Proposed Rules Title 16

TITLE 16. ECONOMIC REGULATION

Part 9. TEXAS LOTTERY COMMISSION

Chapter 401. ADMINISTRATION OF STATE LOTTERY ACT

Subchapter D. LOTTERY GAME RULES

16 TAC §§401.301, 401.304, 401.305, 401.307, 401.308, 401.312, 401.315, 401.316

The Texas Lottery Commission (Commission) proposes amendments to Title 16, Part 9, Chapter 401, §401.301 (relating to General Definition); §401.304 (relating to On-Line Game Rules (General)); §401.305 (relating to "Lotto Texas" On-Line Game Rule); §401.307 (relating to "Pick 3" On-Line Game Rule); §401.308 (relating to "Cash Five" On-Line Game); §401.312 (relating to "Texas Two Step" On-Line Game); §401.315 (relating to "Mega Millions" On-Line Game Rule); and §401.316 (relating to "Daily 4" On-Line Game Rule). The purpose of the amendments is to allow the on-line system to include a buffer period during which no new player selections or Quick-Pick selections could be entered into the on-line system but during which the on-line system could complete the processing of player selections or Quick-Pick selections already entered into the on-line system prior to the draw break. In other words, during the draw break, new transactions could not be initiated but transactions could be completed. The buffer would reduce the possibility of incomplete transactions. An incomplete transaction occurs when player selections or Quick-Pick selections are recorded in the on-line system but no ticket is produced at the retail location.

The proposed amendments to §401.301 (relating to General Definition) would change the title of the section to "General Definitions," and redefine the term "draw break." The current definition of "draw break" is "[t]he period of time on a draw day when tickets cannot be sold, produced, or validated on an on-line terminal for the specific game." The proposed amendments would change the definition to "[a] period of time before a drawing for an on-line game during which player selections for that drawing may not be entered into the on-line system and during which no requests for Quick Pick selections for that drawing may be entered into the on-line system."

The proposed amendments to §401.304 (relating to On-Line Game Rules (General)) would clarify that a retailer's ability to sell on-line tickets may be impeded by draw breaks. The proposed amendments to §401.304 (relating to On-Line Game Rules (General)) also revise the language requiring the executive director to establish times for draw breaks. The purpose of the revision is to make clear that while a new transaction may not be initiated during a draw break, a transaction may be completed during a draw break.

The proposed amendments to §401.305 (relating to "Lotto Texas" On-Line Game Rule); §401.307 (relating to "Pick 3" On-Line Game Rule); §401.308 (relating to "Cash Five" On-Line Game); §401.312 (relating to "Texas Two Step" On-Line Game); §401.315 (relating to "Mega Millions" On-Line Game Rule); and §401.316 (relating to "Daily 4" On-Line Game Rule) would eliminate any reference to draw break and a reference to time period during which tickets may not be sold. Because §401.304 (relating to On-Line Game Rules (General)) would require the executive director to establish times for draw breaks for each on-line game, it is not necessary to include such a requirement in each specific on-line game rule.

Kathy Pyka, Controller, has determined that for each year of the first five years the amendments would be in effect, enforcing or administering the rule does not have foreseeable implications related to cost or revenues of the state or local governments. Ms. Pyka has also determined that there will be no adverse effect on small businesses, micro businesses, or local or state employment. There will be no additional economic cost to persons required to comply with the amendments as proposed.

Michael Anger, Lottery Operations Director, has determined that for each year of the first five years the proposed amendments would be in effect, the public benefit expected from the adoption of the proposed amendments is that the amended rules would allow the Lottery Commission to include a buffer in the on-line system that would reduce the possibility of incomplete transactions. An incomplete transaction occurs when a wager is initiated, but not completed on the central computer system. One cause of incomplete transactions is a technological communications disruption in the transmission of information between the central computer to a retail terminal. A buffer would be a period of time after the beginning of draw break, which is the period when new wager requests cannot be initiated prior to the drawing for a particular on-line game, in which the central computer system and the retail terminal could continue to attempt to reestablish communications to complete a wager transaction initiated prior to draw break, thereby resulting in a ticket being printed at the retail location. There is no probable economic cost to persons required to comply with the proposed rules.

