TITLE 16. ECONOMIC REGULATION

PART 8. TEXAS RACING COMMISSION

CHAPTER 301. DEFINITIONS

16 TAC §301.1

The Texas Racing Commission proposes an amendment to 16 TAC §301.1, relating to definitions. The proposed amendment creates a new definition for the term Program/Paper Trainer. The amendment also reorders the definitions to place the already defined terms Active License and Inactive License into their proper alphabetical order.

Chuck Trout, Executive Director, has determined that for the first five-year period the rule is in effect there will be no fiscal implications for local or state government as a result of enforcing the proposal.

Mr. Trout has determined that for each year of the first five years that the rule is in effect the anticipated public benefit will be to provide a method to address the problem of program/paper trainers, who are listed in the racing program as the trainer when in fact the horse has been in the care, custody and training of someone else. The wagering public, which uses trainers' records for handicapping purposes, is defrauded when the program does not accurately reflect the name and history of the actual trainer.

The amendment will have no adverse economic effect on small or micro-businesses, and therefore preparation of an economic impact statement and a regulatory flexibility analysis is not required.

There are no negative impacts upon employment conditions in this state as a result of the proposed amendment.

The amendment will have no effect on the state's agricultural, horse breeding, horse training, greyhound breeding, and greyhound training industry.

All comments or questions regarding the proposed amendment may be submitted in writing within 30 days following publication of this notice in the Texas Register to Mary Welch, Assistant to the Executive Director for the Texas Racing Commission, at P.O. Box 12080, Austin, Texas 78711-2080, telephone (512) 833-6699, or fax (512) 833-6907.

The amendment is proposed under Texas Revised Civil Statutes Annotated, Article 179e, §3.02, which authorizes the Commission to adopt rules to administer the Act.

The amendment implements Texas Revised Civil Statutes Annotated, Article 179e.

§301.1.Definitions.

(a) (No change.)

(b) The following words and terms, when used in this part, shall have the following meanings, unless the context clearly indicates otherwise:

(1) Act--The Texas Racing Act, Article 179e, Texas Civil Statutes.

(2) Active license--a racetrack license designated by the commission as active.

(3) [(2)] Age of a greyhound--determined as beginning on the day the greyhound is whelped.

(4) [(3)] Age of a horse--determined as beginning on the first day of January in the year in which the horse is foaled.

(5) [(4)] Application documents--documents submitted by an applicant for a license in support of the application.

(6) [(5)] Application period--a period designated by the Commission for the submission of application documents for a racetrack license.

(7) [(6)] Association grounds--all real property approved by the Commission for use by an association in the conduct of a race meeting.

(8) [(7)] Association veterinarian--a veterinarian employed by the association.

(9) [(8)] Authorized agent--a person appointed in writing by the owner or trainer of a horse or greyhound to represent the owner or trainer at a racetrack.

(10) [(9)] Backstretch--the straightaway on the side of a track that is opposite to the finish line.

(11) [(10)] Booking--a contract between an association and a kennel owner for the kennel owner to provide greyhounds to the association for a race meeting and for the association to provide kennel buildings to house the greyhounds.

(12) [(11)] Branding--the act of a totalisator system imprinting a mutuel ticket with information that identifies the ticket as canceled or cashed and automatically making the appropriate notation in the system's memories.

(13) [(12)] Canceled ticket--a mutuel ticket that represents a wager that has been canceled and withdrawn from the pari-mutuel pool.

(14) [(13)] Cashed ticket--a mutuel ticket that is paid for a winning wager.

(15) [(14)] Chief veterinarian--the chief veterinarian employed by the Commission.

(16) [(15)] Common pool--a pool in which the wagers received at a receiving location are combined with the wagers received at a sending racetrack.

(17) [(16)] Condition of a race--a characteristic element of the race, such as the distance, qualifications of animal to enter, purse or stakes, or other special features.

(18) [(17)] Coupled entry--two or more horses entered in a race that, because of common ties of ownership are joined to be a single betting interest in that race.

(19) [(18)] Cushion--the top level of a dirt racetrack.

(20) [(19)] Dead heat--a race in which two or more race animals finish at the same time.

(21) [(20)] Double entry--an entry of two or more greyhounds in the same race that have either common ownership or the same trainer and are separate wagering interests.

(22) [(21)] Encrypted--scrambled or otherwise manipulated audio-visual signals to mask the original video content of the signal to cause the signals to be indecipherable and unrecognizable to any person receiving the signal.

