TITLE 16. ECONOMIC REGULATION

PART 2. PUBLIC UTILITY COMMISSION OF TEXAS

CHAPTER 25. SUBSTANTIVE RULES APPLICABLE TO ELECTRIC SERVICE PROVIDERS

SUBCHAPTER S. WHOLESALE MARKETS

The Public Utility Commission of Texas (commission) proposes new 16 Texas Administrative Code (TAC) §25.513, relating to Texas Energy Fund - Texas Backup Power Package Program. The proposed rule will implement Public Utility Regulatory Act (PURA) §§34.0204, 34.0205, and 35.005(g) as enacted by Senate Bill 2627 during the Texas 88th Regular Legislative Session. The proposed rule will establish procedures for applying for a grant or loan for procurement, installation, and operation of Texas Backup Power Packages (TBPPs), terms for an applicant to request a grant or loan, as well as conditions under which a TBPP loan may be forgiven. The proposed rule excludes TBPPs that source power from electric school bus batteries (ESBs) from the scope of this rulemaking because the logistical and technical complexities inherent to such assets are significantly different from stationary TBPP assets. The commission will take additional time to study and integrate TBPPs that source power from ESBs at a future date; the commission invites interested stakeholders to provide information related to ESBs in the TBPP Program in a question below. Additionally, the proposed rule includes other questions for public comment related to implementation of the TBPP program.

Growth Impact Statement

The agency provides the following governmental growth impact statement for the proposed rule, as required by Texas Government Code §2001.0221. The agency has determined that for each year of the first five years that the proposed rule is in effect, the following statements will apply:

(1) the proposed rule will not create a government program and will not eliminate a government program;

(2) implementation of the proposed rule will not require the creation of new employee positions and will not require the elimination of existing employee positions;

(3) implementation of the proposed rule will not require an increase and will not require a decrease in future legislative appropriations to the agency;

(4) the proposed rule will not require an increase and will not require a decrease in fees paid to the agency;

(5) the proposed rule will not create a new regulation;

(6) the proposed rule will not expand, limit, or repeal an existing regulation;

(7) the proposed rule will not change the number of individuals subject to the rule's applicability; and

(8) the proposed rule will not affect this state's economy.

Fiscal Impact on Small and Micro-Businesses and Rural Communities

There is no adverse economic effect anticipated for small businesses, micro-businesses, or rural communities as a result of implementing the proposed rule. Accordingly, no economic impact statement or regulatory flexibility analysis is required under Texas Government Code §2006.002(c).

Takings Impact Analysis

The commission has determined that the proposed rule will not be a taking of private property as defined in chapter 2007 of the Texas Government Code.

Fiscal Impact on State and Local Government

David Gordon, Executive Counsel, has determined that for the first five-year period the proposed rule is in effect, there will be no fiscal impacts for units of local government under Texas Government Code §2001.024(a)(4) as a result of enforcing or administering the sections. However, local governments may participate in the program addressed in the rule, which could benefit local governments by obviating expenditures on backup power systems for qualifying governmental facilities.

Public Benefits

David Gordon, Executive Counsel, has determined that for each year of the first five years the proposed section is in effect the public benefit anticipated as a result of enforcing the section will be availability of backup power for critical facilities on which communities rely for health, safety, and well-being. There will be no probable economic cost to persons required to comply with the rule under Texas Government Code §2001.024(a)(5).

Local Employment Impact Statement

For each year of the first five years the proposed section is in effect, there should be no effect on a local economy; therefore, no local employment impact statement is required under Texas Government Code §2001.022.

Costs to Regulated Persons

Texas Government Code §2001.0045(b) does not apply to this rulemaking because the commission is expressly excluded under subsection §2001.0045(c)(7).

Public Hearing

The commission staff will conduct a public hearing on this rulemaking if requested in accordance with Texas Government Code §2001.029. The request for a public hearing must be received by January 30, 2026. If a request for public hearing is received, commission staff will file in this project a notice of hearing.

