0001 1 TRANSCRIPT OF PROCEEDINGS BEFORE THE 2 BINGO ADVISORY COMMITTEE (TEXAS LOTTERY COMMISSION) 3 AUSTIN, TEXAS 4 QUARTERLY MEETING OF THE § 5 BINGO ADVISORY COMMITTEE § WEDNESDAY, AUGUST 6, 2008 § 6 7 8 COMMITTEE MEETING 9 WEDNESDAY, AUGUST 6, 2008 10 11 BE IT REMEMBERED THAT on Wednesday, 12 the 6th day of August 2008, the Bingo Advisory 13 Committee meeting was held from 10:02 a.m. to 14 1:42 p.m., at the Offices of the Texas Lottery 15 Commission, 611 East 6th Street, Austin, Texas 78701, 16 before CHAIR SUZANNE TAYLOR. The following 17 proceedings were reported via machine shorthand by 18 Patricia Gonzalez, a Certified Shorthand Reporter of 19 the State of Texas, and the following proceedings were 20 had: 21 22 23 24 25 0002 1 APPEARANCES 2 BINGO ADVISORY COMMITTEE: 3 Ms. Suzanne Taylor, Chair 4 Ms. Kimberly Rogers Ms. Rosalie Lopez 5 Ms. Pat Gifford Mr. Larry Whittington 6 Ms. Markey Weaver Mr. Earl Silver 7 8 CHARITABLE BINGO OPERATIONS ASSISTANT DIRECTOR: 9 Mr. Philip D. Sanderson 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 0003 1 TABLE OF CONTENTS 2 PAGE NO. 3 AGENDA ITEM NO. 1 - Meeting Called to Order...... 5 4 AGENDA ITEM NO. 2 - Consideration of and possible discussion and/or action on the 5 minutes of the May 14, 2008 Bingo Advisory Committee meeting................................ 5 6 AGENDA ITEM NO. 3 - Report by the Bingo 7 Advisory Committee Chair and possible discussion and/or action on the Chair's activities.......... 6,7 8 AGENDA ITEM NO. 4 - Report and possible 9 discussion and/or action on the recently released version of the On-Line Operator 10 Training Program................................. 7,8 11 AGENDA ITEM NO. 5 - Report, possible discussion and/or action on 1st quarter calendar year 12 2008 bingo conductor information................. 13 13 AGENDA ITEM NO. 6 - Report, possible discussion and/or action on nominations and appointments 14 for the Bingo Advisory Committee................. 18 15 AGENDA ITEM NO. 7 - Consideration of and possible discussion and/or action on the 16 Bingo Advisory Committee work plan............... 20 17 AGENDA ITEM NO. 8 - Report and possible discussion and/or action on DRAFT 16 TAC 18 §402.512 relating to Bingo Occasion Records...... 35 19 AGENDA ITEM NO. 9 - Report and possible discussion and/or action on DRAFT amendments 20 to 16 TAC § 402.103 relating to the Operator Training Program................................. 119 21 AGENDA ITEM NO. 10 - Report and possible 22 discussion and/or action on DRAFT 16 TAC §402.410 relating to Amendment of a 23 License General Provisions....................... 124 24 25 0004 1 TABLE OF CONTENTS (continued) 2 PAGE NO. 3 AGENDA ITEM NO. 11 - Report and possible discussion and/or action on DRAFT 16 TAC 4 §402.422 relating to Amendment to a License to Conduct Charitable Bingo.............. 131 5 AGENDA ITEM NO. 12 - Report and possible 6 discussion and/or action on DRAFT 16 TAC §402.444 relating to Common Roof/Common 7 Foundation....................................... 137 8 AGENDA ITEM NO. 13 - Report and possible discussion and/or action on DRAFT 16 TAC 9 §402.421 related to Affiliated Organization...... 150 10 AGENDA ITEM NO. 14 - Report and possible discussion and/or action on DRAFT 16 TAC 11 §402.604 related to Delinquent Purchaser......... 170 12 AGENDA ITEM NO. 15 - Report and possible discussion on the activities of the Charitable 13 Bingo Operations Division........................ 176 14 AGENDA ITEM NO. 16 - Public Comment.............. 177 15 AGENDA ITEM NO. 17 - Consideration of and possible action on future bingo Advisory 16 Committee meeting dates and/or items to be considered for future meetings................... 180 17 AGENDA ITEM NO. 18 - Adjournment................. 186 18 19 20 21 22 23 24 25 0005 1 P R O C E E D I N G S 2 WEDNESDAY, AUGUST 8, 2008 3 (10:02 a.m.) 4 AGENDA ITEM NO. 1 5 MS. TAYLOR: It's August 6th, 10:02 a.m. 6 We do have a quorum; so we're going to call the 7 meeting to order. We have all the Members here except 8 for Knowles and Tom. 9 AGENDA ITEM NO. 2 10 MS. TAYLOR: Item No. 2 on the agenda, 11 Consideration of and possible discussion and/or action 12 on the Minutes of the May 14, 2008 Advisory Committee 13 Meeting. 14 And I would like to welcome Commissioner 15 Schenck via television to our meeting. 16 COMM. SCHENCK: Thank you. 17 MS. TAYLOR: Okay. Any -- I did 18 notice -- and I, unfortunately, forgot the paper, that 19 there is one place in the Minutes where Phil is 20 talking and they have it written down that I'm doing 21 the talking. And I honestly can't remember where it 22 was, but other than that, I didn't see anything that 23 required any changes. 24 Any changes, Committee Members? 