(23) [(22)] Entry--a horse, or horses in the case of a coupled entry, made eligible to run in a race.

(24) [(23)] Established weight--the racing weight for a greyhound established in accordance with the Rules.

(25) [(24)] Exempt institutional investor--an investor who is:

(A) an insurance company as defined by the Securities Act of 1933, §2(13), a bank as defined by that Act, §3(a)(2), a savings and loan association or other institution referenced in that Act, §3(a)(5)(A), or a foreign bank or savings and loan association or equivalent institution;

(B) an investment company as defined by the Investment Company Act of 1940, §3(a), an issuer that would have been deemed an investment company under that Act except for the exclusion in that Act, §3(c)(1), or a business development company as defined by that Act, §2(c)(48);

(C) a small business investment company licensed by the United States Small Business Administration under the Small Business Investment Act of 1958, §301(c);

(D) a plan established and maintained by a state, its political subdivisions, or an agency or instrumentality of a state or its political subdivisions for the benefit of its employees;

(E) an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974;

(F) a trust fund whose trustee is a bank or trust company and whose participants are exclusively plans of the types identified in subparagraph (D) or (E) of this definition, except trust funds that include as participants individual retirement accounts or H.R. 10 plans;

(G) a business development company as defined by the Investment Advisers Act of 1940, §202(a)(22), or an investment adviser registered under that Act;

(H) an organization described in the Internal Revenue Code, §501(c)(3);

(I) a dealer registered under the Securities Exchange Act of 1934, §15;

(J) a legal entity with a market value of at least $50 million whose securities are traded on a nationally recognized or foreign securities exchange or interdealer quotation system, such as NASDAQ; and

(K) a legal entity, acting for its own account or the account of other exempt institutional investors, that in the aggregate owns and invests on a discretionary basis at least $25 million in securities of issuers that are not affiliated with the entity, with the aggregate value of the securities being the cost of the securities, except if the entity reports its securities holdings in its financial statements based on their market value and no current information regarding the cost of the securities has been published, in which case the securities may be valued at market.

(26) [(25)] Exotic pool--a mutuel pool that involves wagers on more than one entered horse or greyhound or on entries in more than one race.

(27) [(26)] False start--failure of the starting gate or box doors to open simultaneously.

(28) [(27)] Foul--an action by a horse or jockey that hinders or interferes with another horse or jockey during the running of a race.

(29) [(28)] Greyhound race--a contest among greyhounds for purse, stakes, premium, or wager for money, run in the presence of the racetrack officials, including the following:

(A) Hurdle race--a race over a course in which jumps or hurdles are used.

(B) Match race--a race between two or more greyhounds, each the property of different owners, on terms agreed on by the owners and approved by the Commission.

(C) Overnight race--a race for which entries close 96 hours or less before the time set for the first race of the day on which the race is to bee run.

(D) Purse race--a race for money or other prize to which the owners of the greyhounds engaged in the race do not contribute an entry.

(E) Race on the flat--a race over a course in which no jumps or other obstacles are placed.

(F) Stakes race--a race in which all money is to be deposited by the owners of the greyhounds engaged in the race, including a race of the day on which the stakes race is to be run.

(30) [(29)] Groom--an individual employed by an owner or trainer of a racehorse to tend to the physical appearance of the horse and to perform chores in and around the stable.

(31) [(30)] Growing medium--the substance immediately below the grass on a turf track.

(32) [(31)] Handle--the total amount of money wagered at a racetrack during a particular period.

(33) [(32)] Horse--an equine of any breed, including a stallion, gelding, mare, colt, filly, or ridgling.

(34) [(33)] Horse Race--a running contest between horses for entry fees, purse, prize, or other reward, including the following:

(A) Claiming race--a race in which a horse may be claimed in accordance with the Rules.

(B) Derby race--a race in which the first condition of eligibility is to be three years old.

(C) Futurity race--a race in which the first condition of eligibility is to be two years old.

(D) Guaranteed race--a race for which the association guarantees by its conditions a specified purse, which is the limit of its liability.

(E) Handicap race--a race in which the weights to be carried by the entered horses are adjusted by the racing secretary for the purpose of equalizing their respective chances of winning.

(F) Match race--a race between only two horses that are owned by different owners.

(G) Maturity race--a race in which the first condition of eligibility is to be four years of age or older.