Public Comments

Interested persons may file comments electronically through the interchange on the commission's website or by submitting a paper copy to Central Records, Public Utility Commission of Texas, 1701 North Congress Avenue, P.O. Box 13326, Austin, Texas 78711-3326. Comments must be filed by January 30, 2026. Comments should be organized in a manner consistent with the organization of the proposed rule. The commission invites specific comments regarding the costs associated with, and benefits that will be gained by, implementation of the proposed rule. The commission also requests any data, research, or analysis from any person required to comply with the proposed rule or any other interested person. The commission will consider the costs and benefits in deciding whether to modify the proposed rule on adoption. All comments should refer to Project Number 59024.

In addition to comments on the text of the proposed rule, the commission invites interested persons to address the following questions related to implementation and administration of the TBPP Program.

Should the commission require TBPP awardees to contribute a dollar amount towards the total TBPP cost as a condition of the award of a loan or a grant (the "cost-share")? If yes, what is an appropriate cost-share amount for the applicant? Should the cost-share be expressed in nominal dollars, on a dollar-per-kilowatt basis, or some other metric?

What technical specifications, asset characteristics, and operational requirements are needed to implement TBPPs that source power from an electric school bus?

Should the rule accommodate any restrictions that would otherwise prohibit a public entity applicant from granting a secured interest in a TBPP facility that is financed with a loan?

Each set of comments should include a standalone executive summary as the first page of the filing. This executive summary must be clearly labeled with the submitting entity's name and should include a bulleted list covering each substantive recommendation made in the comments.

Statutory Authority

The new rule is proposed under PURA §34.0204, which authorizes the commission to use money in the Texas Energy Fund without further appropriation to provide a grant or loan for a TBPP; §34.0205, which authorizes the commission to establish procedures for the application for and award of a grant or loan; §35.005(g), which authorizes the commission to adopt procedures to expedite an electric utility interconnection request for a TBPP; and §14.002, which authorizes the commission to adopt and enforce rules reasonably required in the exercise of its powers and jurisdiction.

Cross Reference to Statute: Public Utility Regulatory Act §§ 34.0204; 34.0205; 35.005(g); and 14.002.

§25.513. Texas Backup Power Package Program.

(a) Purpose. The purpose of this section is to implement Public Utility Regulatory Act (PURA) §§34.0204, 34.0205, and 35.005(g), and establish requirements and terms to provide grants and loans for funding Texas Backup Power Packages (TBPPs).

(b) Eligibility.

(1) Applicant eligibility. To be eligible for a grant or loan under this section, an applicant must be the owner of a critical facility.

(A) A critical facility may be owned by a corporation, municipality, county, district, or a utility.

(B) A critical facility must be a facility located in the state of Texas that provides essential services which a community relies on for health, safety, and well-being.

(i) a hospital, ambulance dispatch facility, healthcare treatment facility, police station, fire station, or critical water or wastewater facility;

(ii) a medical facility or facility providing hospice, nursing, assisted living, or end-stage renal disease treatment and dialysis;

(iii) a community heating or cooling center, storm shelter, or homeless shelter;

(iv) an evacuation route fuel station or a gas station or grocery store in an urban or rural area with limited access to essential supplies;

(v) a communications facility that serves 911 call centers and radio and television emergency alert systems; or

(vi) a food bank or gathering place, including a public school, public library, town hall or municipal building, or house of worship which is identified as critical by the presiding officer of the governing body of a political subdivision.

(D) The applicant must control the site at which a TBPP may be installed, either through ownership or a lease of the property for the duration of the TBPP compliance and monitoring period.

(2) Vendor eligibility. To be eligible to participate in a TBPP project at an eligible critical facility, a vendor must be selected by the commission through a competitive solicitation process. The commission will maintain an approved vendor list.. Approved vendors servicing TBPPs that fail to operate may be removed from the approved vendor list.

