0001 1 TRANSCRIPT OF PROCEEDINGS 2 BEFORE THE 3 TEXAS LOTTERY COMMISSION 4 AUSTIN, TEXAS 5 BINGO ADVISORY COMMITTEE MEETING 6 7 8 9 10 NOVEMBER 5, 2019 11 3:00 p.m. 12 AT 13 TEXAS LOTTERY COMMISSION 611 East 6th Street 14 Austin, Texas 78701 15 16 17 18 19 20 21 22 23 24 Proceedings reported by electronic sound recording; transcript prepared by Verbatim Reporting & Transcription 25 LLC. 0002 1 APPEARANCES 2 COMMITTEE MEMBERS: 3 William T. Smith III 4 Kimberly Rogers 5 Tommy Duncan 6 Melodye Green 7 Veronica Uriegas 8 COMMISSION STAFF: 9 Michael P. Farrell, Director 10 Tyler Vance, Staff attorney 11 Bob Biard, General Counsel 12 13 PUBLIC: 14 Steve Bresnan 15 Tom Stewart 16 Kim Kiplin 17 Stephen Fenoglio 18 Eddie Heinemeier 19 20 21 22 23 24 25 0003 1 TABLE OF CONTENTS 2 PAGE 1. Call to order . . . . . . . . . . . . . . . . . . 4 3 2. American Pledge . . . . . . . . . . . . . . . . . 4 4 3. Texas Pledge. . . . . . . . . . . . . . . . . . . 4 5 4. Roll Call . . . . . . . . . . . . . . . . . . . . 4 6 5. Meeting Minutes from 10 September 2019. . . . . . 6 7 a) Public comment b) Approval 8 6. Report on Texas Lottery Commissioners meeting - 9 Trace . . . . . . . . . . . . . . . . . . . . . . 7 10 7. Discussion and possible recommendations on rules and regulations regarding bills passed in 2019 11 Legislative session (HB914) and quadrennial rule review. . . . . . . . . . . . . . . . . . . . . . 7 12 a) Public comment 13 8. Discussion and possible recommendations on BAC nominations: 14 a) Using a charity candidate nomination for General Public Member . . . . . . . . . . . . . . . . . 71 15 9. Any old business. . . . . . . . . . . . . . . . 81 16 a) Public comment 17 10. Any new business. . . . . . . . . . . . . . . . 84 a) Public comment 18 11. Set date for next meeting . . . . . . . . . . . 131 19 12. Adjourn . . . . . . . . . . . . . . . . . . . . 132 20 21 22 23 24 25 0004 1 P R O C E E D I N G S 2 TUESDAY, NOVEMBER 5, 2019 3 (3:00 p.m.) 4 AGENDA ITEM 1 5 CHAIRMAN SMITH: We’ll go ahead and get the 6 meeting started. Just real quick, we are mic’d for the court 7 reporter, so it is best not to speak over each other. Make 8 sure you give proper spacing between what you’re saying. 9 I’ll go ahead and call the meeting to order at 10 after 3:00 10 AGENDA ITEMS 2 and 3 11 CHAIRMAN SMITH: And we’ll start off with the 12 American pledge, followed by the Texas pledge, and then roll 13 call. 14 UNIDENTIFIED VOICE: There are no flags here, 15 sir. 16 CHAIRMAN SMITH: Well, we’ll face the door 17 here then, I guess. 18 UNIDENTIFIED VOICE: We’re going to pretend. 19 (Pledges recited) 20 AGENDA ITEM 4 21 CHAIRMAN SMITH: All right. Let’s do the roll 22 call. We’re going to do the roll call. 23 Tommy Duncan. 24 MR. DUNCAN: Here. 25 CHAIRMAN SMITH: Veronica Uriegas. 0005 1 MS. URIEGAS: Here. 2 CHAIRMAN SMITH: Kim. 3 MS. ROGERS: Here. 4 CHAIRMAN SMITH: Melodye. 5 MS. GREEN: Here. 6 CHAIRMAN SMITH: Michael. 7 MR. FARRELL: Here. 8 CHAIRMAN SMITH: We have two not present; Will 9 Martin and Emil Bourgoyne. 10 UNIDENTIFIED VOICE: Jason. 11 CHAIRMAN SMITH: Oh, and Jason, right. That’s 12 right. 13 UNIDENTIFIED VOICE: Three. 14 UNIDENTIFIED VOICE: That’s right. 15 CHAIRMAN SMITH: Okay. We do have enough for 16 a quorum, so I think we’re going to be all right. 17 I would like to take a moment just to welcome 18 our newest member Veronica. She’s here today. She’s from 19 Austin. And if you’d like to tell us -- tell us who you play 20 for or what you do or -- 21 MS. URIEGAS: I have two halls here in Austin. 22 I represent 10 charities, Lucky Lady and Treasure Island, and 23 I’ve been doing this since 1990. So pretty much bingo’s my 24 life. 25 UNIDENTIFIED VOICE: A newcomer. 0006 1 CHAIRMAN SMITH: Yeah. Glad to have you. 2 Glad to have you. 3 MS. URIEGAS: Yes. Thanks. 4 AGENDA ITEM 5 5 CHAIRMAN SMITH: All right. Moving on. 6 Meeting minutes from the 10th of September. 7 MS. ROGERS: I was not here during that 8 meeting, but I did look over the meeting minutes. The only 9 thing I could say is to everyone, be sure that you state your 10 name prior to speaking for the court reporter, because quite 11 a few times it was -- I forget how he put it in there, 12 unknown person. So then you can’t go back and see who did 13 it. So that was my only comment on the meeting minutes. 14 But other than that, I move to approve. 15 CHAIRMAN SMITH: I did read these transcripts. 16 They were very accurate, so -- 17 MS. ROGERS: Uh-huh. 18 CHAIRMAN SMITH: -- other than that, any 19 comments on that, public or otherwise? All right. We have a 20 motion on the table accepting the minutes as published. Do 21 we have a second on that? 22 MS. GREEN: Second. 23 CHAIRMAN SMITH: All right. We have a second. 24 All in favor? 25 (Chorus of “ayes”) 0007 1 CHAIRMAN SMITH: Any opposed? All right. 2 Meeting minutes are approved. 3 AGENDA ITEM 6 4 CHAIRMAN SMITH: All right. Report on Texas 5 Lottery Commissioner’s meeting. We had a good meeting with 6 the Lottery Commissioners. As always, they were glad to hear 7 from us. 8 The main thing that we did ask them for was 9 the -- the approval to accept -- or to change the public 10 member for the BAC and they did grant that. So we’ve got 11 some -- we’ve got four -- four people on the list to approve 12 for the other remaining seat for the Bingo Advisory 13 Committee. And we’ll get into that here just shortly. 14 Other than that, that was pretty much all we 15 had going on at the Lottery Commissioners’ meeting. So we’ll 16 move on to number 7. 17 AGENDA ITEM 7 18 CHAIRMAN SMITH: Discussion and possible 19 recommendations on the rules and regulations regarding bills 20 passed in 2019 legislative session and quadrennial rule 21 review. 22 Everybody should have a little packet in front 23 of them starting at Subchapter B, conduct of bingo. And 24 there’s going to be a lot of comments on this. I know 25 there’s going to be some changes that we’re going to have to 0008 1 add to it, so we’ll start out with that. We’ll go ahead and 2 start out with 402.200, general restrictions on the conduct 3 of bingo. 4 A through E is no changes. We’ll skip on down 5 to the meet of it, the underlying packet G, cash bingo prize 6 includes -- pardon? 7 UNIDENTIFIED VOICE: No, she was just 8 coughing. 9 CHAIRMAN SMITH: Cash bingo prize includes 10 cash, coins, checks, money orders, or any other financial 11 instrument that is convertible to cash. It includes any 12 card, ticket, certificate or similar item with a prefunded 13 monetary value that may be used to purchase goods and 14 services and is reduced in value when used. 15 It does not include a card, ticket, 16 certificate or similar item that has no monetary value and is 17 only redeemable one time for a specific good or service. 18 Comments? Melodye? 19 MS. GREEN: Well, yes, I do. I -- I would 20 like to see where it says -- what is a non-cash prize as a -- 21 I’d like to say bingo gift certificate, that -- that spelled 22 out, because it really doesn’t spell it out. Does that make 23 sense what I’m saying? 24 I mean, it doesn’t say -- it just says if you 25 -- if somebody gets a bingo gift certificate that’s $100, 0009 1 they might not spend all $100 right then. They may want to 2 come back the next day. So I would like this to say 3 specifically that any bingo gift certificate awarded as a 4 prize is a non-cash merchandise prize. Okay. 5 And then the stored value card. I -- you 6 know, I’ve talked to Kim, I’ve talked to a lot of people in 7 the industry, I don’t know anybody that agrees that a stored 8 value card is cash. Actually, on the way here, I was talking 9 to Sharon and -- and we called the Lottery Commission. And 10 we asked to speak to the lottery side, and I said how -- you 11 know, how do you buy a lottery tickets, it is in cash, can 12 you buy it with a debit card, yes. I said, can you buy it 13 with a stored value visa card. I said, I got a $50 visa card 14 for my birthday. Can I use it to buy lottery? No. Why? 15 It’s not cash. AJ told me that, so -- today on the way here. 16 So the lottery doesn’t think it’s cash. So I 17 do not think it’s cash either. Do I think that -- and I 18 understand Michael’s concern. I don’t know if I’m ever going 19 to give away a gift certificate that’s not for bingo. Why 20 would that help my hall? I would like the ability to do 21 that. Again, I’d like to have all the tools I can in my tool 22 box for maybe not today, but maybe two, three, four, five 23 years down the road, to use. But if -- if you’re playing 24 bingo and you get a certificate instead of cash, that doesn’t 25 help my bingo sales, that doesn’t help my pull-tab. If Kim 0010 1 came to play bingo, which would never happen, but if she came 2 to play bingo and she won $500, she’d get 475 in cash and we 3 would be all over her to get that money back in pull-tabs. 4 We’d just go take it from her. I know we wouldn’t, but 5 somebody -- I know, poor Kim. 6 But that’s what -- that’s how -- that’s how 7 bingo survives. Anybody that owns a bingo hall is going to 8 tell you that, that’s how bingo survives; we live on the 9 churn, on the money given. 10 So I -- you know, I don’t see -- but I -- I 11 want to be able to give away an Amazon gift card or a Cracker 12 Barrel. If I give away Cracker Barrel, you can go get 13 chicken fried steak, but you can also go buy those redhots in 14 the little store and you can buy your little bonnet or a -- 15 who know -- you can buy all kinds of things at the Cracker 16 Barrel. Or HEB like Kim said. 17 So anyway, I -- you know, I did not feel that 18 I -- you know, cash is cash. Is it -- and the same thing, we 19 looked up Ken Paxton and for the charitable raffle rules, and 20 he defines cash as cash. And he says a stored value card can 21 be given away in a charitable raffle, because it’s not cash. 22 So I’d just like us to all be on the same page 23 that a stored value card is not cash. Because I’m afraid if 24 you say it is cash here, like I was trying to tell Michael 25 earlier, you know, four, five years down the road when, you 0011 1 know, maybe there are -- they’ve got casinos coming in here 2 or something, that’s going to come back and bite us. Or if 3 we leave it up to interpretation of anybody in the lottery, 4 well this one -- this one is good, but this card was not, or 5 this, you know, Amazon, it’s too much up to interpretation. 6 And every bingo hall I spoke to feels the same way. So 7 that’s all I have to say. 8 MS. ROGERS: I have a question. You said 9 Michael’s opinion. Michael or Tyler, either one, maybe -- I 10 missed the last meeting and maybe I missed it, but short 11 version of why. 12 MR. FARRELL: Well, really the short version 13 is that it -- that it real -- it’s an instrument like cash, 14 because a dollar bill doesn’t buy -- you can’t eat a dollar 15 bill, you cant wear a dollar bill, you can’t do -- it’s -- 16 it’s a tool in order to buy goods or services. That’s the 17 short -- that’s the short version. 18 MS. ROGERS: But if I lay a visa card like 19 Melodye was talking about for $50 here and I lay a $50 cash 20 bill, they’re not the same. They’re very different. Because 21 I can go into Walmart and buy with both of those, but I can’t 22 go into -- you know -- 23 MR. FARRELL: Lottery tickets. 24 MS. ROGERS: Right. Lottery tickets. I can’t 25 buy lottery tickets. 0012 1 MS. GREEN: They don’t -- they say that wasn’t 2 cash. 3 MS. ROGERS: Right. 4 MS. GREEN: And they told me that over the 5 phone today. 6 MS. ROGERS: It’s not cash. Okay. 7 MR. VANCE: So I think it’s -- the policy 8 reason behind it is that it -- it’s reasonably foreseeable 9 that if -- if a debit card, a visa prepaid card, is allowed 10 to be cash, it will just eliminate prize fees -- I’m sorry, 11 if it’s allowed to be merchandise. If we don’t treat it as 12 cash, it’s just a matter of time before all these halls are 13 just handing out all their prizes as debit cards, because 14 debit cards don’t cost anything. A $500 debit card costs 15 $500 because visa makes their money on the back end on the 16 transactions. 17 MS. ROGERS: No, it costs $5, I think; 4.97. 18 UNIDENTIFIED VOICE: Yeah, it’s -- 19 MS. GREEN: But -- this is Melodye. But we’re 20 not talking about debit cards. You’re right. A debit card 21 can be cash. 22 MR. VANCE: Yeah. 23 MS. GREEN: I can buy lottery tickets on a 24 debit card -- 25 MR. VANCE: Right. 0013 1 MS. GREEN: -- and you can come play bingo on 2 a debit card. We don’t take debit cards, because number one, 3 I don’t hold $12,000 cash in the hall -- 4 MS. ROGERS: Right. 5 MS. GREEN: -- to make the payouts. I have to 6 have the cash come in. And I understand your concern about 7 that. But that’s a concern from somebody who doesn’t play 8 bingo and is a lawyer. 9 MR. VANCE: Yeah. 10 MS. GREEN: And I understand that, but we are 11 -- Trace has halls, you’ve got halls, I’ve got halls, are you 12 going to give out debit cards instead of -- not debit cards, 13 I need to stop that. 14 MR. VANCE: Yeah. Prepaid debit card is what 15 they’re calling it. 16 MS. GREEN: A visa card instead of cash. 17 That’s going to hurt your hall. 18 MS. ROGERS: I’m not. 19 MS. GREEN: I’m not either. But I mean, I 20 would like the ability to do that. Don’t tell me I can’t. 21 MS. ROGERS: Sure. 22 MS. GREEN: I think the intent of the 23 legislature says that there’s cash, which is cash, and then 24 there’s value cards, which is value cards. And I am -- I 25 can’t use that visa card to -- to buy bingo with, because 0014 1 it’s not cash. So it’s against the law for me to use it 2 because it’s not cash. 3 MS. ROGERS: If Ken Paxton says it’s not cash 4 and the lottery says it’s not cash, why would the bingo 5 industry say it’s cash? 6 MR. VANCE: So the -- the Paxton -- to 7 differentiate it, it’s in the Raffle Act and they use the 8 word money, which is obviously a bit more vague thancash. I 9 mean, I think it’s a very reasonable argument that cash means 10 cash. But money -- 11 MS. ROGERS: Money. 12 MR. VANCE: -- is a much bigger word, right? 13 MS. ROGERS: Right. 14 MR. VANCE: And so, that’s why it was 15 interpreted and why they -- they determined money means cash, 16 coins, negotiable instruments, but does not include stored 17 value cards. 18 MS. GREEN: Right. 19 MR. VANCE: That’s on the AG’s website. 20 There’s nobody in charge of -- of raffle, there’s no raffle 21 agency, so there’s nobody else to turn to to regulate that. 22 I would distinguish it that the Raffle Act doesn’t generate 23 prize fees based on the award of money or merchandise. And 24 so again, that’s what puts us in an awkward spot. And one 25 way to approach this is just -- just let it go and see what 0015 1 happens, but it seems very foreseeable that if -- if we don’t 2 attach prize fees to this thing that is -- that is very 3 easily obtained and it’s just as fungible as cash paper, that 4 eventually we’re going to run out of prize fees. And that’s 5 what funds the Agency to a large extent. License fees do 6 somewhat, but they’ve been reduced quite a bit over the 7 years. 8 And so it’s, you know, it just needs to be 9 considered that how we interpret this can drastically affect 10 our prize fees, which in turn may have to affect licensing 11 fees if -- if -- you know, we’ve got a long way to go. We 12 had 27-million in prize fees. We could do this thing and 13 then see it might take five, 10 years before prize fees until 14 everyone’s just handing out debit cards. 15 Or maybe they don’t. Maybe like you say you 16 want to give out cash because you want them to turn that cash 17 in to pull-tabs. 18 CHAIRMAN SMITH: This is Trace. I think -- I 19 understand your fear on that, on the prize fee issue. I 20 think there’s a practicality that you’re missing just simply 21 because you’re not exposed to it on a daily basis. 22 MR. VANCE: Sure. 23 CHAIRMAN SMITH: And that’s the churn, okay? 24 And I know you keep hearing that. If we were to give away 25 debit car -- or excuse me, stored value cards on every game, 0016 1 to just get around the five percent, you’re not going to help 2 your hall by doing that, because you’re taking the churn out 3 of the hall. 4 MR. VANCE: Right. 5 CHAIRMAN SMITH: That’s not gonna happen. 6 Cash reigns supreme at a bingo hall. 7 MR. VANCE: Gotcha. 8 CHAIRMAN SMITH: What you also get into is you 9 get into let’s say on a $100 -- on a $100 gift card, or 10 stored value card, a $100 stored value card, it’s going to 11 cost you $6 to get that card loaded, plus, you’re going to 12 have to pay somebody to go buy all those cards at “X” store. 13 So you’re really defeating the purpose when 14 you can just give away $95 on a cash prize. 15 MR. VANCE: Right. So you’re paying 95 for a 16 $100 card anyway. 17 CHAIRMAN SMITH: Yes. Or actually, it’s gonna 18 be cheaper to give away cash than it would be to give away 19 $100 stored value card. Because you’re going to have to pay 20 somebody to go get it, it’s 5.99 to load the card, so you’re 21 defeating the purpose on that. In my opinion. 22 MR. VANCE: Okay. 23 CHAIRMAN SMITH: Also, my -- my second 24 question is, is do you differentiate between a stored value 25 card like visa, and a Walmart card or an Amazon card, where 0017 1 you only get merchandise and you cannot get cash back. Is 2 there a differentiation? 3 MR. VANCE: So it -- and the way the rule is 4 written, yes, a card that was to -- an open-ended card to 5 Walmart for $500 would be treated as cash and have a prize 6 fee, but I think that’s -- that’s another reasonable 7 argument. Somewhere in-between the two is that a -- a visa 8 debit is -- is the most cash-like thing that’s possible 9 because you can use it everywhere in any combination as many 10 times as you want, whereas the Walmart one can only be used 11 in Walmart, only for merchandise in Walmart, and so I think 12 there’s -- there’s a good argument that that should be 13 treated more like merchandise than cash. But the way it’s 14 currently proposed, that -- that would be treated as cash. 15 The only thing that would be merchandise is a -- is a card or 16 certificate or something that’s redeemable a single time for 17 a single, specific thing or service. 18 CHAIRMAN SMITH: Okay. That leads me to my 19 third question. Why -- why is there a limit on the amount of 20 times you can use it if it’s just merchandise you’re getting? 21 Merchandise is merchandise, whether you get a -- like, you 22 know, when you buy fireworks, you can buy one bottle rocket 23 or you can buy a big family pack that’s got a bunch of bottle 24 rockets in it, and they’re all different kinds. What -- does 25 it matter what merchandise you get as long as it’s 0018 1 merchandise? 2 MR. VANCE: I think the idea is that a $500 3 gift card to Walmart is -- is more convertible into cash than 4 a -- I guess certificate for a television at Walmart. But 5 these are all just matters of degrees, none of this is -- is 6 set in stone. 7 CHAIRMAN SMITH: Okay. 8 I know, Kim, you wanted to speak. 9 MS. KIPLIN: Yeah, I just didn’t know -- Kim 10 Kiplin. I didn’t know what you all’s protocol was or 11 process, whether you wanted to go through all the rules or 12 hit them one by one and -- 13 CHAIRMAN SMITH: I think I was taking -- 14 MS. KIPLIN: -- I do have comment -- 15 CHAIRMAN SMITH: -- them one by one if we can. 16 MS. KIPLIN: Okay. 17 CHAIRMAN SMITH: And that way let everybody 18 have a chance to speak on that one rule. 19 MS. KIPLIN: Okay. 20 CHAIRMAN SMITH: That way, it’s -- 21 MS. KIPLIN: Okay. 22 CHAIRMAN SMITH: -- uniform and concise. 