(H) Optional claiming race--a claiming race in which there is an option to have horses entered to be claimed for a stated price or not eligible to be claimed.

(I) Progeny race--a race restricted to the offspring of a specific stallion or stallions.

(J) Purse or overnight race--a race for which owners of horses entered are not required by its conditions to contribute money toward its purse.

(K) Stakes race--a race to which nominators of the entries contribute to a purse.

(L) Starter race--an overnight race under allowance or handicap conditions, restricted to horses which have previously started for a designated claiming price or less, as stated in the conditions of the race.

(M) Walkover race--a stakes race in which only one horse starts or all the starters are owned by the same interest.

(N) Weight for age race--a race in which weights are assigned in keeping with the scale of weights in these rules.

(35) [(34)] In today horse--a horse that is in the body of a race program which is entered into a race on the next consecutive race day.

(36) Inactive license--a racetrack license designated by the commission as inactive.

(37) [(35)] Kennel area--an area on association grounds for the boarding or training of greyhounds.

(38) [(36)] Lead out--an individual who handles a greyhound from the lockout kennel to the starting box.

(39) [(37)] Locked in the gate--a horse or greyhound that is prevented from leaving the starting gate or box due to the failure of the front door of the gate or box to open simultaneously with the other doors.

(40) [(38)] Lure--a mechanical apparatus at a greyhound racetrack consisting of a stationary rail installed around the track, a motorized mechanism that travels on the rail, and a pole that is attached to the mechanism and extends over the track, and to which a decoy is attached.

(41) [(39)] Maiden--a horse or greyhound that has never won a race at a recognized race meeting authorized by the Commission or by another racing jurisdiction.

(42) [(40)] Minus pool--a pool in which there are insufficient net proceeds to pay the minimum price to holders of the winning tickets.

(43) [(41)] Mutuel field--a group of horses joined as a single betting interest in a race due to the limited numbering capacity of the totalisator.

(44) [(42)] No race--a race that is canceled after being run due to a malfunction of the starting gate or box or any other applicable reason as determined by the Rules.

(45) [(43)] Nominator--the person in whose name a horse or greyhound is entered for a race.

(46) [(44)] Occupational licensee--an individual to whom the Commission has issued a license to participate in racing with pari-mutuel wagering.

(47) [(45)] Odds--a number indicating the amount of profit per dollar wagered to be paid to holders of winning pari-mutuel tickets.

(48) [(46)] Off time--the moment when, on signal from the starter, the horses or greyhounds break from the starting gate or box and run the race.

(49) [(47)] Paddock--the area in which horses or greyhounds gather immediately before a race.

(50) Paper/Program Trainer--a licensed trainer who solely for the purposes of the official race program is identified as the trainer of a horse that is actually under the control of and trained by another person who may or may not hold a current trainer’s license in any jurisdiction.

(51) [(48)] Patron--an individual present on association grounds during a race meeting who is eligible to wager on the racing.

(52) [(49)] Pecuniary interest--includes a beneficial ownership interest in an association, but does not include bona fide indebtedness or a debt instrument of an association.

(53) [(50)] Performance--the schedule of horse or greyhound races run consecutively as one program. A greyhound performance consists of fifteen or fewer races unless approved by the executive secretary.

(54) [(51)] Photofinish--the system of recording pictures or images of the finish of a race to assist in determining the order of finish.

(55) [(52)] Place--to finish second in a race.

(56) [(53)] Post position--the position assigned to a horse or greyhound in the starting gate or box.

(57) [(54)] Post time--the time set for the arrival at the starting gate or boxes by the horses or greyhounds in a race.

(58) [(55)] Purse--the cash portion of the prize for a race.

(59) [(56)] Race date--a date on which an association is authorized by the Commission to conduct races.

(60) [(57)] Race day--a day in which a numerical majority of scheduled races is conducted and is a part of the association's allocated race days.

(61) [(58)] Race meeting--the specified period and dates each year during which an association is authorized to conduct racing and/or pari-mutuel wagering by approval of the Commission.

(62) [(59)] Racetrack facility--the buildings, structures and fixtures located on association grounds used by an association to conduct horse or greyhound racing.

(63) [(60)] Racetrack official--an individual appointed or approved by the Commission to officiate at a race meeting.

(64) [(61)] Racing judge--the executive racing official at a greyhound track.