(3) TBPP eligibility. To receive a grant or loan under this section, an applicant must contract with an approved vendor to install a TBPP that meets the following requirements.

(A) The TBPP must:

(i) be connected behind-the-meter at an eligible critical facility;

(ii) be engineered to minimize operation costs;

(iii) use interconnection technology and controls that enable immediate islanding from the power grid and stand-alone operation for the critical facility;

(iv) be capable of operating for at least 48 continuous hours without refueling or connecting to a separate power source;

(v) be designed so that one or more TBPPs can be aggregated onsite to serve not more than 2.5 megawatts of load at the critical facility; and

(vi) provide power sourced from a combination of natural gas or propane with photovoltaic panels and battery storage; and

(vii) be able to produce energy from the battery storage component sufficient to serve the critical facility's monthly average peak demand for one hour and produce energy from photovoltaic panels sufficient to recharge the battery storage component within six hours.

(B) The TBPP must not be used by the owner or the facility operator for the wholesale or retail sale of energy, ancillary services, or other reliability services products.

(1) Grants. Grant funds may be used for the following cost categories:

(A) Design costs. Eligible costs under this category include costs for site specific plans, drawings, and studies.

(B) Installation costs. Eligible costs under this category include:

(i) costs for site installation, including labor;

(ii) costs for permitting, utility coordination, and code compliance;

(iii) costs for standard site preparation inputs, including foundations and pads; and

(iv) costs for inspection, testing, and commissioning; or

(C) any other costs necessary to facilitate the ownership or operation of the TBPP that are not expressly excluded under subsection (d) of this section.

(2) Loans. Loan funds may only be used for the following cost categories:

(A) Procurement. Eligible costs under this category include:

(i) costs for material and equipment delivery, and temporary storage and staging;

(ii) costs for equipment, such as the generator, battery storage system, photovoltaic modules and inverters, switchgear, controllers, and associated hardware; and

(iii) any other costs necessary to procure a TBPP that are not expressly excluded under subsection (d) of this section.

(B) Operating costs. Eligible operating costs include costs for operations and routine preventative maintenance, and warrantied repair services during the compliance period.

(d) Funding exclusions. Grant or loan funds received under this section must not be used for:

(1) A facility that:

(A) is a commercial energy system, a private school, or a for-profit entity that does not directly service public safety and human health;

(B) is a private residence;

(C) operates under a land lease agreement that expires prior to the end of the project compliance period or that does not have the lessor's written consent to install a TBPP;

(D) installs a source of backup power that does not follow the design and use standards of a TBPP; or

(E) uses the TBPP for the wholesale or retail sale of energy, ancillary services, or other reliability services products.

(2) Project costs that are:

(A) not included in a quotation provided by an approved vendor;

(B) for integrating existing backup power equipment into a TBPP installation, unless it aligns with vendor's TBPP design and the vendor offers the same warranties and performance guarantees as for a comparable TBPP of entirely new backup equipment;

(D) related to segregating existing backup power equipment;

(E) associated with any enhanced system features outside the standard TBPP offering from an approved vendor;

(F) for critical facility or owner personnel;

(G) associated with operating costs incurred by the critical facility that are not directly required by the TBPP; or

(H) refueling costs or additional operations and maintenance costs outside the service agreement with the approved vendor.

(e) Application requirements and process. An application must be submitted by an eligible applicant in the form and manner prescribed by the commission. An applicant may submit one or more applications for an award under this section. Each application must only contain one critical facility project. An application must contain the information required by this subsection. An applicant may withdraw an application at any time while under commission review.

(1) Applicant.

(A) A corporate sponsor or the most senior parent corporation or owner entity may submit an application on behalf of a subsidiary applicant. An application for a TBPP with multiple owners must be submitted by the highest level of the entity with managing authority over the critical facility (e.g., owner with controlling interest, managing partner, or cooperative).