The Commission requests comments on the proposed amendments from any interested person. Comments may be submitted to Sarah Woelk, Special Counsel, by mail at Texas Lottery Commission, P.O. Box 16630, Austin, Texas 78761-6630; by facsimile at (512) 344-5189; or by email at www.txlottery.org. The Commission will hold a public hearing on this proposal at 10:00 a.m. on October 18, 2007, at 611 E. 6th Street, Austin, Texas 78701. Comments must be received within 30 days after publication of this proposal in order to be considered.

The amendments are proposed under Texas Government Code, §466.015, which provides the Commission with the authority to adopt rules governing the operation of the lottery. The amendments are also proposed under Texas Government Code, §467.102, which provides the Commission with the authority to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction.

Texas Government Code, Chapter 466, is affected by this proposal.

§401.301.General Definitions [ ~~Definition~~ ].

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

(1) - (9) (No change.)

(10) Draw break-- A [ ~~The~~ ] period of time before a drawing for [ ~~on a draw day when tickets cannot be sold, produced, or validated on~~ ] an on-line game during which player selections for that drawing may not be entered into the on-line system and during which no requests for Quick Pick selections for that drawing may be entered into the on-line system [ ~~terminal for the specific game(s) being drawn~~ ].

(11) - (59) (No change.)

§401.304.On-Line Game Rules (General).

(a) (No change.)

(b) Sale of tickets.

(1) Except to the extent that sales in on-line games are impeded by draw breaks, on-line [ ~~On-line~~ ] tickets may be sold during all normal business hours of the lottery on-line retailer during on-line game operating hours. On-line retailers must give prompt service to lottery customers present and waiting at the on-line terminal to purchase tickets for on-line games. Prompt service includes interrupting processing of on-line ticket orders for which the customer is not present at the terminal.

(2) (No change.)

(1) - (2) (No change.)

(3) The executive director shall establish the times [ ~~determine~~ ] for draw breaks for each [ ~~type of~~ ] on-line game [ ~~the time for the end of sales prior to the drawings. On-line terminals will not process on-line tickets for that drawing after the time established by the executive director~~ ].

(4) - (5) (No change.)

(d) Procedures for claiming on-line prizes.

(1) All apparent winning tickets presented for payment to the lottery or an on-line retailer must meet the commission's validation requirements as set forth in subsection (e) [ ~~(f)~~ ] of this section.

(2) - (11) (No change.)

(e) - (h) (No change.)

§401.305."Lotto Texas" On-Line Game Rule.

(a) - (b) (No change.)

(1) - (11) (No change.)

~~[ ~~(12)~~ The commission shall establish a time period before each drawing during which tickets may not be sold.]~~

(12) [ ~~(13)~~ ] An unsigned winning ticket is payable to the holder or bearer of the ticket if the ticket meets all applicable validation requirements.

(d) - (g) (No change.)

§401.307."Pick 3" On-Line Game Rule.

(a) - (c) (No change.)

(d) Plays and tickets

(1) - (17) (No change.)

~~[ ~~(18)~~ The commission shall establish a time period before each drawing during which tickets may not be sold.]~~

(18) [ ~~(19)~~ ] An unsigned winning ticket is payable to the holder or bearer of the ticket if the ticket meets all applicable validation requirements.

(e) - (h) (No change.)

§401.308."Cash Five" On-Line Game.

(a) - (f) (No change.)

(g) Drawings.

(1) (No change.)

~~[ ~~(2)~~ Cash Five tickets will not be sold during the draw break for the Cash Five game on Monday, Tuesday, Wednesday, Thursday, Friday, and Saturday nights.]~~

(2) [ ~~(3)~~ ] The drawings will be conducted by lottery officials.