23 MS. KIPLIN: And I didn’t want to jump the gun 24 in terms of discussion, but I -- I do have comment. 25 I’m Kimberly Kiplin, I’m an attorney here in 0019 1 Austin, I’m here today on behalf of the Department of Texas 2 Veterans of Foreign War. 3 With regard to the inclusion of the what I’m 4 going to characterize as a stored value card just -- just to 5 call it that, and I know that’s not the way it’s defined, we 6 are opposed to -- we would like the Bingo Advisory Committee 7 to also be opposed -- to including that in the definition of 8 cash bingo prize. 9 I gave you all my written comments, you should 10 have those in front of you. And if you don’t, Trace, I’d be 11 happy to get you another one. 12 CHAIRMAN SMITH: I think I have that. 13 MS. KIPLIN: Okay. 14 CHAIRMAN SMITH: Yes. 15 MS. KIPLIN: And so, for a couple reasons and 16 we -- Melodye Green, you did refer to the -- it was actually 17 General Abbott, Attorney General opinion, on the raffle prize 18 and it does -- it does discuss the term money, but it also 19 includes coins, currency, things that are -- along those 20 lines, readily convertible. 21 What’s interesting about that opinion is that 22 it specifically excluded these stored value cards as -- as 23 money and therefore, not prohibited to be awarded. 24 I think that’s pretty good -- a pretty good 25 analogy, but the other part I put in my comment is under the 0020 1 rules of statutory construction, when you have terms that are 2 not defined and cash is not defined in the Bingo Enabling 3 Act, you look to the ordinary meaning, and you look to the 4 dictionary. And so, I know this is weird, and it’s very 5 simplistic, but it’s intended to be, the Merriam Webster 6 defines cash to mean ready money or money or its equivalent 7 such as a check, paid for goods or services at the time of 8 purchase or delivery. 9 So that’s why we oppose it. We don’t think it 10 should be considered to be cash and therefore, it should be a 11 merchandise prize. 12 I have heard the concern expressed by the 13 staff that geez, you know, if we allow all these store gift 14 cards to be merchandise prize, it’s going to completely 15 undercut the funding of the Division because it’s funded in - 16 - I think in large part, if not all, on -- on prize fees. 17 I think -- I understand that concern, but I 18 think it’s unfounded. I don’t think it’s grounded in fact. 19 I don’t think you have the information to be able to support 20 that particular conclusion. And my suggestion would be that 21 you -- you -- the Commission move forward not including it as 22 cash and you take a trend and you take a look at it. 23 The clients that I have, I’ve talked to them 24 and what I’ve been told is -- is that they don’t really like 25 awarding merchandise prizes, that the blend would be no more 0021 1 than 30 percent of their prizes would be merchandise prize. 2 And -- and so for those reasons, VFW is opposed to have the 3 stored value card as I call it with -- as it’s defined in the 4 proposed amendment -- be included as a cash bingo prize, and 5 we’d like the Bingo Advisory Committee to oppose that as 6 well. 7 And I’m happy to answer any questions that you 8 all or staff have. 9 CHAIRMAN SMITH: Steve. 10 MR. BRESNAN: I have about -- I have a 11 question first and is that our -- are these going into the 12 comment period or are we considered to be making comments or 13 do we need to write -- 14 MR. VANCE: I don’t think so. So she’s going 15 to submit this or she already has in writing and -- 16 MR. BRESNAN: Yeah. 17 MR. VANCE: -- then I assume tomorrow you guys 18 are going to show up and then you can email it. 19 MR. BRESNAN: Sure. 20 MR. VANCE: So yeah, I wouldn’t count -- this 21 is for their benefit, not -- not so -- 22 MR. BRESNAN: Okay. I’m just trying to figure 23 out if I need to be repetitious tomorrow. 24 MR. VANCE: I think so. 25 MR. BRESNAN: And so I will. And I’ll try not 0022 1 to be repetitious today. And we will have comments on this 2 issue. 3 And first of all I’ll say you’ve obviously 4 given a lot of thought about this, you and -- you and Michael 5 and you see these permutations and combinations and 6 gradations and everything and I very much respect and 7 appreciate -- appreciate that. 8 I’d like to address a couple of other things. 9 One is the one time only deal. And I’m -- I’m envisioning 10 like a coupon for Whataburgers that you, you know, you take 11 it and they punch it an you’ve got your -- you’ve got your 12 one this day and, you know, they -- it’s a loss leader for 13 them to get somebody to come in and get the free burger, but 14 you can only get one at the time of purchase and they’re 15 hoping you’re going to get fries at the same time, right? 16 So I think the one time restriction is a 17 little too -- a little too limiting. 18 One of the things that I’ve seen on Amazon is 19 two kinds of cards that you can get. One is an Amazon card 20 that can be used for any of the merchandise that’s on Amazon. 21 And obviously, they’ve got a wide variety of things. I guess 22 it’s analogous to Walmart, but you can only use it for 23 merchandise at Amazon. 24 But Amazon also dispenses cards for other 25 issuers. And so, for example, there’s a Cheesecake Factory 0023 1 card on there and you buy it through the Amazon website off 2 of Amazon, but it’s actually issued by the Cheesecake Factory 3 and can be used not at Amazon, but somewhere else. It’s kind 4 of walking around money, but it’s a limited -- you walk 5 around past Amazon, but you can’t walk around past the 6 Cheesecake Factory. 7 As you can tell, I’ve never walked past the 8 Cheesecake Factory and I’m usually in there. But at any 9 rate, so we’re going to make a suggestion about an alteration 10 that would accommodate that sort of -- of scenario, those two 11 type of scenarios. You don’t mind if I consult my notes 12 again real quick. 13 With respect to the -- whether cash is cash. 14 I don’t want to beg y’all to put fiscal notes on bills that 15 I’m pushing at the legislature, but there was a fiscal note 16 that took account of this, and as I recall, the fiscal note 17 didn’t say there’ll be a loss, but I can’t estimate what it 18 would be. I think we’re all grappling with this now. 19 I respect the fact that you’re concerned about 20 the just general walking around nature of a visa card, 21 although, I think Kim’s right on the law that the plain 22 language test probably, you know, applies in this state. So 23 tomorrow what I will go and do is be more specific and at 24 some point in time, if not tomorrow, I’ll pass out specific 25 language that will bifurcate, at least on this card issue, 0024 1 between the one that can only be used at say, Walmart or 2 Amazon only for merchandise, can’t get cash back for it, and 3 then those that the issuer and the seller of the card are not 4 the same person, but you can still get only merchandise for 5 it. 6 Do I have any other comments? 7 (Laughter) 8 MR. BRESNAN: Okay. 9 MR. VANCE: Okay. So I -- I think in -- this 10 is your Committee, I don’t want to direct you, but I think 11 you -- you have three options on this rule basically. One is 12 the way it’s written, another is kind of what Steve’s saying 13 where prepaid cards, like a general just unbranded Visa 14 prepaid card, would be -- would be cash, but a specific, like 15 a gift card to HEB, a gift card to Amazon, would be 16 merchandise. That’s kind of splitting it down. And then the 17 third option would be Kim’s version of cash means cash, and 18 that’s it. It doesn’t matter if it’s a prepaid card that can 19 be used anywhere, the plain language says cash, and so we’re 20 only going to attach a prize fee to cash. 21 And so I think those -- those are the three 22 options unless you guys can come up with any other hybrids of 23 those. 24 CHAIRMAN SMITH: Tommy, any comments? 25 MR. DUNCAN: I’m good either way, just on the 0025 1 visa, the visa gift cards. I mean, you know, there is a 2 charge with those, so you gotta account with that in your 3 prizes, so, you know, you’re playing a $500 game, it’s really 4 $506. So you’re going to have to account for that. If you 5 buy a Walmart card, you don’t have to worry about it. You 6 buy an Amazon card, you don’t have to worry about it. They 7 don’t charge you for that. 8 MR. VANCE: Right. 9 MR. DUNCAN: But I’m not opposed -- I’m -- I’m 10 kind of in Melodye’s corner. I don’t see a lot of people 11 doing it, but I -- I think they ought to have -- it’s another 12 tool in the box. 13 CHAIRMAN SMITH: Veronica? 14 MS. URIEGAS: I agree, it’s a tool in the box. 15 I have two halls and I’m not going to run out and go buy a 16 whole bunch -- even if they were at no charge, that doesn’t 17 benefit my halls, because I need that money to stay there in 18 the halls. So I mean, I -- I kind of agree. I mean, I do 19 agree. 20 MR. VANCE: You’ve got a comment in the back, 21 Trace. 22 MR. MOORE: Yeah, this is Danny Moore. I’m 23 not sure -- I’m trying to understand why this has become such 24 a big issue. You still can do this, but you have to pay the 25 five percent. Right? Or collect it. So nobody’s stopping 0026 1 you from doing that at this point. 2 What I’m worried about is what it does is it 3 encourages halls that think they’re going to beat the five 4 percent and now they’re going to do something to the 5 detriment of their business. Because if Kim starts doing it 6 and a player comes in your competitive hall and they say 7 well, Kim’s giving away HEB cards, then it forces that guy to 8 do it. 9 And I just -- like Tommy said earlier, it just 10 -- you know, don’t take the money out of the halls, that’s 11 all I got to say. And this is going to encourage it. So 12 think about it. 13 MR. DUNCAN: And more to his point, we’ve been 14 -- we’ve been able to give away cash pull-tabs or merchandise 15 on tickets for years now. I mean, you know, this is really a 16 -- a prize fee thing, you know, so we’ve already been doing 17 the merchandise. So, you know, for people that want to do 18 that. 19 MS. HALE: Angela Hale with Conservative Texas 20 for Charitable Bingo. I mean, the main thing I look at as 21 this is another attempt at over-regulation and over- 22 interpretation, which is outside of the Attorney General’s 23 legal opinion and is trying to constrict bingo in ways that 24 should not be. And just because you think that that’s how it 25 should be doesn’t mean that that’s what the law says or what 0027 1 other charitable raffles, other things, are going by. So I 2 don’t understand why most of the time whenever I attend these 3 meetings it’s always come to the same thing. It’s over- 4 regulation, too many tightening rules that don’t comply with 5 what the Attorney General’s opinion says. 6 MR. FENOGLIO: And Trace, to follow-up on 7 that. 8 MR. VANCE: Steve Fenoglio. 9 MR. FENOGLIO: Stephen Fenoglio, I’m a board 10 member of Texas Charity Advocates. And helped draft some of 11 the provisions in House Bill 914, including this one. 12 We started out with a definition of 13 merchandise. You know, there’s legion case law and AG 14 opinion, ordinary use. And ordinary use according to the 15 Webster’s dictionary, which the AG has cited repeatedly for 16 different opinions, merchandise includes quote, “The 17 commodities of goods that are bought and sold in a business,” 18 quote unquote. 19 I’ve got three examples of an Amazon gift card 20 25 to 500, a Chili’s card $50, and a Chick-fil-A $10. These 21 are sold in the ordinary course and scope of business, 22 period, end of sentence. 23 I’ve either had the good fortune or misfortune 24 to represent bingo clients since the agency inherited the 25 regulation of lottery back in 1994 and the first case I had 0028 1 started in 1994 and Kim was general counsel at the time. And 2 I came over to visit with Kim and then visited with the Bingo 3 Director, and I’ve had the good fortune, sometimes maybe 4 misfortune, to visit with every bingo director and every 5 general counsel, of which there are only two to date, and a 6 whole host of assistant general counsels. 7 And when we on our side of the table in the 8 bingo world wanted to do something that was innovative, I was 9 always quoted the Bible by the lawyers and by the Bingo 10 Director. And the Bible says under Section 2001.051, and I 11 know you guys can read it, because it’s the Bingo Bible, “The 12 Commission had broad authority and shall exercise strict 13 control and close supervision over all bingo conducted in 14 this state so that bingo is fairly conducted and the proceeds 15 derived from bingo are used for an authorized purpose.” 16 Fairly conducted and proceeds used. 17 The proceeds, of course, under the statutory 18 definition is the money that’s leftover after the payment of 19 prizes and reasonable and necessary expenses. 20 The stated purpose when we -- this provision 21 was first started out as the definition of the cash bingo 22 prize was we’ll hemorrhage state money. You won’t. And 23 you’re going to hear tomorrow from bingo hall managers or 24 representatives and managers all over the state that this 25 would be a tool that they would seek to use, but it’s not 0029 1 gonna happen often. It’ll happen on occasion. If a 2 particular customer wanted to try it or a particular group of 3 customers wanted to have an Amazon gift card to play, they 4 could do so. 5 But I go back to what the statutory provision 6 of the Bingo Enabling Act is to regulate bingo, which is in 7 part the point of the Conservative Texans. You’ve got two 8 reasons to regulate, this isn’t one of them. Your fear, 9 which is totally unjustified, that the state will hemorrhage 10 prize fees, that’s not one of them. 11 Is there some way that if I use the Amazon 12 gift card that bingo won’t be fairly conducted, if the hall 13 announces and has rules that say on game 2 of our hall we’re 14 going to give away $100 Amazon gift card. Everyone knows it. 15 Those are the rules that have been posted. The game is 16 fairly conducted. And then if they make money on it and at 17 the end of the quarter they’ve got so much in proceeds, they 18 distribute those proceeds, your job is to make sure that 19 those proceeds are distributed. 20 This is actually a whole lot easier to track 21 if you think about it than cash. So to the extent that 22 there’s a concern about any fraud that might go on, these are 23 traceable. The cash money is not. Ever. 24 I want to turn to the issue that Tyler’s also 25 raised about the visa card. Visa cards are not accepted 0030 1 everywhere or MasterCards or American Express cards. There 2 are a whole host of merchants who don’t accept them, period, 3 end of sentence. And most merchants won’t give you cash 4 back. 5 These gift cards on the back of them that you 6 can buy throughout Texas say no cash unless required by law. 7 And there are a handful of states that require for certain 8 denominations, California’s one, if it’s $10 or less on a 9 Chick-fil-a or an Amazon or a Chili’s, the -- the customer 10 can get cash back. But in Texas, cash is never required to 11 be given back and no merchant in Texas gives cash back. So I 12 want to get ahead of the issue on the notion of quote unquote 13 this being cash. In Texas this is not cash, period, end of 14 sentence. Amazon, Chili’s or Chick-fil-a. 15 Be happy to answer any questions. Thank you. 16 MS. GREEN: Can I say one more -- Melodye 17 Green. I have one more thing to say about the prize fees. 18 We have trained our customers for I don’t know 19 how many years, 25 years, that they win $500, they’re getting 20 475. I’m sure not going to start giving them more. You 21 know, I mean, it -- there -- I don’t -- here’s 500. I -- and 22 if -- if Kim started giving away $500 and you know, Dan was 23 saying if she started giving away $500 visa cards and I was 24 giving away 475 cash, I’m going to get her customers. They 25 get $25 more -- 0031 1 MS. ROGERS: That’s true. 2 MS. GREEN: -- but they don’t want, you know, 3 they don’t -- I mean, I hate gift cards. I always break it, 4 you cant use them, I lose them, I mean, I just hate them. 5 So, you know, personally I don’t like them. But people like 6 cash. And it’s like I said, we’ve spent years training our 7 customers that they’re not going to get that -- that -- all 8 that money. 9 CHAIRMAN SMITH: Yeah, this is Trace. One -- 10 one other thing that I wanted to talk about in the -- the 11 definition of cash bingo prize, I -- I don’t -- nobody’s 12 addressed it yet, but there are certain apps out there, Venmo 13 or CashApp, I’m assuming y’all would consider those cash as I 14 would. So that’s a -- 15 MR. VANCE: I would think so, but that -- 16 MR. FARRELL: That’s how we pay -- a lot of 17 people get paid with Venmo right now. It’s just transferred 18 from your account to their account. 19 MS. ROGERS: You going to pay your bingo 20 customers through Venmo? 21 CHAIRMAN SMITH: CashApp. You can. 22 MS. ROGERS: Wow. 23 CHAIRMAN SMITH: You can. But I’m -- I’m 24 thinking three steps down the road here. 25 MS. ROGERS: A couple. 0032 1 MR. FARRELL: One of the things that we look 2 at -- 3 CHAIRMAN SMITH: I think -- I think the staff 4 -- 5 MR. FARRELL: And I think we talked -- I think 6 I talked to them about Trace, one of the things that I -- 7 that you talk about this, remember, as you move down the 8 road, you want to have a younger clientele in there, a 9 younger clientele doesn’t carry around cash a lot of times. 10 if you go downtown Austin right now and go down on Congress 11 and you want to go to Chi’lantro and buy out of the food 12 truck, they don’t take anything but a piece of plastic. A 13 debit card or a credit card. That’s the only thing they’ll - 14 - and some people only take debit cards now. 15 There was a big story about 7-Eleven talking 16 about getting away from cash and just going to -- because 17 it’s safer for the 7-Eleven. Right? So as you work down -- 18 I’m not picking a side, I’m just saying as you work down the 19 -- the lodge, your clientele may be much more experienced 20 with hey, why can’t I tap your phone or can’t I send it to 21 you some way, shape or form. I’m just throwing that out. 22 That’s the only thing I’m -- I’m -- I’m listening to what you 23 say and I -- and -- 24 CHAIRMAN SMITH: I don’t think that anybody 25 can -- can argue the point that Venmo or CashApp isn’t the 0033 1 same thing as cash. 2 MR. FARRELL: Right. 3 CHAIRMAN SMITH: It’s -- 4 MR. FARRELL: Of course you’ve got ApplePay, 5 you’ve got GooglePay, you’ve got -- 6 CHAIRMAN SMITH: Yeah. All that. ApplePay is 7 what -- 8 MR. FARRELL: It’s another way -- it’s not 9 only to get money, so -- 10 CHAIRMAN SMITH: I think that’s all going to 11 be considered cash by everybody in the general -- 12 MS. GREEN: Yeah. 13 CHAIRMAN SMITH: -- general thing, but I 14 wanted to bring that up and address that to make sure that 15 y’all didn’t think we were advocating for that. Because 16 we’re definitely not. For me personally. 