(B) Each application must include information about the applicant, including:

(i) the applicant's legal name;

(ii) the applicant's form of organization;

(iii) the applicant's relationship to the critical facility in the proposed project;

(iv) the applicant's primary contact name and title, mailing address, business telephone number, business e-mail address, and web address;

(v) information showing that the applicant is in good financial standing with relevant financial institutions and is meeting all compliance requirements;

(vi) the applicant's agreement to adhere to TBPP performance requirements;

(vii) description of any past grant and loan management and administration experience, if applicable;

(viii) information showing that control of the site at which a TBPP may be installed for a duration is at least as long as the compliance and monitoring period;

(ix) an attestation that the applicant is authorized to operate the TBPP at the critical facility; and

(x) the applicant's justification for seeking loan funds to cover a portion of TBPP costs.

(2) Critical facility information. For the critical facility for which an applicant is seeking a TBPP, the application must include:

(A) Critical facility information, including:

(i) the facility's name;

(ii) the facility type as enumerated under subsection (b)(1)(C) of this section;

(iii) the facility's physical address and mailing address;

(iv) the facility's owners and details about facility ownership;

(v) the key personnel associated with TBPP project operation;

(vi) a description of activities that the critical facility undertakes to support community welfare;

(vii) a description of the facility's community impact, including the service area and the quantity and type of population served;

(viii) a statement describing the manner in which a TBPP installation will enhance the community impact of the critical facility;

(ix) average daily energy consumption measured in kilowatt-hours and maximum daily demand measured in kilowatts; and

(x) for an applicant that submits more than one application at the same time, a ranked priority for each of the proposed critical facility projects.

(B) Backup power information, including:

(i) information related to any existing backup power system, including a description of the type of technology used and the system's rated maximum capacity; and

(ii) the facility's required backup power capacity and requested TBPP size.

(3) Project information. For the critical facility for which an applicant is seeking a TBPP, the application must include project information required by this subsection, as provided by the vendor. An eligible applicant authorized by the commission to coordinate with an approved vendor must provide all relevant project information to the vendor to satisfy the requirements of this subsection.

(A) Project information, including:

(i) the total TBPP project budget;

(ii) the respective portions of the project budget to be funded through a grant and loan;

(iii) the respective portions of the project budget by site preparation, package costs, installation, and maintenance;

(iv) any ineligible costs that the applicant will fund separately; and

(v) the vendor quotation and an indication of applicant approval of the quotation.

(B) A project work plan, including:

(i) a proposed installation schedule;

(ii) information demonstrating the feasibility of the project, including documentation establishing that the TBPP can be installed at the critical facility;

(iii) documentation that all permissions, approvals, and permits required by applicable laws and regulations have been obtained, or a detailed plan for obtaining all required permissions, approvals, and permits; and

(iv) an operation and maintenance plan.

(4) Information submitted to the commission as part of the application process is confidential and not subject to disclosure under Chapter 552, Government Code.

(f) Application review.

(1) Applicant approval. An applicant must be approved as eligible and obtain notice of eligibility before submitting a TBPP project proposal under paragraph (2) of this subsection.

(A) The TxEF administrator will review applications in the order in which they are received.

(B) The TxEF administrator will review the application to determine applicant eligibility in accordance with subsection (b)(1) of this section.

(C) The executive director or his or her designee will determine applicant eligibility and will provide notice that an eligible applicant is authorized to coordinate with an approved vendor for the purpose of submitting a TBPP project application to the commission.

(2) Project approval. The executive director or his or her designee will approve, deny, or approve with modifications an application submitted by an eligible applicant for each TBPP project based on the screening and evaluation criteria outlined in this subsection.

(A) Each proposed TBPP project will be evaluated based on:

(i) the project cost;

(ii) the timeline for TBPP installation and commissioning;

(iii) the TBPP's expected benefits and impact. While evaluating benefits and impact, the executive director or his or her designee will consider factors such as the applicant's facility type and the criticality of services offered, the number of people served by the facility, and geography served by the critical facility;

(iv) the applicant's resources to implement the project and comply with compliance and performance requirements;

(v) the critical facility's current backup power capabilities;

(vi) the applicant's stated priority level for the facility, if the applicant has applied for more than one critical facility; and

(vii) the creditworthiness of the applicant to determine eligibility for a loan.