(3) [ ~~(4)~~ ] Each drawing shall determine, at random, five winning numbers in accordance with Cash Five drawing procedures. Any numbers drawn are not declared winning numbers until the drawing is certified by the lottery in accordance with the drawing procedures. The winning numbers shall be used in determining all Cash Five winners for that drawing.

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

(5) [ ~~(6)~~ ] A drawing will not be invalidated based on the financial liability of the lottery.

(h) (No change.)

§401.312."Texas Two Step" On-Line Game.

(a) - (f) (No change.)

(g) Drawings.

(1) (No change.)

~~[ ~~(2)~~ Texas Two Step tickets will not be sold during the draw break for the Texas Two Step game.]~~

(2) [ ~~(3)~~ ] The drawings will be conducted by commission officials.

(3) [ ~~(4)~~ ] Each drawing shall determine, at random, five winning numbers in accordance with Texas Two Step 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 Texas Two Step winners for that drawing.

(4) [ ~~(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, the drawing supervisor, and the independent certified public accountant immediately prior to a drawing and immediately after the drawing.

(5) [ ~~(6)~~ ] A drawing will not be invalidated based on the financial liability of the commission.

(h) (No change.)

§401.315."Mega Millions" On-Line Game Rule.

(a) - (h) (No change.)

(i) Drawings.

(1) (No change.)

~~[ ~~(2)~~ Mega Millions tickets will not be sold during the draw break for the Mega Millions game.]~~

(2) [ ~~(3)~~ ] Each drawing shall determine, at random, the six winning numbers in accordance with the Mega Millions 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 Mega Millions winners for that drawing.

(3) [ ~~(4)~~ ] Each drawing shall be witnessed by an independent certified public accountant. All drawing equipment used shall be examined immediately prior to a drawing and immediately after the drawing.

(j) - (l) (No change.)

§401.316."Daily 4" On-Line Game Rule.

(a) - (c) (No change.)

(d) Plays and tickets

(1) - (14) (No change.)

~~[ ~~(15)~~ The commission shall establish a time period before each drawing during which tickets may not be sold.]~~

(15) [ ~~(16)~~ ] An unsigned winning ticket is payable to the holder or bearer of the ticket if the ticket meets all applicable validation requirements.

(e) - (i) (No change.)

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 September 21, 2007.

TRD-200704422

Kimberly L. Kiplin

General Counsel

Texas Lottery Commission

Earliest possible date of adoption: November 4, 2007

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

Chapter 402. CHARITABLE BINGO ADMINISTRATIVE RULES

The Texas Lottery Commission (Commission) proposes new Title 16, Part 9, Chapter 402, Subchapter B, §402.210 (relating to House Rules); §402.211 (relating to Fair Conduct) and new Subchapter G, §402.709 (relating to Corrective Action--Audit).

The purpose of proposed new §402.210 is to set out the minimum requirements for house rules, including: posting, announcement, publication, and content. Specifically, the new rule requires the licensed authorized organization to establish and adhere to its house rules for the fair conduct of bingo, and the operator on duty to be responsible for ensuring the house rules are consistently enforced. The new rule also provides that the house rules shall not conflict with the Bingo Enabling Act or the Charitable Bingo Administrative Rules.

The purpose of proposed new §402.211 is to set out the requirements for organizations to follow in order to ensure the fair conduct of a bingo game. The new rule provides that a fairly conducted bingo occasion is one that is impartial, honest and free from prejudice or favoritism. The bingo game is also to be conducted competitively, and free of corrupt and criminal influences, and follows applicable provisions of the Bingo Enabling Act and Charitable Bingo Administrative Rules. Specifically, the new rule provides that the licensee is responsible for ensuring minimum requirements are met in order to conduct a fair bingo occasion.