17 So I think we as the BAC have basically as I 18 see it and I may be corrected, is -- well, as Tyler stated, 19 two to three ways to look at this. That we can oppose the 20 proposed rule -- or we can oppose the proposed rule change on 21 402.200, or we can say we’re for it with some changes, to 22 where all stored value cards are accepted or just merchandise 23 stored value cards are accepted. 24 So has anybody got a motion or a idea of how 25 you want to proceed on this? 0034 1 MR. DUNCAN: Well, he brought the examples for 2 option 2, you know. That’s the option you’re looking for, 3 right? 4 MR. VANCE: Yes. 5 MR. DUNCAN: That’s the one I’m for. I’m 6 against the visa, I’m for -- all for the Amazon. As a tool. 7 I mean, you know. 8 CHAIRMAN SMITH: Okay. So you’re saying that 9 you -- stored value cards that only give merchandise back 10 you’re in support of; is that correct? 11 MR. DUNCAN: Well, and he gave us three 12 options. I -- I just think when you -- when you start buying 13 the cards that you have to get -- that you have to pay for, 14 that’s going to be an auditing problem for everybody. 15 MS. ROGERS: I think cash should be cash. 16 MS. URIEGAS: Yeah. 17 MS. ROGERS: Plain and simple. Am I right or 18 wrong? 19 UNIDENTIFIED VOICE: You’re right. 20 CHAIRMAN SMITH: Cash is cash. 21 MS. ROGERS: Cash is cash. Cash is king. 22 CHAIRMAN SMITH: All right. 23 MS. ROGERS: Cash is cash. 24 CHAIRMAN SMITH: Okay. So I think we have a 25 consensus on the board. If somebody wants to make a motion. 0035 1 MR. FARRELL: Well, can I ask the definition 2 and it’s -- correct me if I’m wrong, what you’re saying is 3 you want to use the definition for cash that’s in the Raffle 4 Act. 5 MR. VANCE: I think the way -- one -- one way 6 to do it is just not even have a rule like the law says cash 7 bingo prize just means it’s cash bingo. 8 MR. FARRELL: No, what I’m saying is -- 9 because we’ve got auditors that gotta do all this stuff, so 10 you’re saying basically cash is cash as defined either in 11 Webster’s or in the Raffle Act, which is stored value cards 12 and everything else don’t count. 13 MR. VANCE: So it could be basically the first 14 sentence of this, cash, coins, checks, money orders or any 15 other financial instrument that’s converted to cash. 16 MS. KIPLIN: Well, do you mind -- Kim Kiplin, 17 if I chime in on that? That would be very consistent with 18 the Abbott opinion on the Raffle Act. And there were certain 19 things that were excluded that were not considered to be 20 cash, but there were other items that were, for example, a 21 certificate of deposit. So it -- there is a distinction and 22 it -- it’s a pretty good explanation. 23 MR. FARRELL: Because I think -- don’t get me 24 wrong -- but based on what I’m hearing, and I’m not trying to 25 play the lawyer here at all, but it’s any financial 0036 1 instrument that is convertible to cash. 2 If you have an ATM machine in your hall and you 3 give you a visa card and the visa card allows you to pull 4 cash off that visa card, you’ve given something that’s 5 convertible to cash. 6 UNIDENTIFIED VOICE: I agree. 7 MR. FARRELL: So what I’m saying is, is that 8 you -- if you leave the phrase convertible to cash, then 9 you’re all -- then we’re back at the same place. 10 MS. KIPLIN: Uh-huh. 11 MR. FARRELL: Which is a visa card not an 12 Amazon card. 13 MS. KIPLIN: And then you could track the AG 14 opinion. 15 CHAIRMAN SMITH: Wait. 16 MS. KIPLIN: I’m sorry. 17 CHAIRMAN SMITH: That’s going to be a 18 secondary -- that’s going to be a secondary transaction, 19 though. Because a TV’s convertible to cash if -- if that’s 20 the instrument you’re using. If I give away a TV -- and this 21 happens all the time. We give away a TV at the hall, they 22 take it to the pawn shop, and then they go get cash for it, 23 that’s a secondary transaction, though. 24 MS. ROGERS: You can only hold us responsible 25 for our first transaction. What -- and that’s my personal 0037 1 opinion. I’m not pretending to be a lawyer. 2 MR. FARRELL: Well, I know -- I’m not sure you 3 can write it so that it’s understood. That’s the other 4 piece. 5 MS. KIPLIN: I think you can. 6 MS. GREEN: A stored value card you can buy, 7 go to an ATM, and get cash off of it. You understood that 8 you can do that; you cannot do that. 9 MR. TREVINO: Rene Trevino, Ben White Bingo. 10 With regards to this -- I think Melodye was just about going 11 into it, a stored value visa card that’s not a debit card, 12 it’s a gift card, cannot be -- you don’t get a pin, you can’t 13 get the cash out of it. 14 CHAIRMAN SMITH: Okay. 15 MR. TREVINO: Even ones that are issued by 16 chains locally, you can’t withdraw or you can’t even go back 17 to the bank and say I need my money back from the card. 18 THE COURT REPORTER: I apologize. That 19 gentlemen is too far from the microphone. I didn’t hear him 20 at all. 21 CHAIRMAN SMITH: Can you come closer? 22 MS. GREEN: Come near the mic. 23 CHAIRMAN SMITH: Yeah. 24 MR. TREVINO: Rene Trevino, Ben White Bingo. 25 MS. GREEN: One more thing, Trace. When we do 0038 1 -- you know, pull this down and be concise, I would like it 2 still to say that bingo gift certificates or bingo, you know, 3 merch -- bingo pull-tabs, bingo are not cash, they are a 4 merchandise prize. I’d like to have that in writing. It 5 doesn’t really specifically say that right now. 6 MR. VANCE: Sure, no, it doesn’t. And I would 7 -- we can certainly do that, but yeah -- 8 MR. FARRELL: The Act says it somewhere else. 9 MR. VANCE: -- but if I -- if we end up taking 10 all this stuff out, then I mean, it -- it’s not -- 11 MS. GREEN: All right. 12 MR. VANCE: -- it’s not even really ambiguous 13 any more. I mean, it’s -- yeah, the Act says that all bingo 14 merchandise has no fee, and then so bingo prize -- bingo 15 certificate can only be exchanged. 16 MR. FARRELL: If necessary, we can reference 17 that paragraph somewhere else, just so it’s clear. 18 CHAIRMAN SMITH: So if I understand this 19 correctly. 20 MR. FARRELL: I’m sorry, that was Michael 21 Farrell. 22 CHAIRMAN SMITH: So if I understand this 23 correctly, Melodye, you’re saying that if you can get cash 24 off a card, you don’t want that, but if you can only get 25 merchandise off of a card, you’re for that? 0039 1 MS. GREEN: Correct. A stored value card you 2 cannot get cash back. I know that. 3 CHAIRMAN SMITH: Right. 4 MS. GREEN: We’ve had raffles before and has 5 Rene has, and that’s what you get for raffles, the stored 6 value card. 7 CHAIRMAN SMITH: Okay. 8 MS. GREEN: There’s no way you can -- you 9 cannot -- you cannot take it to an ATM, you cannot take it 10 anywhere. If you go to Walmart and buy something with it, 11 you do not get cash back in change. 12 MS. URIEGAS: I have a comment. 13 CHAIRMAN SMITH: Yes, ma’am. 14 MS. URIEGAS: So the only thing -- somebody 15 here -- I don’t know which one of you said it, but it’s like 16 you -- we should only be held responsible for that first 17 transaction. We did do gift cards early on. At one time I 18 tried it. I thought it’s something new, they want gift 19 cards, everybody’s doing it. They’ll go to somebody around 20 the corner and say hey, you know, I just won this, I really 21 don’t want it, 50 bucks, can you give me -- you know, 45 for 22 it. And so you know, that’s holding me accountable for 23 something somebody else has done, so that’s kind of -- 24 CHAIRMAN SMITH: Yeah. All right. So is it 25 the consensus that the BAC supports a rewrite on 402.200 with 0040 1 the -- how do I phrase this here -- with the caveat that a 2 stored value card would be okay as long as you could not get 3 cash off of it; is that correct? 4 MS. GREEN: Why don’t we just take it out? 5 MS. KIPLIN: Kim Kiplin. I think Tyler 6 Vance’s suggestion is just end the -- with the first sentence 7 under cash bingo prize, and take out the rest of it. And so 8 it says cash, coins, checks, money orders, or any other 9 financial instrument, a stored value card is not a financial 10 instrument, Michael Farrell to you, that is convertible to 11 cash, and I think that tracks the Attorney General opinion on 12 the question on stored value cards as a raffle prize, because 13 it’s not money, it’s not paper currency. 14 CHAIRMAN SMITH: So is everybody good with 15 that? 16 MS. ROGERS: Yes. 17 CHAIRMAN SMITH: Any other comments on that or 18 opposition for/against, anything? No? Okay. So do we have 19 a motion to support that as suggested by Tyler? 20 MS. ROGERS: I make a motion that we accept 21 the first sentence and stop at the word -- a period at cash. 22 MS. URIEGAS: Second. 23 CHAIRMAN SMITH: All in favor? 24 (Chorus of “ayes”) 25 CHAIRMAN SMITH: Any opposed? All right. 0041 1 Okay. 2 CHAIRMAN SMITH: Let’s skip over to -- we’ll 3 skip over to Subchapter C, bingo games and equipment, that’s 4 going to be one, two, three pages back. It’ll be 19, 5 consecutive bingo occasions within one day. More than one 6 bingo occasion conducted by an authorized or conducted by an 7 organization within a 24-hour period without any intervening 8 occasion conducted by another organization commencing at the 9 start of the first occasion. 10 (Pause) 11 CHAIRMAN SMITH: All right. Consecutive bingo 12 occasions within one day. All right. Tyler, you want to 13 give us some comment on that? 14 MR. VANCE: Sure. So the statute -- and I’m 15 just going to quote this verbatim. “If pull-tab bingo 16 tickets are sold by one licensed authorized organization that 17 conducts consecutive bingo occasions during one day, the 18 organization may account for and report all bingo prize 19 ticket sales for the occasion as sales for the final 20 occasion.” 21 And so I felt the need to make a rule of what 22 is consecutive, what are consecutive bingo occasions within 23 one day. I think the statute pretty clearly allows us just 24 for a single organization, although I understand there’s a 25 lot of folks out there that would like this to be able to 0042 1 apply to a unit that’s using multiple organization licenses 2 consecutively. 3 I -- I don’t really see that it’s allowed by 4 the Act, but I understand the -- Mr. Bresnan has an argument 5 that we may be able to rule make it. 6 MR. BRESNAN: Do you mind if I -- 7 MR. VANCE: Go for it. 8 MR. BRESNAN: Mind if I make it? 9 CHAIRMAN SMITH: Steve Bresnan. 10 MR. BRESNAN: Steve Bresnan, sorry. On behalf 11 of the Bingo Interest Group it appears to me, I stand to be 12 corrected on this, but I’ve looked topside and bottom for the 13 requirement that you report -- necessarily report them at the 14 end of each occasion, except as a feature of the existing 15 rules before we pass the bill. And my apologies to everybody 16 that we didn’t pick up units in there at the same time. 17 That’s another screw up on my part. 18 But we did that basically to override the 19 process that’s been imposed by the Commission from time 20 immemorial. You get to the end of an occasion, you account 21 for the pull-tab sales. 22 So there not being any prohibition in the 23 statute and the -- everything that we were doing was trying 24 to override what the prior rules were, I think you have the 25 authority to make this applicable to both units and single 0043 1 charity -- or charities that I -- or locations that operate 2 without a unit. 3 If you’re -- if you reach agreement on -- and 4 frankly, I think the public policy that’s established by the 5 legislature is to favor the creation of units because of the 6 efficiency that’s connected with them and the fact that you 7 can -- that efficiency should lead to better productivity to 8 the bottom line. Not having to do this because of the 9 intervention of the unit form, will lower costs. Otherwise, 10 you having costs of having to stop and do it, even though 11 it’s two organizations in the same unit. 12 So it seems consistent with what the 13 legislature would like, I could probably get a letter from 14 the sponsor saying oh yeah, we’d like -- we’d like that if 15 that is of any use. I understand the opposite argument would 16 be that that which is expressed eliminates that which is not, 17 and there’s some Latin phrase for that that I can never 18 remember. 19 At any rate, if -- if ultimately the org -- 20 the Agency would see fit to do that for all the good reasons 21 I’ve outlined, this definition of consecutive bingo occasions 22 within one day would have to be changed because necessarily 23 there would be an intervening organization between the first 24 one and the last one. And I’m happy to shut up after that. 25 And I’ll put the -- I’ll make those as formal 0044 1 comments and a request. I also think that you would have 2 done the four year review at -- even absent -- whether or not 3 the bill passes. 4 MR. VANCE: Correct. 5 MR. BRESNAN: And in the course of that four 6 year review, we would have been coming around and asking you 7 to amend the rules to allow that to happen. And so, for 8 those reasons, we appreciate the Agency’s consideration in -- 9 in treating the two alike. 10 As contrasted, for example, with the -- the 11 deposit situation. 12 MR. VANCE: Right. 13 MR. BRESNAN: Clearly, there’s an express 14 provision about two days on the unit. 15 MR. VANCE: Right. 16 MR. BRESNAN: So there’s no similar -- 17 MR. VANCE: Right. 18 MR. BRESNAN: -- deal here, so -- for all the 19 good policy reasons that you could have done it to begin 20 with, I -- I think it’s fair to say the legislature didn’t 21 intend to tie your hands with regard to -- with regard to 22 that. And that’s all I got to say. And I’m going to have to 23 leave about 4:15, so thank you very much for letting me speak 24 about that out of turn. 25 CHAIRMAN SMITH: Absolutely. Any other 0045 1 comment on that; Tommy? 2 MR. DUNCAN: No, I -- 3 CHAIRMAN SMITH: No? 4 MR. DUNCAN: -- agree with him. Yeah, I think 5 -- I think the unit should -- you’re under one unit license, 6 you’re under one umbrella. You should be able to re -- you 7 know, do your paperwork at the end of the night. 8 CHAIRMAN SMITH: Everybody good with that? 9 Any public comment on this? 10 MS. ROGERS: Absolutely. 11 MR. FENOGLIO: Stephen Fenoglio with Texas 12 Charity Advocates. We agree with what Mr. Bresnan said. 13 It’s technically not under one license. Each charity 14 continues to have their own license, but they are under an 15 umbrella. 16 CHAIRMAN SMITH: Right. 17 MR. FENOGLIO: Right. But they are under 18 umbrella, and the practical effect for the auditors in the 19 room, I’m sure they would rather audit one set of books than 20 seven sets of books. Can I get a hallelujah and an amen? 21 UNIDENTIFIED VOICE: Hallelujah amen. 22 MR. FENOGLIO: For the bingo division staff, 23 as well as bookkeepers like Kim who it is just so much 24 simpler, so much more efficient, on both sides of the table. 25 And that’s how it’s been done. 0046 1 CHAIRMAN SMITH: Michael, Tyler, any comment 2 on that one? 3 MR. VANCE: I’m going to have to look into 4 Steve’s argument, but I mean, if it’s -- if it is the case, 5 and I -- I’m not aware offhand that there is a requirement in 6 the Act about how this accounting is done, I think it is a 7 rule making thing. But if -- if it is as Steve says it is, 8 then -- then I believe we can -- 9 MR. BRESNAN: Well, corre -- if you find it, 10 you know, correct me. 11 MR. VANCE: Yeah, of course. 12 MR. BRESNAN: There may be some implication in 13 it that I’ve -- that I’ve missed. I think -- I think Steve 14 and I are in agreement that it’s not in there, but you know, 15 you’ll -- 16 MR. VANCE: I’ll check it out. 17 MR. BRESNAN: Yeah. Sure. 18 MR. VANCE: Yeah. 19 CHAIRMAN SMITH: Okay. Would the BAC like to 20 make a motion that we add the unit to that rule making if 21 Tyler sees fit to be able to do that? 22 MR. DUNCAN: Without having to move the 23 charities, yeah. I’ll make a motion to -- for that. 24 CHAIRMAN SMITH: That we support that with the 25 addition of the unit, if Tyler can do it. 0047 1 MS. URIEGAS: Second the motion. 2 CHAIRMAN SMITH: We have a second. All in 3 favor? 4 (Chorus of “ayes”) 5 CHAIRMAN SMITH: Any opposed? That will -- 6 all right. 7 Next line on that is 402.300(e)(1), “Instant 8 pull-tab bingo tickets from a single deal may be sold by 9 licensed authorized organization over multiple occasions. A 10 licensed authorized organization may bundle pull-tab bingo 11 tickets of different form numbers and may sell those bundled 12 pull-tab tickets during their license times. Pull-tab 13 tickets may be sold up to one hour before an occasion, but 14 they may only be redeemed during an occasion.” 15 And it’s striking a winning instant bingo -- 16 any -- “a winning instant pull-tab bingo ticket must be 17 presented for payment during the licensed authorized 18 organization’s bingo occasions at which the instant pull-tab 19 bingo ticket is available for sale.” 20 MS. ROGERS: Michael goes over this in his 21 town hall meeting. 22 MR. FARRELL: Yeah. 23 UNIDENTIFIED VOICE: Same page. 24 CHAIRMAN SMITH: Yeah, it’s the same page. 25 It’s just down a little bit. 0048 1 UNIDENTIFIED VOICE: How -- okay. 2 MS. ROGERS: Michael goes over this in his 3 town hall meeting very well, and he explains it for you. So 4 they’re saying okay. You can sell pull-tab tickets an hour 5 before the occasion starts, but now that you’ve sold it to 6 this customer, bingo customer might I add, even though Susie 7 wins, you can’t trade it, you can’t do anything. She has to 8 sit there until your time starts. So she’s going to look at 9 you and say well, then why did you sell it to me I’m sure. 10 MS. GREEN: Uh-huh. 11 MS. ROGERS: But my question would be, how are 12 you gonna -- how are you gonna -- yeah, monitor that. 13 MR. FARRELL: How are we gonna monitor that? 14 MS. ROGERS: Yeah. It just -- 15 MR. FARRELL: You’re supposed to be following 16 -- you’re supposed to be following the rules. 17 MS. ROGERS: Really? 18 MR. FARRELL: Yes, I understand. 19 MS. GREEN: I’m moving back on that. 20 (Laughter) 21 MR. FARRELL: Trace -- the problem -- the 22 problem you run into -- 23 CHAIRMAN SMITH: Hold on, guys. We’re talking 24 over each other. 25 MR. FARRELL: I’m sorry. Michael Farrell. 0049 1 What Kim brings up is the issue that I’ve seen, is that in 2 the BEA it defines what an occasion is. An occasion is, is 3 when you -- the first ball drops or you redeem a pull-tab. 4 That’s defi -- that’s the way an occasion is defined in the 5 BEA, right? Am I mistaken? 6 MR. VANCE: That’s right. 7 MR. FARRELL: And so, by trying to change the 8 rule, the rule will go against what it says in the BEA, by 9 saying you can redeem a pull-tab. 10 MS. ROGERS: Okay. 11 MR. FARRELL: So you can’t -- we can’t go 12 against the rule, against the BEA by creating a rule. 13 Now, one of the -- and this is -- what I said 14 -- what I said in the meeting, and I’ll say it here because I 15 said it at the meeting, is we -- they’ve also extended the 16 time for an occasion from four to six hours, right? So it 17 doesn’t mean your occasion can’t start and you sell pull-tabs 18 and redeem them, as long as you fill out all the paperwork 19 and do all those steps. And then it’s -- you -- you’ve got 20 that extra hour or two hours before you drop -- the first 21 ball drops, to actually sell pull-tabs and redeem them. 22 Right? 23 I mean, so there’s -- there’s ways ar -- to go 24 within the law, but I can’t write a rule against the law. 25 CHAIRMAN SMITH: Well, I -- this is Trace. 