0001 1 TRANSCRIPT OF PROCEEDINGS 2 BEFORE THE 3 TEXAS LOTTERY COMMISSION 4 AUSTIN, TEXAS 5 6 16 TEXAS ADMINISTRATIVE CODE § § 7 §402.200, 402.205, 402.400, 402.442 § 8 9 PUBLIC COMMENT HEARING ON RULEMAKINGS 10 TUESDAY, SEPTEMBER 9, 2008 11 12 BE IT REMEMBERED THAT on Tuesday, the 9th day 13 of September 2008, the above-entitled public comment 14 hearing was held from 10:02 a.m. to 11:12 a.m., at the 15 Offices of the Texas Lottery Commission, 611 East 6th 16 Street, Austin, Texas 78701, before SANDRA JOSEPH, 17 ASSISTANT GENERAL COUNSEL. The following proceedings 18 were reported via machine shorthand by Kim Pence, a 19 Certified Shorthand Reporter of the State of Texas, 20 and the following proceedings were had: 21 22 23 24 25 0002 1 APPEARANCES 2 3 ASSISTANT GENERAL COUNSEL: Ms. Sandra Joseph 4 5 BINGO OPERATIONS DIVISION DIRECTOR: Mr. Phil Sanderson 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 0003 1 TABLE OF CONTENTS 2 PAGE 3 PROCEEDINGS, TUESDAY, SEPTEMBER 9, 2008 4 4 PUBLIC COMMENT ON 16 TAC 402.200: 5 CHARLES HUTCHINGS 5 TRACE SMITH 8 6 SHARON IVES 12 THE BINGO INTEREST GROUP (BRESNEN) 17 7 PUBLIC COMMENT ON 16 TAC 402.205: 8 SHARON IVES 31 9 THE BINGO INTEREST GROUP (BRESNEN) 35 10 PUBLIC COMMENT ON 16 TAC 402.400: 11 SHARON IVES 45 THE BINGO INTEREST GROUP (BRESNEN) 46 12 PUBLIC COMMENT ON 16 TAC 402.442: 13 THE BINGO INTEREST GROUP (BRESNEN) 48 14 15 PROCEEDINGS CONCLUDED 51 16 REPORTER'S CERTIFICATE 52 17 18 19 20 21 22 23 24 25 0004 1 P R O C E E D I N G S 2 TUESDAY, SEPTEMBER 9, 2008 3 (10:02 a.m.) 4 MS. JOSEPH: Good morning. My name is 5 Sandra Joseph. I'm Special Counsel for the Texas 6 Lottery Commission. Also sitting in the front is 7 Mr. Phil Sanderson, Director of the Charitable Bingo 8 Operations Division. 9 I'd like to call to order the public 10 hearing to receive comments on four proposed 11 rulemakings. First, proposed amendments to 12 Rule 402.200, General Restrictions on the Conduct of 13 Bingo; second, 16 TAC Section 402.400, Amendments to 14 General Licensing Provisions. 15 Then also two new proposed rules, 16 Section 16 -- excuse me -- 16 TAC Section 402.205 17 pertaining to Unit Agreements; and finally, 16 TAC 18 Section 402.442 relating to Amendment to a Commercial 19 Lessor License. 20 We appreciate you being here today to 21 offer comments and assist us in this rulemaking 22 process. Although this is not an evidentiary 23 proceeding, we do like to ask that anyone that plans 24 to present testimony to take an oath. And if you 25 would please raise your right hand if you plan to 0005 1 present testimony today? Mr. Bresnen? 2 AUDIENCE MEMBER: Raise your right hand. 3 (Laughter) 4 MS. JOSEPH: Okay. Thank you. 5 MR. BRESNEN: My other right -- my other 6 right hand. 7 MS. JOSEPH: Okay. 8 (Witnesses sworn by Ms. Joseph) 9 MS. JOSEPH: All right. At this time, I 10 have witness affirmation forms from four people, and 11 what I'll do is I will call your name, and you can 12 come up and offer your comments. If you would like to 13 go ahead and offer comments on all four rules at the 14 same time, that's fine, if you'll just clearly 15 indicate which rule you're talking about. 16 All right. First, Mr. Charles Hutchins. 17 COMMENTS BY CHARLES HUTCHINGS 18 MR. HUTCHINGS: Good morning. 19 MS. JOSEPH: Good morning. 20 MR. HUTCHINGS: 200, all them digits I 21 see, 16 TAC 402.200. I'll just -- I'll do the one, 22 and then we'll -- if the others get through, well, 23 then we can go to those. 24 Under -- let me locate myself. 25 MS. JOSEPH: Sure. 0006 1 MR. HUTCHINGS: On Page 6497, the way I 2 have it, under (4)(e), "All bingo games must be 3 conducted and prizes awarded on days and within the 4 times specified on the license to conduct bingo." 5 The problem with that is if for some 6 reason a game runs long, you think you can get it in 7 and you don't get it in, you can't just stop. I mean, 8 you've offered the money, the people have bought their 9 cards, whatever they're playing for that game, how do 10 you just stop and say "Well, that's it, folks. We 11 have to just cut it off"? 12 (f) right below that, I really don't 13 understand, "Pull-tab bingo event tickets may not be 14 sold after the occurrence of the event unless the 15 organization has a policy and procedure in their house 16 rules addressing the sale and redemption of pull-tab 17 bingo event tickets after the event has taken place." 18 I guess that could happen somewhere. I 19 can't understand why. I don't know what brought 20 that -- or why that was put in here. It must have 21 been something someplace that took place, but, you 22 know, it's just -- I don't think it's quite necessary. 23 Down on (h), "Donating Bingo Prizes -- 24 Donated Bingo Prizes. Only licensed authorized 25 organizations holding a non-annual temporary license 0007 1 may accept and/or award donated bingo prizes." 2 I was under the impression that -- and 3 I'm sure there's small bingo games all over this state 4 that has donated bingo prizes that is their standard 5 prizes for the night's games. 6 On the other side of the page under 7 (5) -- (4) -- no, it's No. (5). "The operator shall 8 announce to players any change to information required 9 by Paragraph (4) of this subsection." 10 Let's make that "caller." The operator 11 is not going to -- they're busy. They're not going to 12 be doing that. Besides it's needs to be the caller. 13 He's the one with the mic in his hand. 14 On the next page, let's see. This is 15 still under (5)(c) there in the middle, "whether the 16 bingo is valid and if not" -- I'm sorry, wrong 17 paragraph -- "the number of winners and the total 18 amount of money or prizes awarded for the game." 19 That would require -- when you have 20 multiple levels of cards in a hall, the caller really 21 doesn't know what has -- what has bingo'd, whether it 22 be considered a full Level 1, Level 2 or Level 3. So 23 to announce the amount of the prize paid, and the 24 help, they call them back, they're out on the floor 25 selling cards or whatever they're doing, then they go 0008 1 to the counter when the next game starts normally and 2 get their payoffs and take them back. Not even the 3 counter is going to know what those bingos were. So 4 if it was a Level 1, 2 and 3, you know, they're going 5 to have to wait until the next game started before 6 they even know that, and the caller still wouldn't 7 know. 8 That concludes my comment on that one. 9 Thank you. 10 MS. JOSEPH: All right. Thank you, 11 Mr. Hutchings. Will you have comments on the other 12 rules, Mr. Hutchings? 13 MR. HUTCHINGS: Most likely, yes. 14 MS. JOSEPH: All right. All right. 15 Would anyone else -- well, let me just go to the next 16 person here. 17 Trace Smith, do you have any comments? 18 MR. SMITH: Yes, ma'am. 19 MS. JOSEPH: All right. 20 COMMENTS BY TRACE SMITH 21 MR. SMITH: Good morning, everyone. My 22 name is Trace Smith. 23 Just real quick, I'd like to echo what 24 Mr. Hutchings had to stay and start off on -- I 25 believe it would be (c)(6), "The organization must 0009 1 establish and adhere to a written procedure that 2 addresses problems during a bingo occasion 3 concerning." 