The purpose of proposed new §402.709 is to set out the requirements for organizations to follow in order to address compliance issues identified in an audit of their organization. The new rule provides a process for organizations to take corrective actions for violations noted as a result of an audit of the organization's bingo activities. Specifically, the new rule sets forth the definition of "corrective action," lists examples of corrective actions, and explains what occurs if a licensed authorized organization does not take corrective action.

Kathy Pyka, Controller, has determined that for each year of the first five years the proposed new rules will be in effect, there will be no significant fiscal impact for state or local governments as a result of this new rule. There will be no adverse effect on small businesses, micro businesses, or local or state employment. There will be no additional economic cost to persons required to comply with the new rules as proposed.

Philip D. Sanderson, Director of the Charitable Bingo Operations Division, has determined that for each year of the first five years the proposed new rules will be in effect, the public benefit anticipated is providing interested parties with the following: rules adopted by the licensed authorized organization to explain in detail how the organization is going to conduct its bingo games, information about the conduct of a bingo game in a manner that is fair, and information about the audit process and related requirements.

The Commission requests comments on the proposed new rules from any interested person. Comments on the proposed rules may be submitted to Sandra Joseph, Assistant General Counsel, by mail at Texas Lottery Commission, P.O. Box 16630, Austin, Texas 78761-6630; by facsimile at (512) 344-5189; or by email at www.txlottery.org. The Commission will hold a public hearing on this proposal at 10:00 a.m. on October 16, 2007, at 611 E. 6th Street, Austin, Texas 78701. Comments must be received within 30 days after publication of the proposed new rules in order to be considered.

Subchapter B. CONDUCT OF BINGO

16 TAC §402.210, §402.211

The new rules are proposed under Occupations Code §2001.054, which authorizes the Commission to adopt rules to enforce and administer the Bingo Enabling Act and under Government Code §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of this chapter and the laws under the Commission's jurisdiction.

The proposed new rules implement Occupations Code, Chapter 2001.

§402.210.House Rules.

(a) House rules are rules adopted by the licensed authorized organization that have been developed by its officers to inform players in detail of how the organization is going to conduct its bingo games.

(b) The licensed authorized organization shall establish and adhere to its house rules for the fair conduct of bingo.

(d) The house rules must be posted in a conspicuous manner.

(e) At a minimum, the house rules shall contain the following information:

(1) Effective date of the house rules;

(2) Licensed authorized organization's name and taxpayer number;

(3) How players are expected to gain the caller's attention when they bingo;

(4) How the prize will be split when there are multiple winners of a bingo game;

(5) Contingency plan for inclement weather, power outages, equipment failure, caller error, and other emergencies that occur during the occasion;

(6) Procedure for handling malfunctioning card-minders;

(7) Acceptable payment options for purchase of pull-tabs, bingo cards, and use of card-minders; and

(8) Refund policy.

(f) If applicable, the house rules shall contain the following information:

(1) That the last number called must be on the winning card(s);

(2) That players must be present during the play of a regular game or an event ticket game to be eligible to win;

(3) That players must purchase bingo paper or instant tickets by a certain time to participate in a bingo game;

(4) That persons under the age of 18 are allowed on the premises;

(5) Minimum required purchase; and

(6) Returned check policy.

(g) The information required in subsections (e)(2) - (4) and (f)(1) - (3) of this section must be announced prior to the start of the first game of each bingo occasion.

(h) House rules shall not conflict with the Bingo Enabling Act or the Charitable Bingo Administrative Rules.

§402.211.Fair Conduct.

(a) A fairly conducted bingo occasion is one that is impartial, honest, and free from prejudice or favoritism. It is also conducted competitively, free of corrupt and criminal influences, and follows applicable provisions of the Bingo Enabling Act and Charitable Bingo Administrative Rules.

(b) The licensee is responsible for ensuring the following minimum requirements are met to conduct a bingo occasion in a manner that is fair:

(1) Consistent enforcement of the house rules.

