1 1 TRANSCRIPT OF PROCEEDINGS 2 BEFORE THE 3 TEXAS LOTTERY COMMISSION 4 AUSTIN, TEXAS 5 6 7 MEETING VIA TELEPHONE § 8 CONFERENCE CALL OF THE § TEXAS LOTTERY COMMISSION § 9 WEDNESDAY, AUGUST 14, 2013 § 10 11 12 13 COMMISSION MEETING 14 15 16 17 BE IT REMEMBERED THAT on Wednesday, the 14th 18 day of August 2013, the Texas Lottery Commission meeting 19 was held from 9:00 a.m. until 9:08 a.m., at 20 the Offices of the Texas Lottery Commission, 611 East 21 6th Street, Austin, Texas 78701, before CHAIRMAN MARY 22 ANN WILLIAMSON and COMMISSIONER VERONICA ANN EDWARDS; 23 that the following proceedings were reported via machine 24 shorthand by Lou Ray, Certified Shorthand Reporter. 25 2 1 APPEARANCES 2 CHAIRMAN: Ms. Mary Ann Williamson 3 COMMISSIONER: 4 Ms. Veronica Ann Edwards 5 GENERAL COUNSEL: Mr. Robert F. Biard 6 EXECUTIVE DIRECTOR: 7 Mr. Gary N. Grief 8 CHARITABLE BINGO OPERATIONS DIRECTOR Ms. Sandra K. Joseph 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3 1 TABLE OF CONTENTS 2 PAGE 3 PROCEEDINGS, WEDNESDAY, AUGUST 14, 2013 ............ 4 4 I. Notice of Public Meeting by Telephone Conference Call. Pursuant to Section 551.125 5 of the Texas Government Code, one or more Texas Lottery Commissioners may participate 6 in this public meeting by telephone conference call because (1) a public necessity 7 exists requiring immediate action because it is reasonably unforeseeable that a 8 clerical error in 16 Tex. Admin Code §402.404 must be corrected prior to September 1, 2013, 9 in order to timely effectuate the provisions of the General Appropriations Act for the next 10 biennium relating to the Charitable Bingo Operations Division; and (2) the convening 11 at one location of a quorum of the Commission is difficult or impossible. The location of 12 the public meeting will be Texas Lottery Commission Headquarters, 611 E. 6th Street, 13 Austin, Texas 78701. The Texas Lottery Commission will call 14 the meeting to order .......................... 4 15 II. Consideration of and possible discussion and/or action, including emergency adoption, 16 on amendments to 16 TAC §402.404 License and Registry Fees ............................. 4 17 III. Consideration of and possible discussion 18 and/or action, including proposal, on amendments to 16 TAC §402.404 License and 19 Registry Fees ................................. 9 20 IV. Public comment ................................ 11 21 V. Adjournment ................................... 11 22 REPORTER'S CERTIFICATE ............................. 13 23 24 25 4 1 P R O C E E D I N G S 2 WEDNESDAY, AUGUST 14, 2013 3 (9:00 a.m.) 4 CHAIRMAN WILLIAMSON: Good morning. This 5 is Mary Ann Williamson. I'd like to call this meeting 6 of the Texas Lottery Commission to order. Today is 7 August the 14th, 2013. The time is 9 a.m. This meeting 8 is being held by telephone conference call and is open 9 to the public at the Commission's headquarters in 10 Austin. 11 Commissioner Edwards, would you please 12 identify yourself for the record? 13 COMM. EDWARDS: This is Commissioner 14 Veronica Edwards. 15 CHAIRMAN WILLIAMSON: Thank you. We have 16 a quorum. Commissioner Krause is not able to attend 17 this meeting. 18 Because this is a telephone conference 19 meeting, I ask of everyone who will be speaking to 20 please identify yourself for the record each time you 21 speak. This includes the Commissioners. 22 AGENDA ITEM NO. I 23 CHAIRMAN WILLIAMSON: We will go to the 24 first item, which is consideration of an possible 25 discussion and/or action, including emergency adoption, 5 1 on amendments to 16 TAC 402.404, license and registry 2 fees. 3 James, this is your item, please. 4 MR. PERSON: Good morning, Commissioners. 5 For the record, this is James Person, Assistant General 6 Counsel for the Commission. 