(B) The TxEF administrator may request additional information associated with the items in this subsection if necessary to evaluate any project.

(g) Award amount. Eligible applicants may receive a grant or a loan towards eligible costs in accordance with subsection (c) of this section.

(1) The amount of the award will be determined by the executive director or his or her designee based on availability of program funds and evaluation of the applicant and project by the TxEF administrator.

(2) A grant award may not exceed $500 per kilowatt.

(3) A loan award will be structured as a forgivable loan consistent with subsection (h)(5) of this section.

(h) Funding structure and terms.

(1) To receive an award payment under this section, an applicant must enter into an award agreement or agreements in the form and manner specified by the commission.

(2) Any costs funded by a grant or loan under this section must not be collected from customers or constituents of the critical facility.

(3) An uncured breach of the executed award agreement will be grounds for the TxEF administrator to determine that an applicant is ineligible to obtain any future payments or forgiveness under this section.

(4) Funding terms for grants.

(A) Payment terms for a project will be specified in the corresponding grant agreement. An awardee must comply with all terms and conditions outlined in the grant agreement, including all reporting requirements, and all federal or state statutes, rules, regulations, or guidance applicable to the grant award to be eligible for grant fund disbursement.

(B) Grant funds will be paid directly to an approved vendor as a reimbursement payment upon submission of required documentation in accordance with the grant agreement.

(C) All other costs required for project completion must be financed by the applicant or awarded through a loan under this section.

(D) The commission will withhold or require the return of payments for costs that are found ineligible or if an awardee fails to comply with the requirements described in subsection (i) of this section.

(5) Funding structure and terms for loans.

(A) Loan structure. An approved loan will have the following characteristics:

(i) Loan term. The loan will have a term of 1 to 5 years, which will be contingent upon the size of the loan, attributes of the critical facility, and financial capabilities of the applicant.

(ii) Forgivability. Up to 100 percent of the loan funds are forgivable, if the awardee meets the performance expectations delineated in the loan agreement. Loans will be forgiven on a prorated basis based on the duration of performance during the compliance period. Failure to meet any requirements for loan forgiveness will result in the full loan amount plus any accrued interest becoming immediately due and payable.

(iii) Loan interest rate. Unforgiven loan amounts will bear an interest rate equal to the effective federal funds rate published the date an award agreement is executed plus one percent.

(B) Loan terms and agreements. Each awardee must enter into one or more award agreements with the commission and approved vendor. Such agreements may include a:

(i) credit agreement, which is the primary award agreement between the awardee and the commission that will govern the terms and conditions under which the commission will loan funds to the awardee; and

(ii) performance covenant, which requires that a TBPP that is financed by a loan under this section must comply with the performance milestones, performance metrics and targets, and deliverables.

(i) Compliance and monitoring period.

(1) Each project will be subject to a compliance period of up to 5 years, based on the cost of the TBPP, which will be stated in the award agreement. Any specific project milestones which are stated in the award agreement will apply during this period.

(2) During the compliance and monitoring period, the TBPP must be available to operate during any period of time when the critical facility experiences a power outage.

(A) An awardee must ensure the routine maintenance and testing of the TBPP. Such maintenance and testing must be performed under contract by an approved vendor.

(B) Failure of the TBPP to be available to operate during an outage event may result in the commission demanding the return of a grant payment or determining that a loan payment is unforgivable.

(3) An awardee must continue to provide critical services at the critical facility during the compliance period. Change in status as a critical facility during the compliance period may result in the commission demanding the return of an award payment or termination of the award agreement.

(4) Reporting requirements.

(A) Vendor reporting. An approved vendor must annually file with the commission a report in accordance with the grant and loan reporting requirements.