25 (No verbal response) 0006 1 MS. TAYLOR: Is there a motion to 2 approve them as posted on-line? 3 MS. ROGERS: I motion to approve these. 4 MS. TAYLOR: Second? 5 (Show of hands) 6 MS. TAYLOR: Okay. Motion by Kim; 7 second by Markey. 8 All in favor? 9 (All those in favor of the motion so 10 responded.) 11 MS. TAYLOR: Any opposed? 12 (No response) 13 MS. TAYLOR: It unanimously passes. 14 AGENDA ITEM NO. 3 15 MS. TAYLOR: Item No. 3, Report by the 16 Bingo Advisory Committee Chair and possible discussion 17 and/or action on the Chair's activities. 18 Included in the notebook is the report 19 that I had given to the Commissioners at the last 20 Commission Meeting. 21 What date was that? Do you remember, 22 Phil? 23 MR. SANDERSON: I believe that was the 24 May -- June 25th Meeting. 25 MS. TAYLOR: So this is just to let you 0007 1 know what -- the report that went to the 2 Commissioners. 3 AGENDA ITEM NO. 4 4 MS. TAYLOR: Item No. 4, Report and 5 possible discussion and/or action on the recently 6 released version of the on-line operator training 7 program. 8 MR. SANDERSON: Madam Chair, may I go 9 back to the previous agenda item? 10 MS. TAYLOR: Yes, sir. 11 AGENDA ITEM NO. 3 12 MR. SANDERSON: I believe that was an 13 item that you wanted added to the agenda so that you 14 could discuss the conversations you had with the 15 Commissioners on your annual report and you could 16 report back to the committee what the Commissioners 17 had forwarded through you. 18 MS. TAYLOR: True. There's -- I guess 19 there's two reasons that we initially put this in the 20 book. One was because I know that the Minutes as 21 posted on-line are pretty extensive, and because we 22 only have our Meetings every quarter, sometimes it's 23 difficult to remember exactly what we talked about the 24 previous quarter, and this is a really small, little 25 version of what we went through. So it's a quick way 0008 1 to refresh our memory on what we had at the previous 2 meeting. 3 We did report to the Commissioners. The 4 Commissioners did approve our Annual 2007 report. 5 They did ask what we thought how bingo could be 6 improved, which was already in our report, which, 7 additional advertising by the organizations and 8 increase in attendance. And I don't believe there was 9 much else discussed at that meeting. 10 AGENDA ITEM NO. 4 11 MS. TAYLOR: So back to Item No. 4. 12 Phil. 13 MR. SANDERSON: Item No. 4 is the Bingo 14 Operator Training Program. We launched this on the 15 Internet on June the 25th, and I think as of last 16 week, anyway, we had around 36 individuals that had 17 taken the test and received their certification. And 18 all the feedback that we received, very positive 19 feedback. And if you haven't had an opportunity to go 20 out and look at the training modules or have the 21 opportunity to view a few of the modules, I would ask 22 that you please do that and offer any feedback you 23 have on the program. 24 MR. WHITTINGTON: Well, I got some 25 feedback from a couple of people. They said it was 0009 1 lengthy; it was long. But I told them the difference 2 between a live operating training class compared to 3 training on-line, they've got to cover everything. 4 You've got to read everything. It's not like somebody 5 is standing in front of you. So I said it's not going 6 to be like that because they've got to go through all 7 the particulars that you got to -- you know, research 8 and -- be involved when it comes to bingo so they 9 understood it a lot better. I said you've got to 10 realize, when somebody is on-line, they've got to go 11 through everything. They can't miss nothing. And 12 that's the only feedback I got on it. 13 MS. ROGERS: I -- go ahead, Phil. 14 MR. SANDERSON: I was going to say, the 15 one thing that -- in developing the training program 16 for on-line, we specifically broke it out into 17 different modules that are anywhere from 20 to 45 18 minutes, I believe, and -- for the sole purpose -- we 19 don't expect someone to sit down one day and go 20 through all the modules. They can do it over a period 21 of two or three days, two or three weeks. There's not 22 a specific time period that they have to be completed 23 in. 24 So I agree, because we sat through it in 25 a two-day period, and it was very lengthy, so -- 0010 1 MS. ROGERS: My comment -- I do have 2 some feedback on it. I had to have a little lesson in 3 some of the unit paperwork, the returns that I was not 4 doing correctly, and I was able to go back to the 5 exact module and look at it, and it was able to take 6 me and walk me through. The voice was very appealing, 7 very calm, and, you know, wasn't hard to listen to, 8 had -- even had little pictures on it. 9 I was able to print out each page; so I 10 put that in front so I could make sure, while I was 11 doing my paperwork, that I had that right there. So I 12 found it very, very user-friendly once you figure out 13 what module to go to. I thought it was great. 