7 Staff is recommending that you adopt 8 emergency amendments to Section 402.404 of the bingo 9 rules. And that is our bingo license and registry fee 10 rule. As you may recall, the Commission voted in July 11 to adopt amendments to Rule 402.404. Among other 12 things, those amendments raised the fees for bingo 13 conductor and commercial licenses issued on of after 14 September 1st. 15 Just last week, however, we discovered a 16 problem with a portion of the amendments affecting 17 commercial lessor license fees. Section 2001.158 of the 18 Bingo Enabling Act establishes minimum fees for 19 commercial lessor licenses and establishes criteria used 20 to determine the class of a license. The higher the 21 class of a license, the higher the fee is. 22 In our recent rule amendments, we 23 inadvertently used a different set of criteria to 24 determine the class of commercial lessor licenses. The 25 Bingo Enabling Act sets those criteria, and we are not 6 1 authorized to alter them. Therefore, our rule directly 2 conflicts with the Bingo Enabling Act and it must be 3 fixed. 4 Compounding the problem is that under the 5 current rule language, the Commission may end up 6 collecting less fee revenue than we originally 7 anticipated. This, as you know, is a major issue 8 because we must collect a certain amount of revenue in 9 order to receive our appropriation for the 14 new FTEs 10 in the bingo division. The Comptroller must also 11 certify that we will collect a requisite amount of 12 money. As currently drafted, Rule 402.404 may not allow 13 us to collect that amount revenue we need because all of 14 our calculations were based on the statutory criteria 15 determining the class of commercial lessor licenses. 16 Therefore, a fix is needed right away, and 17 that is why staff is recommending an emergency 18 rulemaking. The Commission is allowed to adopt 19 emergency amendments if it finds an imminent peril to 20 the public health, safety or welfare, or a requirement 21 of state or federal law requires the adoption of a rule 22 on fewer than 30 days notice. 23 In our situation, staff believes that 24 there's an imminent peril to public welfare and that 25 state law requires immediate adoption of the rule 7 1 amendments. First, because our rule directly conflicts 2 with the statute, state law requires an immediate fix. 3 Second, if we do not fix this rule 4 immediately so that we can begin collecting the correct 5 amount of fees beginning September 1st, we may not be 6 able to obtain our appropriation for the new 14 FTEs. 7 And as the Sunset Commission observed, the bingo 8 division's current lack of funding and personnel impede 9 its ability to fairly and effectively regulate bingo, 10 which thus threatens the public welfare. 11 Emergency amendments will go into effect 12 upon filing with the Secretary of State. So if you vote 13 to adopt these today, we plan on filing them today, 14 which will make them effective today. 15 The amendments we are proposing are 16 obviously very important, but they are not complex 17 changes. All the amendments will do is replace the 18 current criteria used to determine the class of a 19 license with the criteria set in statute. That is all. 20 We are not altering the amount of the fees that you 21 adopted back in July. 22 That is my presentation. I'd be happy to 23 answer any questions you may have. 24 CHAIRMAN WILLIAMSON: All right. This is 25 Williamson. 8 1 Thank you, James. 2 Commissioner Edwards, do you have any 3 questions or comments or discussions that you'd like to 4 share. 5 COMM. EDWARDS: No, ma'am. 6 CHAIRMAN WILLIAMSON: All right. Is there 7 a motion to approve the staff's recommendation? 8 COMM. EDWARDS: This is Veronica Edwards. 9 I move that the Commission approve the staff's 10 recommendation to adopt emergency amendments to 16 TAC 11 Section 402.404. 12 CHAIRMAN WILLIAMSON: This is Williamson. 13 I second. All in favor? 14 (All those voting in favor so responded) 15 MR. BIARD: Thank you, Commissioners. 16 This is Bob Biard, General Counsel. The last page of 17 this item in your notebooks is a signature page for an 18 order to be approving the rule changes. The rule can be 19 adopted just with your voice vote here on the record, 20 but for our paper records here, if you would please 21 indicate your vote by signing that last page. And you 22 can get it to me however it's easiest for you, fax it to 23 me or send it by email. 24 There's no great urgency, but for the 25 record we'd like to have that. Thank you. 9 1 CHAIRMAN WILLIAMSON: Okay. This is 2 Williamson. I just want to make sure I -- Commissioner 3 Edwards, I didn't hear her vote. I'm sure we probably 4 just stepped over each other. I just wanted to confirm 5 that she had voted. 