4 MS. JOSEPH: All right. And let me 5 clarify if you're addressing Rule 402.200? 6 MR. SMITH: Yes, ma'am. I'm sorry. 7 MS. JOSEPH: Thank you. All right. 8 MR. SMITH: I don't think that there's 9 any way that an organization could establish a written 10 procedure to deal with every single problem that may 11 arise in a bingo hall. I've been working bingo since 12 I was 18, and I've not seen every problem yet. 13 There's newer problems -- there's new problems that 14 arise every day. 15 Skipping down to (d) -- or excuse me -- 16 (e), "All bingo games must be conducted and prizes 17 awarded on the days" -- excuse me, I'm sorry. I'm on 18 the wrong spot here. 19 It would be -- okay. Skipping to -- I'm 20 sorry -- it would be (c)(4) on the right-hand side 21 there, "The following information shall be available 22 to all patrons: (A) the games to be played; (B) the 23 order in which the games will be played; (C) the 24 patterns needed to win; (D) the prize(s) to be paid 25 for each game; and (E) whether the prize payout is 0010 1 based on sales or attendance." 2 A lot of times small games like where we 3 operate, we don't know how many games we're going to 4 get in that session. It's a run on the fly. We might 5 get in ten games. We might get in 30 games. It just 6 depends on how many games we do. 7 If they're based on sales, you don't 8 know how much the prize is going to be until you get 9 your sales accounted for. It's hard to tell which 10 order the games will be played in prior to the game 11 because sometimes you have favorite games that they 12 like to play in different -- different time periods of 13 the organization's playing time. 14 Skipping over to -- I guess it would be 15 (b)(2) on the next page, "be the only person to handle 16 the bingo balls during each bingo game" would be the 17 caller. Assuming that we could have multiple callers, 18 if the caller had an emergency bathroom break, we want 19 to be sure that we could have another caller stand in 20 at that time. Sometimes they get emergency telephone 21 calls, children or family has an emergency, we want to 22 be sure we can substitute bingo callers at any time. 23 And then skipping down to (D), "the 24 number of winners and the total amount of money or 25 prizes awarded for the game." The caller is not going 0011 1 to know that in a timely fashion. The counter or the 2 cashiers, they're not going to know that in a timely 3 fashion either. If you have multiple pay levels -- as 4 Mr. Hutchings was saying, if you have multiple pay 5 levels, sometimes we have up to four different pay 6 levels at one time on the floor. And if you have a 7 $100 game and you have Level A, B, C and D, and 8 there's two half pay levels, two quarter pay levels 9 and three full pay levels and one superpay level, 10 that's going to take some time to calculate that. The 11 caller is not going to know that. 12 Hopefully we can take that into account 13 and work something out there because that's a very 14 difficult thing to do. And if you're announcing it 15 three games later after you've got it all figured out, 16 it's going to do two things: It's going to confuse 17 your patrons because they're going to think what 18 you're announcing is for that game, and they're going 19 to be upset if that's a $750 game they're playing, and 20 you're saying that game paid out $47.50. Well, it's 21 going to upset your crowd. It's going to confuse 22 them, and it's going to cause chaos in your crowd. 23 You need to be very careful about this rule. 24 Going down to No. (6), "not use cell 25 phones, personal digital assistants, computers, or 0012 1 other personal electronic devices to communicate with 2 anyone during the bingo occasion, except for emergency 3 situations." 4 I know in several halls the counter or 5 the operators will communicate with the caller via 6 walkie-talkie to make announcements. It's not always 7 convenient where the counter and the cashiers are in 8 retrospect to where the caller is. To yell across the 9 room is very unprofessional as well. And sometimes 10 there's not enough manpower to send someone over there 11 to communicate an announcement change. I just want to 12 make sure we'll be able to use walkie-talkies there. 13 And that's all I have for you. 14 MS. JOSEPH: Thank you. Sharon Ives? 15 COMMENTS BY SHARON IVES 16 MS. IVES: Good morning. My name is 17 Sharon Ives. 18 On Rule 402.200, Paragraph (5), "the 19 organization must maintain a log of each bingo ball, 20 bingo console and flashboard inspection signed by the 21 registered worker conducting the inspection." 22 My comments are why require an 23 additional form for the charities to complete? And is 24 this type of form to be left on premise? And if so, 25 for how long? Is it the four-year time period? 0013 1 The paragraph underneath that, No. (6), 2 "The organization must establish and adhere to a 3 written procedure that addresses (A) bingo equipment 4 malfunctions" or problems during occasion. 5 And my comments are the organization 6 cannot address every known malfunction or problem. 7 Some of these are out of their control, Mother Nature, 8 for instance, as Mr. Trace Smith just stated. 9 No. 7 -- Paragraph 7, I'm sorry, "The 10 organization must establish and adhere to a written 11 procedure that addresses (B) improper bingo ball calls 12 or placements" during an occasion. 13 And my comments are the customers will 14 be the first ones to let you know if you improperly 15 called a ball. 16 (Telephonic interruption) 17 MR. SANDERSON: What's No. 7? 18 MS. JOSEPH: Where was that? 19 MS. IVES: On Paragraph 7. 20 MR. SANDERSON: I don't see a 7. 21 MS. JOSEPH: Okay. On what page? 22 MS. IVES: Let me see here. I'm working 23 off of two different lists here. 24 MS. JOSEPH: Okay. 25 MR. SANDERSON: Is it (6)(B)? 0014 1 MS. IVES: I don't have a (6)(B) on 2 mine. Does it have to do with the -- yes, you are 3 correct. Thank you, Phil. 4 MS. JOSEPH: (6)(B)? 5 MS. IVES: Yes, ma'am. 6 MS. JOSEPH: All right. Okay. Would 7 you repeat your comment? 8 MS. IVES: The customers would be the 9 first one to let the caller know if he or she called 10 an improper ball. 11 MR. SANDERSON: May I ask a question? 12 MS. IVES: Yes, sir. 13 MR. SANDERSON: What we're asking the 14 organizations to do are to establish a procedure if 15 there is an improper ball call. So what would you do 16 if a player said "You didn't call the right ball"? 17 MS. IVES: Well, as a caller, you would 18 have the ball that came up through the hopper. When 19 you put it into the flashboard, if they lit up, 20 perhaps as you're stating -- 21 MR. SANDERSON: Uh-huh. 22 MS. IVES: -- you know, if they put a 23 B-12 in a G-52, you know, G-52 would be flashing. I 24 mean, that would be easy to notice if the B-12 -- you 25 know, once the customer has alerted you to that 0015 1 problem. 