0050 1 You said an occasion starts when the first ball drops or a 2 pull-tab is redeemed. 3 MR. DUNCAN: No, an occasion starts whatever 4 time your license says. 5 CHAIRMAN SMITH: That’s where I’m -- I’m 6 asking -- I’m saying to Michael. 7 MR. FARRELL: Yes. Yeah, you have it the time 8 on your license. 9 CHAIRMAN SMITH: Right. 10 MR. FARRELL: So if you redeem a pull-tab 11 before the time on your license, you’re playing illegal 12 bingo. 13 CHAIRMAN SMITH: Right. 14 MR. FARRELL: Right? 15 CHAIRMAN SMITH: Okay. Yeah, I agree. 16 MR. FARRELL: Because -- because you’re doing 17 a redemption. Because that’s what they say an occasion is. 18 CHAIRMAN SMITH: Right. 19 MR. FARRELL: Right? When you’re doing your 20 license, you’re giving your time period that you’re going to 21 have an occasion. 22 CHAIRMAN SMITH: Sure. 23 MR. FARRELL: The -- it says you can sell 24 things an hour before the occasion, but the -- 25 CHAIRMAN SMITH: Right. 0051 1 MR. FARRELL: -- BEA says you can’t redeem 2 anything -- 3 CHAIRMAN SMITH: Right. 4 MR. FARRELL: -- you can redeem the -- before 5 your occasion license starts. So what I’m saying is, when I 6 said about the time is, you change the time of your occasion 7 on your license. 8 CHAIRMAN SMITH: I get that. 9 MR. FARRELL: And then you -- then you’re in - 10 - you’re in within the law. 11 MS. ROGERS: Right. 12 MR. FARRELL: And -- 13 CHAIRMAN SMITH: I thought you were saying 14 something else. 15 MR. FARRELL: Oh no, I’m sorry Trace. 16 CHAIRMAN SMITH: Okay. 17 MR. BRESNAN: May I ask a question? 18 CHAIRMAN SMITH: Yes, absolutely. Steve 19 Bresnan. 20 MR. BRESNAN: Thank you. And again, I’m -- I 21 appreciate y’all letting me participate so rapid fire here. 22 If I’m the -- the phrase that I’m concerned about and I’m 23 referring to the underline -- the first underlined sentence 24 in (E)(1), and the phrase is during their license times. 25 Almost be the same legal argument we were talking about, 0052 1 about the units? 2 MR. VANCE: Right. 3 MR. BRESNAN: It could be read as a 4 limitation. 5 MR. VANCE: Right. 6 MR. BRESNAN: So I think it should say that 7 you can sell bundle pull-tab tickets from different form 8 numbers and sell it -- and -- and you can -- you can bundle 9 them and you can sell them. Period. And then -- 10 UNIDENTIFIED VOICE: Take them off. 11 MR. BRESNAN: -- take the -- during your 12 license times out and then we fully understand you could only 13 redeem during an occasion. And we talked to the legislature 14 in those terms when we talked about being able to sell an 15 hour in advance of your license time. So I think that would 16 be -- that’s consistent with the bill. 17 CHAIRMAN SMITH: Tyler -- this is Trace. Let 18 me ask you a question and Michael, you may have a better 19 answer for this. It says you may bundle pull-tab tickets of 20 different form numbers. Do we really need a rule to do that? 21 MR. VANCE: So that -- that -- 22 CHAIRMAN SMITH: I mean, that seems just -- I 23 mean, that -- to me, bundling would be taking $50 out of one 24 box and $50 out of another box, and putting a rubber band 25 around it. 0053 1 MR. VANCE: So that -- that -- 2 CHAIRMAN SMITH: Maybe I’m missing -- 3 MR. VANCE: That line was moved. If you go on 4 the next page under Section 8. 5 CHAIRMAN SMITH: Uh-huh. 6 MR. VANCE: So that was just shifting around 7 something that -- 8 MR. BRESNAN: It just reorganized an existing 9 rule. 10 CHAIRMAN SMITH: Okay. 11 MR. VANCE: Yeah, just to try to group 12 everything together where I thought it belonged better. 13 CHAIRMAN SMITH: Yep. Okay. I mean, do you 14 really need that as a rule? I mean, is that -- or is it just 15 -- 16 UNIDENTIFIED VOICE: It was already a rule. 17 CHAIRMAN SMITH: Yeah, I mean, I -- since 18 we’re at that point, I mean, would it -- and Michael, there 19 may be -- there may be a reason for that rule that I’m not 20 aware of. I just -- if you’re selling multiple different 21 types of pull-tabs at the same time anyway, what difference 22 does it make if they’re bundled or not? 23 MR. FARRELL: Well, I -- 24 MR. VANCE: There might have been a time when 25 it wasn’t allowed, so the -- 0054 1 MR. DUNCAN: There was a time. 2 MS. GREEN: It was commingling, that’s what it 3 was called, commingling. 4 MR. DUNCAN: Yeah, we don’t to mess with that. 5 MS. GREEN: It was against the law. Remember 6 that? 7 CHAIRMAN SMITH: We don’t -- 8 MR. BRESNAN: No. 9 CHAIRMAN SMITH: Okay. So we want to leave 10 that alone? 11 MR. BRESNAN: Except -- except the phrase -- 12 Steve Bresnan. Except the phrase during your license time, 13 because we -- the legislature’s now authorized you to sell an 14 hour ahead of your license. 15 CHAIRMAN SMITH: Sell an hour earlier. Yeah. 16 MR. DUNCAN: And also we can start our license 17 two hours earlier. 18 MR. BRESNAN: So that would have -- even the 19 existing one wouldn’t be -- 20 MR. VANCE: Okay. 21 MR. BRESNAN: -- modified. 22 MR. FENOGLIO: But he’s right, the statute did 23 prohibit commingling back in the Billy Atkins generation. 24 MS. GREEN: Right. 25 MR. BRESNAN: All right. We changed that. 0055 1 UNIDENTIFIED VOICE: Of the same form number. 2 MR. DUNCAN: Yeah, same form number. Which 3 that still is today. You shouldn’t commingle the same form 4 number. 5 CHAIRMAN SMITH: So that’s still -- 6 MR. DUNCAN: That should be still a rule. You 7 can’t -- you should not be able to commingle same form 8 numbers together. They have to be different. 9 CHAIRMAN SMITH: Ah, okay. 10 MR. DUNCAN: You see what I mean? 11 CHAIRMAN SMITH: You can’t commingle the same 12 form -- you can’t have two boxes of 677, 677s and 678s, 13 whatever they -- 14 MR. DUNCAN: Bundled together. But you can 15 have 677 and 678 bundled together. 16 CHAIRMAN SMITH: Right. Right. Okay. That’s 17 context. Thank you. Okay. All right. 18 So we’re recommending that we strike “during 19 the license times” is that correct? 20 MS. ROGERS: Yes, sir, I think that’s what 21 they’re on. 22 CHAIRMAN SMITH: Somebody want to make a 23 motion on that one? 24 MS. ROGERS: I make a motion to go with what 25 Steve Bresnan says to strike during their license times so 0056 1 there’s no confusion there. 2 MS. KIPLIN: In Subsection (E)(1). 3 CHAIRMAN SMITH: Yes. 4 MS. ROGERS: Subsection (E)(1), thank you. 5 Melodye seconds. 6 CHAIRMAN SMITH: All right. We have a motion 7 and a second. All in favor? 8 (Chorus of “ayes”) 9 CHAIRMAN SMITH: Any opposed? Motion carries. 10 All right. 402.300(E)(4), going to be at the bottom of the 11 same page. “For a licensed authorized organization that 12 conducts bingo on consecutive occasions within one day,” 13 striking 24-hour period, “the organization may sell or redeem 14 event pull-tab tickets from a deal during either occasion and 15 may account for and report all of the pull-tab bingo ticket 16 sales and prizes for the occasions as sales and prizes for 17 the final occasion.” 18 MR. VANCE: So this one could be, based on 19 Steve’s earlier argument, could be changed to, to add a unit 20 at the top for a licensed authorized organization or unit. 21 MR. FARRELL: No, I would say -- 22 UNIDENTIFIED VOICE: That is per card. 23 MR. FARRELL: -- organ -- I would say the 24 organizations in the same unit or in the single unit. That 25 way we keep it on the organization. 0057 1 MR. BRESNAN: Same unit back to back. Yeah, 2 back -- 3 MR. DUNCAN: No, no, wait a minute. We do the 4 unit, that’s to eliminate having to move all these license 5 times around. 6 MR. FARRELL: No. What I’m saying is, is what 7 you’re saying is that within one day the organizations within 8 a single unit may -- 9 MR. DUNCAN: Right. 10 MS. ROGERS: Right. 11 MR. FARRELL: So one is we’re keeping with the 12 unit, but we’re not taking the organizations out of it, 13 because the unit isn’t really an entity other than a 14 convenience. Right? 15 MR. DUNCAN: Taxpayer number. 16 MS. ROGERS: So how would you propose to -- 17 MR. FARRELL: I’d say the organi -- that a 18 licensed organized -- based on what was said before. It said 19 conduct on consecutive occasions within one day the 20 organizations within a single unit may sell or redeem event 21 pull-tabs or deal during either occasion. 22 MR. DUNCAN: So as long as Charity A first 23 session Friday night, Charity B first -- second session 24 Friday night, as long as they’re in a unit, I can still -- 25 MR. FARRELL: They’re in the same unit, then 0058 1 they can -- 2 MR. DUNCAN: I can still -- I can still 3 account at the end of the night. 4 MR. FARRELL: Yes. 5 MS. ROGERS: Yes. Same unit. 6 MR. DUNCAN: Yes. That’s what we want. 7 MR. VANCE: Yes. 8 MR. FARRELL: Right. Because you don’t want - 9 - I don’t want the word smithing to be multiple units, 10 they’re a different unit. 11 MR. DUNCAN: Right, right, right. 12 MS. ROGERS: So the word will be single unit 13 not same unit. 14 MR. VANCE: I’ve got single, yeah. 15 Organizations within the same -- 16 MR. FARRELL: That’s fine. However it’s -- 17 MR. BRESNAN: My -- my suggestion would be for 18 economy of the use of your time is that I think you’ve got 19 the concept. Once you make the policy call, then you can 20 conform the -- you can conform the proposed rule to -- 21 MR. FARRELL: As I said, it’s somewhere -- 22 somewhere we’ve got it in the rule. 23 MR. BRESNAN: Yeah, you get it. Yeah. 24 MS. ROGERS: Okay. 25 CHAIRMAN SMITH: All right. So we don’t need 0059 1 to make a motion on that one yet; is that correct? 2 MR. DUNCAN: I think we already talked about. 3 MS. ROGERS: Yeah. 4 CHAIRMAN SMITH: All right. Okay. All right. 5 Skipping over to the next page (E)(8). “The winning pull-tab 6 bingo ticket must be presented for payment during the 7 licensed authorized organization’s bingo occasion at which 8 the instant pull-tab bingo ticket is available for sale.” 9 MR. VANCE: Yeah, this was just in a different 10 place previously. It just got moved over, so nothing was 11 changed on it. 12 CHAIRMAN SMITH: Got you. 13 MR. FARRELL: It was moved for emphasis to 14 make sure it didn’t get pulled out. 15 CHAIRMAN SMITH: Got you. Anybody have any 16 comment or opposition to that? Okay. No comment on that 17 one, so I’m going to -- everything’s all right with that. We 18 go to (E)(9), licensed authorized organization’s gross 19 receipts from the sale of pull-tab bingo tickets must be 20 included in the reported total gross receipts for the 21 organization except that an organization that conducts 22 consecutive bingo occasions during one day may account for 23 and report all of the pull-tab bingo ticket sales for the 24 occasions as sales for the final occasion. An organization 25 that chooses to account for pull-tab bingo ticket sales for 0060 1 consecutive bingo occasions during one day as sales for the 2 final occasion, must also account for the pull-tab bingo 3 ticket prizes awarded over those occasions as prizes awarded 4 for the final occasion.” 5 MR. VANCE: Yeah, so this is going to be the 6 same deal. 7 MR. FARRELL: And the rationale behind that -- 8 this is Michael Farrell. The rationale behind that was is so 9 that you didn’t have negative numbers in one occasion and be 10 positive numbers in the -- in the second occasion, because if 11 you tried to account for it, that one that you count for all 12 the things, it would screw up the bookkeeping. 13 MS. ROGERS: Right. Exactly. 14 CHAIRMAN SMITH: All right. Do we have any 15 comment on that? Everything’s okay with that one. All 16 right. 17 We’re going to go skip to the next -- oh 18 sorry. Eddie? 19 UNIDENTIFIED VOICE: Does the word unit have 20 to be -- does the word unit need to be in there also, because 21 it just -- 22 MR. DUNCAN: That’s what we’ve been talking 23 about. 24 UNIDENTIFIED VOICE: Yeah. 25 MR. DUNCAN: They’re going to have to change 0061 1 it to -- 2 UNIDENTIFIED VOICE: You’re going to have to 3 change it to include the unit. 4 MR. DUNCAN: -- amend it before we can do it. 5 MS. ROGERS: Consistently, yeah. 6 CHAIRMAN SMITH: Yeah. Okay. Skipping to the 7 next page, (G)(2), licensed authorized organizations must 8 show the sale of pull-tab bingo tickets, prizes that were 9 paid and the form number and serial number of the pull-tab 10 bingo tickets on the occasion cash report except that an 11 organization that conducts consecutive bingo occasions during 12 one day may account for and report all of the pull-tab bingo 13 ticket sales for the occasion of the sales for the final 14 occasion. An organization that chooses to account for pull- 15 tab bingo ticket sales for consecutive bingo occasions during 16 one day as sales for the final occasion must also account for 17 pull-tab bingo ticket prizes awarded over those occasion as 18 prizes awarded for the final occasion.” 19 And then once again, we’re talking about 20 adding unit to that. Yeah. Okay. All right. Everybody’s 21 good with that. Okay. 22 We will skip over to Subchapter (D) licensing 23 requirements. It’s going to be on the next page. 24 MR. FARRELL: It’s from 14 days to 30 days. 25 CHAIRMAN SMITH: Yes, it’s (A), from 14 days 0062 1 scratching that and going to 30 on that. God bless you is 2 all I’m going to tell you on that one. All right. Any 3 comments on that one? No? Okay. All right. Then we will 4 skip to Subchapter (E), books and records. We’re going to go 5 to the next page. 6 402.500, general record requirements, (D). 7 “An organization that conducts bingo in more than one 8 location must record each occasion separately and include for 9 each occasion the municipality and county where the occasion 10 was held, the total amount of prizes awarded, and the prize 11 fees to be distributed to the state and local governments 12 where the occasion was held if applicable.” 13 Any comments on that? All right. I think 14 everybody’s all right with that. 15 And we’ll skip down to (C), 402.503(C), we’re 16 going to take out “and five percent of the value of the prize 17 is withheld as a prize fee.” This is on a bingo gift 18 certificate. 19 Any comments? All right. 20 MS. GREEN: Just bingo certificates? 21 CHAIRMAN SMITH: Yes, just on bingo 22 certificates. 23 MS. GREEN: Okay. 24 MR. FARRELL: Then you have three on the 25 bottom of that page, Trace? 0063 1 MS. ROGERS: Yeah, start there. 2 CHAIRMAN SMITH: Pardon? 3 MR. FARRELL: You have the third -- 4 MS. ROGERS: The change is going to start 5 here. 6 CHAIRMAN SMITH: Yeah. It’s going to go to 7 402.503(G)(3). Bottom of the page. They’re going to take 8 out second business day and add third business day. 9 MR. FARRELL: And if -- and address units on 10 the next page because you have to. 11 CHAIRMAN SMITH: Yes. 12 MR. DUNCAN: Yeah, because it’s only two days. 13 CHAIRMAN SMITH: Yeah, that’s a -- So and then 14 the next page we’re going to add four occasions as required 15 by the occupations code and by the end of the second business 16 day after the bingo occasion, or units as required by 17 occupations code 2001.435. 18 Any comment on that? 19 MS. ROGERS: I don’t think I can say it 20 publicly. 21 CHAIRMAN SMITH: Okay. 22 (Laughter) 23 CHAIRMAN SMITH: Well, I agree. I agree. All 24 right. We’re going to go to 402.511, required inventory 25 records. We’re going to go to number -- letter (C), 0064 1 “licensed authorized organization may be held responsible for 2 the gross receipts and prizes associated with missing or 3 unaccounted for disposable bingo cards and pull-tab bingo 4 tickets.” 5 Any comment on that? None? Okay. Moving on. 6 All right. We’re going to go to compliance 7 and enforcement, and it’ll be the next page, 402.702, going 8 down to (C)(1), striking an offense committed less than five 9 years before the date of application. Any comment? Skipping 10 to (C)(3) -- excuse me, that was (C)(2), I apologize. 11 (C)(3), they’re just remembering that, so 12 we’re -- 13 MR. VANCE: Well, kind of. So the -- they 14 revised chapter 53, and so I removed our old considerations 15 and put in new ones. But I see that -- that Kim would like 16 to request an inclusion that used to be in there. 17 MS. KIPLIN: That’s right. 18 CHAIRMAN SMITH: On which one? 19 MS. KIPLIN: Subsection (H), we’re not there 20 yet. 21 CHAIRMAN SMITH: 8? 22 MS. KIPLIN: (H). 23 CHAIRMAN SMITH: Oh, okay. Yeah. This -- 24 that was the next one. 25 MS. KIPLIN: Yeah. 0065 1 CHAIRMAN SMITH: So we’ll go ahead and go to 2 Subsection (H). “If the Commission determines an applicant 3 has a criminal conviction directly related to the duties and 4 responsibilities of the licensed occupation, the Commission 5 shall consider the following in determining whether to take 6 an action against the applicant. The extent and nature of 7 the person’s past criminal activity, the age of the person 8 when the crime was committed, the amount of time that has 9 elapsed since the person’s last criminal activity, conduct an 10 work activity of the person before and after the criminal 11 activity, evidence of the person’s rehabilitation and 12 rehabilitative effort while incarcerated or after release, 13 evidence of the person’s compliance with any conditions of 14 community supervision, parole, or mandatory supervision, and 15 other evidence of a person’s fitness, including letters of 16 recommendation.” And then striking the rest of that. 17 All right. We do have a comment. Kim, you 18 want to take the lead on that? 19 MS. KIPLIN: Yes, thank you. Kim Kiplin here 20 once against for the Department of Texas Veterans of Foreign 21 War. 22 And our comment is that if -- we -- what we 23 glean is that the lift was from the statute house bill 24 approval bill -- House Bill 1342. And so, it was a -- just a 25 direct lift and it was put in and then it was a wholesale 0066 1 removal of the existing language of Subsection (H). 2 In particular, the concern that we have is the 3 removal of -- of the ability to consider as mitigating factor 4 an applicant’s veteran status, including their discharge 5 status. This was the subject of a rule making back in 2013 6 when the -- the Bingo Enabling Act or bingo licenses were -- 7 were now subject to the entire body of law on the criminal 8 convictions in Chapter 53. 9 And we put on testimony that we wanted that as 10 a mitigating factor. And the reason at that time, and the 11 Commission did approve that and it was as you can see part of 12 the rule. But the reason is that we have our soldiers that 13 are coming back. And they’re at war, we know that a good 14 many of them suffer from post traumatic stress disorder, a 15 good many are suffering from mental illness, and they may 16 tend to act out in a way that maybe they shouldn’t, which 17 causes them to catch a conviction on, for example, an 18 assault. I think that still is part of the directly related, 19 and that’s the reason we’re bringing it up. 20 We -- we want the -- the Commission to retain 21 that language so that the Commission can consider when you 22 have an applicant coming forward just to be a bingo worker, 23 for example, but not limited to that, right? 24 CHAIRMAN SMITH: Right. 25 MS. KIPLIN: That they can work and -- and 0067 1 they’re not going to be precluded because of this type of 2 consi -- of conviction, at least to consider their veteran 3 status. A good many of them are already, you know, down the 4 line, they’re in -- they’re the subject of a veteran’s court, 5 they’re already in mental health, and we just don’t want them 6 to be precluded from being able to work and make a living. 