(65) [(62)] Reasonable belief--a belief that would be held by an ordinary and prudent person in the same circumstances as the actor.

(66) [(63)] Recognized race meeting--a race meeting held under the sanction of a turf authority.

(67) [(64)] Refunded ticket--a pari-mutuel ticket that has been refunded for the value of a wager that is no longer valid.

(68) [(65)] Rule off--to bar an individual from the enclosure of an association and to deny all racing privileges to the individual.

(69) [(66)] Rules--the rules adopted by the Texas Racing Commission found in Title 16, Part VIII of the Texas Administrative Code.

(70) [(67)] Schooling race--a practice race conducted under actual racing conditions but for which wagering is not permitted.

(71) [(68)] Scratch--to withdraw an entered horse or greyhound from a race after the closing of entries.

(72) [(69)] Scratch time--the closing time set by an association for written requests to withdraw from a race.

(73) [(70)] Show--to finish third in a race.

(74) [(71)] Specimen--a bodily substance, such as blood, urine, or saliva, taken for analysis from a horse, greyhound, or individual in a manner prescribed by the Commission.

(75) [(72)] Stakes payments--the fees paid by subscribers in the form of nomination, entry, or starting fees to be eligible to participate.

(76) [(73)] Stallion owner--a person who is owner of record, at the time of conception, of the stallion that sired the accredited Texas-bred horse.

(77) [(74)] Starter--a horse or greyhound entered in a race when the doors of the starting gate or box open in front of the horse or greyhound at the time the official starter dispatches the horses or greyhounds.

(78) [(75)] Straight pool--a mutuel pool that involves wagers on a horse or greyhound to win, place, or show.

(79) [(76)] Subscription--money paid to nominate, enter, or start a horse or greyhound in a stakes race.

(80) [(77)] Tack room--a room in the stable area of a horse racetrack in which equipment for training and racing the horses is stored.

(81) [(78)] Totalisator--a machine or system for registering and computing the wagering and payoffs in pari-mutuel wagering.

(82) [(79)] Tote board--a facility at a racetrack that is easily visible to the public on which odds, payoffs, advertising, or other pertinent information is posted.

(83) [(80)] Tote room--the room in which the totalisator equipment is maintained.

(84) [(81)] Tout--an individual licensed to furnish selections on a race in return for a set fee.

(85) [(82)] Trial--a race designed primarily to determine qualifiers for finals of a stakes race.

(86) [(83)] Uplink--an earth station broadcasting facility, whether mobile or fixed, which is used to transmit audio-visual signals and/or data emanating from a sending racetrack, and includes the electronic transfer of received signals from the receiving antenna to TV monitors within the receiving location.

(87) [(84)] Weigh in--the process by which a jockey is weighed after a race or by which a greyhound is weighed before being placed in the lockout kennel.

(88) [(85)] Weighing in weight--the weight of a greyhound on weighing in to the lockout kennel.

(89) [(86)] Weigh out--the process by which a jockey or greyhound is weighed before a race.

(90) [(87)] Weighing out weight--the weight of a greyhound on weighing out of the lockout kennel immediately before post time for the race in which the greyhound is entered.

(91) [(88)] Win--to finish first in a race.

(92) [(89)] Winner--

(A) for horse racing, the horse whose nose reaches the finish line first, while carrying the weight of the jockey or is placed first through disqualification by the stewards; and

(B) for greyhound racing, the greyhound whose muzzle, or if the muzzle is lost or hanging, whose nose reaches the finish line first or is placed first through disqualification by the judges.

[(90) Active license--a racetrack license designated by the commission as active.]

[(91) Inactive license--a racetrack license designated by the commission as inactive.]

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 November 22, 2016.

TRD-201606051

Mark Fenner

General Counsel

Texas Racing Commission

Earliest possible date of adoption: January 8, 2017

For further information, please call: (512) 833-6699


CHAPTER 307. PROCEEDINGS BEFORE THE COMMISSION

SUBCHAPTER C. PROCEEDINGS BY STEWARDS AND RACING JUDGES

16 TAC §307.62

The Texas Racing Commission proposes an amendment to 16 TAC §307.62, Disciplinary Action. The section relates to disciplinary hearings conducted by the stewards or racing judges. The proposed amendment modifies subsection (b), Notice of Hearing, by providing that a hearing notice may be: hand delivered; mailed by both certified mail, return receipt requested, and regular mail; or sent by email provided that the Commission verifies receipt by the licensee. The proposed amendment also creates new subsection (j), Discovery, to set out the process by which agency staff and licensees exchange evidentiary information prior to a disciplinary hearing. Finally, the amendment changes the section's title to "Disciplinary Hearings" in order to more accurately reflect the section's content.