2 MR. SANDERSON: So the procedure would 3 be for the callers to pull the ball out an put it back 4 in the right spot? 5 MS. IVES: Into the B-12, yes, sir. 6 MR. SANDERSON: That's what we're asking 7 to be -- 8 MS. IVES: Oh, okay. So just written? 9 MR. SANDERSON: Yeah. 10 MS. IVES: Okay. I got you. 11 Let's see. On down, No. (1) -- let me 12 find it on you-all's sheet here -- "Each licensed 13 authorized organization shall obtain, maintain, keep 14 current and make available for review to any person 15 upon request a copy of the Bingo Enabling Act and the 16 Charitable Bingo Administrative Rules." 17 MS. JOSEPH: Okay. Excuse me. I 18 just want to insert that I believe that's (i) -- 19 Paragraph (i)(1). Okay. 20 MS. IVES: (i)(1), yes, ma'am. Thank 21 you. 22 My comment would be to add the verbiage 23 "or unit." So it would read "Each licensed authorized 24 organization or unit" because otherwise you would have 25 up to, you know, seven charities at that particular 0016 1 bingo location. And the way that this reads is that 2 each charity would be required to obtain, maintain. 3 So you would have seven copies of the Bingo Enabling 4 Act as well as seven copies of the administrative 5 rules. And, you know, these books are -- I believe 6 the TLC charges $9 per -- per book for those. 7 Okay. Moving on down, (3)(A) where it's 8 talking about "The letters on the sign shall be no 9 less than one inch tall," and that is for the name of 10 the licensed organization as well as the operator in 11 charge. 12 As you are aware, there are several 13 charities that have a mile-long name, for instance, 14 Mexican American Educational Advisory Committee. If 15 you put that in one-inch letters, you're going to need 16 a poster board. The same thing with United Hispanic 17 Council of Tarrant County, or how about this one, 18 National Organization for Mexican American Rights, 19 Incorporated. One-inch-block letters or one-inch 20 letters, that would be -- I just don't understand why 21 the bingo license will not sufficient since the bingo 22 license does have to be posted in a conspicuous place. 23 I also agree with Trace on -- I'm 24 sorry -- Mr. Hutchings on No. (5) where you have "The 25 operator shall announce to players any changes to the 0017 1 information required by Paragraph (4) of this 2 subsection." 3 Mark out "caller" -- I mean mark out 4 "operator" and insert "caller." 5 And those are my comments for this rule 6 at this time. 7 MS. JOSEPH: Thank you. 8 MS. IVES: Thank you. 9 MS. JOSEPH: Mr. Bresnen? 10 COMMENTS ON BEHALF OF THE BINGO INTEREST GROUP 11 MR. BRESNEN: Thank you. My name is 12 Steve Bresnen. I'm here on behalf of the Bingo 13 Interest Group, and we have members from Texarkana to 14 Midland, in the Dallas/Fort Worth area, various places 15 in East Texas. 16 On -- and I'm discussing 402.200 on 17 Page 6496 of the Register version of the rule in 18 Subsection (c)(1). It says "No licensee or worker of 19 a licensed authorized organization may tamper with or 20 modify equipment." 21 I think what you want to do is make that 22 "no person." I think the Commissioners asked about 23 this maybe when this was being discussed for posting 24 in the record. It doesn't -- it doesn't seem to me 25 that any member, whether they work for the 0018 1 organization or a member of the public, should be 2 allowed to tamper or modify the bingo equipment. 3 On the next page, 6497, Subsection 4 (c)(5) of the rule. I think we understand that to 5 mean the organization has to maintain a log of each of 6 these kinds of inspections. I think all of those 7 things in the series are meant to modify the word 8 "inspection," but I would suggest a change in language 9 on this that says "The organization must maintain a 10 log of each inspection of bingo balls, bingo consoles 11 and flashboards and signed by the registered worker 12 conducting the inspection." 13 You know, we've had this issue about 14 trying to -- having to keep a log of all the ball 15 calls, and I realize we're past that, and I think this 16 would help clarify that for the regulated community. 17 Subsection (e), you know, you-all had a 18 case one time where some people had started a game 19 within the licensed time, and they went to complete 20 the game. They were written up and had an 21 administrative case that went a long way down the 22 road. They spent a lot of money because they finished 23 the game, and it was alleged that finishing the game 24 affected the integrity of the game. 25 And I saw the Commissioners had a pretty 0019 1 stout disagreement over that interpretation of the 2 integrity of the game being affected. And we believe 3 if you don't complete the game, you have -- you have 4 affected the integrity of the game. Players are going 5 to be suspicious. People who have paid money for 6 bingo products expecting to get paid or if they win 7 would literally would not be able to be paid if the 8 game was not completed. 9 So I realize there's a difficulty, Phil, 10 in the regulatory regime where we have specified 11 times, but I think your overarching duty under the 12 statute to protect the integrity of the game and 13 players can be construed to override that, and the 14 game should be required to be completed, or certainly 15 allowed to be completed if it runs down to the end 16 there. 17 We're not sure what (f) actually means. 18 Apparently there's some people who keep selling 19 tickets after the event has occurred in a pull-tab 20 event ticket game. You know, I guess that's not a 21 very substantive comment, but it appears that that 22 rule only requires that you have some sort of policy 23 or procedure in place to address that. 24 MR. SANDERSON: May I interject or ask a 25 question? 0020 1 MR. BRESNEN: Absolutely. 2 MR. SANDERSON: Originally that 3 paragraph was all event tickets had to be sold before 4 the event could take place. 5 MR. BRESNEN: Yes, sir. 6 MR. SANDERSON: And there were people 7 saying that "We can't sell all of them." 8 MR. BRESNEN: Right. 9 MR. SANDERSON: And then some people 10 said "Well, we go in and hold the event. If nobody 11 won, then we sell the rest of them." 12 MR. BRESNEN: Until somebody wins? 13 MR. SANDERSON: Until somebody wins. 14 MR. BRESNEN: Right. 15 MR. SANDERSON: So in a compromise of 16 all three areas is the purpose that this was reworded 17 in that direction. 18 MR. BRESNEN: Well, in that case -- in 19 that case, we support it. 20 MR. SANDERSON: Okay. 21 MR. BRESNEN: The donated prize 22 provision in Subsection (h), I'm not sure why any 23 charity shouldn't be able to receive a donated prize 24 and award that. So we would -- we would like for that 25 not to be a limitation on charities being able to 0021 1 receive donated prizes. 2 Also, there's several places in the rule 3 where you-all are using "and/or," and I'm not used to 4 seeing -- maybe that's common in administrative rules, 5 but it's never done in statute. 