14 MR. WHITTINGTON: Well, can you go back 15 in it after you get -- 16 MS. ROGERS: Sure. 17 MR. WHITTINGTON: -- through? I mean, 18 that's the advantage -- 19 MS. ROGERS: Yeah. 20 MR. WHITTINGTON: I mean, that should be 21 definitely posted, that people can actually go back if 22 they forget -- 23 MS. ROGERS: Well, and I -- 24 MR. WHITTINGTON: -- something. 25 MS. ROGERS: I Didn't go through the 0011 1 whole training -- because I don't need to; I just sat 2 through a class -- but I just went to an exact module 3 that the auditors had told me contained the 4 information and the instructions for what I had a 5 mistake in. I was able to see exactly how you do it 6 and what -- and I printed it out, because I'm very -- 7 I want to see it in front of me, and so I had it 8 sitting there while I was doing my papers. 9 MR. WHITTINGTON: That's good. 10 MS. ROGERS: Yes. 11 MR. WHITTINGTON: And I really feel that 12 these should have a footnote that it might be long and 13 lengthy, but in the meanwhile, once you finish this, 14 you can always go back if you need to review something 15 over and see it again. And that's a big advantage of 16 the lengthiness that they talk about. "It's so long, 17 so-and-so, so-and-so," but that's the advantage, 18 people can go back. 19 MS. ROGERS: And that might be -- I 20 don't know if it says it somewhere, but even if 21 someone has already taken the operator's training 22 course, make them aware and know that they can go to a 23 certain module just to get more explicit instructions 24 on what they need to do. Maybe put a footnote 25 somewhere for these people -- for the other charities 0012 1 when they go on there, say, "Hey, even though you 2 don't need to the take the operator's training course, 3 go to this module if you're having a problem with 4 this," or -- you can just view the module. 5 MS. TAYLOR: Phil, did all 36 people 6 that took this course pass the test the first time? 7 MR. SANDERSON: No. 8 (Laughter) 9 MS. TAYLOR: How many times? 10 MR. SANDERSON: I believe there were 11 six -- five or six had to retake the test. I think 12 two of them had to retake it three times. 13 MS. TAYLOR: I'm sorry. What was the 14 date? The 36 had taken it as of what date? 15 MR. SANDERSON: Last week. One day last 16 week. 17 MS. TAYLOR: Okay. 18 MS. WEAVER: We pulled it up and viewed 19 it during our charity meeting the other day, and it 20 was great. 21 MS. TAYLOR: Is there -- are there ever 22 going to be any requirements for people taking the 23 on-site class to have to take a test? 24 MR. SANDERSON: Not at this point in 25 time, no. 0013 1 MS. TAYLOR: I've watched people reading 2 newspapers during those on-site ones; so I wish they 3 would have to take their test. 4 Okay. Any other discussion on this 5 agenda item? 6 (No response) 7 AGENDA ITEM NO. 5 8 MS. TAYLOR: Item No. 5, Report, 9 possible discussion and/or action on first quarter 10 calendar year 2008 bingo conductor information. 11 MR. MINER: Good morning, Chair, 12 Members. For the record, my name is Bruce Miner. I'm 13 the manager of the Bingo Taxpayer Services Department 14 and I'm here to present to you the first quarter 2008 15 information as reported by our licensed authorized 16 organizations. 17 Prize payout for regular bingo in the 18 first quarter of 2008 was 74.2 percent of gross 19 receipts. Prize payout percentages for instant bingo 20 were 72.8 percent of gross receipts. 21 This pie chart reflects what percent 22 each expense is as it relates to the total expenses. 23 These expenses do not include prize payouts or 24 charitable distribution. The blue box in the upper 25 left-hand corner sets out all the salaries, which 0014 1 include janitorial services, callers, cashiers, 2 ushers, security, legal and accounting, and they 3 account for over 39 percent of the total expenses 4 while rent payments account for just under 29 percent. 5 This pie chart shows that instant bingo 6 sales continue to exceed regular bingo card sales. In 7 the first quarter of 2008, instant sales represented 8 almost 45 percent of the total sales while regular 9 card sales represented 32.1 percent, and electronics 10 was 23.3 percent. 11 This chart shows the comparison of gross 12 receipts for the first quarter of each year from 2004 13 through 2008. As you can see, gross receipts for 14 instant bingo sales, as shown by the yellow line here, 15 have increased each year since 2004; while at the same 16 time, gross receipts for regular bingo sales, which is 17 made up of paper and electronic bingo, shown here in 18 the red, continue to be declining. 