is in effect there will be no cost to small businesses.
There will be no impact on local employment.
William L. Atkins, Charitable Bingo Operations Director, Texas Lottery
Commission has determined that for each year of the first five-year period
the repeal is in effect, the public benefit anticipated as a result of enforcing
or administering the repeal will be to propose new §402.545 and §402.583
that will set out the requirements for the license to conduct bingo and to
lease bingo premises and for bonds and other security.
Comments on the proposal may be submitted to Kimberly L. Kiplin, General
Counsel, Texas Lottery Commission, P.O. Box 16630, Austin, Texas 78761-6630.
Comments must be submitted within 30 days from the date the proposal is published
in the
Texas Register
to be considered.
The repeal is proposed under the Government Code, §467.102
and the Occupations Code, §2001.054 which provide the Commission with
the authority to adopt rules for the enforcement and administration of the
laws under the Commission's jurisdiction.
The proposed repeal implements Occupations Code, Chapter 2001.
§402.545.Licenses, Fees and Bonds for Conduct of Bingo Occasions and for Commercial Lessor.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State on February 3, 2003.
TRD-200300814
Kimberly L. Kiplin
General Counsel
Texas Lottery Commission
Earliest possible date of adoption: March 16, 2003
For further information, please call: (512) 344-5113
Part 4.
TEXAS DEPARTMENT OF LICENSING AND REGULATION
Part 9.
TEXAS LOTTERY COMMISSION
Chapter 402.
BINGO REGULATION AND TAX