6 So I would suggest that you've got to go 7 one way or the other with these "ands" and "ors" in 8 here or the licensee. It's either two things are 9 required or one thing is required in most instances 10 when you use that kind of terminology, and the 11 licensee has no way of knowing which it is. So I'd 12 make that general comment about any place there's an 13 "and" and "or" in there. And if I see the other ones, 14 I'll call them to your attention on the way by. 15 MR. SANDERSON: Is that in this? 16 MR. BRESNEN: Yeah, that's in (h). It 17 says "Only licensed authorized organizations holding a 18 non-annual temporary license may accept and/or award 19 donated bingo prizes." 20 I think what you need there is an "or." 21 You can't do either one of them if that's what -- if 22 that's what you're intending to achieve. If you have 23 "and" in there and you could accept the prize but you 24 couldn't award it, or you could award the prize but 25 you couldn't accept it, I mean, it's just not the best 0022 1 grammar probably. 2 Okay. Item, what is now going to be 3 (i)(1), I agree with Sharon Ives' comment about 4 inserting the word "unit" in there. We realize this 5 is the current requirement. I think since you're 6 amending the rule anyway, I'd like to make the 7 following suggestion, that that paragraph read 8 something like: "Each licensed authorized 9 organization or unit as applicable shall make 10 available for review to any person upon request a copy 11 of the Bingo Enabling Act and the Charitable Bingo 12 Administrative Rules." 13 Two reasons for that: First of all, one 14 could not make it available without having already 15 obtained it, maintained it -- I'm sorry -- it should 16 be "request a current copy." So you'd have to obtain 17 it and maintain it in order to make it available. So 18 those words are surplus to begin with. 19 Secondly, there's no need to have 20 seven -- you know, in a hall without a unit, there's 21 no need to have seven copies of this up there, but 22 they should have to be able to make it available. We 23 agree with that. We're just thinking you might be 24 able to streamline this rule a little bit by making 25 that suggested change. 0023 1 Shall I repeat that, or was that 2 coherent? 3 MR. SANDERSON: I think the court 4 reporter got it, and I understand what you're saying. 5 The only question I've got with that 6 per se is that the unit is a group of organizations 7 that is strictly put together for the accounting of 8 the proceeds and the expenses. 9 MR. BRESNEN: Uh-huh. 10 MR. SANDERSON: So the bingo occasion is 11 actually conducted by the organizations and not the 12 unit. 13 MR. BRESNEN: I see. 14 MR. SANDERSON: So that's the reason 15 that "unit" was not added to begin with, but I think 16 there could be some -- I agree you don't need seven 17 copies of the rule. 18 MR. BRESNEN: Right. So you get the 19 general point. 20 MR. SANDERSON: Yes. 21 MR. BRESNEN: We do -- I think if you 22 revise the rule in a way that made it clear there has 23 to be a copy there for the public -- the playing 24 public to be able to review, then we'd certainly 25 accept that. 0024 1 Let's see here. All right. Moving over 2 to Item No. (i)(4). I think subject to the other 3 comments that have been made on (4), I think we can 4 generally accept this list with the understanding that 5 these -- No. (5), Subsection (5), clearly prevails 6 over Subsection (4). I think this partly addresses 7 the night owl problem that we've been talking about. 8 These are living, breathing operations that are 9 happening out there. 10 So we can't have the audit staff or the 11 folks dropping in, whoever drops in, whatever division 12 they work in, penalizing people because they've 13 deviated from the schedule. But we also think it's 14 fair that the players know what the games are about, 15 the structure and the occasion. 16 I agree with the suggestion that the 17 word "operator" in Subsection (5) be changed to 18 "caller" since it's the callers doing -- do 19 announcing. 20 On Page 6498, we have a strenuous 21 problem with item number -- what is that, is that an 22 L -- (l)(1) -- yeah, (l)(1). I know of at least one 23 hall that the caller is located on a stage that's 24 above the playing public. And the playing public has 25 no access to that area, but the area is covered by a 0025 1 camera so the drawing of balls from the bingo 2 receptacle is visible. The result is visible to 3 people in the hall. 4 Now, I also agree that one thing you 5 could do is -- I guess is, you know, take a player or 6 make a nominal person a player and, you know, seat 7 them up there. 8 But I think you have locations -- I was 9 in another bingo hall where the smoking area was 10 offset from the main area. People in the main area, 11 there would be one player, one or more players, who 12 could see the caller at the front, but the folks in 13 the smoking area could not see it. So I think this 14 rule has undergone some compromise like we were 15 talking about earlier, and I appreciate that. But I 16 think you've got some locations that are achieving the 17 protection of the player that this rule would achieve 18 by using video. 19 So I would suggest an amendment to the 20 rule that would clearly provide that if the drawing of 21 balls, you know, can be experienced by the players 22 through the use of video, that that be done. 23 That's how they -- I don't know how the 24 Lottery -- if the Lottery let's somebody on the set 25 when they're drawing the numbers out there, but 0026 1 clearly the state's -- most of the people in the state 2 are being served by the fact there's video there. 3 Do they even broadcast those anymore? I 4 know they used to. No? 5 MR. SANDERSON: Yeah, they still -- then 6 there is a viewing section where people can come in 7 and sit down and watch the drawing -- 8 MR. BRESNEN: Is it? 9 MR. SANDERSON: -- as well as the 10 windows on 6th Street are opened under so they can 11 stand on 6th Street and watch them. 12 MR. BRESNEN: All right. Anyway, I 13 think what we're going to do is make it difficult for 14 some people to comply with this rule who are really -- 15 who are not doing anything wrong and whose players 16 don't feel like anything wrong is being done. So we 17 need to cut a little slack. 18 That might also be handled by 19 grandfathering an existing location where it's 20 determined that the players' interest are -- 21 MR. SANDERSON: And this one location 22 you're talking about is absolutely no one person can 23 even see the caller stand? 24 MR. BRESNEN: I don't think so. Do 25 you -- you can see the person sitting up there, but 0027 1 it's significantly elevated above the floor. So you 2 can see the person up there, and you see the balls 3 showing up on the screen. Am I describing this right? 4 AUDIENCE MEMBER: (Nodded) 5 MR. BRESNEN: So the players seeing 6 the -- you know, the person up there and the ball is 7 coming out, but they can't physically get up there on 8 a level, like I am with you now. If you're located 9 15 feet up in the air, I've got a different view than 10 where you're sitting now. 11 And, you know, I know that's the 12 difficulty with writing rules. You've always got, you 13 know, some outliers, but there's nothing wrong going 14 on here, nobody complains, and it's a successful hall. 15 But it's also utilized a building that was available 16 in a neighborhood in proximity to bingo players, and 17 so it's a living, breathing, functioning operation. 