19 This chart shows the comparison of net 20 receipts for the first quarter of each year from 2004 21 through 2008. Net receipts are gross receipts minus 22 prizes, and as you can see, the net receipts from 23 instant bingo have increased each successive year for 24 2004 to present while the net receipts for regular 25 bingo continues to decrease for the same time period. 0015 1 This slide compares the gross receipts 2 for regular and electronic bingo -- I'm sorry. I went 3 backwards. 4 No. 7, this slide, compares the gross 5 receipts for regular and electronic bingo sales and 6 the prize payout reported for each of the past five 7 years. It shows the trend of gross receipts in blue 8 and prize payout for regular bingo in yellow. As you 9 can see, the gross receipts for regular and electronic 10 bingo has dropped 16 million, and the prize payouts 11 have dropped 6-1/2 million. 12 This next slide shows that instant bingo 13 has had an increase of 35.9 million in gross receipts 14 over the past five years and an increase of 15 26.1 million in prize payouts for the same period. 16 This slide charts the prize payout 17 percentage for regular and instant bingo for the past 18 five years. The payout percentage for regular bingo 19 has increased from 70.4 percent to 74.2 percent while 20 the payout percentage for instant bingo has averaged 21 around 72.9 percent for the five years from 2004 to 22 2008. 23 This slide shows a continuing decline of 24 the number of occasions per year, dropping from a high 25 of 37.8 thousand to 33.4 thousand as compared to the 0016 1 average number of players per occasion, which dropped 2 from an average of 149 down to 138. 3 This next slide shows the average 4 players per occasion as compared to the average spend 5 per player. And this shows that even though the 6 average attendance has declined 7.4 percent since 7 2004, there has been a 37.6 percent increase in the 8 average spend rate per player over the same five 9 years. 10 This slide illustrates the comparison 11 between reported charitable distribution as opposed to 12 the minimum amount required to be distributed by the 13 Bingo Enabling Act. As you can see, the actual 14 reported charitable distributions have consistently 15 been more than three to four times the required 16 distribution amount. 17 And, finally, this slide illustrates a 18 comparison between reported charitable distribution 19 and the total net receipts. On average, charitable 20 distributions run about 17 percent of net receipts. 21 And net receipts is the gross receipts less prizes 22 awarded. 23 That concludes my report for this agenda 24 item. Are there any questions? 25 (No response) 0017 1 MS. TAYLOR: Any discussion from the 2 Committee? 3 (No response) 4 MS. TAYLOR: Any public comment? 5 MR. NEWTON: Is there a posting of that 6 report? 7 MS. TAYLOR: I'm sorry? 8 MR. NEWTON: Is that report posted 9 anywhere? 10 MS. TAYLOR: Could you come up here? 11 And state your name, please. 12 MR. NEWTON: Hi. My name is Mark 13 Newton. I was just questioning whether or not that 14 report is posted on-line anywhere. 15 MR. SANDERSON: The report is not posted 16 on-line, but the slide show that was presented is 17 contained within the Bingo Advisory Committee 18 notebook, which is on-line. So you can go out to the 19 website and go to the legal notices and Bingo Advisory 20 Committee transcripts and click on the August 6th 21 notebook, and within that notebook is the slide show. 22 MR. NEWTON: Thank you. 23 MR. BRESNEN: Steve Bresnen on behalf of 24 the Bingo Interest Group. I noticed the other day 25 when you-all presented this to the Commissioners that 0018 1 you were using the term "net receipts." 2 MR. MINER: Okay. 3 MR. BRESNEN: What definition of "net 4 receipts" are we using? Are we using "true net" or 5 are we using "adjusted gross" or -- what's our -- 6 MR. SANDERSON: Net receipts is gross 7 receipts minus prizes. 8 MR. BRESNEN: Okay. 9 MR. SANDERSON: Adjusted gross is net -- 10 is gross receipts minus prizes minus cost of goods 11 sold. That's defined in the statute. The bottom 12 line, net proceeds, is everything left over after 13 expenses and prizes. 14 MR. BRESNEN: Okay. So by "net 15 receipts" we're talking adjusted -- I mean, gross 16 minus prizes? 17 MR. SANDERSON: Yes. 18 MR. BRESNEN: Okay, thanks. 19 MS. TAYLOR: Any other questions, 20 discussion? 21 (No response) 22 AGENDA ITEM NO. 6 23 MS. TAYLOR: If not, we'll go on to Item 24 No. 6, Report, possible discussion and/or action on 25 nominations and appointments for the Bingo Advisory 0019 1 Committee. 