TITLE 16. ECONOMIC REGULATION

PART 9. TEXAS LOTTERY COMMISSION

CHAPTER 401. ADMINISTRATION OF STATE LOTTERY ACT

SUBCHAPTER B. LICENSING OF SALES AGENTS

16 TAC §401.153

The Texas Lottery Commission (Commission) proposes amendments to 16 TAC §401.153 (Qualifications for License). The purpose of the proposed amendments is to add language required by newly-enacted HB 1555 concerning certain locations licensed to sell alcoholic beverages. Specifically, the statute permits the Commission to license these locations if they derive less than 30 percent of their gross receipts from the sale or service of alcoholic beverages.

Kathy Pyka, Controller, has determined that for each year of the first five years the amendments will be in effect, there will be no significant fiscal impact for state or local governments as a result of the proposed amendments. There will be no adverse effect on small businesses, micro businesses, or local or state employment. There will be no additional economic cost to persons required to comply with the amendments, as proposed. Furthermore, an Economic Impact Statement and Regulatory Flexibility Analysis is not required because the amendments will not have an adverse economic effect on small businesses as defined in Texas Government Code §2006.001(2).

Michael Anger, Director of Lottery Operations, has determined that for each year of the first five years the proposed amendments will be in effect, the public benefit is reflecting the statutory change which allows the licensing of certain locations permitted to sell alcoholic beverages.

The Commission requests comments on the proposed amendments from any interested person. Comments on the proposed amendments may be submitted to Ryan Mindell, Assistant General Counsel, by mail at Texas Lottery Commission, P.O. Box 16630, Austin, Texas 78761-6630; by facsimile at (512) 344-5189; or by email at legal.input@lottery.state.tx.us. Comments must be received within 30 days after publication of this proposal in the Texas Register in order to be considered.

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

This proposal is intended to implement Texas Government Code, Chapter 466.

§401.153.Qualifications for License.

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

(c) Without limiting the foregoing grounds for denial of a license under this subchapter, the director shall deny a license to any person whose location for the sales agency is either:

(1) a location licensed for games of bingo under the Bingo Enabling Act (Occupations Code, Chapter 2001);

(2) on land owned by the State of Texas; or a political subdivision of this state and on which is located a public primary or secondary school, an institution of higher education, or an agency of the state; or

(3) a location for which a person holds a wine and beer retailer's permit, mixed beverage permit, mixed beverage late hours permit, private club registration permit, or private club late hours permit issued under the Alcoholic Beverage Code, Chapter 25, 28, 29, 32, or 33, other than a location for which a person holds a wine and beer retailer's permit issued under Chapter 25, Alcoholic Beverage Code, that derives less than 30 percent of the location's gross receipts from the sale or service of alcoholic beverages.

(d) - (e) (No change.)

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on August 9, 2017.

TRD-201703036

Bob Biard

General Counsel

Texas Lottery Commission

Earliest possible date of adoption: September 24, 2017

For further information, please call: (512) 344-5012


SUBCHAPTER C. PRACTICE AND PROCEDURE

16 TAC §401.207

The Texas Lottery Commission (Commission) proposes new 16 TAC §401.207 (Written Answer; Default Proceedings). The purpose of the proposed new rule is to set forth in a rule the Commission’s process for handling default contested case proceedings. In addition to describing the Commission’s recently developed default process, the proposed rule requires a respondent or applicant file a written response to the Commission’s notice of hearing with the State Office of Administrative Hearings (SOAH) at least 10 calendar days prior to the date of the hearing (or at least 5 calendar days prior to the date of the hearing in lottery summary suspension cases) if the respondent/applicant intends to appear at the hearing and contest the allegations in the notice of hearing. If no response is filed, or if the respondent/applicant does not appear at the hearing, SOAH and the Commission staff may proceed to dispose of the case by default. If an applicant or respondent appears at a hearing without first filing a written response, the rule contemplates that Commission staff generally would request a continuance of the hearing in order to prepare for a fully litigated contested case.

Kathy Pyka, Controller, has determined that for each year of the first five years the new rule will be in effect, there will be no significant fiscal impact for state or local governments as a result of the proposed new rule. There will be no adverse effect on small businesses, micro businesses, or local or state employment. There will be no additional economic cost to persons required to comply with the new rule, as proposed. Furthermore, an Economic Impact Statement and Regulatory Flexibility Analysis is not required because the proposed new rule will not have an adverse economic effect on small businesses as defined in Texas Government Code §2006.001(2).

Bob Biard, General Counsel, has determined that for each year of the first five years the proposed new rule will be in effect, the public benefit anticipated is a more efficient use of state resources by preparing for a fully litigated contested case hearing only in instances where a respondent or applicant intends to appear at the hearing and contest the allegations in the notice of hearing.