18 And I'm happy to work with you. You 19 know, if we want to go -- if you want to go look and, 20 you know, see, we can do that and work on some 21 compromise language on it. 22 Okay. I want to echo what's been said 23 about Item No. (l)(4)(D), "the number of winners" -- 24 this is what the caller is required to announce -- 25 "the number of winners and the total amount or prizes 0028 1 awarded for the game." 2 Now, I won't go into the details because 3 that's already been gone into, but you've got a 4 disconnect between what the caller knows and what the 5 caller is required to announce. So we would -- 6 players know what the total prize offered for the game 7 is. And if they know what the number of winners is, 8 they're pretty close to a final tally, but until you 9 know you've got half pays or Level 3 pays or whatever, 10 the caller doesn't -- the caller doesn't have that 11 information. 12 So our main -- one of our main emphasis 13 in all these rules is not to slow the process down, 14 keep it going, keep it exciting. 15 And then finally item -- let me see. I 16 think my final comment on this rule is Item (l)(6). 17 We subscribe to the principle that the other workers 18 in the hall should not be able to communicate with the 19 caller about information that would affect the 20 integrity of the game, but they do -- of a game, any 21 game. But we do communicate especially -- you've got 22 one requirement over here, for example, to make people 23 know -- make it known if a prize is -- a payout is 24 based on sales or attendance. And yet since you don't 25 know what the prize is until the sales have been 0029 1 counted up, there's no way, short of somebody walking 2 down there and communicating orally to them in a 3 nonelectronic fashion, there's no way to -- there's no 4 way to go communicate that. 5 So I would say you might add some 6 language there that either tailored this to 7 information that would affect the outcome of the game, 8 such as "Mrs. Smith needs B-9 to win," or, you know, 9 something like that. 10 If it's information that the caller is 11 required to announce or is required to be made 12 available to the players, then I see no evil in having 13 that information be able to be communicated 14 electronically to the caller. 15 That completes my comments on this rule. 16 I meant to start out by saying thanks to the staff and 17 all of you-all for working with us on these rules for 18 a long time. I think we've made a lot of progress, 19 and we appreciate your efforts. Thanks. 20 MS. JOSEPH: Thank you, Mr. Bresnen. Is 21 there anyone else that would like to -- or anyone that 22 would like to add to their comments on 402.200? 23 Mr. Smith? 24 COMMENTS BY TRACE SMITH 25 MR. SMITH: Once again, my name is 0030 1 Trace Smith, 402.200. Sorry, I went over my notes a 2 little too fast last time. 3 Going to -- on Page 6497 at the top, it 4 would be (c)(2), (3), (4) and (5) talking about the 5 bingo ball inspection log and the flashboard log and 6 the console log. 7 It's general practice across the state 8 to inspect the bingo balls or to ask a customer to 9 come up and inspect the bingo balls anyway. To 10 actually required to them have them and maintain a log 11 is -- I'm not sure what you're going to accomplish 12 there. It's redundant. It's going to have mounds of 13 paperwork. I'm not sure where we're going to start 14 keeping all this stuff, but if you're doing that every 15 session and you're playing a lot of sessions a week, 16 it adds up. 17 It's also something to lose, something 18 to get mixed up, mistakes get made. If a bingo ball 19 is missing or damaged, it's replaced in front of 20 customers 99 percent of the time anyway. In most of 21 the halls that I've ever seen or been in, it's always 22 inspected beforehand anyway. It's just something that 23 we'd just have to keep up with. 24 Thank you. 25 MR. SANDERSON: Thank you. 0031 1 MS. JOSEPH: Thank you. All right. 2 Moving to Rule 402.205 pertaining to Unit Agreements. 3 Mr. Hutchings, do you have any comments 4 on that? 5 MR. HUTCHINGS: No comment on that one. 6 Thank you. 7 MS. JOSEPH: Uh-huh. Mr. Smith? 8 MR. SMITH: No, ma'am. 9 MS. JOSEPH: Ms. Ives? 10 MS. IVES: Yes. 11 MS. JOSEPH: Thank you. 402.205 12 pertaining to Unit Agreements. 13 COMMENTS BY MS. IVES 14 MS. IVES: Good morning again. 15 Sharon Ives reporting -- or commenting on 402.205, 16 Unit Agreements. 17 Paragraph (C), a unit -- excuse me -- 18 "a unit must notify the Commission on a 19 Commission-prescribed form and submit a copy of the 20 executed unit agreement to the Commission prior to 21 operating as a unit." 22 My comments were going to be, you know, 23 what about a brand new conductor? And then I went on 24 to read Paragraph (k), and I believe that Paragraph 25 (k), that would be -- was that (2)(k)(C) -- just 0032 1 Paragraph (k). I'm sorry. So that really took care 2 of that comment. 3 On down to (B)(2) where it talks about 4 "A bookkeeper may be a business contact for a 5 commercial lessor and/or a designated agent for an 6 accounting unit provided that the bookkeeper is not 7 compensated or employed by the commercial lessor." 8 I'm really confused on that paragraph. 9 As you know, I own Fort Worth Bookkeeping and have 10 been -- I'll be celebrating my 20-year Anniversary in 11 February. Thank you. 12 I do have several lessors as clients, 13 you know, several of the bingo lessors. So I'm also 14 listed as the designated agent on various unit 15 agreements. So I'm not really sure how that's going 16 to play out or if that paragraph -- if I'm just 17 reading it wrong, if that would affect me as an 18 individual. But keep in mind that the commercial 19 lessors as well as the bingo units do not pay me, 20 Sharon Ives, individually, they pay Fort Worth 21 Bookkeeping, Incorporated. So I don't know if that 22 makes a difference or not. 23 MR. SANDERSON: We'll look into the 24 situation, the scenario. 25 MS. IVES: Exactly. Thank you. Moving 0033 1 on to Paragraph (m) where it's -- on down. I think 2 it's the last sentence of that paragraph, "unexpended 3 bingo funds must be disbursed to the bingo account of 4 each unit member before the end of the next calendar 5 quarter after the calendar quarter in which the unit 6 dissolved." 7 MS. JOSEPH: Excuse me. Could you state 8 again where this is? 9 MS. IVES: (m), Paragraph (m). 10 MS. JOSEPH: (m). Thank you. 11 MS. IVES: It will be on your second 12 column there about halfway down. 13 MS. JOSEPH: I got it. Thank you. 14 MS. IVES: As far as I know, the 15 organizations or the units only have the one bingo 16 checking account, which is their unit account. And 17 the way that I read this paragraph, I'm really 18 confused. And if I'm confused, other members can be 19 confused. When you disburse those funds, are you 20 disbursing them as you would a regular Charitable 21 distribution to the general funds? I just think that 22 that paragraph is confusing. 