Chuck Trout, Executive Director, has determined that for the first five-year period the rule is in effect there will be no fiscal implications for local or state government as a result of enforcing the new rule.

Mr. Trout has determined that for each year of the first five years that the rule is in effect the anticipated public benefit of the amendment to subsection (b) will be to ensure adequate notice to licensees of disciplinary hearings while also ensuring that the Commission can efficiently proceed with a case, and that the anticipated public benefit of new subsection (j) will be to provide an effective system for the parties to exchange information prior to a hearing.

The amendment will have no adverse economic effect on small or micro-businesses, and therefore preparation of an economic impact statement and a regulatory flexibility analysis is not required.

There are no negative impacts upon employment conditions in this state as a result of the proposed amendment.

The amendment will have no effect on the state's agricultural, horse breeding, horse training, greyhound breeding, and greyhound training industry.

All comments or questions regarding the proposed amendment may be submitted in writing within 30 days following publication of this notice in the Texas Register to Mary Welch, Assistant to the Executive Director for the Texas Racing Commission, at P.O. Box 12080, Austin, Texas 78711-2080, telephone (512) 833-6699, or fax (512) 833-6907.

The amendment is proposed under Texas Revised Civil Statutes Annotated, Article 179e, §3.02, which authorizes the Commission to adopt rules to administer the Act.

The amendment implements Texas Revised Civil Statutes Annotated, Article 179e.

§307.62.Disciplinary Hearings [Action].

(a) (No change.)

(b) Notice of Hearing. Except as otherwise provided by the Rules, the stewards and racing judges shall provide written notice to a person who is the subject of a disciplinary hearing at least 10 calendar days before the hearing. Notice given under this subsection must state the nature of the charges against the person and the possible penalties that may be imposed. The stewards and racing judges or their designee may hand deliver the written notice of the disciplinary hearing to the licensee who is the subject of the hearing. Alternatively, the stewards and racing judges may provide the notice by sending it by both certified mail, return receipt requested, and regular mail to the licensee's last known address as found in the Racing Commission's licensing records. The stewards and racing judges may also send the notice by electronic mail provided that the Commission verifies receipt by the licensee. The person may waive his or her right to 10 days notice. Nonappearance of a licensee to whom notice has been provided under this subsection shall be deemed a waiver of the right to a hearing before the stewards or racing judges.

(c) - (i) (No change.)

(j) Discovery.

(1) Prior to a disciplinary hearing, upon written request served on the opposing party, a party shall be entitled, subject to the limitations in §2.15 of the Act, to:

(A) the name and address of any witness who may be reasonably expected to testify on behalf of the opposing party, together with a brief summary of the subject matter of each witness's anticipated testimony; and

(B) copies of all documents or other materials in the possession or control of the opposing party that the opposing party reasonably expects to introduce into evidence in either its case-in-chief or in rebuttal. Rebuttal documents, to the extent that they are not immediately identifiable, shall be tendered to the opposing party forthwith upon identification.

(2) A party may obtain discovery only by making a written request for the production of witness lists, documents, and other materials, as provided in paragraph (1) of this subsection.

(3) The stewards and racing judges may exclude from a disciplinary hearing any witnesses, documents, and other materials that were not properly disclosed in accordance with this subsection unless good cause is shown for the failure to disclose them.

(4) Discovery requests under this section shall not be cause for postponement or delay of a disciplinary hearing or of the disposition of the proceedings.

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 November 22, 2016.

TRD-201606052

Mark Fenner

General Counsel

Texas Racing Commission

Earliest possible date of adoption: January 8, 2016

For further information, please call: (512) 833-6699


CHAPTER 311. OTHER LICENSES

SUBCHAPTER B. SPECIFIC LICENSES

16 TAC §311.104

The Texas Racing Commission proposes an amendment to 16 TAC §311.104, Trainers. The section relates to qualifications and duties of horse and greyhound trainers. The proposed amendment creates new subsection (l) and prohibits any licensee from acting as a program/paper trainer and any owner from naming a program/paper trainer on an entry form. The amendment also identifies this conduct as a detrimental practice and as being inconsistent with maintaining the honesty and integrity of racing.