2 Earl. 3 MR. SILVER: Good morning. Our work 4 group has had conversations. In our last booklet, we 5 were given a list of applicants. We also obtained a 6 standardized list of questions for phone interviews 7 from Phil. So we went ahead and called the applicants 8 that we think -- that would serve the purpose on the 9 BAC, and then we called a couple of others that we 10 thought might not, just to have a true sampling. And 11 we have the question -- or the answers to the 12 questions, if you need them, but our recommendation at 13 this point would be Markey Weaver and Rosie Lopez, 14 going through the list of all the applicants we have. 15 MS. TAYLOR: Do we have three openings? 16 MR. SILVER: Yes, ma'am, we have three 17 openings. 18 MS. TAYLOR: So at this time, you do not 19 have a third recommendation? 20 MR. SILVER: No, ma'am. 21 MS. TAYLOR: Any other discussion? 22 MR. WHITTINGTON: Do we know any of 23 these two people that you just recommended? 24 (Laughter) 25 MR. SILVER: Do we know -- yes. Yes, 0020 1 sir, they are here. They already serve on the BAC. 2 MR. WHITTINGTON: Okay. 3 MS. TAYLOR: Okay. Is there a motion to 4 accept the recommendations from the work group and 5 pass our recommendations to the Commissioners? 6 MS. ROGERS: I motion to accept that and 7 pass it on to the Commissioners, please. 8 MR. WHITTINGTON: I second. 9 MS. TAYLOR: All in favor? 10 (All those in favor of the motion so 11 responded.) 12 MS. TAYLOR: Opposed? 13 (No response) 14 MS. TAYLOR: Unanimously passes. 15 Any other discussion on this topic? 16 (No response) 17 MS. TAYLOR: Public comment? 18 (No response) 19 MS. TAYLOR: Then we'll move on. 20 AGENDA ITEM NO. 7 21 MS. TAYLOR: Item No. 7, Consideration 22 of and possible discussion and/or action on the Bingo 23 Advisory Committee work plan. This has my name 24 listed, but I'm going to go ahead and defer to Rosie 25 Lopez at this time. 0021 1 MS. LOPEZ: Okay. Our committee put 2 together, basically, a list of accomplishments that 3 the BAC has actually accomplished throughout the past 4 year in line with the work plan. And so what I'm 5 going to do, if it's okay, I'm going to actually 6 outline the actual Work Plan No. 1 and then the 7 response as to what we responded to, if that's all 8 right. 9 The No. 1 work plan issue that is listed 10 on our adopted work plan for 2007 is: Comment on 11 improvement and status of the bingo industry; and that 12 includes, the BAC will review and comment on 13 charitable bingo gross receipts, charitable 14 distributions, expenses, attendance and any other area 15 requested by the Commission. 16 And our BAC accomplishment for that 17 particular comment is that the Bingo Advisory 18 Committee has developed a detailed annual report to 19 the Commission which focused on the state gross 20 receipts, charitable distributions, expenses and 21 attendance. That is what -- how we addressed that 22 particular Item No. 1. 23 Item No. 2 on the work plan is: Comment 24 on existing and proposed rules, which includes that 25 the BAC will review existing rules and offer comments 0022 1 or recommendations for change. The BAC will review 2 draft rules and offer comment prior to their 3 presentation to the Commission unless an emergency 4 requires otherwise. 5 And the BAC accomplishments for that 6 particular work plan is that the Bingo Advisory 7 Committee has been very involved in providing input 8 for numerous existing and proposed rules this past 9 year. Some of these include house rules, 10 recordkeeping, licensing and others. The BAC work 11 groups met with the Commission on additional meeting 12 dates to accomplish the implementation of the adopted 13 rules. 14 Item No. 3 on our work plan is: Comment 15 on effective administrative rules and regulations on 16 bingo operations. The BAC will review the effect 17 current administrative rules and regulations have on 18 bingo operations and potential effects new rules 19 and -- will have on licensees and their -- on licenses 20 and their bingo operations. 21 And the BAC accomplishments for that 22 particular work plan is that the BAC has worked with 23 the Commission by providing input on the effect of 24 administrative rules and regulations. The BAC work 25 groups have met with members of the industry in 0023 1 efforts to provide concise information to the 2 Commission on the effects of these rules and 3 regulations for the bingo industry on a whole. 4 Item No. 4 of our Committee work plan 5 is: Study of alternative styles of bingo games not 6 currently available in Texas, and this includes that 7 the BAC will investigate, review and comment on 8 alternative styles of bingo games that would benefit 9 licensees, including but not limited to linked bingo, 10 progressive bingo, instant bingo card-minders, et 11 cetera. Additionally, the BAC will stay appraised of 12 any technological changes in the bingo industry. 