23 On down Paragraph (o), prior to -- let's 24 see, "An organization joining a unit must provide to 25 the Commission a complete list of the inventory it has 0034 1 transferred to the unit within ten business days of 2 joining the unit." 3 What if -- what if it's a new charity, 4 they're just starting out, they don't have an 5 inventory to transfer, is there a form? And I think 6 this would go with Paragraph (n) and (o). Is there a 7 form that when an organization joins a unit, that they 8 can just fill out and just put, you know, "not 9 applicable" or "does not apply" or "N/A" or something 10 to that sort? 11 MR. SANDERSON: If it's an organization 12 that hasn't been licensed before, then they probably 13 would not have any inventory. 14 MS. IVES: Right. Well, that's what I'm 15 saying. But when you read this paragraph, it says 16 "prior to joining a unit" -- that's Paragraph (n) -- 17 "a licensed authorized organization must provide 18 written notice to the Commission stating whether it 19 will be transferring inventory to the unit." If 20 they're brand new, if they're a brand new conductor 21 that just now got licensed and they're going straight 22 into a unit hall, which, therefore, they'll be part of 23 that unit, they won't have any inventory to transfer. 24 And the way that this reads is that you have to have 25 it on a prescribed form. 0035 1 MR. SANDERSON: If you transfer 2 inventory. 3 MS. IVES: Okay. (q), Paragraph (q), 4 the 15 days, I don't believe that's enough time 5 because once the unit agreement comes from the 6 attorney and you have to obtain all the signatures on 7 the unit agreement, it's only giving you 15 days, 15 8 business days to the effective date of any change. 9 The same thing on Paragraph (s) on the 10 next page. If you amend it to comply with the act or 11 the rules, it's 25 business days there in order to 12 have the executed amended unit agreement. And then 13 Paragraph (v) has, again, the 15 days. I just think 14 it should be all units and, you know, why not just 15 pick the 25 days across the board for this rule? 16 And those are my comments on the 17 402.205. 18 MS. JOSEPH: Thank you. 19 MS. IVES: Thank you. 20 MS. JOSEPH: Mr. Bresnen? 21 COMMENTS ON BEHALF OF THE BINGO INTEREST GROUP 22 MR. BRESNEN: Steve Bresnen on behalf of 23 the Bingo Interest Group. 24 My first comment is on -- this is on 25 402.205, Subsection (d). That appears to lay out 0036 1 three options by which the net proceeds from bingo can 2 be shared among the members of a unit. And if that 3 was going to be changed from one occasion to another 4 or from one time period to another, it would 5 apparently require a -- an amendment to the unit 6 agreement to be filled with the -- with the 7 Commission, if I'm reading that right. 8 I don't know why we would limit the 9 number of ways in which partners could determine to 10 share proceeds amongst themselves. And I have one 11 concern that -- the phrase in the middle says "or 12 based on a set percentage." It doesn't say a 13 percentage of what. If you mean that to be very 14 general to give them lots of latitude, then that's 15 fine, and that's better. 16 MR. SANDERSON: I think all these apply 17 to net proceeds. 18 MR. BRESNEN: Okay. But here is -- here 19 is my point: A given entity at a given time might 20 have better business than another one or might have a 21 different need than another one. So we're -- I think 22 we're straight-jacketing people a little bit in not 23 being able to make agreements amongst themselves 24 without filing amendments all the time. 25 I think if you -- this could be written 0037 1 to say that the basis for sharing the proceeds has to 2 be stated in the agreement or, you know, it has to be 3 stated somewhere. And if you want it to be filed with 4 the Commission, I'm just trying to avoid people having 5 to amend their agreement and then waiting. Doesn't 6 one of the provisions say you have to give like 15 7 days notice before you change the effective -- and I'm 8 thinking a lot of this works on the fly, and somebody 9 may have a need for a scholarship fund or something 10 where they're trying to make a distribution, and their 11 partners may agree to change that, but they may not 12 want to wait 15 days to do it. 13 So all I'm proposing here is that you 14 say they have to have an established method of sharing 15 in their agreement and allow them to inform the 16 Commission of a change in that. So it's really -- 17 there's nothing you can do. I don't think the statute 18 authorizes the Commission to intercede on the basis of 19 how the monies are distributed. 20 We don't -- we don't complain about the 21 part that -- of this rule that requires that the unit 22 has to meet the current requirements in the statute 23 for distributions, and I think it just -- I believe 24 that's over in Paragraph (l). But I'm afraid you're 25 just getting them straight-jacketed into three methods 0038 1 of distributing this money between themselves when 2 there's bound to be other varieties of methods to do 3 that. I think in the business world you find there's 4 a lot of different ways for doing that. So some 5 flexibility in Paragraph (d) would be good. 6 I think we need to do a considerable 7 amount of work, and I appreciate your willingness to 8 look at Subaction (e)(2). The statute lays out the 9 functions of a designated agent and who the designated 10 agent -- who a designated agent cannot be. And it 11 does not provide that a bookkeeper who is compensated 12 by a commercial lessor is prohibited from being a 13 designated agent. And it uses the word "employed," 14 and I believe under the rules of statutory 15 construction "employed" has to be given its every day 16 meaning unless otherwise defined in the statute. 17 And so in the case of someone 18 like Ms. Ives, she's employed by her company. She's 19 not employed by a commercial lessor. She is the 20 bookkeeper, being Fort Worth Bookkeeping, is 21 compensated by a commercial lessor, but that's not one 22 of the exclusions from the statute. And I think 23 you're adding an exclusion that the legislature didn't 24 provide for, and there's some rule of statutory 25 construction with a Latin name that says, you know, 0039 1 "What's in is in, and what's out is out" and all that. 2 So if you-all would take a look at that 3 and make sure we don't put Ms. Ives out of business, 4 I'd appreciate it. 5 Keep in mind that the only role for a 6 designated agent is to provide the books and records 7 to the Commission. They're not involved with 8 necessarily constructing the books and records as a 9 designated agent. So if you'd -- if you'd be careful 10 there, I'm sure Mr. Heinline, if he were here, would 11 feel the same way about that. 12 Over in -- by the way, there's an 13 "and/or" in that paragraph, "and/or." 14 In Paragraph (d) (sic) I think 15 there's -- there's an "and/or" on the next to the last 16 line, and then there's something -- something that's 17 wrong in the verbiage here that says -- I'm down at 18 the first comma. It says "the unit must notify the 19 Commission within fifteen business days of 20 distribution of the method of distribution and/or 21 provide a complete inventory." I'm not sure what 22 "fifteen days of distribution of the method of 23 distribution and/or provide a complete" -- you might 24 just get on the record and tell me what you're trying 25 to achieve there so people would understand the 0040 1 language of "distribution of the method of 2 distribution." 