7 So the ask is please oppose the removal of the 8 -- of (H), the current (H)(1) and allow the Commission to 9 consider that as a mitigating factor in determining whether 10 they’re going to deny an application to be a worker. 11 CHAIRMAN SMITH: So basically you want the 12 veterans exemption put back in? 13 MS. KIPLIN: That’s right. We want it back. 14 MS. GREEN: Just that -- 15 MS. KIPLIN: For the same reasons that we put 16 on the record in 2013. 17 CHAIRMAN SMITH: My only question on that is, 18 is you’re talking about veterans discharge status. I -- I’m 19 not a veteran, but -- 20 MS. KIPLIN: So honorable, general, 21 dishonorable -- 22 CHAIRMAN SMITH: Honorable, general not -- not 23 dishonorable. 24 MS. KIPLIN: Yes. 25 CHAIRMAN SMITH: That’s my only question. And 0068 1 that -- 2 MS. KIPLIN: Well, it’s going to be. When -- 3 when we put it on we knew it’s discharge status, it could be 4 any of it. But clearly, if it’s honorable or even a general 5 -- 6 CHAIRMAN SMITH: Sure. 7 MS. KIPLIN: -- it should be considered. 8 MR. FARRELL: How are we going to know the 9 discharge status, because that doesn’t come across. 10 CHAIRMAN SMITH: That’s on a DD214, isn’t it? 11 MR. FARRELL: It’s on a DD -- no. But they 12 don’t submit the DD214 when they try to get on the registry. 13 MR. VANCE: I think this would be like in the 14 case of a SOAH hearing if we denied somebody. Because what 15 we typically do, somebody comes and they have a theft 16 conviction -- 17 MR. FARRELL: Right. 18 MR. VANCE: -- or we just deny them and tell 19 them please submit letters of recommendation or any of this 20 other stuff. 21 MR. FARRELL: Uh-huh. 22 CHAIRMAN SMITH: Right. 23 MS. KIPLIN: This would -- if I can chime in. 24 CHAIRMAN SMITH: Sure. 25 MS. KIPLIN: The timing on this when this 0069 1 would come up is after y’all run a criminal history, know 2 there’s an issue and you’ve sent the notice, and you’re 3 giving that applicant an opportunity to respond. 4 MR. FARRELL: Okay. 5 CHAIRMAN SMITH: Okay. 6 MS. KIPLIN: And at that time, the -- we would 7 li -- just not the Commission, but the Commission’s staff, to 8 consider -- 9 CHAIRMAN SMITH: So it’ll be on a case by case 10 basis. 11 MR. FARRELL: No, it -- Kim, that’s -- this is 12 Michael Farrell again. That makes sense because the initial 13 application we wouldn’t have any. 14 MS. KIPLIN: That’s right. 15 CHAIRMAN SMITH: Right. 16 MR. FARRELL: If they -- if they send that in, 17 which is what the paperwork that we denied it, they want to 18 send it in, that’s putting it there. That’s a fine place to 19 put it to determine whether it’s -- 20 MS. KIPLIN: And so what we’re asking is just 21 -- just keep status quo, because this is the current rule 22 language. We want it to remain in the current -- in the 23 rule. 24 CHAIRMAN SMITH: And that’s on a case by case 25 basis anyway, so it’s -- 0070 1 MS. KIPLIN: That’s right. It’s a 2 consideration on mitigating factor. It’s not a slam dunk. 3 CHAIRMAN SMITH: Any comments on that, public 4 or otherwise? 5 MS. ROGERS: I agree. I have no problem with 6 that. 7 CHAIRMAN SMITH: I definitely support that. 8 MS. GREEN: Me, too. 9 CHAIRMAN SMITH: Do we need to make a motion 10 on that? I guess so. Yeah, because it’d be adding to that. 11 So we have a motion to -- 12 MR. DUNCAN: I make a motion to support the 13 VFW. 14 CHAIRMAN SMITH: Okay. Veterans of -- 15 MS. ROGERS: I second that motion. 16 CHAIRMAN SMITH: Okay. All right. We have a 17 motion and second. All in favor? 18 (Chorus of “ayes”) 19 CHAIRMAN SMITH: Any opposed? All right. 20 Good deal. 21 All right. 22 MR. VANCE: So this next one I’ll try to save 23 you guys the time. If you turn two pages, you’ll see a list 24 starting with 18 through 28. And down at the very bottom on 25 number 28, the change here is to change the penalty chart to 0071 1 reflect that organizations now have two days to make a 2 deposit -- or I’m sorry, have three days to make a deposit, 3 but units are still -- still within a two day limit. 4 CHAIRMAN SMITH: All right. Okay. Any 5 comments on that? No comment? All right. And that 6 concludes all the changes, correct, sir? 7 MR. VANCE: Yes, sir. 8 CHAIRMAN SMITH: All right. Excellent. Okay. 9 AGENDA ITEM 8 10 CHAIRMAN SMITH: Moving on. I know we’ve got 11 a couple of other things that we’ve got to get to today. 12 Number 8, discussion and possible recommendations on BAC 13 nominations. We’ve got an email from Michael the other day 14 and the Commissioners and staff have agreed to let us use a 15 charity candidate in place of a general public member for our 16 last vacant seat on the Bingo Advisory Committee and Michael 17 gave us four names and they are: 18 Marie Underdown (ph) in Conroe; 19 Polly Gonzales (ph) from Lidl; 20 Katrina Hicks (ph) from Austin; -- excuse me, 21 five names. 22 Cory Harris (ph) of Arlington; and 23 Charles Lee (ph) from Richardson. 24 And would anybody like to make a -- a case or 25 -- 0072 1 MR. DUNCAN: Are any of them here today? 2 MR. FARRELL: No. 3 CHAIRMAN SMITH: No. None are here today. 4 Pardon? 5 MS. GREEN: Melodye Green. Michael was in 6 earlier, we don’t have really anybody from the Houston area 7 or down south in San Antonio, so -- 8 MR. DUNCAN: I’m from the Houston area. 9 MS. GREEN: -- the one from Conroe. 10 UNIDENTIFIED VOICE: Tommy just got me over 11 here. 12 MS. GREEN: Like I said, we -- but -- 13 (Laughter) 14 MS. GREEN: But we don’t have any -- a -- a 15 charity person, bingo person, from Conroe, so. 16 MS. KIPLIN: Kim Kiplin, I -- just an inquiry. 17 Have you all seen the nomination forms? Do you know the 18 background of any of these folks? 19 CHAIRMAN SMITH: No, that’s -- that was -- 20 MS. KIPLIN: Just their names? 21 CHAIRMAN SMITH: That was what I was fixing to 22 bring up. 23 MS. KIPLIN: Okay. 24 MR. FARRELL: We provided what the charities 25 were. 0073 1 MS. KIPLIN: Uh-huh. 2 MR. FARRELL: We gave them the charities that 3 they were attached to, which came off their application form 4 and what we had embossed to make sure we knew their status. 5 MS. KIPLIN: Okay. 6 MR. FARRELL: Usually, what their application 7 form has -- this is Michael Farrell, has name, address, point 8 of contact, what they’re nominating form, check block and how 9 they participate in bingo. And we can provide those to 10 Trace. We can provide those to anybody who wants to see 11 them, it’s just -- 12 CHAIRMAN SMITH: Well, it’s -- go ahead, 13 Veronica. 14 MS. URIEGAS: No, no. She was pointing at me. 15 I don’t know why. 16 CHAIRMAN SMITH: Oh. 17 MS. GREEN: Oh, I was do you have it? Did you 18 get it? 19 MS. URIEGAS: I -- 20 MS. GREEN: Because you’re new, so I -- 21 MS. URIEGAS: I did get -- but I don’t know 22 any background any -- 23 MS. GREEN: Okay. 24 MS. URIEGAS: I don’t have any -- 25 MR. FARRELL: That doesn’t come with -- 0074 1 MS. URIEGAS: I think it -- yeah. 2 CHAIRMAN SMITH: All right. I think what we 3 were trying to determine is if there was any background 4 information on any of the nominees, how long, you know, 5 they’ve been in bingo or who they associate with. That sort 6 of stuff. 7 It -- it -- I think in the past there has been 8 someone to nominate them. I think maybe is that on the form, 9 Michael, who nominated them? 10 MR. FARRELL: Most of these -- most of these 11 folks -- 12 UNIDENTIFIED VOICE: I think there was only 13 one nominated by somebody else. All the rest were self- 14 nominees. 15 MR. FARRELL: Yeah. Most of these are self- 16 nominated. 17 CHAIRMAN SMITH: Okay. 18 MR. FARRELL: Yeah. 19 CHAIRMAN SMITH: All right. Maybe -- 20 MS. ROGERS: Can I ask a question? 21 CHAIRMAN SMITH: Absolutely. 22 MS. ROGERS: We used to do -- and I think I’ve 23 said this before in a meeting, we used to do where one of us 24 would call and interview the nominees, ask them questions, 25 because I used to do it. Ask them all kinds of questions. 0075 1 Their history in bingo, you know, what -- what they like, 2 what they do, everything like that. And I know staff doesn’t 3 have that time. Can we not go back to that or does anyone 4 want to go back to that? Would you all allow us to go back 5 to that? 6 MR. FARRELL: I -- I think based upon what it 7 says in the -- in the BEA and the rules, I don’t think 8 there’s anything against you asking them -- 9 MS. ROGERS: Because it just -- because if I 10 would have done this -- and I’m just using myself here. If I 11 would have done this, of course we’re going to nominate the 12 new lady to do it, just saying. 13 (Laughter) 14 CHAIRMAN SMITH: I knew that was coming. I 15 knew that was coming. 16 MS. ROGERS: If I would have done this, I 17 mean, I would be here and I would tell you, okay, this person 18 has been in bingo for 20 years, this one’s been in it for 30 19 years, this one’s part of a VFW, they know about it. I would 20 be able to give you all some information. You guys don’t 21 have the time for it, I understand that. That’s our job. 22 That’s what we’re here for, is to find out who these people 23 are. 24 MR. FARRELL: We can get you the applications, 25 we can get you the contact information. That’s easy. 0076 1 MS. ROGERS: So my opinion would be a person 2 on the BAC take -- step up and take the responsibility to say 3 I’ll be the BAC nomination person, whatever you want to call 4 it, and Michael only has one person or whoever his staff is - 5 - 6 CHAIRMAN SMITH: Right. 7 MS. ROGERS: -- to send all the nomination 8 forms to, interview them by the next meeting, bring it 9 forward this is the person I think we should go with, you 10 know, and -- 11 MS. URIEGAS: I agree with all that, except I 12 think two people should do it. 13 MS. ROGERS: Okay. 14 MS. URIEGAS: Two people should be -- get 15 together and whether it’s a conference call or whatever. 16 That way there’s three people, you know, you always have 17 backup just -- 18 CHAIRMAN SMITH: Sure. 19 MS. ROGERS: Excellent. And we used to split 20 it. If there was 10 nominations, five and five, you know, 21 and then -- and then talk about it. Yes, sir? 22 MR. MOORE: This is Danny Moore. I made it 23 through that interview process, so it’s not perfect. 24 UNIDENTIFIED VOCE: We remember. 25 (Laughter) 0077 1 MR. MOORE: So there are loopholes. 2 MS. ROGERS: I actually have a questionnaire 3 that I still have probably that I can -- 4 MR. FARRELL: That’s fine. 5 CHAIRMAN SMITH: Michael, are you -- are you 6 okay with that? 7 MR. FARRELL: I’m -- I don’t see any -- 8 MR. VANCE: No, I don’t see any problem with 9 that. 10 MR. FARRELL: I don’t see anything -- Michael 11 Farrell. I do not see anything wrong with that process. 12 CHAIRMAN SMITH: And I -- and I think where 13 Kim is going with that is to try to get the position filled 14 quickly and not have any mishaps or trip ups like we did on 15 the past couple -- 16 MR. FARRELL: No. 17 MS. ROGERS: Well, actually find somebody that 18 -- I mean, they have -- because believe it or not, by talking 19 to them you’re going to find out if they’re self-motivated, 20 if that’s appropriate, or if they’re really looking out for 21 bingo in the state of Texas. Really and truly by asking a 22 bunch of questions, you’re going to figure that out, you 23 know, hopefully. 24 CHAIRMAN SMITH: I agree with that. 25 MR. FARRELL: Okay. My only recommendation is 0078 1 -- 2 MS. ROGERS: Yes, sir. 3 MR. FARRELL: -- do you want it -- or my 4 question is, not my recommendation. My question is, do you 5 want to have this nominee available for the December 6 Commission meeting? 7 MS. ROGERS: Well, I think if we decide on a 8 person or persons to take care of it, we could call and 9 question -- I thought the next meeting was in January? 10 MR. FARRELL: No, the Commission meeting is 11 the 12th of December. 12 CHAIRMAN SMITH: Commission; yeah, the 13 Commission. 14 MR. FARRELL: Right. So what you can do, 15 there’s nothing in the rules for the BEA that says you -- you 16 can’t talk amongst yourselves and come to a determination 17 outside of a meeting. 18 CHAIRMAN SMITH: Yeah, we -- 19 MR. FARRELL: You could -- you could do the 20 interviews, you could route around who you thing are the top 21 folks that you want, and then make a determination and where 22 it comes to the Commission meeting on the 12th, can say we 23 recommend so and so to be on the meeting -- or be on the 24 committee. 25 MS. ROGERS: I’m fine with that. 0079 1 CHAIRMAN SMITH: Okay. Well, do you want to - 2 - 3 MS. ROGERS: I’m fine with that. 4 CHAIRMAN SMITH: Do you and Veronica want to 5 do that? 6 MS. ROGERS: You ready, girl? Let’s do it. 7 CHAIRMAN SMITH: Feet -- both feet first. 8 Both feet first. 9 MS. URIEGAS: Well, I guess it’s a -- scooting 10 back that meant -- yeah. 11 CHAIRMAN SMITH: Well, I was giving you a 12 choice there. 13 MS. ROGERS: Okay. So Veronica and I will 14 head up a BAC nomination committee. 15 CHAIRMAN SMITH: Sure. Absolutely. 16 MS. ROGERS: Okay? We will take -- so if you 17 could, Michael, forward me the -- 18 MR. FARRELL: We’ll get you the applications. 19 MS. ROGERS: And then I will get -- 20 MR. FARRELL: When are you leaving? 21 MS. ROGERS: -- with Veronica. 22 MR. FARRELL: Are you going to be here 23 tomorrow? 24 MS. ROGERS: No, I will not. 25 MR. FARRELL: Craig can get them to you -- 0080 1 we’ll try to get them to you today. 2 MS. ROGERS: That’s fine. Just tomorrow is 3 fine. 4 MR. FARRELL: Okay. 5 MS. ROGERS: That’s fine. 6 CHAIRMAN SMITH: Are they in electronic 7 format? 8 MS. ROGERS: Yeah. You’re going to email them 9 to me, yes? 10 UNIDENTIFIED VOICE: I can scan and email 11 them, that’s no problem. 12 MS. ROGERS: Thank you. 13 CHAIRMAN SMITH: That’d probably be the 14 easiest way to do it, yeah. 15 MR. FARRELL: Yeah. 16 MS. ROGERS: Yeah. And then I will get with 17 you. 18 CHAIRMAN SMITH: So you all can -- okay. 19 Excellent. Excellent. 20 Okay. All right. Any more comments on the 21 BAC nominations, anyone? All right. We’re going to go to -- 22 MR. FARRELL: I do have one more comment, 23 Trace. I’m sorry. Michael Farrell. 24 This is the BAC’s nominee for the committee. 25 It’s not Charitable Bingo Operation Division’s, so the way 0081 1 you get them is -- is it’s no way, sense or form, it’s not in 2 any order. 3 CHAIRMAN SMITH: Right. 4 MR. FARRELL: It’s not who we recommend. I 5 just want to make sure. 6 CHAIRMAN SMITH: Absolutely. 7 MS. ROGERS: Yes. 8 CHAIRMAN SMITH: Yes. Yeah, that’s 9 understood. Yes. 10 MR. FARRELL: I just want to make sure 11 everybody else understands. 12 CHAIRMAN SMITH: Absolutely. Okay. All 13 right. 14 AGENDA ITEM 9 15 CHAIRMAN SMITH: We’re going to go to any old 16 business. Do we have any business from the past meetings 17 that we need to address? 18 MS. ROGERS: Nothing that I know of. 19 MR. VANCE: Trace. 20 CHAIRMAN SMITH: Yes, sir. 21 MR. VANCE: Tyler Vance. Just to bring up the 22 rule review, back in item 7, I know you guys assigned folks 23 who last time were trying to get it done by the end of the 24 year, so really if any -- if any of the attorneys would like 25 to submit anything at anytime, too. We -- we published the 0082 1 notice of the rule review, so the process is out there. 2 We’ve got six months to do it, but I just want to encourage 3 people to -- 4 CHAIRMAN SMITH: Sure. 5 MR. FARRELL: To piggyback on that is you did 6 say you were going to get a subcommittee to do it, if I 7 remember correctly. 8 CHAIRMAN SMITH: We have one. 9 MR. FARRELL: I recommend -- my recommendation 10 is do it sooner rather than later, come in, staff will assist 11 you in copies of the BEA or they’ll -- we’re not going to 12 guide the -- the rule review. 13 CHAIRMAN SMITH: Got you. 14 MR. FARRELL: So but it -- whatever you -- 15 whatever administrative support you need. If you need a 16 conference call number or you need a room that you want to 17 sit down here and do it in, that’s fine and dandy. We’ll 18 arrange that. But just let me know. 19 CHAIRMAN SMITH: I know Melodye was the chair 20 on that and I know Melodye’s been looking at it. I know -- 21 MR. DUNCAN: Did you post the list of the ones 22 we were supposed to go over? 23 MR. VANCE: Yes, sir. It’s in the -- 24 CHAIRMAN SMITH: It’s in our blue book. 25 MR. VANCE: It’s all -- All right. 0083 1 MR. FARRELL: They don’t have that. I don’t 2 think they have blue books. It’s -- if you go to -- if you 3 go to the website underneath “about us” it’ll give you the 4 link to all the rules. 5 CHAIRMAN SMITH: Right. Incidentally, can we 6 get Veronica a book like we have? The blue ones, to the rule 7 review? I think that would probably -- 8 MR. FARRELL: Yeah, we can get her a booklet. 9 CHAIRMAN SMITH: A copy of it? Okay. So I 10 know the attorneys in the public are looking at that. I know 11 Kim is, I know Steve is and Steve Bresnan is as well. So 12 it’s being worked on. We’ll -- are you wanting it done by 13 the December Commission meeting? 14 MR. VANCE: No, by the end of this year, 15 hopefully. By January 1 we would like to, but I mean, that’s 16 -- that’s a pretty aggressive timeline. 17 CHAIRMAN SMITH: Yes. 18 MR. VANCE: You know, we do have more time 19 than that, but we -- you know, we like to set high 20 expectations around here. 21 CHAIRMAN SMITH: Yes. Yes. Just if you’ll 22 please be kind and keep in mind that we have full-time jobs 23 besides the rule review. 24 MR. VANCE: I understand. 25 CHAIRMAN SMITH: So -- 0084 1 MR. FARRELL: But I will tell you that I think 2 at the last Commission meeting it was said that to try to get 3 it all wrapped up by April, will be six months. 4 CHAIRMAN SMITH: Yes. That -- 5 MR. FARRELL: So the next meeting after 6 December is February, the next meeting after February is 7 April. 8 MR. DUNCAN: Yeah, I thought we said February. 9 I have one more question to that. 10 CHAIRMAN SMITH: Yeah. 11 MR. DUNCAN: Can we start a BAC compensation 12 committee or? 13 (Laughter) 14 CHAIRMAN SMITH: Yeah, I think I’m -- I would 15 be in favor for that. All right. Anything else about the 16 rule review? No? Okay. 17 AGENDA ITEM 10 18 CHAIRMAN SMITH: All right. I’m going to go 19 to new business. Very briefly I’m going to address this, and 20 we’re going to move on from it very quickly. I think most of 21 the people in the BAC got a letter in the mail regarding a -- 22 I really don’t know how to categorize it, but the letter we 23 received doesn’t have anything to do with the BAC, we don’t 24 know why we got the letter, it’s not our jurisdiction, and we 25 have no authority, so we’re just going to forget about it. I 0085 1 don’t know what else -- we turned it over to staff, staff has 2 it, and we don’t -- we don’t know why we got it. So we’ll 3 move on from that. 4 MR. FARRELL: Got you. 5 CHAIRMAN SMITH: I know that there’s a couple 6 people in the -- in the public that want to comment on a 7 couple of things. Eddie Heinemeier, I think you want to 8 comment. I know Tom Stewart does. Is Tom still here? 9 MR. STEWART: Y’all have covered all the stuff 10 I was going to. 11 CHAIRMAN SMITH: Okay. 12 MR. STEWART: I agree 100 percent on what 13 y’all are doing. 14 CHAIRMAN SMITH: Okay. 15 MR. DUNCAN: Tom, you need to speak up and 16 identify who you are. 17 CHAIRMAN SMITH: I think you’re going to want 18 to be on record for that. 19 MR. STEWART: Tom Stewart, Executive Director 20 Texas Charity Advocates. 