Chuck Trout, Executive Director, has determined that for the first five-year period the rule is in effect there will be no fiscal implications for local or state government as a result of enforcing the new rule.

Mr. Trout has determined that for each year of the first five years that the rule is in effect the anticipated public benefit will be to discipline those who engage in being a program/paper trainer and those use them, and to thereby reduce and eventually eliminate the practice.

The amendment will have no adverse economic effect on small or micro-businesses, and therefore preparation of an economic impact statement and a regulatory flexibility analysis is not required.

There are no negative impacts upon employment conditions in this state as a result of the proposed amendment.

The amendment will have no effect on the state's agricultural, horse breeding, horse training, greyhound breeding, and greyhound training industry.

All comments or questions regarding the proposed amendment may be submitted in writing within 30 days following publication of this notice in the Texas Register to Mary Welch, Assistant to the Executive Director for the Texas Racing Commission, at P.O. Box 12080, Austin, Texas 78711-2080, telephone (512) 833-6699, or fax (512) 833-6907.

The amendment is proposed under Texas Revised Civil Statutes Annotated, Article 179e, §3.02, which authorizes the Commission to adopt rules to administer the Act, and §13.01, which requires the Commission to adopt rules providing for the exclusion or ejection of a person who has committed a corrupt or fraudulent act in connection with racing or pari-mutuel wagering.

The amendment implements Texas Revised Civil Statutes Annotated, Article 179e.

§311.104.Trainers.

(a) - (k) (No change.)

(l) No licensee shall act as a program trainer, nor shall any owner name a program trainer on the entry form. Any licensee found to be acting as a program trainer and any owner who listed a program trainer is responsible for all violations occurring from participation of any horse or greyhound entered or raced by the licensee. Further, the Commission recognizes that identification of the correct trainer in the program is an important handicapping tool used by the wagering public. Therefore, the Commission identifies the practices of utilizing a program trainer and of acting as a program trainer as being inconsistent with maintaining the honesty and integrity of racing under §307.7 (relating to Ejection and Exclusion) and as a detrimental practice under §311.6 (relating to Denial, Suspension and Revocation of Licenses.)

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 November 22, 2016.

TRD-201606053

Mark Fenner

General Counsel

Texas Racing Commission

Earliest possible date of adoption: January 8, 2017

For further information, please call: (512) 833-6699


CHAPTER 321. PARI-MUTUEL WAGERING

SUBCHAPTER A. MUTUEL OPERATIONS

The Texas Racing Commission proposes amendments to 16 TAC §§321.2, 321.11, 321.35, 321.41, and 321.42. Section 321.2 relates to the practice of odds manipulation and identifies it as a violation of the rules. Section 321.11 relates to the storage of magnetic media containing totalisator computer logs. Section 321.35 relates to claims on pari-mutuel tickets or vouchers presented for payment. Section 321.41 relates to the cashing of outstanding pari-mutuel tickets. Section 321.42 relates to the cashing of outstanding pari-mutuel vouchers.

The proposed amendment to §321.2 corrects an incorrect rule reference. The proposed amendment to §321.11 deletes the term "magnetic media" and replaces it with the words "removable electronic media." The proposed amendment to §321.35 deletes the subsections requiring the approval of the executive secretary prior to a claim being paid by the association on an unclaimed ticket or voucher. The proposed amendments to both §321.41 and §321.42 delete the subsections requiring the associations to provide pari-mutuel auditor tote reports and copies of Outs tickets.

Chuck Trout, Executive Director, has determined that for the first five-year period the rules are in effect there will be no fiscal implications for local or state government as a result of enforcing the rule amendments.

Mr. Trout has determined that for each year of the first five years that the rule amendments are in effect the anticipated public benefit of the proposed amendment to §321.2 will be to provide appropriate enforcement authority for violations of the odds manipulation rule. The public benefit of the proposed amendment to §321.11 will be to modernize technology references in the rule to be consistent with current business practices. The public benefit of the proposed amendments to §§321.35, 321.41 and 321.42 will be to alleviate unnecessary administrative burdens on the racing associations when paying patrons on outstanding tickets and vouchers.

The amendments will have no adverse economic effect on small or micro-businesses, and therefore preparation of an economic impact statement and a regulatory flexibility analysis is not required.