3 MS. JOSEPH: Is this Paragraph (g)? 4 MR. BRESNEN: Yes. 5 MR. SANDERSON: I will try to explain 6 it. If not, I'll ask Ms. Meagan Ahmad to come up. 7 If the unit agreement has in there that 8 a member withdrawing from the unit is entitled to a 9 share of their inventory or some other compensation, 10 then within 15 days after that member has left the 11 unit, they have to provide to us written documentation 12 of the method of the distribution of either the 13 inventory or funds to compensate them for that. 14 MR. BRESNEN: Okay. It may just be that 15 that's a long sentence and hard to read. So I might 16 suggest that you, you know, do a "See Spot Run" 17 version of that and see if the regulated community -- 18 if I'm having a hard time reading it and I do this all 19 the time, I think you're going to find some people -- 20 you're going to find some people in here who have a 21 hard time complying with it. We're not -- 22 MR. SANDERSON: Was my explanation 23 understandable? 24 MR. BRESNEN: I think so. 25 MR. SANDERSON: Okay. 0041 1 MR. BRESNEN: I think what you want to 2 say -- what you're trying to say is if you -- if 3 somebody leaves and they've got a right to a share of 4 money or inventory within 15 days after they leave -- 5 well, it says after -- I guess it says "after the 6 distribution," you want to be informed of the method 7 of distribution? 8 MR. SANDERSON: Yes. 9 MR. BRESNEN: Is that -- okay. Anyway, 10 I think that can be made clearer probably for the 11 general community. 12 Down on Subsection (o), you've got a ten 13 business day limit in there, and I would concur with 14 Sharon that we might homogenize the number of business 15 days here, generally speaking, except that I disagree 16 on the 25 business day requirement. It seems clear to 17 me that you-all were cutting some slack to people 18 where that if you change the rules or the statute 19 changes, that people get a little bit longer time to 20 comply. It's one thing if you're doing it and you 21 want to notify the Commission, you want the Commission 22 to be notified, because you have some control of 23 whether you do it or not. On this other, if you-all 24 do it or if the legislature changes the statute, 25 that's out of control and people should have a longer 0042 1 period of time to do it. 2 But I would suggest 15 business days in 3 (o), and I think that will bring all these timelines 4 consistent. The more you can be consistent in the 5 timelines, it's probably going to be easier for people 6 to follow them. 7 MR. SANDERSON: Just an overarching 8 comment based on some comments made by the 9 Commissioners at not the last meeting, but the meeting 10 prior to that. They would like to see all our rules 11 have working days instead of business days. So there 12 will be probably that change throughout some of these 13 rules. 14 MR. BRESNEN: Is a -- 15 MR. SANDERSON: I'm sorry, calendar 16 days. 17 MR. BRESNEN: Oh, they want calendar 18 days? 19 MR. SANDERSON: Calendar days, yes. 20 MR. BRESNEN: All right. Well, in that 21 case, bigger -- in that case, a bigger number; if 22 we're going to do calendar days, let's use bigger 23 numbers. Okay? 24 MR. SANDERSON: Okay. 25 MR. BRESNEN: Subsection (t) on 0043 1 Page 6500 of the Register, I'm not sure what evil that 2 prevents. If a unit is -- I don't know why we would 3 involuntarily dissolve a unit. I don't require (sic) 4 anything in the statute that requires an involuntary 5 dissolution of a unit. 6 I know of at least one instance where a 7 unit came into very strenuous conflict with a 8 commercial lessor and exercised its option to leave, 9 but it wanted to continue playing bingo. And so they 10 went and found another location and worked on getting 11 started up, but it took some time to do it. And it 12 might take more than 60 days. So I don't -- I don't 13 know if there's -- I don't see the evil or the need 14 for Subsection (t) there. 15 Subsection (u) I think is -- it puts the 16 Commission in the position of enforcing the terms of a 17 unit agreement, and the unit agreement is being a 18 trust agreement between the charities that enter into 19 it is enforceable as to each one of those folks. 20 So I think if there are some terms of 21 the unit agreement that you want them to abide by, 22 then until it's submitted or dissolved, then you might 23 specify those. But generally speaking, I think 24 you're -- there are elements of the operation of the 25 charities or the partnership there that you-all 0044 1 probably shouldn't be enforcing, you probably really 2 don't want to enforce. So you might think your way 3 through that to drill down on that. 4 For example, one thing that you probably 5 do want to enforce is the distribution amongst the 6 parties because it has to comply with the distribution 7 requirements in the statute. But other aspects of it 8 may fall beyond your purview. 9 And those are my comments on that rule. 10 MS. JOSEPH: Thank you, Mr. Bresnen. 11 MR. BRESNEN: Okay. Thank you. 12 MS. JOSEPH: Are there any additional 13 comments on 205? 14 (No response) 15 MS. JOSEPH: All right. If not, let's 16 go to rule 402.400 pertaining to General Licensing 17 Provisions; 402.400. 18 Mr. Hutchings? 19 MR. HUTCHINGS: No comment. Thank you. 20 MS. JOSEPH: Thank you. Mr. Smith? 21 MR. SMITH: No comments at this time. 22 MS. JOSEPH: Ms. Ives? 23 MS. IVES: Here we go again. 24 (Laughter) 25 MS. IVES: He's being mean to me. 0045 1 COMMENTS BY SHARON IVES 2 MS. IVES: Sharon Ives commenting on 3 Rule 402.400, General Licensing Provisions. 4 Let's see. (j)(2), I would like to add 5 "bingo chairman" or "bingo chairperson" on that 6 paragraph. So that form would be "signed by the 7 primary operator, officer or bingo chairman" or 8 whatever, however you-all wanted to word that one. 9 Let's see. The next comment would be 10 (m)(4), "A licensee that has not submitted a renewal 11 application timely must cease all bingo activity until 12 properly licensed." What documentation at that point 13 would be required in order to free up those time slots 14 so that the other charities could submit temporaries? 15 MR. SANDERSON: You're saying (m)(4), "A 16 licensee that has not submitted a renewal application 17 timely must cease all bingo activity until properly 18 licensed? 19 MS. IVES: Yes, sir. 20 MR. SANDERSON: That's not part of the 21 amendment. 