21 With regard to the rules that -- and the 22 issues that were discussed earlier, we are supportive of 23 those positions that the BAC has taken here today. We’ll be 24 testifying tomorrow along those lines. Thank you. 25 CHAIRMAN SMITH: Okay. All right. New 0086 1 business. Eddie, do you want to -- got some -- 2 MR. HEINEMEIER: Yes. First -- 3 CHAIRMAN SMITH: -- things to go over? 4 MR. HEINEMEIER: Yes. There’s three things. 5 The first one I’ll mention, when there are changes made at 6 the Bingo Commission, word needs to get out to tell people of 7 those changes. I’ll give an example. 8 The 21 day rule moving. In the past -- in the 9 2017 legislative session, it was dropped that there was not 10 180 days any more for licensees to get into a hall. No 11 change was made, though, until about two months ago. And I 12 know Kim had the problem, we had the problem with -- we got a 13 call from the licensing saying this person who’s applied for 14 a license has got to be in a hall as of tomorrow or they’ll 15 have to start over. And there had not been any notice put 16 out changing it from the six month rule which we’ve been 17 using to the 21 day rule. 18 Notice needs to be given of things like that. 19 In addressing that, the changing to a 21 day rule once they 20 have their license that they have to be in a hall, is a very 21 -- makes a hardship for the unit, for the charity, for the 22 Bingo Commission, because if you’re trying to put all these 23 things together, it takes more than 21 days. 24 If you have to have -- to get into the 25 occupancy, the county, the city, they get into squabbles with 0087 1 each other. I had a case where the sprinkler system had to 2 be replaced three times because the fire department and the 3 licensing department couldn’t agree what had to be in there. 4 And this drug on for some months to get the hall started. 5 That’s just one example. But, we need to be -- have the six 6 months if -- once somebody is licensed to be active in a hall 7 as it has been in the past. That works better with the 8 licensing people because we can try to put a package 9 together, especially if it’s a unit, we’re having to get, you 10 know, five to seven charities in there or whatever the number 11 is, four to seven, and get all of them on the same paperwork 12 so we’re not having to redo unit agreements and submit it to 13 licensing and the problems we have there. 14 So I’m recommending that we have instead of 15 the -- and I haven’t seen anything in writing yet saying that 16 it’s changed to 21 days. I don’t think anything has been put 17 out about that, but if you speak to people in license, they 18 say no, you only have 21 days once the license is approved to 19 get it going. So -- I’m sorry. 20 MS. ROGERS: No, you’re fine. You’re fine. 21 MR. HEINEMEIER: So I would like to see that 22 stay at the six month period, and that was the recommendation 23 that I’ve spoken to people on this group and I’ve spoken to 24 people in the industry, and they’re saying we need, you know, 25 that six months to be able to do it. 0088 1 MS. ROGERS: It was changed. Michael, do you 2 know when it was changed and why? 3 MR. FARRELL: From what I can tell, this 4 wasn’t changed while I was here, it was changed in the last 5 legislative session, which is ‘17. 6 CHAIRMAN SMITH: Right. 7 MR. FARRELL: When it was pulled out. 8 MS. ROGERS: Well -- 9 MR. FARRELL: So that -- it’s -- there -- 10 before I got here. 11 MS. ROGERS: I’d licensed a charity and I got 12 their letter that states to send their (indiscernible) 7 13 January 1st of this year. And I had 180 days. I licensed 14 another charity, got their letter the end of August -- no, 15 I’m sorry, end of September, and I had 21 days. So -- and I 16 had -- I unfortunately did not print them out, but so it was 17 this year because it was January of this year, I had 180, and 18 then -- I’m just curious when it changed, because I do agree 19 I’m not right now taking a stand on 180 or 21, I’m just 20 asking when it changed and why weren’t we noted -- notified 21 or were we and I missed it somewhere. 22 MR. FARRELL: Well, I can’t tell you why you 23 weren’t notified, because it -- I can tell you that having 24 gone through the rules, it went -- it said 21 days and that’s 25 when I looked at it and that was the rule. So if -- if -- 0089 1 they removed the 180 days. 2 So if they -- that’s all I can tell you, 3 because I don’t -- I don’t personally process the licenses, 4 so -- 5 MS. ROGERS: Got you. 6 MR. FARRELL: -- I can’t tell you what’s 7 happening there. What I will tell you is, is that I’m going 8 to take back from this is that we have to make sure we’ve got 9 consistency in the application to make sure that we’re 10 consistent. 11 Now, I -- I was looking and I can only get our 12 website on my phone, but I do have -- I do know that they -- 13 in the archives there’s a whole bunch of, you know, 14 director’s messages and the like, kind of like what I was 15 saying that came from Alfonzo and those people, it may have 16 said it somewhere in there, but I didn’t go looking for it 17 personally. 18 MS. ROGERS: Because here’s my -- it’s January 19 17th, 2019, I had 180 days. And then on the second charity 20 that I just did -- so I’m just saying it wasn’t back then, it 21 -- it’s now, it was just changed now I guess. October 3rd, 22 2019 I only had 21. 23 MR. DUNCAN: Was it the same person -- was it 24 the same person that sent you that? 25 MS. ROGERS: Those are mine, two -- 0090 1 MR. DUNCAN: Sent you the letter? 2 MS. ROGERS: -- charities that I did. 3 MR. DUNCAN: I understand, though. But the 4 two letters that come from the Lottery, were they from the 5 same person? 6 MR. FARRELL: Yes, they’re probably coming 7 from the same person. 8 MS. ROGERS: I don’t know -- 9 MR. HEINEMEIER: All I know is about two 10 months ago they changed -- 11 MS. ROGERS: Yes, it was the same person. 12 MR. HEINEMEIER: -- to about the 21 days. And 13 I -- no notice or anything to anyone about it and -- 14 MS. ROGERS: Right. 15 MR. HEINEMEIER: -- we need better 16 communication, but then also, I think we need longer time, I 17 -- you know, to keep that. 18 CHAIRMAN SMITH: So I -- this is Trace. I 19 talked to Eddie quite a long time about this. And my 20 question was -- in -- I -- I don’t -- I have never licensed a 21 charity that I didn’t already have my location picked out and 22 pretty much ready to go. Obviously, people do it differently 23 everywhere. 24 Six months seems a really long time to me. 25 Michael, is there an industry norm that’s -- 0091 1 MR. FARRELL: I haven’t looked at -- this is 2 Michael Farrell. I haven’t looked at industry norm and how 3 long it takes. We’ve got people who file a license and 4 they’re going into a unit or they’re going into a building 5 already because there’s a slot there. And then we have some 6 that -- like you say, they’re waiting for the building to be 7 completed. 8 MS. ROGERS: I will say the 180 days didn’t 9 take me that long. 10 CHAIRMAN SMITH: Right. 11 MS. ROGERS: Now, I already had my location. 12 I do understand sometimes when you’re working with the city - 13 - so on the 180 days, when you send the Form N7 back, and I 14 don’t know if I should be asking this to Sherry (ph) or Tyler 15 or who, do you have to be playing? 16 MR. VANCE: No, there’s no requirement that 17 you use a license. 18 MS. ROGERS: You just have to have an address. 19 MR. VANCE: You have to have a license of the 20 -- the application must include the address you intend to 21 conduct bingo in. 22 CHAIRMAN SMITH: So you don’t have to be 23 playing in 21 days, you just have to have an address. 24 MR. VANCE: No. 25 MS. ROGERS: So you wouldn’t necessarily need 0092 1 the 180, you know, exact -- but the -- I will say the 21 2 days, I did it on 20 days and like had 30 minutes to spare. 3 MR. VANCE: So it depen -- if the application 4 -- if you didn’t put anything in there, then it would be an 5 incomplete application and then so you’d have 21 days to 6 submit that information. But all you have to do is put the 7 address you intend to, even if you’re not there yet, and then 8 you can sit on that, it doesn’t cost you anything any more. 9 So yeah, just because you have a license doesn’t mean you 10 have to be using it. 11 MR. HEINEMEIER: Understand. I just -- that 12 needed to have been communicated because no one -- just like 13 you had, I had the same situation. We had to have someone 14 drive from Corpus and someone drive from San Antonio, because 15 they gave us hey, it’s gotta be here today. 16 MS. ROGERS: Because one thing that I know 17 that y’all don’t have to deal with -- well, you do have to do 18 deal with it, but on our end of it, you know, I’ve got to go 19 out and get signatures and everything from charity 20 individuals, and once again, they all have full-time jobs. 21 MR. HEINEMEIER: And the county and the city 22 and -- 23 MS. GREEN: Right. 24 MS. ROGERS: So you know, hunting them down. 25 And then a lot of them are gone on vacation or -- 0093 1 MS. GREEN: I understand the severity of it. 2 CHAIRMAN SMITH: So let me ask a question, 3 Eddie. This is Trace. So to -- to address this, all they’re 4 requiring, and correct me if I’m wrong, all they’re requiring 5 is to have an address in that 21 day period. It doesn’t have 6 to be ready. Does that solve your problem? 7 MR. HEINEMEIER: Well, I’m just saying no one 8 communicated that we only had 21 days when they changed the 9 rule. So that word needs to -- and I get -- 10 MR. FARRELL: I’m going to back up and just -- 11 and I’m not trying to be argumentative at all. 12 MR. HEINEMEIER: Okay. 13 MR. FARRELL: The rule was changed sometime in 14 ‘17. 15 MR. HEINEMEIER: Right. 16 MR. FARRELL: Okay? That it was changed in 17 ‘17 doesn’t preclude us in 2019 going into 2020 to re -- 18 regurgitate -- that’s a bad word, right -- to tell you all 19 the stuff that got changed before. 20 Now, I will -- I will tell you that the 21 discussion in the office was why are we doing it 180 days 22 because the rule says 21 days. Right? Because that’s what 23 it says. 24 MS. ROGERS: Right. 25 MR. FARRELL: Right? So you not being 0094 1 notified I understand -- I understand your position there 2 about not knowing about the change. 3 MR. HEINEMEIER: When you started enforcing 4 it, we should have been informed that it was going to change, 5 because it hadn’t changed since ‘17 and then two months ago 6 all of a sudden there was a different enforcement. 7 CHAIRMAN SMITH: Right. But let me -- let me 8 step in and ask a question, once again. All they’re saying 9 is you have to have an address in 21 days. You can -- once 10 you give them an address, then you can indefinitely -- is 11 that -- 12 MR. HEINEMEIER: I don’t disagree. 13 MR. FARRELL: Is that -- I mean -- no, I’m 14 asking is that -- does that solve your problem? 15 MR. HEINEMEIER: Well, if we had known it had 16 changed. The rule was changed back in ‘17. 17 CHAIRMAN SMITH: I’m talking about going 18 forward. 19 MR. HEINEMEIER: I know. Well, I’m just 20 saying, if the word is put out and everyone knows it, I think 21 it would be better longer than 21 days, but that’s -- I mean, 22 at least we know that it’s a rule, we can apply with it. 23 CHAIRMAN SMITH: Sure. 24 MR. HEINEMEIER: But we really -- especially 25 like you’re saying, start up halls sometimes, when you think 0095 1 you’re going to open, all of the sudden they don’t give you a 2 certificate of occupancy. 3 MS. ROGERS: Well, but you would have your 4 address. 5 MR. HEINEMEIER: But you could put -- I know 6 you could put the -- you could put the charity’s names down. 7 MS. URIEGAS: This is Veronica. That just 8 happened to me. My hall wasn’t ready, so -- but I got all my 9 licenses and I just sat on them literally for three months, 10 but I did -- I did just submit the address and it was fine. 11 So will that solve the problem that -- 12 MR. HEINEMEIER: I think so, yes, and they’ll 13 just start with zero reports because they haven’t started 14 playing yet. 15 MS. ROGERS: Right. 16 MR. HEINEMEIER: No, I understand that. 17 CHAIRMAN SMITH: Okay. So you’re good on 18 that? 19 MR. HEINEMEIER: Yep. 20 CHAIRMAN SMITH: Yeah. 21 MR. HEINEMEIER: We’ve got to be told when 22 they start -- 23 CHAIRMAN SMITH: Yeah, I understand. 24 MR. HEINEMEIER: -- enforcing it. That was 25 the main issue is -- and nobody was informed. 0096 1 MS. URIEGAS: And -- and I want to say 2 something else to that. It’s not only being informed, it’s 3 the consistency. You have one auditor doing one thing and 4 you have one doing another, especially the licensing 5 examiners, nothings always the same. And like you said, one 6 said why are we doing this now, well, it was impli -- it was 7 supposed to be in 2017 and so we just decided just now to do 8 it. And so just like training is -- 9 MR. FARRELL: Okay. 10 MS. URIEGAS: -- needs to be a little bit -- 11 MR. FARRELL: I will tell you that somebody 12 who just decided to do it is me. 13 MS. URIEGAS: And that’s all fine and dandy, 14 but -- 15 MR. FARRELL: So I don’t -- I don’t want -- I 16 don’t want anybody to think it’s my licensing staff or 17 anybody else, I read the rules, I determined that -- what it 18 was doing, because we had licenses sitting out there for 600 19 plus days. Okay? We had licenses sitting out there forever. 20 CHAIRMAN SMITH: Wow. 21 MR. FARRELL: So we said hey, this 120 days is 22 really nice, but it’s not part of the rules anymore. 23 CHAIRMAN SMITH: Yeah. 24 MR. FARRELL: If it’s incomplete, we can send 25 it back. They do it -- one of the reasons it’s my 0097 1 understanding that they had such a long period of time was 2 because it cost you money to get preliminary pre-approved, 3 you didn’t want to spend $3,000 on a license if you -- if you 4 didn’t think you were going to get approved. 5 CHAIRMAN SMITH: Right. 6 MR. FARRELL: Now there’s no more licensing 7 fees. 8 MS. ROGERS: Right. 9 MR. FARRELL: So realistically is you still 10 submit all this stuff, you’re still going to need the bond, 11 you’re still going to need all those -- some of the other 12 stuff after you’ve got actually a playing hall to get the 13 information in, and you get a provisional license I think 14 that’s what -- you’re provisionally approved. 15 MR. HEINEMEIER: That’s -- they have 11, Form 16 11ID is the one where it’s the final approval, you have to 17 send in where you’re going to play and all. 18 MR. FARRELL: But what you’re talking about 19 is, is that we’ve had licensing staff chase us down, 20 conductors, to fill their paperwork. And I said that’s -- 21 while we want to help the charities, after the second 21 day 22 letter, it’s -- we’re not sure they’re serious about it 23 anymore. 24 CHAIRMAN SMITH: Right. 25 MR. FARRELL: So the person that changed was 0098 1 me. 2 CHAIRMAN SMITH: All right. 3 MR. FARRELL: So. My email address is on my 4 business card. 5 CHAIRMAN SMITH: There you go. All right. 6 MR. HEINEMEIER: Is it going to be -- Mr. 7 Farrell, is it going to be 21 days then after they get their 8 approval of their license? That just needs to be put out so 9 the people know about it. 10 MR. FARRELL: It’s -- it’s the way the rules 11 are written. 12 MR. HEINEMEIER: Okay. All right. But I’m 13 just saying even -- it wasn’t enforced for three years -- or 14 two years, so therefore now, the word needs to get out and 15 tell people hey, we are now only giving 21 days, not the -- 16 the 180 days that we were doing two months ago. 17 MR. FARRELL: Steve, you want to say 18 something? 19 MR. FENOGLIO: Yeah. Are we talking about 20 402.400? The rule? It’s -- and I’m sorry, Tyler -- Tyler 21 and I had a conversation earlier, but I left my notes at 22 home. 23 MR. VANCE: Yeah, I just have my -- yeah, so 24 it’s 400 -- so 402.400(D), within 21 days after the 25 Commission has received an application will review it and 0099 1 notify the applicant if additional information is required. 2 (E), if the application is incomplete, the Commission will 3 notify them. They must provide the app -- the information 4 within 21 calendar days. Failure to do so will revoke -- 5 will result in denial of the application. 6 So these are really two different things. 7 This 180 day thing was something that -- I think that was in 8 the law that said you had to have a location within 180 days. 9 At the same time, that 21 day thing was there. Twenty-one 10 days applies to an incomplete application, if you leave 11 anything off, you don’t sign it, it’s incomplete and we give 12 you 21 days to send it back. 13 But I think what was happening is people would 14 submit an application and they didn’t -- their hall wasn’t 15 ready yet, so they just wouldn’t put anything in it. And 16 you’re no longer required to be in a hall within 180 days, 17 but you’re still required to put the address of the hall you 18 intend to play at within 21 days. 19 MR. HEINEMEIER: Well, they send the 21 day 20 letter out and they say these are the things you need to 21 correct. And once you’ve corrected all those, you -- they’ve 22 said all right, everything’s done, put -- you know, tell us 23 the location and give us the bond. And so we would send the 24 bond and the location at that time. 25 And once they tell us do that, that’s when the 0100 1 final 21 days should start. Because once they’ve said 2 everything else is approved, and that’s what I understand to 3 be done -- 4 MR. FARRELL: No, we -- 5 CHAIRMAN SMITH: There is no final 21 days. 6 MR. FARRELL: No, it’s -- to my -- Eddie, I’m 7 confused now, because what -- what we were doing was is we 8 were not giving you more than 60 days to do an application. 9 MR. HEINEMEIER: Okay. 10 MR. FARRELL: Right? So you got the first 21, 11 if you don’t get it, we review it, we send you -- it’s not 12 done in 21, we send you the 21 day letter saying you’ve got 13 21 days to fill it -- 14 MR. HEINEMEIER: Right. 15 MR. FARRELL: -- you didn’t, staff had been 16 making telephone calls, sending emails, trying to track it 17 all down. 18 MR. HEINEMEIER: Right. 19 MR. FARRELL: We said because of some of the 20 length of time, you can do that, but we gotta have a certain 21 point where we just cut it off and say -- 22 CHAIRMAN SMITH: If you’ve got an address, 23 there’s no issue. 24 MR. FARRELL: Right. 25 MR. HEINEMEIER: I understand. I’m just 0101 1 saying so they give -- the question I had is because in the 2 past, they would say all right, we’ve got everything you 3 need, you’re ready to go, send us the bond and send us the 4 location. And that is what I understood was starting the 21 5 days. 6 CHAIRMAN SMITH: Well yeah, if you didn’t have 7 your location on there, your license application is 8 incomplete. 9 MR. FARRELL: Yeah. And what happened was we 10 were holding it and I think what -- the confusion part I 11 think is that not only in -- in ‘17 did they change that, 12 they also got rid of the licensing fees, and the -- the 13 reason you had all those other pieces were because you wanted 14 to save the charities a lot of money, because some of them 15 were non-refundable, we were refunding things back and forth, 16 we’re doing a lot of paperwork. 17 So since -- they all left at the same time if 18 I -- correct me, I wasn’t here. 19 MR. FENOGLIO: You’re correct. 