There are no negative impacts upon employment conditions in this state as a result of the proposed amendments.

The amendments will have no effect on the state's agricultural, horse breeding, horse training, greyhound breeding, and greyhound training industry.

All comments or questions regarding the proposed amendments may be submitted in writing within 30 days following publication of this notice in the Texas Register to Mary Welch, Assistant to the Executive Director for the Texas Racing Commission, at P.O. Box 12080, Austin, Texas 78711-2080, telephone (512) 833-6699, or fax (512) 833-6907.

DIVISION 1. GENERAL PROVISIONS

16 TAC §321.2, §321.11

The amendments are proposed under Texas Revised Civil Statutes Annotated, Article 179e, §3.02, which authorizes the Commission to adopt rules to administer the Act, and §11.01, which requires the Commission to adopt rules to regulate pari-mutuel wagering on horse and greyhound races.

The amendments implement Texas Revised Civil Statutes Annotated, Article 179e.

§321.2.Odds Manipulation.

The Commission recognizes that the wagering public uses Odds and Will Pays as a handicapping tool. To maintain the integrity of the pools, the Commission, therefore, identifies the practice of canceling wagers that were placed for the sole purpose of manipulating the posted Odds or Will Pays as being inconsistent with the honesty and integrity of racing under §307.7, Ejection and Exclusion, and as a detrimental practice under §311.6 [§309.9], Denial, Suspension, and Revocation of Licenses.

§321.11.Access to Removable Electronic [Magnetic] Media.

(a) An association shall submit a storage plan for all removable electronic [magnetic] media storing computer logs to the executive secretary for approval. This plan must include sufficient information for the executive secretary to determine that the information will remain secure, including:

(1) sufficient space for the totalisator vendor to store all removable electronic [magnetic] media; and

(2) a storage cabinet that will protect the media from damage.

(b) An association shall include in its security plans a means by which access to the removable electronic [magnetic ] media is restricted.

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 November 22, 2016.

TRD-201606054

Mark Fenner

General Counsel

Texas Racing Commission

Earliest possible date of adoption: January 8, 2017

For further information, please call: (512) 833-6699


DIVISION 3. MUTUEL TICKETS AND VOUCHERS

16 TAC §§321.35, 321.41, 321.42

The amendments are proposed under Texas Revised Civil Statutes Annotated, Article 179e, §3.02, which authorizes the Commission to adopt rules to administer the Act, and §11.01, which requires the Commission to adopt rules to regulate pari-mutuel wagering on horse and greyhound races.

The amendments implement Texas Revised Civil Statutes Annotated, Article 179e.

§321.35.Claim for Payment.

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

(d) In the event a claim is made for a ticket that meets the criteria established in §321.41(a) of this chapter (relating to Cashing Outstanding Tickets), the claim must be approved by the executive secretary before the claim can be paid.

(e) In the event a claim is made for a voucher that meets the criteria established in §321.42(a) of this chapter (relating to Cashing Outstanding Vouchers), the claim must be approved by the executive secretary before the claim can be paid.

§321.41.Cashing Outstanding Tickets.

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

(d) At the end of each race day, the mutuel manager shall deliver to the pari-mutuel auditor:

(1) a list of the outstanding tickets that were cashed on the previous race day; and

(2) a photostatic copy of each outstanding ticket cashed on the previous day.

(e) In the event a photostatic copy can not be provided, the association will not be held liable for:

(1) a reader cashed ticket if the association can produce documentation to support the ticket's existence; or

(2) a ticket cashed in accordance with the executive secretary's approval under §321.35(b) or (d) of this chapter (relating to Claim for Payment).

§321.42.Cashing Outstanding Vouchers.

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

(d) At the end of each race day, the mutuel manager shall deliver to the pari-mutuel auditor:

(1) a list of the outstanding vouchers that were cashed on the previous race day; and

(2) a photostatic copy of each outstanding voucher cashed on the previous day.

(e) In the event a photostatic copy can not be provided, the association will not be held liable for:

(1) a reader cashed voucher if the association can produce documentation to support the voucher's existence; or

(2) a voucher cashed in accordance with the executive secretary's approval under §321.35(b) or (d) of this chapter (relating to Claim for Payment).

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 November 22, 2016.

TRD-201606055

Mark Fenner

General Counsel

Texas Racing Commission

Earliest possible date of adoption: January 8, 2017

For further information, please call: (512) 833-6699