The Commission requests comments on the proposed new rule from any interested person. Comments on the proposed new rule may be submitted to Stephen White, Assistant General Counsel, by mail, at Texas Lottery Commission, P.O. Box 16630, Austin, Texas 78761-6630; by facsimile at (512) 344-5189; or by email at legal.input@lottery.state.tx.us. Comments must be received within 30 days after publication of this proposal in the Texas Register in order to be considered.

The new rule is proposed pursuant to Texas Government Code §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction, §466.015(a), which authorizes the Commission to adopt rules necessary to administer Chapter 466, and §2001.004(1) of the Texas Government Code, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures.

§401.207.Written Answer; Default Proceedings.

(a) The Commission may dispose of a contested case by default if a State Office of Administrative Hearings (SOAH) administrative law judge (ALJ) remands the case to the Commission for informal disposition upon proof that adequate and sufficient notice of hearing was mailed to, or personally served on, the respondent or applicant, and the respondent or applicant failed to either:

(1) file a written response to a notice of hearing in accordance with subsection (d) of this section; or

(2) appear in person or through an authorized representative on the day and at the time set for the hearing of the case, regardless of whether a written response has been filed.

(b) In addition to providing service of notice of hearing by mail or personal service, the Commission shall send a copy of a notice of hearing to a respondent or applicant by email if the respondent or applicant has provided the Commission with their email address.

(c) The Commission's default order shall state that the matters set forth in the notice of hearing are deemed admitted as true, and may grant the relief requested in the notice.

(d) A respondent or applicant must file a written answer to a Commission notice of hearing with SOAH at least 10 calendar days prior to the date of the hearing set forth in the notice (or at least 5 calendar days prior to the date of the hearing in lottery summary suspension cases conducted pursuant to Texas Government Code §466.160), and must provide the Commission with a copy of the answer provided to SOAH. A general denial of matters pleaded by the Commission in the notice shall be sufficient to comply with this subsection.

(e) If a respondent or applicant fails to file a written answer to a notice of hearing as required by this section, but appears in person or through an authorized representative on the day and at the time set for the hearing of the case, good cause exists for the ALJ to grant a continuance to schedule an evidentiary hearing at the request of the Commission.

(f) Following the Commission's issuance of a default order, and upon the timely filing of a motion for rehearing by the respondent or applicant in the contested case, the Commission, for good cause shown, may grant rehearing and request that SOAH schedule an evidentiary hearing in the case.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on August 9, 2017.

TRD-201703038

Bob Biard

General Counsel

Texas Lottery Commission

Earliest possible date of adoption: September 24, 2017

For further information, please call: (512) 344-5012


SUBCHAPTER D. LOTTERY GAME RULES

16 TAC §401.323

The Texas Lottery Commission ("Commission") proposes the repeal of 16 TAC §401.323 ("MONOPOLY MILLIONAIRES' CLUB™" Game Rule). The purpose of the proposed repeal is to remove references to a discontinued multi-jurisdiction lottery draw game no longer offered by the Commission.

Kathy Pyka, Controller, has determined that for each year of the first five years the repeal will be in effect, there will be no significant fiscal impact for state or local governments as a result of the proposed repeal. There will be no adverse effect on small businesses, micro businesses, or local or state employment. There will be no additional economic cost to persons required to comply with the repeal, as proposed. Furthermore, an Economic Impact Statement and Regulatory Flexibility Analysis is not required because the repeal will not have an adverse economic effect on small businesses as defined in Texas Government Code §2006.001(2).

Michael Anger, Director of Lottery Operations, has determined that for each year of the first five years the proposed repeal will be in effect, the public benefit anticipated is the elimination of references to a discontinued game as well as the minimization of player confusion.

The Commission requests comments on the proposed repeal from any interested person. Comments on the proposed repeal may be submitted to Ryan Mindell, Assistant General Counsel, by mail, at Texas Lottery Commission, P.O. Box 16630, Austin, Texas 78761-6630; by facsimile at (512) 344-5189; or by email at legal.input@lottery.state.tx.us. Comments must be received within 30 days after publication of this proposal in the Texas Register in order to be considered.

This repeal is proposed under Texas Government Code §466.015, which authorizes the Commission to adopt rules governing the operation of the lottery, §466.451, which authorizes the Commission to adopt rules relating to a multi-jurisdiction lottery game, and §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction.

This proposal is intended to implement Texas Government Code, Chapter 466.

§401.323."MONOPOLY MILLIONAIRES' CLUB™" Game Rule.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on August 9, 2017.