20 MR. FARRELL: It was BMF. 21 UNIDENTIFIED VOICE: Before Michael Farrell. 22 MS. ROGERS: Before Michael Farrell. 23 MR. FARRELL: Yeah. Yeah. 24 CHAIRMAN SMITH: All right. Okay. So we’re 25 good on that issue. Let’s -- let’s move on to the next issue 0102 1 for time. 2 MR. HEINEMEIER: All right. So now I’m -- now 3 I’m just saying something should be put out letting people 4 know this, because they don’t all know it. Just like when I 5 told Kim she said no, that hasn’t changed, but then she had 6 it happen. 7 MR. FENOGLIO: I think a lot of people know 8 it, Eddie, and I tried to get a response from you, so -- but 9 what I hear you saying is you were given 21 days to get this 10 address, and that was too short? 11 MR. HEINEMEIER: Well, what I -- the final 12 application is what I’m saying. After they filed the seven - 13 - they said all right, we’ve ans -- you’ve answered 14 everything, everything’s fine now, give us a location and the 15 bond and you’re -- you’re licensed. 16 CHAIRMAN SMITH: Right. 17 MR. FENOGLIO: And so what’s the problem with 18 that? You had 21 days notice to give them an address. 19 MR. HEINEMEIER: Well, and -- two months ago 20 they gave us six months to do that, not 21 days. 21 MR. FENOGLIO: What difference does it make if 22 you were notified you had 21 days, see, that’s what I’ve 23 never understood. 24 MR. HEINEMEIER: All right. And I’ve repeated 25 this to you multiple times. Six weeks ago or two months ago, 0103 1 that was not the way they were doing it. 2 CHAIRMAN SMITH: What difference does it make? 3 The ADC tells you -- 4 MR. HEINEMEIER: Because they weren’t told. 5 CHAIRMAN SMITH: Okay. All right. Moving on. 6 Eddie, next point. 7 MR. HEINEMEIER: All right. The other point 8 is the back rent, which was passed for 120 days. I’ve had 9 commercial lessors in halls and things saying, you know, it 10 costs half a million to a million and a half to set up a hall 11 or if they take over an existing hall that’s failing, they 12 have to go in and of course, they’ve got to pay utilities, 13 pay, taxes, all the other things, the distributors. If you 14 don’t do that within 30 days, you get on the delinquent list. 15 The last thing that is paid is rent. And for these new halls 16 and things starting up, they need more -- in fact, one of the 17 things that keeps up, they also -- if they -- right now with 18 120 day rule, it’s a loan if it’s more than 120 days. 19 And attorneys I’ve talked to and everything 20 said that is not a loan, it’s a delay in items of expense, 21 and there’s been arguments back and forth. 22 I’ve got commercial lessors who are saying 23 hey, this doesn’t work for starting up new halls, because we 24 don’t -- we can’t get our rent and they -- they want to take 25 it to court. I’ve said let’s not do that, let’s go back and 0104 1 see if we can get it at 180 days, if we can get this at 180. 2 They’ve said we don’t like it, but we will concede to that. 3 So they’re wanting 180 days on back rent, not 4 120. 5 CHAIRMAN SMITH: Let me -- let me comment real 6 quick. Eddie, we visited this months ago and we had multiple 7 meetings on this 120/180 day deal. And we didn’t hear 8 anything from you on that. We went through the whole 9 proposed rule making process on that. 10 It was in the Texas Register, it was -- we 11 talked about it in all our meetings, we talked about it in -- 12 at TCA board meetings and the TCA opted not to endorse 13 anything on that on any back rent, and it -- it -- the BAC 14 voted to support 120 days at the staff’s recommendation. And 15 now you’re coming back and you’re asking us to -- your 16 petitioning the Bingo Advisory Committee to go back to the 17 Commissioners to ask them to open up the rule making process 18 again on the back rent to make it longer to get back rent. 19 MR. HEINEMEIER: Yes, I am. I’ve spoken to 20 everybody on your group here and -- 21 CHAIRMAN SMITH: No, it’s not my group. 22 MR. HEINEMEIER: Well -- 23 MR. DUNCAN: It’s not my group. 24 MR. HEINEMEIER: -- excuse me, the BAC, excuse 25 me. All right. And they’ve all say yes, they feel this 0105 1 should be longer, too. We shouldn’t have acted. I -- when 2 you’re saying I didn’t respond on this, I am -- I personally 3 was out of the country at the time, I had commercial lessors 4 and things that said they had -- had addressed it with 5 different people and they thought it wasn’t going to be cut 6 back to 120. It did get that. I -- I’m sorry, that’s what 7 happened. 8 CHAIRMAN SMITH: All right. 9 MR. HEINEMEIER: They’re just saying now they 10 need more time than 120 days. They don’t feel it -- you 11 know, now it was in the rule, too that they can sue the 12 charities and the commercial lessors. We don’t want to sue 13 the charities, that’s not the issue. The charities don’t put 14 any money up usually to get into these halls, the commercial 15 lessor gets it going, it takes them more than six months to 16 usually make it profitable. But they’re saying they’re 17 willing, if it can be for six months or 180 days excuse me, 18 that that would be acceptable and they will just -- they will 19 accept it. But they just said 120 days is not long enough. 20 CHAIRMAN SMITH: Well, let me ask you one 21 question. How would it go -- how would it benefit the 22 charities if it went from 120 to 180 days. 23 MR. HEINEMEIER: The way it var -- there’s 24 halls that people are thinking of starting up and things and 25 they’re saying hey, it’s going to cost us too much, we’re 0106 1 going to lose too much money, we need more time for that to 2 be made up. And we’ve got charities that want to get into 3 bingo halls, they can’t afford it, they don’t have the money 4 up-front, so that’s why. 5 And I’m just saying this is -- this is what 6 I’ve had different people tell me. I think this does benefit 7 the charities, because it’s letting them get into a hall, we 8 can open up some more halls. I’ve got nine halls that people 9 want to open up within the next year, and they’re thinking 10 about this because of this 120 day rule. 11 MS. URIEGAS: Can I make a comment? 12 CHAIRMAN SMITH: Yes. Absolutely. 13 MS. URIEGAS: Okay. So I know coming late to 14 this party here, but so because I have just recently opened a 15 hall, 10 days, I -- this is -- I had a hall on North IH35 and 16 it was profitable, it did pretty well, and we had competition 17 on Riverside. There was an opportunity for me to move in 18 there. I was able to go in the first day and make money. 19 I had no problem paying $40,000 a month rent. 20 Now, we have moved out of that location 21 because they’re going to build condos there, so we are now at 22 a new location and I can understand the struggles from that 23 end, because I’ve put over a half a million dollars into this 24 project and right now, my first 10 days have not been like 25 they were on my first opening day on Riverside. 0107 1 And you know, I -- I kind of -- you know, it’s 2 going to -- hit or miss, and I know it’s going to take me 3 time to grow, so I’m kind of waiting to hear how this is 4 going to affect me, because now instead of making money in 5 the first, you know, having 180 days, I only have 120 days to 6 make sure I get some of my money back. And I mean, as the 7 lessor, not personal, but so I mean, I can understand the 8 struggle. As and I’m not a -- I don’t have deep pockets. 9 I’m trying to do the best for my charities. 10 I just took in a new VFW and you know, they’re 11 scrimping for every dollar and so I want to be able to get 12 them money, but I mean, if I don’t succeed in the next three 13 months, then everything’s going to be -- it’s just a 14 struggle, so I mean, I can understand the struggle. 15 MR. MOORE: Danny Moore. 16 CHAIRMAN SMITH: Danny. 17 MR. MOORE: Why is the rule on this? Why is 18 there a period of going back? Why shouldn’t it just be a 19 business thing that -- 20 MR. FARRELL: Because the BEA says -- the BEA 21 says lessors cannot loan money to charities. 22 MR. MOORE: Okay. 23 MR. FARRELL: And so it -- after a certain 24 period of time it becomes a loan. 25 MS. KIPLIN: So Kim Kiplin, I don’t want to 0108 1 belabor the point. I did comment on behalf of the VFW during 2 the rule making period, and we were in opposition to -- to 3 establishing a timeline and we were in opposition of the -- 4 the Commission deeming a business transaction as a loan when 5 they’re not a party to that transaction. And the fact that 6 they’re requiring to be able to get around that, right, get 7 around that, requiring there to be a court order, which in my 8 view, and I’ve said that and it was rejected but I stand on 9 it, I think it’s against public policy to encourage 10 litigation when a -- parties would normally work it out. 11 And to go in front of a judge and say Judge, I 12 don’t know why we’re here. We’re only here because the 13 Lottery Commission has a rule that says I -- I can’t get my 14 money back or I’m going to lose my license because they’re 15 going to deem it a loan unless I have an order. So I’m tying 16 up judi -- the court’s time on something that could have -- 17 could have been handled by the parties in normal business 18 transactions. 19 I don’t think it’s the purview of the 20 Commission to deem a business transaction as a loan when 21 they’re not parties to the loan and parties to the 22 transaction and they don’t know if that in fact is a loan. 23 So -- 24 MR. MOORE: I’ve got a question. Wait, I’m 25 not -- 0109 1 MS. KIPLIN: It’s all in terms of why -- the 2 only reason I’m giving you this information now and tying up 3 everybody’s time is because you asked the question. 4 MR. MOORE: Right. 5 MS. KIPLIN: So you -- I -- makes me think you 6 weren’t familiar with the rule making at the time. 7 MR. MOORE: No. But I just was curious. I 8 don’t think they should be involved in it either honestly, 9 but what I was going to ask is so is it -- can this go back 10 or is this from the date this rule is put in place going 11 forward? 12 MR. FARRELL: It was the date -- it’s the date 13 the rule was put in place forward, but historically, one of 14 the complaints was we were using 90 days, give or take. 15 Right, Steve? 16 MR. FENOGLIO: Yes. 17 MR. FARRELL: We were using 90 days give or 18 take, and the time period that came back that everybody feels 19 was reasonable was 120 days and triple net and quarterly 20 bills and all those other words you use that I don’t -- I 21 understand, but I mean, all this -- 22 MS. ROGERS: Well, but -- 23 MR. FARRELL: -- but that -- that was why we 24 went to 120 days. 25 MS. ROGERS: I just have one quick question. 0110 1 You said that if it goes beyond 120 days it’s a loan. Is 2 that -- I look towards the lawyers -- is that legally 3 written? 4 MS. KIPLIN: They deemed it by rule. 5 MR. VANCE: It’s in the rule. 6 MR. FENOGLIO: It’s in the rule. 7 MS. KIPLIN: It’s in the rule. The Commission 8 has deemed something that goes beyond 120 days, you collect 9 that, that’s considered a loan, and that makes you ineligible 10 for a lessor’s license. So it was the way that the 11 Commission decided to hook a lessor in a business transaction 12 when they were -- when in my experience it -- and it may be 13 limited, other people have other experience, it’s parties 14 that are trying to -- to work it out. To your point, 15 Veronica, in new halls where you have an extended time 16 period. 17 MS. URIEGAS: Thank you. 18 MS. KIPLIN: But in my view it’s just -- it’s 19 against public policy to encourage litigation and that’s what 20 they’re -- that’s the -- 21 CHAIRMAN SMITH: If I remember correctly, it 22 wasn’t just loan that was used, it was extension of credit. 23 Was that correct or am I -- 24 MS. KIPLIN: Not in the rule. 25 CHAIRMAN SMITH: -- thinking of a different 0111 1 rule? 2 MS. KIPLIN: Not in the rule. It -- it says 3 loan. 4 MR. VANCE: Yeah, it says a loan shall be -- 5 CHAIRMAN SMITH: Okay. 6 MS. KIPLIN: Deemed. 7 MR. VANCE: Right. 8 MS. URIEGAS: And so what my last statement, 9 is that you’re asking me to be profitable from day one so I 10 can meet all my expenses. What other business industry are 11 you profitable day one to meet all your expenses? 12 MR. FARRELL: We’re -- this is Michael 13 Farrell. We’re not asking you to be profitable. We’re not. 14 We’re asking that the charity’s debt, when they come into a 15 hall, that they know what the rent’s going to be, that 16 they’re not going to be charged $12.80 a session rent, we’ve 17 got somebody who did that, and at least that’s what the 18 numbers plan out to be, for six months and then be charged, 19 seven, eight, $900 a month for rent, because that’s not -- 20 UNIDENTIFIED VOICE: Session. 21 MR. FARRELL: -- good for the -- I’m sorry? 22 CHAIRMAN SMITH: Per session. 23 UNIDENTIFIED VOICE: Per session. 24 MR. FARRELL: Per session, I’m sorry. That’s 25 not good for the charity. So what the deci -- we’re -- we’re 0112 1 looking -- what we’re doing is good for the charities. We’re 2 looking to do what’s good for the charities. I want to 3 rephrase that. 4 MS. URIEGAS: I’m sorry to interject here, but 5 how can it not be good for the charities if they were not 6 paying and being able to stay there and to grow this 7 business? How is that not good for the charity? 8 MR. FARRELL: Well -- 9 MS. ROGERS: Because the charity’s still in a 10 bingo hall. 11 MS. URIEGAS: And they’re allowed to continue 12 -- 13 MR. FARRELL: But is it -- is the charity -- 14 MS. URIEGAS: -- to make money -- 15 MR. FARRELL: -- making money for its 16 charitable purposes and is it -- so really is we’re looking 17 at what’s best for the charities, what’s determined to be 18 best for the charities, at the rule making period, taking 19 into account all the comment period, was that it was going to 20 be 120 days was best for the charities so that they could in 21 turn ensure that they didn’t enter into negative net 22 proceeds, they didn’t get surprised by large amounts of rent, 23 didn’t enter into agreements that they weren’t going to be 24 able to make, and then take money from the charity in order 25 to pay the back rent, because they could still be taken to 0113 1 court. 2 MR. FENOGLIO: Right. Let me put some meat on 3 the bone, because I was at the center of this unwritten rule 4 and encouraged the Division to have a rule. I represented 5 two different lessors in audits, one of which had back rent 6 going back for several years. The charities just couldn’t 7 pay it. So the lessor would -- okay, we’ll give you a rent 8 reduction, but I want to be able to capture that later. 9 Audit came up and well, we’re going to revoke 10 the license of the charities and the lessor because you -- 11 there’s been an extension of credit. And so what I was able 12 to negotiate is the less -- and realistically, if you’re not 13 going to collect your rent in 120 days, you’re probably not 14 going to collect rent. 15 Now, we -- we -- this is about charitable 16 bingo, and what Eddie, and Eddie and I get along fine on some 17 things and sometimes we disagree, and we’re going to disagree 18 on this. 19 What Eddie’s advocating is for the charitable 20 bingo division to adopt a rule that requires charities to pay 21 up to $80,000 more a year. And Eddie thinks that’s good for 22 charitable bingo. And the reason -- the way I get that -- 23 yeah -- a mature bingo hall with seven charities can conduct 24 800 or more sessions a year, right? Yes, eight hundred and - 25 - 0114 1 MS. ROGERS: Right. 2 MR. FENOGLIO: There’s one lessor that’s in 3 830, 840. Divide by 12, times 2, gives you 143 sessions 4 times 600, gives you the $80,000 plus. So I don’t think that 5 the charities ought to be for that. 6 Now, there’s also this notion of well, you 7 don’t make money your first year. I also represent a number 8 of -- about a half a dozen entrepreneurial clients who own 9 strip centers all across Texas and in some other states. And 10 they have tenants who don’t always pay their rent. 11 I don’t know of any legitimate strip center 12 owner that would say oh, tenant, you signed this lease, you 13 promised to pay me $600 a month, you can’t pay it -- or 6,000 14 a month, 600 a session, whatever that works out to be, 140 15 sessions a week, now I’ll just -- why don’t we just pretend 16 that you don’t pay any of that and I’ll give you six months 17 or a year to pay it. 18 Do you know of a lessor who will do that? 19 MS. URIEGAS: My lessor does it to the -- 20 well, not bingo, but to his restaurants and to his nail salon 21 next to me. 22 MR. FENOGLIO: Gives them free rent for six 23 months? 24 MS. URIEGAS: He’s done it. And he’s actually 25 let people rent it until they no longer can do it and then 0115 1 they go -- he finds another person. So yes, he -- 2 MR. FENOGLIO: Well, that’s the only lessor 3 that I’ve ever -- strip center that I’ve ever -- 4 MS. GREEN: I know of one. 5 MR. VANCE: Well, there’s one big difference. 6 MR. FENOGLIO: And hold on just a minute. I 7 haven’t finished. And so when they say well, new business 8 requires a profit, well, the lessors and the charities are in 9 it together, I thought. Which means the lessor should take 10 some of the haircut, not just the charities. 11 The proposal is for the charities to take the 12 haircut, not the lessor, and the lessor will come back in up 13 to six months and get that 600 a session. 14 MR. HEINEMEIER: I disagree with you and I’ll 15 explain why in a minute. 16 MR. FENOGLIO: Well, they’re -- the quarterly 17 reports say otherwise, Eddie, where they’re going back and 18 getting 800 a session or 900 a session. And there are 19 quarterly reports that you have filed on behalf of your -- 20 MR. HEINEMEIER: Not -- not per session. 21 There are back -- you are right, there is back rent. 22 MR. FENOGLIO: Well, the quarterly report 23 breaks it down to 800 or 900 a session. 24 MR. HEINEMEIER: Unless you file a report and 25 explain that to the accounting department of the Bingo 0116 1 Commission, then they’ll accept the back -- up to the -- now 2 it’s 120 days, so that we get any more than that. 3 MR. FENOGLIO: Right. 4 MR. HEINEMEIER: The lessors I’ve spoken to 5 have said no, they’re -- they don’t like it, just like you 6 had just said, that -- it’s a -- the lease is an agreement 7 between them and the charities up-front know that they’re 8 going to pay up to $600 a session. That’s in the lease. But 9 they have put nothing in to get started, the commercial 10 lessor has paid half a million to a million and a half to get 11 the hall going, they are not paying out anything in those 12 expenses. It’s what can be covered as they’re going. And it 13 can take a while to build up. 14 The last thing that’s paid is rent, because 15 the distributors have to be paid, the utilities have to be 16 paid, the one thing that you can delay some is the rent. 17 MR. FENOGLIO: For certain lessors that’s the 18 case. 19 MR. HEINEMEIER: And it’s the in the -- the 20 arrangement the business is getting started, and they are 21 doing it as a team and down the road when it is profitable, 22 then the commercial lessor is hoping to recover some of that, 23 and if the hall shuts down, which I’ve seen happen, that’s 24 it. I mean, I guess the commercial lessor could sue them for 25 the back rent, but that’s one of the conditions -- 0117 1 MR. FARRELL: I’m going to try very hard not 2 to be argumentative. 