6 MR. BIARD: Oh, I'm sorry, Chairman. 7 COMM. EDWARDS: This is Commissioner 8 Edwards. I do -- I voted "aye." 9 CHAIRMAN WILLIAMSON: Okay. Thank you. I 10 just didn't hear it. 11 COMM. EDWARDS: I'm sorry. 12 CHAIRMAN WILLIAMSON: That's quite all 13 right. 14 MR. BIARD: So the vote is two-zero to 15 approve staff's recommendation? 16 CHAIRMAN WILLIAMSON: Right. Okay. So 17 this is Williamson. The vote is two-zero. 18 Thank you, Bob. 19 MR. BIARD: Thanks. 20 AGENDA ITEM NO. III 21 CHAIRMAN WILLIAMSON: All right. Let's go 22 to -- the next item is consideration of and possible 23 discussion and/or action including proposal on 24 amendments to 16 TAC 402.404, license and registry fee. 25 James, this is your item as well. 10 1 MR. PERSON: For the record, this is James 2 Person, Assistant General Counsel. 3 The emergency amendments you just adopted 4 can only remain in effect for up to 180 days; therefore, 5 since we need these amendments on a permanent basis, we 6 must also propose and adopt them using the standard 7 rulemaking process, which allows for public comments. 8 But as a result of the passage of our 9 sunset bill, staff is currently planing on proposing 10 other unrelated changes to this same rule at the 11 September meeting. The Secretary of State's office only 12 allows one pending rulemaking proposal for any 13 particular rule at any one time. Therefore, with your 14 approval, staff would like to propose today's emergency 15 amendments and the sunset amendments together at the 16 next month's meeting. 17 CHAIRMAN WILLIAMSON: Thank you. This is 18 Williamson. 19 Commissioner Edwards, do you have any 20 questions or discussion on this briefing item? 21 COMM. EDWARDS: This is Commissioner 22 Edwards. I have no questions at this time. 23 CHAIRMAN WILLIAMSON: All right. This is 24 Williamson. Neither do I, and I understand there's no 25 action -- formal action other than going ahead and 11 1 proceed with posting this. 2 MR. BIARD: Correct -- this is Bob Biard. 3 That's correct, Commissioners. 4 AGENDA ITEM NO. IV 5 CHAIRMAN WILLIAMSON: All right. This is 6 Williamson. The next item is public comment. 7 Bob is there anyone that wants to make a 8 public comment? 9 MR. BIARD: We have not received any 10 witness sheets indicating that anyone wants to make a 11 public comment. 12 CHAIRMAN WILLIAMSON: All right. Thank 13 you. 14 AGENDA ITEM NO. V 15 CHAIRMAN WILLIAMSON: Then Commissioner 16 Edwards and attendees, I believe that concludes the 17 business of the Commission for this meeting. 18 Is there a motion to adjourn? 19 COMM. EDWARDS: This is Commissioner 20 Edwards. I move we adjourn. 21 CHAIRMAN WILLIAMSON: Williamson. I 22 second the motion. 23 All in favor say "aye." 24 COMM. EDWARDS: This is Commissioner 25 Edwards; aye. 12 1 CHAIRMAN WILLIAMSON: Williamson, aye. 2 The vote carries two-zero. This concludes this 3 emergency Texas Lottery Commission meeting on -- 4 MR. BIARD: Actually, Chairman, this 5 meeting is not an emergency meeting. This is a -- it's 6 just -- it's not an emergency meeting. 7 CHAIRMAN WILLIAMSON: Okay. 8 MR. BIARD: Just to clarify. 9 CHAIRMAN WILLIAMSON: This concludes this 10 telephone conference meeting. 11 MR. BIARD: Thank you. 12 CHAIRMAN WILLIAMSON: Today is August the 13 14th, 2013, and the time is 9:08 a.m. 14 MR. BIARD: Thank you, Commissioners. 15 (Proceedings concluded at 9:08 a.m.) 16 17 18 19 20 21 22 23 24 25 13 1 C E R T I F I C A T E 2 STATE OF TEXAS ) 3 COUNTY OF TRAVIS ) 4 I, Lou Ray, Certified Shorthand Reporter 5 in and for the State of Texas, do hereby certify 6 that the above-mentioned matter occurred as 7 hereinbefore set out. 8 I FURTHER CERTIFY THAT the proceedings of 9 such were reported by me or under my supervision, 10 later reduced to typewritten form under my 11 supervision and control and that the foregoing pages 12 are a full, true, and correct transcription of the 13 original notes. 14 IN WITNESS WHEREOF, I have hereunto set my 15 hand and seal this 15th day of August, 2013. 16 _______________________________ 17 LOU RAY 18 Certified Shorthand Reporter CSR No. 1791 - Expires 12/31/13 19 Firm Registration No. 276 20 Kennedy Reporting Service, Inc. 1016 La Posada Drive, Suite 294 21 Austin, Texas 78752 512.474.2233 22 23 24 Job No. 111863 25