(B) Critical facility reporting. Each awardee must annually submit to the commission a report containing an attestation that the TBPP was maintained in good working condition and was available to provide backup power during the compliance period; and that the awardee continued to provide critical services at the critical facility during the compliance period. Each awardee must also submit an after-action report with the commission that contains details of the TBPP performance in the event of a distribution system outage lasting more than 12 consecutive hours.

(j) No contested case or appeal. An application for a grant or loan under this section is not a contested case. A commission decision on a grant or loan award is not subject to a motion for rehearing or appeal under the commission's procedural rules.

(k) Relationship to distribution service provider network. An applicant requesting to install a TBPP at a critical facility in a manner that involves interactivity with the distribution network must coordinate with the appropriate distribution service provider to facilitate safe operation for the TBPP and the distribution network. The distribution service provider must expedite a request from a customer with a commission-approved TBPP application.

(l) Expiration. This section expires September 1, 2050.

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 December 19, 2025.

TRD-202504760

Seaver Myers

Rules Coordinator

Public Utility Commission of Texas

Earliest possible date of adoption: February 1, 2026

For further information, please call: (512) 936-7433

PART 8. TEXAS RACING COMMISSION

CHAPTER 321. PARI-MUTUEL WAGERING

SUBCHAPTER A. MUTUEL OPERATIONS

DIVISION 3. MUTUEL TICKETS AND VOUCHERS

16 TAC §321.37

The Texas Racing Commission (Commission) proposes amendments to 16 Texas Administrative Code §321.37, relating to Cashed Tickets and Vouchers. The amendments modernize recordkeeping requirements by clarifying secure procedures for digitally stored files associated with cashed tickets, vouchers, and outstanding ticket and voucher files.

Background and Purpose

The Commission's existing rules reference physical storage of tickets and vouchers. As wagering systems and audit records move to digital formats, the rule text is updated to require secure procedures for accessing and maintaining digitally stored files and to clarify access limitations. These changes support integrity of pari-mutuel wagering operations and modern auditing practices.

Fiscal Note

David Holmes, Interim Executive Director, has determined that for the first five-year period the proposed amendments are in effect, there will be no significant fiscal implications for state or local governments.

Public Benefit/Cost Note

For each year of the first five years the amendments are in effect, the public benefit anticipated is an increase in the integrity and auditability of pari-mutuel wagering through clearer security and access controls for digitally stored files. There are no anticipated costs to persons required to comply beyond ordinary costs associated with implementing and maintaining reasonable information security procedures.

Government Growth Impact Statement

For each year of the first five years the rule is in effect, the proposed amendments do not: (1) create or eliminate a government program; (2) require the creation of new employee positions or the elimination of existing positions; (3) require an increase or decrease in future appropriations; (4) require an increase or decrease in fees paid to the agency; (5) create a new regulation; (6) expand, limit, or repeal an existing regulation beyond the clarifications described; (7) increase or decrease the number of individuals subject to the rule's applicability; or (8) positively or adversely affect the state's economy.

Local Employment Impact Statement

The proposed amendments are not expected to have an adverse effect on local employment in any locality.

Economic Impact Statement and Regulatory Flexibility Analysis

The proposed amendments are not anticipated to have an adverse economic effect on small businesses, micro-businesses, or rural communities, as the changes clarify security procedures applicable to licensed associations that already maintain wagering systems with digital records. Therefore, a regulatory flexibility analysis is not required.

Takings Impact Assessment

The Commission has determined that no private real property interests are affected by this rulemaking and that the proposal does not burden, restrict, or limit an owner's right to property that would otherwise exist in the absence of government action. Accordingly, a takings impact assessment under Texas Government Code §2007.043 is not required.

Public Comment

Comments on the proposal may be submitted to the Texas Racing Commission Interim Executive Director, David Holmes, via webpage comment form at https://www.txrc.texas.gov/texas-rules-of-racing or through the agency customer service desk at customer.service@txrc.texas.gov, or by calling the customer service phone number at (512) 833-6699. Comments will be accepted for 30 days following publication of the proposal in the Texas Register.