TRD-201703037

Bob Biard

General Counsel

Texas Lottery Commission

Earliest possible date of adoption: September 24, 2017

For further information, please call: (512) 344-5012


16 TAC §401.324

The Texas Lottery Commission (Commission) proposes new 16 TAC §401.324 (Prize Winner Election to Remain Anonymous). The purpose of the new rule is to implement recent legislative changes made by House Bill 59, relating to certain lottery prize winners' choice to remain anonymous. House Bill 59 establishes Texas Government Code §466.411, effective September 1, 2017, which will apply to any lottery prize claim submitted after January 1, 2018. This legislation, signed by Governor Abbott on June 12, 2017, permits a lottery prize winner of $1,000,000 or more, who is a natural person, the opportunity to elect to remain anonymous, in certain instances, by prohibiting all personally identifiable information from being released to the public. Prior to this legislation, the name of the prize winner, whether a natural person or legal entity, was released to the public pursuant to the Texas Public Information Act. Additionally, the name of a prize winner who is a natural person, but who elects to receive the prize payments in periodic installments, will only be withheld for thirty (30) days from the date of the claim. House Bill 59 requires the Commission to adopt rules and procedures to implement this law no later than December 1, 2017.

Kathy Pyka, Controller, has determined that for each year of the first five years the new rule will be in effect, there will be no significant fiscal impact for state or local governments as a result of the proposed new rule. There will be no adverse effect on small businesses, micro businesses, or local or state employment. There will be no additional economic cost to persons required to comply with the new rule, as proposed. Furthermore, an Economic Impact Statement and Regulatory Flexibility Analysis is not required because the new rule will not have an adverse economic effect on small businesses as defined in Texas Government Code §2006.001(2).

Michael Anger, Director of Lottery Operations, has determined that for each year of the first five years the proposed new rule will be in effect, the public benefit anticipated is the opportunity for certain prize winners of a lottery prize in an amount equal to $1 million or more to elect to remain anonymous and prohibit all personally identifiable information from being released to the public.

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

The new rule is proposed under Texas Government Code §466.015, which authorizes the Commission to adopt rules governing the operation of the lottery and §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction.

This proposal is intended to implement Texas Government Code, Chapter 466.

§401.324.Prize Winner Election To Remain Anonymous.

(a) A natural person who is a prize winner of a lottery prize in an amount equal to $1 million or more, or who is an owner of a beneficial interest in a legal entity that is a prize winner of a lottery prize in an amount equal to $1 million or more, may on the date the winner claims the prize elect to remain anonymous and prohibit all personally identifiable information from being released to the public.

(1) A prize winner who elects to remain anonymous must specify that choice at the time of claiming their lottery prize.

(2) If the prize is paid in periodic installments, and the prize winner elects to remain anonymous, the commission may release the prize winner's name on or after the 30th day after the date the person claims the lottery prize. All other personally identifiable information is subject to section 466.022(b)(3) of the State Lottery Act and the Texas Public Information Act (Texas Government Code, Chapter 552).

(b) "Prize winner" means a person who presents a valid winning ticket, claims a lottery prize, and is recognized by the commission as the person entitled to receive lottery prize payments. The term does not include an assignee of a lottery prize.

(c) "Personally identifiable information" means information that alone or in conjunction with other information identifies an individual, including an individual's name, social security number, date of birth, or government-issued identification number such as a driver's license or passport. "Personally identifiable information" does not include the name of the prize winner's city or county of residence.

(d) The amount of a lottery prize is determined by the total amount of prize money paid to a prize winner for a single lottery prize claim, before deducting any federal tax withholdings or other deductions required by law. If a prize winner selects to receive the cash value option, the amount the commission paid to fund the cash value option (before taxes and other deductions) will be considered the prize money paid. In accordance with lottery claim procedures, all prizes resulting from a single lottery ticket will be combined on a single lottery claim form and considered a single lottery prize claim for determining the total amount of prize money paid.

(e) The commission may release the name of a legal entity that is a prize winner as well as the name of the authorized representative of the legal entity (whose name is printed on the lottery claim form), unless the authorized representative is a beneficial interest owner of the legal entity and elects to remain anonymous.

(f) A prize winner's choice to remain anonymous under this rule does not prohibit the commission from requiring, for claim validation and lottery prize processing purposes, certain government-issued identification, including but not limited to a driver's license, social security card, or passport, of all natural persons who are prize winners or owners of a beneficial interest of a legal entity prize winner.

(g) In certain instances, the lottery prize claim processing may be delayed and not occur on the same date the lottery claim is submitted to the commission. In these cases, the day of final validation and processing of the lottery prize will be considered the "date on which the claim is made".

(h) The commission may release personally identifiable information of lottery prize winners to other state agencies or governmental bodies as required by law.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on August 9, 2017.

TRD-201703035

Bob Biard

General Counsel

Texas Lottery Commission

Earliest possible date of adoption: September 24, 2017

For further information, please call: (512) 344-5012