22 MS. IVES: Okay. 23 MR. SANDERSON: That's already in the 24 rule. 25 MS. IVES: Okay. Well, then I guess my 0046 1 comments are over at this time. 2 (Laughter) 3 MS. IVES: Thank you, Phil. 4 MS. JOSEPH: You certainly can comment 5 if you would like to see that amended in the future, 6 but it's not part of this rulemaking. 7 MS. IVES: All right. Thanks. 8 MS. JOSEPH: Okay. Mr. Bresnen? 9 COMMENTS ON BEHALF OF THE BINGO INTEREST GROUP 10 MR. BRESNEN: My name is Steve Bresnen. 11 I'm here on behalf of the Bingo Interest Group. 12 I think I only have one question about 13 this rule, and it would be in Subsection (k). We're 14 changing -- we're limiting -- under current rules, any 15 licensee may place their license on administrative 16 hold, and this appears to restrict the placement on 17 administrative hold of a license of anybody other than 18 a licensed authorized organization or a commercial 19 lessor that is not an association lessor. 20 And I don't see the reason why we would 21 pull up the ladder on manufacturers, distributors, 22 association lessors. Mr. Fenoglio is not here today, 23 but I know that he's very actively involved with an 24 association lessor. That would seem to limit the 25 right of that organization or any similarly situated 0047 1 to place their licenses on administrative hold. 2 And I don't -- I think -- was this the 3 one that we passed over at a meeting or something? 4 Wasn't this on an agenda at a BAC meeting or something 5 and then we pulled it down for that day? I can't -- I 6 can't remember, but I was not familiar with this until 7 I saw this today. It might be just my bad, but I 8 don't -- I don't know of any reason to restrict those 9 other licensees from being able to place a license on 10 administrative hold, and I don't think the statute 11 requires it either. 12 So I would oppose that unless there's 13 some compelling reason that the Commission knows of 14 that they want to talk about publicly. Okay? 15 MR. SANDERSON: I don't at this time. 16 MR. BRESNEN: Okay, good. So I would be 17 opposed to that. I think it should be removed as 18 unnecessary. Thank you. 19 MS. JOSEPH: Any other comments on 20 402.400? 21 (No response) 22 MS. JOSEPH: Okay. I hear none. 23 And finally, comments on 16 TAC 402.442, 24 Amendment to a Commercial Lessor License. 25 Mr. Hutchings? 0048 1 MR. HUTCHINGS: One moment, please. 2 MS. JOSEPH: All right. 3 (Brief pause) 4 MR. HUTCHINGS: No comment. Thank you. 5 MS. JOSEPH: Okay. Thank you. 6 Mr. Smith? 7 MR. SMITH: No, ma'am. 8 MS. JOSEPH: Ms. Ives? 9 MS. MARSH: She said no. 10 MS. JOSEPH: Okay. And who is that 11 speaking for her? If you would identify yourself? 12 MS. MARSH: Kelly Marsh. 13 MS. JOSEPH: Thank you. Mr. Bresnen? 14 COMMENTS ON BEHALF OF THE BINGO INTEREST GROUP 15 MR. BRESNEN: Thank you. Steve Bresnen 16 on behalf of the Bingo Interest Group. 17 My comments are on the second page of 18 proposed amendments to 402.442. In Subsection (4) -- 19 hold on just a moment -- (b)(4)(B), it appears to say 20 that if a corporation or an L.L.C. wants to amend its 21 license to change its organization name, that it has 22 to provide a signed copy of the meeting minutes when 23 the organization voted to change its name. 24 If this is all intended to be licensed 25 authorized organizations changing their name and 0049 1 you're shepherding their interest, that's fine, but a 2 private corporation -- if Steve Bresnen, Inc. is a 3 commercial lessor and wants to change it to SB, Inc., 4 I see no reason why the meeting minutes where I 5 changed my company name need to be filed. 6 And frankly, I don't see any need for 7 (B) at all. I think once an organization has filed 8 the information listed in (A), whatever organization, 9 whether it's a charity or a private entity or 10 whatever, that once they file those instruments with 11 the Secretary of State, it's changed, and it doesn't 12 really matter what their minutes say, and I don't 13 think there's anything that the Lottery Commission can 14 do about that. I think their name is changed. 15 This could be simplified by just 16 eliminating Subsection (B) so the remaining section 17 would be "When amending organization name, additional 18 documents" -- or in addition to whatever else you 19 asked for in the rule -- "a copy of relevant amended 20 organizing instruments reflecting the change in 21 organization name." 22 So I'm just thinking if you -- you know, 23 if somebody changed the name and they didn't have -- 24 they didn't hold a meeting and it wasn't reflected in 25 their minutes, I think once it's -- once the Secretary 0050 1 of State has been filed, once they're accepted it, 2 that name is legally changed. And somebody -- a 3 member of the organization or somebody else might be 4 able to go and contest that because the proper 5 formalities weren't handled, but I don't think you-all 6 would have standing to do that, and I don't -- but for 7 this requirement in this rule, I don't think they'd be 8 doing anything wrong. 9 So I think you can make it easier and 10 simplify some of the paperwork just by requiring that 11 the relevant amended organizing instruments be filed. 12 And I think this is unlike the minutes that are 13 required when you make the decision to conduct bingo. 14 I think -- I think you'd want to see those, and that's 15 not something that gets filed with the Secretary of 16 State's office, and, you know, making sure that the 17 organization has some formality to -- by which its 18 members ought to know. What it's doing is one thing, 19 but in this case, all you're doing is changing the 20 name. 21 That completes my comments on that rule. 22 Thank you. 23 MS. JOSEPH: Is there anyone else 24 wishing to offer comments on any of these rules? 25 (No response) 0051 1 MS. JOSEPH: I see no one indicating 2 that they do wish to make additional comments. 3 We do appreciate everybody being here. 4 Thanks to your taking time to be here and offer 5 comments. I know our rules are going to be improved, 6 and we always appreciate your help. 7 We will now adjourn. It is 11:12. 8 Thank you very much. 9 (Proceedings concluded at 11:12 a.m.) 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 0052 1 C E R T I F I C A T E 2 3 STATE OF TEXAS ) 4 COUNTY OF TRAVIS ) 5 6 I, KIM PENCE, a Certified Shorthand 7 Reporter in and for the State of Texas, do hereby 8 certify that the above-mentioned matter occurred as 9 hereinbefore set out. 10 I FURTHER CERTIFY THAT the proceedings 11 of such were reported by me or under my supervision, 12 later reduced to typewritten form under my supervision 13 and control and that the foregoing pages are a full, 14 true and correct transcription of the original notes. 15 IN WITNESS WHEREOF, I have hereunto set 16 my hand and seal this 16th day of September 2008. 17 18 ______________________________ 19 KIM PENCE Certified Shorthand Reporter 20 CSR No. 4595-Expires 12/31/09 21 Firm Certification No. 276 Kennedy Reporting Service, Inc. 22 Cambridge Tower 1801 Lavaca Street, Suite 115 23 Austin, Texas 78701 512.474.2233 24 25