Statutory Authority

The amendments are proposed under Texas Occupations Code §2023.001, which authorizes the Commission to license and regulate all aspects of horse and greyhound racing in this state, and §2023.004, which requires the Commission to adopt rules for conducting racing that involves wagering and for administering the Texas Racing Act.

Cross-Reference to Statute

Texas Occupations Code §§2023.001 and 2023.004.

§321.37. Cashed Tickets and Vouchers.

(a) An association shall maintain [~~facilities and use~~] procedures that ensure the security of physically or digitally stored files of scanned and manually cashed tickets and vouchers and the integrity of physically or digitally stored files [~~records~~] of outstanding tickets and outstanding vouchers.

(b) The association shall maintain secure procedures for accessing digitally stored files or store cashed tickets and vouchers in a secure area.

(c) The association shall prohibit individuals other than the association's mutuel manager from having access to physically or digitally stored files of [~~the~~] cashed tickets and vouchers or digitally stored files of [~~to storage areas for~~] outstanding ticket files [~~records~~] and outstanding voucher files [~~records~~].

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 December 17, 2025.

TRD-202504695

David Holmes

Interim Executive Director

Texas Racing Commission

Earliest possible date of adoption: February 1, 2026

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

16 TAC §321.39

The Texas Racing Commission (Commission) proposes the repeal of 16 Texas Administrative Code §321.39, relating to Altering Cashed Tickets and Cashed Vouchers. The amendment is proposed in conjunction with amendments to §321.37 that modernize requirements for secure handling and access to digitally stored files of cashed tickets and vouchers, rendering §321.39 unnecessary for digitally stored files.

Background and Purpose

Section 321.39 required physical alteration of cashed or refunded mutuel tickets and cashed vouchers to indicate their status without destroying identity. With contemporary digital records and scanning practices addressed in §321.37, separate alteration requirements in §321.39 are not necessary if the records are kept digitally.

Fiscal Note

David Holmes, Interim Executive Director, has determined that for the first five-year period the proposed repeal is in effect, there will be no significant fiscal implications for state or local governments.

Public Benefit/Cost Note

For each year of the first five years the repeal is in effect, the public benefit anticipated is regulatory clarity by eliminating duplicative provisions and aligning rule text with modern digital recordkeeping practices. There are no anticipated costs to persons required to comply.

Government Growth Impact Statement

For each year of the first five years the amendment is in effect, the proposed action does not: (1) create or eliminate a government program; (2) require the creation of new positions or the elimination of existing positions; (3) require an increase or decrease in future appropriations; (4) require an increase or decrease in fees paid to the agency; (5) create a new regulation; (6) expand, limit, or repeal an existing regulation beyond the repeal described; (7) increase or decrease the number of individuals subject to regulation; or (8) positively or adversely affect the state's economy.

Local Employment Impact Statement

The proposed amendment is not expected to have an adverse effect on local employment in any locality.

Economic Impact Statement and Regulatory Flexibility Analysis

The proposed amendment is not anticipated to have an adverse economic effect on small businesses, micro-businesses, or rural communities. Accordingly, a regulatory flexibility analysis is not required.

Takings Impact Assessment

The Commission has determined that this action does not affect private real property interests and does not impose a burden that would constitute a taking under Texas Government Code §2007.043. A takings impact assessment is not required.

Public Comment

Statutory Authority

The amendment is proposed under Texas Occupations Code §2023.001, which authorizes the Commission to license and regulate all aspects of horse and greyhound racing in this state, and §2023.004, which requires the Commission to adopt rules for conducting racing that involves wagering and for administering the Texas Racing Act.

Cross-Reference to Statute

Texas Occupations Code §§2023.001 and 2023.004.

§321.39. Altering Cashed Tickets and Cashed Vouchers.