13 And our accomplishment for the 2007-'08 14 year is that the BAC has not focused on the study of 15 alternative styles of bingo games due to the fact that 16 most of this past year we focused on numerous changes 17 on new and proposed administrative rules' changes to 18 the industry, especially in the area of charity rules 19 and regulations. And the BAC work groups have focused 20 more on this work plan topic than any other topic this 21 past year. 22 On Committee Work Plan No. 5, the review 23 of new legislation, including utilization and impact 24 study: The BAC will review new legislation and study 25 the impact that new legislation has on bingo 0024 1 operations. And our accomplishments for No. 5 is that 2 there has been no new legislation in the past year. 3 However, BAC Members continue to examine the impact 4 previous legislation has had on bingo operations. 5 Item No. 6 on our work plan is: Review 6 specific recommendations for positive public awareness 7 of charitable bingo. The BAC will review and comment 8 on specific recommendations that would improve 9 charitable bingo through positive public awareness 10 initiatives. And our accomplishments from the BAC is 11 that the BAC has worked with the Commission to promote 12 the use of public awareness through individual markets 13 throughout the state, utilizing the Texas Lottery 14 Bingo public service announcements at broadcast 15 stations. 16 Item No. 7 on our work plan is to review 17 specific recommendations for improvement of bingo 18 operations. That includes that the BAC will review 19 and comment on specific recommendations that would 20 improve bingo operations by increasing gross receipts, 21 charitable distributions and attendance. 22 Our accomplishments for this particular 23 Item No. 7 on the work plan, as stated in our annual 24 report, the BAC has provided suggestions for the 25 improvement of bingo operations, increasing the gross 0025 1 revenue from card sales and electronic sales through 2 increased attendance, which would allow more income to 3 be available for charitable distributions. 4 Recommendations for improvement include more charity 5 involvement in promoting their bingo operations and 6 working to make bingo more enticing to players in 7 their local halls. Improving attendance remains the 8 key issue to the success of charitable bingo in Texas. 9 And the last item on our work plan is 10 Item No. 8, which is to advise the Commission on the 11 needs of the industry for operator training. The BAC 12 will make recommendations to the Commission on 13 beneficial items for inclusion in operator training 14 programs, and our accomplishments for this year is 15 that the BAC has supported the Commission on its new 16 on-line bingo operator training and that the BAC 17 Members have encouraged charity reps to take advantage 18 of using the on-line operator training. 19 MS. TAYLOR: One thing that -- what this 20 actually is, it's 2007-2008, but these are the 21 accomplishments that we have made in our 2007 work 22 plan, since we have yet to have a 2008 work plan. 23 MR. SANDERSON: Let me comment. 24 The work plans, since the Commissioners 25 had, last year, I believe, expressed -- not concerns, 0026 1 but a desire to have the Committee report on their 2 activities at the time that they vote to continue the 3 BAC, we've changed the work plans to a fiscal year 4 work plan. So this '07-'08 is correct, while the 5 actual work plan in the notebook just says 2007, 6 because that's what it was at that point in time. 7 So the process from here would be that 8 you -- you know, you adopt the accomplishments, which 9 would be presented at the next Commission Meeting. 10 They would, you know, based on that, have their desire 11 to vote to continue the BAC for another year, and then 12 after that would be to present your work plan for the 13 '08-'09 year. And so all that would be done at the 14 August Commission Meeting. 15 MS. TAYLOR: So at this time, is there a 16 motion to adopt the accomplishments of the 2007 BAC 17 Work Plan to the Commissioners at the next meeting? 18 MS. WEAVER: I make that motion. 19 MS. TAYLOR: Is there a second? 20 MS. ROGERS: Second. 21 MS. TAYLOR: Any other discussion? 22 (No response) 23 MS. TAYLOR: All in favor? 24 (All those in favor of the motion so 25 responded.) 0027 1 MS. TAYLOR: Any opposed? 2 (No response) 3 MS. TAYLOR: It unanimously passes. 4 At this time, we need to go ahead and 5 put together a 2008 work plan, which, possibly, we'd 6 need to call it a 2008-2009 work plan to present to 7 the Commissioners. 8 We already have the same -- we've got 9 this work plan, which, each year, we've made some 10 adjustments on to add and take off things we felt were 11 of interest or vital to the industry. 