(2) Availability of the following information to all players:

(A) the games to be played;

(B) the order in which the games will be played;

(D) the prize(s) to be paid for each game;

(E) if the prize payout is based on sales or attendance;

(F) the entrance fee and the number of cards associated with the entrance fee, if any; and

(G) the price of each type of bingo card offered for sale.

(3) Announcement to players of any changes to information required by paragraph (2) of this subsection before the first game of the bingo occasion.

(4) Availability of the following information to players prior to the play of a pull-tab bingo event ticket game:

(A) how the game will be played; and

(B) how the winners will be determined.

(5) Inspection of bingo balls and bingo cards, making sure all of the balls and cards are present and not damaged or otherwise compromised. The inspection must be done by a registered bingo worker in the presence of one or more players.

(6) Replacement of bingo balls or bingo cards if balls or cards are missing, damaged or otherwise compromised. Bingo balls or bingo cards shall be replaced in complete sets.

(7) Inspection of the following items, if applicable, to ensure proper working order prior to the first game of the bingo occasion:

(A) bingo console and flashboard, and

(B) bingo hall sound system.

(8) Addressing bingo equipment problems during the occasion.

(A) If a problem is discovered with the bingo balls, bingo equipment, or the operation of the bingo equipment, while the game is still in progress, the game is voided and must be replayed during the same occasion at no additional cost to the players. Each player shall be allowed to replay the bingo cards previously purchased.

(B) If a problem is discovered with the bingo balls, bingo equipment, or the operation of the bingo equipment, after the game has been closed then the licensee shall follow their established procedures in accordance with 16 TAC §402.210(e)(5).

(9) Addressing improper bingo ball calls or placements.

(A) A game may be reconstructed when a bingo ball has been incorrectly called, improperly placed or entered into the bingo board, and the error was discovered prior to the close of the game.

(B) The operator on duty shall assess the situation and determine if the game can be reconstructed. If the game can be reconstructed, the game continues by recalling the game from the point of error.

(D) If a problem is discovered after the game has been closed then the licensee shall follow its established procedures in accordance with 16 TAC §402.210(e)(5).

(10) Caller requirements--The caller shall:

(A) be located so that players can:

(i) observe the drawing of the ball from the bingo receptacle; and

(ii) gain the attention of the caller when the players bingo.

(B) be the only one to handle the bingo balls during each bingo game;

(D) announce the amount of the prize prior to the end of the game, if the prize amount is based on sales or attendance;

(E) ask at least two times, in a manner clear and audible to the players if there are any other bingos;

(F) announce in a manner clear and audible to the players that the game is closed after a pause to permit additional winners to identify themselves. In multiple-part games, the announcement shall specify the part of the game that is closed;

(G) announce in a manner clear and audible to the players whether the bingo is valid. If there is not a valid bingo, then the caller must state in a manner clear and audible to the players that there is no valid bingo and the game shall resume. The caller shall repeat the last number called before calling any more numbers;

(H) announce in a manner clear and audible to the players the number of winners and the total amount of money or prizes awarded for that game;

(I) return the bingo balls to the bingo receptacle only upon the conclusion of the game; and

(J) not, except for emergency situations, use cell phones, personal digital assistants (PDAs), computers, or other personal electronic devices to communicate with anyone during the bingo occasion.

(11) Bingo worker requirements--A bingo worker shall:

(A) have a presence in each playing area while a bingo game is in progress;

(B) not communicate verbally, or in any other manner, the number(s) or symbol(s) needed by any player to win a bingo game; and

(12) Equal opportunity for all players to play and win.

(13) Establishment of procedures to address disputes and availability of those procedures to the players.

(c) All bingo games must be conducted and prizes awarded within the days and times specified on the license to conduct bingo.

(d) All pull-tab bingo event tickets must be sold prior to the occurrence of the event.

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 September 21, 2007.