3 CHAIRMAN SMITH: Eddie, I think -- 4 MR. FARRELL: Where in the BEA does it talk 5 about profit? 6 MR. DUNCAN: It doesn’t. 7 MR. HEINEMEIER: I don’t think it does. 8 MR. FARRELL: Where in the rules does it talk 9 about profit? 10 MR. HEINEMEIER: It doesn’t. 11 CHAIRMAN SMITH: They do not. 12 MR. HEINEMEIER: For anybody. 13 MR. FARRELL: Period. 14 CHAIRMAN SMITH: Period. It talks about 15 charitable distributions, it talks about proceeds and 16 negative net proceeds, and it talks about how charities are 17 supposed to make money for their charitable purposes. 18 MR. HEINEMEIER: Charitable purposes. 19 MR. FARRELL: Right? That’s -- so the -- the 20 whole rule making piece, the whole responsibility division, 21 is to ensure that charities are making money for their 22 charitable distributions and that they’re not being -- that 23 they -- that they’re fulfilling their requirements and the 24 requirements of the BEA and the requirements of the rules. 25 Right? That’s why the rule’s in place, that’s why it was 0118 1 done that way. 2 Now, that said, if you -- we’re going to go 3 round and round on this table about four more times, 4 probably. If there’s -- there’s a -- there’s a way to change 5 what you want to say or you want -- the way you want the 6 rules written there’s a way to do it. We’re in the middle of 7 a rule review now. There’s a way to go if you want to make 8 it -- I don’t care, 12 years, put in that you want 12 years. 9 But I’m saying -- I know that’s hyperbolic. I didn’t 10 recommend 12 years. 11 But I -- 12 (Laughter) 13 MR. FARRELL: What I’m saying is if you want 14 to put in a number, put in a number, and then -- and then it 15 goes to the rules, but again, as we’re doing -- our goal, my 16 goal, is to do what’s best for the charities. And I don’t 17 see, having looked at lots of quarterly reports, and the way 18 rent goes all over creation, I don’t think much over 120 days 19 is being very beneficial to a charity because I’ve seen the 20 ones where they’re $100,000 in the hole, that they are 21 looking to collect rent from a long period of time that 22 they’ve just been deferring and deferring and deferring. 23 So I -- and this -- that’s the anomaly, it’s 24 not the -- it’s not the norm. But I’m just saying is there 25 is that out there. So again -- 0119 1 CHAIRMAN SMITH: Let me -- and I think part of 2 where this comes from is there -- this is a multifaceted 3 rule, okay? I agree on some points and some points I don’t. 4 I think this is a long play rule. 5 In the beginning of bingo when we would go to 6 the legislature, we had a -- and I say we -- the bingo 7 industry had a black hat on the lessors. 8 UNIDENTIFIED VOICE: Still do. 9 CHAIRMAN SMITH: I think that the legislature 10 views even still today some lessors as black hat operators. 11 MS. ROGERS: Uh-huh. 12 CHAIRMAN SMITH: That they’re not in it to 13 help the charities. I say some, not all. Okay? I believe 14 that by us coming up and -- and I say we, the BAC supporting 15 the staff decision to do 120 days, I think it gives some 16 credibility to the industry itself trying to police itself 17 and take care of the black hat operators. 18 MR. HEINEMEIER: Okay. 19 CHAIRMAN SMITH: There are people that operate 20 when they open up a hall that I’m aware of that will go in 21 and they will license four or five charities to open up a new 22 hall, and they will tell those charities, hey, we’re not 23 going to collect any rent from you for the first year, we’re 24 going to collect it in the second year. And what they do is 25 they go in and they move into a -- around established halls 0120 1 that don’t get that luxury. Okay? Under the new rule. 2 Okay? Those new halls have 120 days if everybody else has 3 been collecting rent, they can’t go back past 120 days, 4 right? So when you do that and you go in and you offer them 5 a year’s worth of free rent, the existing halls don’t get 6 that, because they’re going to be already collecting rent, 7 right? And if you go in and free rent, that creates an 8 unfair playing field, correct? 9 MR. HEINEMEIER: No, I don’t think so for a 10 startup hall, because that -- they’re basically -- the 11 charity -- 12 MR. FENOGLIO: So you’re saying a hall that 13 pays rent and a hall that doesn’t pay rent, the one that 14 doesn’t pay rent doesn’t have an advantage? 15 MR. HEINEMEIER: Not when the commercial 16 lessor has put a half a million to a million in a half into 17 it, so that money somehow -- because the charities didn’t put 18 -- 19 MR. FENOGLIO: But the other lessor’s already 20 done that. 21 MR. HEINEMEIER: Let me finish. The charities 22 that are there didn’t put any money up to get started. They 23 want to get into bingo, they can’t afford to get into bingo 24 on their own. 25 MR. FENOGLIO: You know that they did put up? 0121 1 They put their reputation on. 2 MR. HEINEMEIER: And their license, yes. 3 MR. FENOGLIO: And their reputation. 4 MR. HEINEMEIER: Uh-huh. And that’s why -- 5 MR. FENOGLIO: And I think that this rule 6 protects that. 7 MR. HEINEMEIER: It causes problems to start 8 up new halls. I disagree with you there. Because the 9 charities going in, they are told now, I don’t have any that 10 says it’s rent free for a first year, I’ve never done that, 11 but there’s a lot of commercial lessors that I wouldn’t have 12 anything to do with because I don’t think they were taking 13 care of the charities. I represent over 160 charities right 14 now and I’ve got -- that’s growing, we’ve got more that want 15 to come in and get into bingo. So I’m trying to find places 16 they can get into bingo with a commercial lessor who is fair 17 to them and gives more money than others, you know, do. But 18 there’s out there ones that I don’t want to be associated 19 with. 20 But it’s going to take time just as you were 21 saying and as you’ve said, you know, and -- and you’ve -- 22 everyone at this table have said, to build up that and get 23 started. And 120 days is not long enough to cover that. It 24 needs to be longer than that. I feel it should be longer 25 than 180 days, but the commercial lessors I’ve talked to have 0122 1 said we can accept that and do that if you make it 180 days. 2 120 days is not long enough for us to cover the expenses that 3 we’ve put in here, the charities can’t afford it. And we 4 don’t want to use the charities for the rent that they’ve 5 agreed to, because there is a lease agreement between the 6 charity and the commercial lessor that is not covered by the 7 bingo. 8 Now, if -- it’s not part of the -- the lease 9 has been looked at and been approved as such by bingo, but 10 it’s outside that. It’s a business relationship between the 11 commercial lessor and the charities. 12 MS. ROGERS: I just want to make one -- 13 MR. MOORE: So back to what Michael was saying 14 and we don’t want to hurt the charities, the point of what 15 he’s talking about is that $600 not going -- being taken out 16 of the deposit is to flush the charities to get their money 17 in their account so they have net proceeds. I mean, there’s 18 nothing funny going on, it’s the only way to do it. 19 It’s the one thing that you can cut out and if 20 you’ve got enough damn capital to pay the lease on the place, 21 then you should be able to do it. There’s no funny business 22 going on. I don’t think. 23 MS. ROGERS: And I -- 24 MR. MOORE: And they’re not doing it with the 25 purpose in mind of going back and getting the money, most of 0123 1 them, honestly. 2 MS. ROGERS: I just want to make a comment. 3 MR. MOORE: I just think they want the 4 opportunity to do it if all of a sudden the thing takes off 5 and everybody’s making a crapload of money, okay, and I’m 6 talking about the charities first, then I think they should 7 be able to go back and get the money. I’m sorry, I don’t see 8 any problem with it personally. And I’ve been around this 9 thing since ‘93. 10 MR. HEINEMEIER: Yeah, you’ve been around a 11 long time. 12 MR. MOORE: And maybe I -- 13 MR. FENOGLIO: Well, Danny, you say there are 14 not many, but Eddie just said he had 160 charities, and 15 there’s what, 900 charities licensed? That’s almost 20 16 percent of the industry. 17 MR. FARRELL: No, we’ve got -- 18 MS. ROGERS: I just want to make a comment 19 real quick and I’m not necessary -- when this -- when this 20 came up and we voted for it, I was in a different position 21 than I am today as far as starting up a new hall. And just 22 to go on the record, there are commercial lessors out there 23 and buildings, Stephen, that will work with you and actually 24 do great things, because here’s the deal. When you start up 25 a new hall it’s difficult, it’s hard. 0124 1 These charities go into it -- most of them 2 with their eyes wide open. It -- it’s -- once again, we said 3 this in San Antonio. It’s a business. It doesn’t do -- 4 bingo is so cyclical it’s just -- it’s nuts. 5 When the bingo’s not doing well, you’re lucky 6 if you’re a charity in a hall with a good commercial lessor 7 that can take that hit for you and they can keep that space 8 going, because the hall that I’m speaking of that we have now 9 has taken off, you know, and these charities are going to 10 benefit. But if six months ago if we would have said well, 11 that’s it, can’t pay the rent, everybody’s out, forfeit your 12 license, get the hell on out the door. They would be 13 nowhere. 14 But they are somewhere. It’s just like the 15 negative net proceeds. If you take away licenses and you do 16 this kind of stuff, the charities have -- they’re not playing 17 bingo. They’re not where they need to be. So I could see 18 the point of both -- both ways. 120 days is a little bit 19 short, I don’t know if 180 is maybe a little too long, but we 20 -- we have already gone through the process and it kind of 21 stinks, but -- 22 MR. HEINEMEIER: I mean, I’m sorry about that. 23 That’s -- 24 MS. ROGERS: -- like -- like he said, there’s 25 -- 0125 1 MR. HEINEMEIER: I can’t even sit down with 2 Michael. 3 MS. ROGERS: -- another process to open it 4 back up and to do it. 5 MR. FARRELL: Well, you’re -- 6 MR. HEINEMEIER: I sit down with Michael to go 7 over this and he said bring it to the BAC, so that’s what 8 I’ve done, and he was saying that’s the way you need to do 9 it, so that’s what I was trying to accomplish. 10 MS. KIPLIN: May I make a suggestion just in 11 the interest of time? I think this has been pretty well 12 vetted, this particular issue. I don’t think it’s going to 13 be resolved this afternoon. Is there -- would the Bingo 14 Advisory Committee be receptive to taking this up during the 15 rule review and then giving the comments at that time back to 16 the Commission? 17 The only other thing of course is petition -- 18 file a petition for rule making. 19 MR. HEINEMEIER: Yeah. I did contact everyone 20 on this committee and everyone of them said they felt this 21 was good, even the three that are not here, and they said i 22 you need to call them, call them, they’ve agreed that they 23 wanted to go forward on this, too. But I’m not -- I’m not 24 trying to push something, I’m just saying that was the 25 ruling. The only person that did not say yes, they wanted to 0126 1 go along, that was yourself. And you’ve said you were open 2 to it, whatever the -- the group and what people wanted to 3 do. 4 MS. GREEN: Correct me, when you called me 5 this morning, you said, you know, bingo is the office of 6 business, you open a multi-million dollar business with 7 people that have no money whatsoever -- 8 MR. HEINEMEIER: That’s right. 9 MS. GREEN: -- and no experience and they just 10 want to stand there and say pay me. 11 MR. HEINEMEIER: For their charitable purpose. 12 MS. GREEN: Right. Right. But I didn’t say I 13 thought, you know, we needed more than 120, I -- you know, 14 I’ve never gone back -- I’ve never gone back 15 days on a -- 15 on a charity, because you know, when they start making money, 16 that’s when we start making money. I’ve never gone back on 17 30 days, you know, on a charity. 18 CHAIRMAN SMITH: At our hall we’ve never taken 19 back rent ever. 20 MS. GREEN: I never have. 21 MS. ROGERS: But I don’t want -- 22 MS. GREEN: I -- 23 MS. ROGERS: I don’t want the black hat like 24 Danny said, I -- I think it’s kind of offensive to look at a 25 lessor that does -- what’s the word I’m looking for -- 0127 1 MS. GREEN: Try to recoup their money? 2 MS. ROGERS: -- abate -- abate rent -- no, not 3 talking about that. That’s not a bad person. It kind of got 4 the little edge here that the commercial lessor or charity 5 lessor that abates the rent is a bad person. They’re not. 6 They’re trying to make a business work. 7 CHAIRMAN SMITH: True. 8 MS. ROGERS: So that’s the only thing I want 9 on the record. 10 MR. HEINEMEIER: And that -- most of them are, 11 I agree. Most of them are trying to do that. There are some 12 people out there, but that, you know, I don’t want to be 13 associated with those and neither do the people here. But 14 those that are trying to make it good for the charities, 15 they’ve got to have the opportunity to have time as you were 16 talking about to get your business going. 17 MS. GREEN: What about going to the rules 18 review, committee review? Like it -- Kim was saying this 19 would be better if it wasn’t even a rule. 20 CHAIRMAN SMITH: And that’s kind of what I was 21 -- 22 MS. GREEN: Yeah. If everybody would just 23 submit what they want in the rule and Steve, you know, same 24 thing, and -- 25 CHAIRMAN SMITH: And that does come under the 0128 1 rule review, correct? 2 MS. GREEN: Yes. 3 MR. VANCE: Yes. 4 MS. GREEN: Submit what it is and then -- 5 MR. DUNCAN: It’s going to come up anyway now. 6 CHAIRMAN SMITH: Yeah. 7 MS. GREEN: Well, bring are your options, 8 because -- 9 MS. KIPLIN: So -- I mean -- Kim Kiplin. It’s 10 a tri-fold -- or I mean, a bifold process rider. The first 11 thing is just whatever, it’s to determine whether the rule 12 needs to continue to exist. 13 MS. GREEN: Right. 14 MS. KIPLIN: Does it serve a regulatory 15 purpose. 16 MR. VANCE: Right. 17 MS. KIPLIN: And if the answer is yes, then 18 the -- then the further analysis is okay, does -- should it 19 be revised. And so that’s -- the first thing is do you need 20 the rule. And then the next one is if you need the rule, 21 does it need to revised. That’s the purpose of the rule 22 review. 23 MS. ROGERS: I don’t think it should be open- 24 ended for 12 years. I don’t -- I’m not on board with that. 25 (Laughter) 0129 1 UNIDENTIFIED VOICE: I agree. 2 UNIDENTIFIED VOICE: Oh, good. I appreciate 3 that. 4 MS. ROGERS: I agree with Trace. 5 CHAIRMAN SMITH: So are we in agreement to 6 listen to comment on this during a rule review? 7 MS. GREEN: I think so. It would -- you know 8 -- 9 CHAIRMAN SMITH: Tommy, you good with that? 10 MR. DUNCAN: Yeah. Yeah. 11 CHAIRMAN SMITH: All right. Okay. I’m going 12 to look at this during a rule review. 13 MR. HEINEMEIER: Thank you very much for the 14 time. Appreciate it. 15 CHAIRMAN SMITH: Thank you, Eddie. 16 All right. Any other public comment? 17 MR. FARRELL: Yes, I have one thing. I have a 18 couple things, Trace. 19 CHAIRMAN SMITH: Hey guys. Hey. 20 MR. FARRELL: In part -- I’m just making sure 21 everybody knows. I handed out to the BAC members on the 12th 22 of November, Charitable Bingo is going to be holding a bingo 23 hall at Lucky Lady Bingo from 1:00 to 3:00, that’s in Austin, 24 Texas. 25 On the 21st, we’re going to be in Houston at 0130 1 the Texas Star Bingo from 1:00 to 3:00. 2 CHAIRMAN SMITH: I have -- 3 UNIDENTIFIED VOICE: Thursday we have -- 4 MR. FARRELL: And Thursday -- I’m sorry, 5 you’re right. Thursday at 1:00 to 3:00 I’m going to be at 6 MLK 1 or 2 or standing between them, in Lubbock. 7 UNIDENTIFIED VOICE: And if you need a ride, 8 you can check with Michel or myself because we’re both going. 9 Separate cars. 10 CHAIRMAN SMITH: I wanted to -- I want to make 11 a comment real quick here. 12 We -- we’ve been in bingo for 32 years and in 13 32 years, I have never had anyone from the staff here in 14 Austin besides an auditor or a enforcement person, come to 15 our hall. Michael, really hats off to you -- 16 MR. FARRELL: Well, thank you. 17 CHAIRMAN SMITH: -- for making all this -- 18 these rounds, because I’m going to tell you, that it -- it 19 does mean something. We’ve never -- we’ve never had the open 20 dialog that we have now and it’s greatly appreciated. It 21 really is. I just wanted to -- 22 MS. ROGERS: You’re wanting to learn about our 23 world, and that’s well appreciated. 24 CHAIRMAN SMITH: Yeah. Yes. Yes. So thank 25 you, Michael. 0131 1 MR. FARRELL: Thank you. 2 MR. HEINEMEIER: And also, I have to say the 3 professionalism of your team has been great, too, so I -- 4 MS. GREEN: Yeah, they are. 5 MR. FARRELL: Thank you. 6 AGENDA ITEM 11 7 CHAIRMAN SMITH: All right. Next meeting. 8 (Pause) 9 MS. ROGERS: BAC members. 10 (Pause) 11 CHAIRMAN SMITH: Tyler, Michael -- 12 MR. VANCE: Yes, sir. 13 CHAIRMAN SMITH: Looking at early January on 14 BAC to have the rules and stuff to go over? Is that good 15 with you, Melodye? 16 MS. GREEN: Yeah. Yes. 17 MR. FARRELL: Yeah, we’re trying to get -- 18 it’s not easy. If you go to the Texas Secretary of State 19 spot, it’s hard to -- because they list each line, it’s not 20 like it’s -- like when Tyler here -- you can call Alice, but 21 Alice does -- Alice is ready to quit. 22 MS. ROGERS: Hold on. 23 CHAIRMAN SMITH: All right. 24 (Pause) 25 MR. FARRELL: Let’s do -- what the heck -- 0132 1 MS. ROGERS: 16th, 23rd. 2 MR. FARRELL: The 16th -- actually, the 16th 3 is pretty empty. We’ll -- let’s look at the 16th and the 4 23rd. What we’ll do is what I’m saying is, is that if that - 5 - those two dates are good for you, we’ll get -- we’ll get 6 answer to you in the next day or so. 7 (Pause) 8 CHAIRMAN SMITH: Yeah, I’m good with the 16th. 9 MS. KIPLIN: Of January? 10 MR. FARRELL: Yes. 11 MS. ROGERS: Yeah. 12 CHAIRMAN SMITH: I’m good with the 16th. 13 MR. FARRELL: Nobody wants to do it on the 14 24th of December. I’m -- 15 CHAIRMAN SMITH: Everybody else good with 16 that? 17 (Answers in the affirmative) 18 MR. FARRELL: We’ll leave it the 16th. If it 19 doesn’t look right, we’ll let everybody know. 20 (Pause) 21 AGENDA ITEM 12 22 CHAIRMAN SMITH: All right. Well, meeting 23 adjourned. 24 MR. FARRELL: Okay. 25 (Meeting adjourned at 5:31 p.m.) 0133 1 C E R T I F I C A T E 2 STATE OF TEXAS ) 3 COUNTY OF HARRIS ) 4 I, Kimberly C. McCright, Certified Vendor and 5 Notary in and for the State of Texas, do hereby certify that 6 the above-mentioned matter occurred as hereinbefore set out. 7 I FURTHER CERTIFY THAT the proceedings of such were 8 reported by me or under my supervision, later reduced to 9 typewritten form under my supervision and control and that 10 the foregoing pages are a full, true and correct 11 transcription of the original notes. 12 IN WITNESS WHEREOF, I have hereunto set my hand and 13 seal this 18th day of November, 2019. 14 15 /s/ Kimberly C. McCright Kimberly C. McCright 16 Certified Vendor and Notary Public 17 Verbatim Reporting & Transcription, LLC 1322 Space Park Drive, Suite C165 18 Houston, Texas 77058 281.724.8600 19 20 21 22 23 24 25