12 So looking at the work plan in your 13 workbook -- and Rosie just finished reading each one 14 of those eight items on there, are there additional 15 items that you feel the BAC should be looking at? 16 (No response) 17 MS. TAYLOR: Anything that you feel 18 should be taken off of this work plan? 19 MS. ROGERS: I think this work plan 20 gives us a great wide range to be able to work -- make 21 different work groups to work on all the areas of 22 bingo. I don't -- 23 MS. TAYLOR: Now, what is important to 24 remember is that every agenda item has to fall 25 somewhere within this work plan. And if it's not 0028 1 within the work plan, then we can't have it on the 2 agenda, which is why we tried to make the work plan as 3 broad -- Rosie and Kim and I -- 4 MS. LOPEZ: Absolutely. 5 MS. TAYLOR: -- worked on this work plan 6 initially, and we tried to make it as broad as we 7 could to encompass as many agenda items as we could. 8 Earl, you made a face earlier. Is there 9 something you think, maybe, we should take off of 10 this? 11 MR. SILVER: No, ma'am. No, ma'am. 12 MS. ROGERS: Texas is a big state. We 13 need to be wide. 14 MR. SILVER: You've already explained 15 it. 16 MR. WHITTINGTON: Would the marginal tax 17 or anything like that be included with this? Because 18 we really need to work on that and talk about it. 19 MS. ROGERS: How about No. 7? 20 MR. SANDERSON: I think that would -- 21 might go under, like, No. 5, review of legislation. 22 MR. WHITTINGTON: Yes. We need to -- 23 MR. SANDERSON: You know, I think that 24 would be an area where that could definitely fall 25 under that. 0029 1 MR. WHITTINGTON: Yeah, because we 2 skipped that, and we can't deal with it until it come 3 up again, basically. 4 MR. BRESNEN: Would you repeat that? 5 Would you repeat what you just said about legislation? 6 MR. SANDERSON: Item No. 5 of the work 7 plan is: Review new legislation, including utilization 8 and impact study. And Larry's comment about "Is there 9 a way to discuss the margin tax at a BAC meeting and 10 the impact," and it would fall under that -- I believe 11 it would fall under that agenda -- that work plan 12 item. 13 MR. BRESNEN: Thanks. 14 MS. ROGERS: Phil, I had a question for 15 you. I would -- I've been thinking -- and I don't 16 know if this -- this is the time to ask you, I know, 17 but if we wanted to get a work group together to maybe 18 look into -- there's a rule in the BEA that says that 19 you cannot pay your bills on-line; it has to be with a 20 consecutive check, et cetera. Would that also fall 21 under No. 5? Because that would have to be 22 legislation changing. 23 MR. SANDERSON: There's a difference 24 between reviewing legislation and requesting 25 legislation. 0030 1 MS. ROGERS: Okay. So it doesn't fall 2 under that. 3 MR. SANDERSON: The BAC cannot -- and 4 I'll have to ask my attorney to clarify this -- cannot 5 lobby legislation. 6 MS. ROGERS: Right. No. I'm just 7 saying a work group to look into maybe making that -- 8 I don't know. Could we not do that? 9 MR. SANDERSON: I would defer to my 10 attorney on that. I don't think you can discuss 11 potential legislative changes. You can only discuss 12 what legislative bills have been filed. 13 MS. ROGERS: Okay. So we couldn't 14 discuss it in a way and put a work group together to 15 study the effects to see if it would better bingo? 16 MS. JOSEPH: Not unless -- excuse me. 17 Sandy Joseph, Special Counsel. 18 No. Not unless there were some proposed 19 legislation that had been offered to the Commission 20 for consideration or for comment, then perhaps, but 21 not -- I think it would be out of line to just come up 22 with it on our own without any -- because the 23 Commission is not allowed to propose legislation or to 24 lobby for legislation; therefore, the BAC could not do 25 that. 0031 1 MS. TAYLOR: Do the other BAC Members 2 understand what Kim is asking? 3 MS. LOPEZ: About not being able to pay 4 for any expenditures -- 5 MS. TAYLOR: Right, because -- 6 MS. LOPEZ: -- on-line. 7 MS. TAYLOR: -- everything must be on 8 preprinted -- 9 MS. LOPEZ: Sure. If -- 10 MS. TAYLOR: -- prenumbered, 11 consecutively numbered checks. So you can't do 12 anything with on-line payments at this time. 13 MS. ROGERS: And I -- never mind. 14 MS. WEAVER: I was going to say, it's 15 not something that we can discuss at this time in this 16 forum because it's not on the Hill for any changes. 17 MS. TAYLOR: We can't request any 18 legislative changes. That's not within the scope of 19 what we're supposed to be doing. 20 MR. SILVER: Wouldn't that fall under 21 No. 7? 22 MS. TAYLOR: It would, but it's not 23 legislation. We can discuss proposed or new 24 legislation. We cannot propose new legislation. 