TRD-200704421

Kimberly L. Kiplin

General Counsel

Texas Lottery Commission

Earliest possible date of adoption: November 4, 2007

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

Subchapter G. COMPLIANCE AND ENFORCEMENT

16 TAC §402.709

The new rule is proposed under Occupations Code §2001.054, which authorizes the Commission to adopt rules to enforce and administer the Bingo Enabling Act and under Government Code §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of this chapter and the laws under the Commission's jurisdiction.

The proposed new rule implements Occupations Code, Chapter 2001.

§402.709.Corrective Action--Audit.

(a) Definition of Corrective Action--An action(s) required by any of the following in order to resolve audit findings or violations of the Bingo Enabling Act or the Charitable Bingo Administrative Rules:

(1) a determination letter resulting from a compliance audit;

(2) an agreed order; or

(3) a decision in a contested case.

(b) Examples of corrective actions:

(1) Reimbursement of funds--Non-bingo funds deposited into a bingo bank account to replenish the account for:

(A) non-permissible expenses; or

(B) bingo proceeds that were not deposited into the account.

(2) Removal of funds--Funds removed from a bingo bank account that are not proceeds from the conduct of bingo.

(3) Additional charitable distribution--Bingo funds disbursed from a bingo account to meet the minimum charitable distribution requirements.

(4) Implementation of internal controls--Controls a licensee or unit develops and implements to minimize or prevent theft or fraud related to its bingo operation.

(5) Implementation of policies and procedures--Written steps and processes a licensee or unit develops and implements to assist in the operation and control of the bingo operation.

(6) Payment of additional prize fees or rental taxes--The amount a licensee or unit must pay for any additional prize fee or rental tax due, including penalty and interest.

(c) If corrective action is not taken as required, the licensee may be subject to administrative disciplinary action such as:

(1) license revocation;

(2) license suspension;

(3) administrative penalty; and

(4) more frequent inspections and compliance audits.

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 September 24, 2007.

TRD-200704465

Kimberly L. Kiplin

General Counsel

Texas Lottery Commission

Earliest possible date of adoption: November 4, 2007

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

Chapter 403. GENERAL ADMINISTRATION

16 TAC §403.101

The Texas Lottery Commission (Commission) proposes amendments to Title 16, Part 9, Chapter 403, §403.101 (relating to Open Records). The purpose of the amendments is to clarify that charges to a person requesting reproductions of any readily available record of the Commission will be the charges established by rule in accordance with the Texas Government Code Chapter 552, Subchapter F, and to change "Open Records Specialist" to "Open Records Coordinator".

Ms. Pyka has also determined that there will be no adverse effect on small businesses, micro businesses, or local or state employment. There will be no additional economic cost to persons required to comply with the amendments as proposed.

Kimberly L. Kiplin, General Counsel, has determined that for each year of the first five years the proposed amendments would be in effect, the public benefit expected from the adoption of the proposed amendments is clarification of the charges to persons requesting reproductions of Commission records, and identification of the agency's Open Records contact person, the Open Records Coordinator.

The Commission requests comments on the proposed amendments from any interested person. Comments may be submitted to Deanne Rienstra, Assistant General Counsel, by mail at Texas Lottery Commission, P.O. Box 16630, Austin, Texas 78761-6630; by facsimile at (512) 344-5189; or by email at www.txlottery.org. Comments must be received within 30 days after publication of this proposal in order to be considered.

Texas Government Code, Chapter 466, is affected by this proposal.

§403.101.Open Records.

(a) Charges for Copies of Public Records. The charges to any person requesting reproductions of any readily available record of the Texas Lottery Commission will be the charges established by rule in accordance with the Texas Government Code Chapter 552, Subchapter F [ ~~the General Services Commission~~ ].

(b) (No change.)

(c) Open Records Requests. The following guidelines apply to requests for records under the Open Records Act, Texas Government Code, Chapter 552.

(1) - (6) (No change.)

(7) All open records requests appointments will be referred to the agency's Open Records Coordinator [ ~~Specialist~~ ] before complying with a request.