Whether it is stored physically or digitally an [An] association shall ensure that each cashed or refunded mutuel ticket and cashed voucher is altered in a manner that indicates the mutuel ticket or voucher has been cashed or refunded, but does not destroy the identity of the ticket or voucher.

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 December 17, 2025.

TRD-202504696

David Holmes

Interim Executive Director

Texas Racing Commission

Earliest possible date of adoption: February 1, 2026

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

SUBCHAPTER B. TOTALISATOR REQUIREMENTS AND OPERATING ENVIRONMENT

16 TAC §321.101

The Texas Racing Commission (Commission) proposes amendments to 16 Texas Administrative Code §321.101, relating to Totalisator Requirements and Operating Environment, in Chapter 321, Pari-Mutuel Wagering, Subchapter B. The amendments update the incorporated technical standards for totalisator systems and remove outdated address language.

Background and Purpose

Section 321.101 requires each association to conduct wagering using a Commission-approved pari-mutuel system that meets specified technical standards. The proposal updates the reference to the Association of Racing Commissioners International (ARCI) Totalisator Technical Standards to the version amended in December 2020, and prospectively to subsequent amendments, and removes obsolete mailing address references for where standards are available. These changes align the rule with current industry standards and Commission practice.

Fiscal Note

Public Benefit/Cost Note

For each year of the first five years the amendments are in effect, the public benefit anticipated is enhanced consistency with current totalizator technical standards, which supports wagering integrity and interoperability. There are no anticipated costs to persons required to comply beyond ordinary costs associated with maintaining and updating systems to meet recognized industry standards.

Government Growth Impact Statement

For each year of the first five years the rule is in effect, the proposed amendments do not: (1) create or eliminate a government program; (2) require the creation of new positions or the elimination of existing positions; (3) require an increase or decrease in future appropriations; (4) require an increase or decrease in fees paid to the agency; (5) create a new regulation; (6) expand, limit, or repeal an existing regulation beyond the clarifications described; (7) increase or decrease the number of individuals subject to the rule's applicability; or (8) positively or adversely affect the state's economy.

Local Employment Impact Statement

The proposed amendments are not expected to have an adverse effect on local employment in any locality.

Economic Impact Statement and Regulatory Flexibility Analysis

The proposed amendments are not anticipated to have an adverse economic effect on small businesses, micro-businesses, or rural communities. Accordingly, a regulatory flexibility analysis is not required.

Takings Impact Assessment

The Commission has determined that no private real property interests are affected by this rulemaking and that the proposal does not burden, restrict, or limit an owner's right to property that would otherwise exist in the absence of government action. A takings impact assessment under Texas Government Code §2007.043 is not required.

Public Comment

Comments on the proposal may be submitted to the Texas Racing Commission Interim Executive Director, David Holmes, via webpage comment form at https://www.txrc.texas.gov/texas-rules-of-racing or through the agency customer service desk at customer.service@txrc.texas.gov, or by calling the customer service phone number at 512-833-6699. Comments will be accepted for 30 days following publication of the proposal in the Texas Register.

Statutory Authority

Cross-Reference to Statute

Texas Occupations Code §§2023.001 and 2023.004.

§321.101. Totalisator Requirements and Operating Environment.

Each association shall conduct wagering using a pari-mutuel system approved by the Commission. The pari-mutuel system shall operate in accordance with applicable laws and rules and meet the technical standards set forth in the Association of Racing Commissioners International Totalisator Technical Standards as amended in December 2020 and any subsequent amendments [~~July 2012~~]. Copies of the Totalisator Technical Standards are available at the Texas Racing Commission, Austin Headquarters office [~~P.O. Box 12080, Austin, Texas 78711, or at the Commission office at 8505 Cross Park Dr., #110, Austin, Texas 78754~~].

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 December 17, 2025.

TRD-202504697

David Holmes

Interim Executive Director

Texas Racing Commission

Earliest possible date of adoption: February 1, 2026

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