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 September 21, 2007.

TRD-200704424

Kimberly L. Kiplin

General Counsel

Texas Lottery Commission

Earliest possible date of adoption: November 4, 2007

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

16 TAC §403.301

The Texas Lottery Commission (Commission) proposes amendments to Title 16, Part 9, Chapter 403, §403.301 (relating to Historically Underutilized Businesses). The purpose of the amendments is to revise the Texas Lottery Commission's adoption by reference of the Historically Underutilized Businesses (HUB) rules so that it accurately reflects the location of the HUB rules within the Texas Administrative Code and the state agency responsible for the promulgation of the HUB rules, Office of the Comptroller of Public Accounts.

Michael Fernandez, Administration Director, has determined that for each year of the first five years the proposed amendments would be in effect, the public benefit expected from the adoption of the proposed amendments is the adoption by reference by the Texas Lottery Commission of the HUB rules that accurately identifies the state agency responsible for the promulgation of the HUB rules as well as the location of the rules within the Texas Administrative Code.

The Commission requests comments on the proposed amendments from any interested person. Comments may be submitted to Sarah Woelk, Special Counsel, by mail at Texas Lottery Commission, P.O. Box 16630, Austin, Texas 78761-6630; by facsimile at (512) 344-5189; or by email at www.txlottery.org. Comments must be received within 30 days after publication of this proposal in order to be considered.

Texas Government Code, Chapter 466, is affected by this proposal.

§403.301.Historically Underutilized Businesses.

The Texas Lottery Commission adopts by reference the rules administered [ ~~promulgated~~ ] by the Office of the Comptroller of Public Accounts [ ~~General Services Commission~~ ] regarding historically underutilized businesses, which are set forth in the Texas Administrative Code, Title 34, Part 1, Chapter 20, §§20.11 - 20.28 [ ~~1 TAC §§111.11-111.28~~ ].

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 September 21, 2007.

TRD-200704423

Kimberly L. Kiplin

General Counsel

Texas Lottery Commission

Earliest possible date of adoption: November 4, 2007

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

16 TAC §403.402

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

The Texas Lottery Commission (Commission) proposes the repeal of Title 16, Part 9, Chapter 403, §403.402 (relating to Exemption from Vehicle Inscription Requirements). The Commission is proposing the repeal of the rule because during Chapter 403 rule review, the Commission determined that there was no reason to re-adopt the rule. The rule is obsolete, no longer reflects current legal and policy considerations, and no longer reflects current procedures and practices of the Commission. The Commission no longer maintains surveillance vehicles and does not anticipating doing so in the future.

Kathy Pyka, Controller, has determined that for each year of the first five years the repeal will be in effect there will be no significant fiscal impact for state or local government. There will be no adverse effect on small businesses, micro businesses, or local or state employment. There will be no additional economic cost to individuals who are required to comply with the repeal as proposed.

Kimberly L. Kiplin, General Counsel, has determined that for each year of the first five years the repeal will be in effect, the public benefit anticipated is the elimination of an unnecessary and obsolete rule.

The Commission requests comments on the proposed repeal from any interested person. Comments may be submitted to Sarah Woelk, Special Counsel, by mail at Texas Lottery Commission, P.O. Box 16630, Austin, Texas 78761-6630; by facsimile at (512) 344-5189; or by email at www.txlottery.org. Comments must be received within 30 days after publication of this proposed repeal in order to be considered.

The repeal is proposed under Texas Government Code, §466.015, which provides the Commission with the authority to adopt rules governing the operation of the lottery. The repeal is also proposed under Texas Government Code, §467.102, which provides the Commission with the authority to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction.

Texas Government Code, Chapter 466, is affected by this proposal.

§403.402.Exemption from Vehicle Inscription Requirements.

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 September 21, 2007.

TRD-200704420

Kimberly L. Kiplin

General Counsel

Texas Lottery Commission

Earliest possible date of adoption: November 4, 2007

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