25 MR. BRESNEN: Madam Chair, Steve Bresnen 0032 1 on behalf of the Bingo Interest Group. And if you'd 2 change my thing there to reflect that I've commented 3 on this. 4 I had planned to ask you-all if it would 5 be appropriate at some time for us to come and talk 6 about the legislation that was introduced last 7 session, because I expect that legislation will be 8 introduced again this session. It specifically did 9 address the issue -- don't I remember, Phil, that it 10 at least addressed the part about checks and having 11 electronic versions of checks rather than paper checks 12 and that sort of thing? But, anyway, I plan to do 13 that at a future date, to at least talk about what was 14 done last time and what some of us are planning this 15 time. 16 I think the staff's right, that 17 you're -- probably not in order for you to propose 18 legislation. On the other hand, a member of the 19 Legislature might request the Commission's point of 20 view and/or your point of view, in which case I think 21 you'd be, you know, able to respond to them. But if 22 it's to you-all's liking, I'd love to be able to do 23 that some time and go through and explain kinds of 24 things that the Bingo Interest Group would be 25 advocating. 0033 1 Would that be in order, do you think, as 2 long as it's informational and not an action item? 3 MS. JOSEPH: Yes. 4 MS. TAYLOR: We would love that. 5 MR. BRESNEN: Okay. Thanks. 6 Oh. I'm sorry. One other thing under 7 that item. There is an interim charge from the 8 Lieutenant Governor to a subcommittee of the Senate 9 State Affairs Committee and the Senate Finance 10 Committee to address issues surrounding the 11 privatization of the Lottery. One of the issues that 12 we think needs to be discussed in light of that is 13 what would happen to the regulation of bingo if this 14 agency was substantially -- its mission was 15 substantially changed, or, I guess, eliminated 16 altogether in favor of private sector. 17 I don't think anybody knows how that 18 would be done right now, and I wouldn't suggest you 19 talk about it today, but that is an item that will be 20 under current discussion as of August 27th. There's a 21 meeting of the -- those two entities at the Capitol 22 Building to discuss that. We'll be making some 23 comments there. So that might be something else that 24 would fit under that category for a later date when 25 there's some proposal or something. 0034 1 Thank you. 2 MS. TAYLOR: Thank you. 3 Okay. Members, anything else that you 4 would like to add to this work plan, any changes? 5 MS. LOPEZ: I think we've covered just 6 about almost every area, there, again, like you 7 mentioned, leaving it broad, in broad terms so that we 8 are able to discuss any of the issues that do arise 9 within one of these eight topics under the work plan. 10 MS. ROGERS: Would we be able to talk 11 about what Steve Bresnen -- if they brought something 12 for us to talk about, would that be able to go on our 13 agenda, under, like, 7? Because that would affect -- 14 CHORUS OF VOICES: Yes. 15 MS. TAYLOR: Okay. Is there a motion, 16 then, to present this work plan as our 2008-2009 work 17 plan to the Commission at their next meeting for their 18 approval -- 19 MR. WHITTINGTON: Yeah. 20 MS. TAYLOR: -- for consideration and 21 approval? 22 Did you make the motion, Larry? 23 MR. WHITTINGTON: Yes. I make the 24 motion. 25 MS. TAYLOR: Larry made the motion. 0035 1 MS. WEAVER: I'll second. 2 MS. TAYLOR: Markey seconded it. 3 MS. TAYLOR: Any other discussion? 4 (No response) 5 MS. TAYLOR: All in favor? 6 (All those in favor of the motion so 7 responded.) 8 MS. TAYLOR: Any opposed? 9 (No response) 10 MS. TAYLOR: That unanimously passes. I 11 will present this at their next meeting. 12 AGENDA ITEM NO. 8 13 MS. TAYLOR: Item No. 8, Report and 14 possible discussion and/or action on Draft 16 TAC 15 402.512 relating to bingo occasion records. 16 MR. SANDERSON: Good morning, Members. 17 Just to preface my comments, Item 8 and 18 Item 10, Item 11 and 12 and 13 are all rules that were 19 presented several meetings ago as a big group from the 20 Licensing Section where subcommittees were formed and 21 you-all discussed the rules themselves and we've made 22 some changes based on those meetings and 23 recommendations. 24 Item 8 relates to bingo occasion 25 records. These are records that are required to be 0036 1 maintained as it relates to bingo occasion, and I 2 believe it's been -- the comments -- some of the 3 comments have been incorporated based on previous 4 discussions with the work group. And I just open that 5 up for your discussion. 6 MS. TAYLOR: Okay, Members. Is there 7 any discussion in particular? I know, Kim, you have 8 highlighted places. I have highlighted placed. 9 Rosie, do you have anything you would 10 like to discuss? 11 MS. LOPEZ: Not right now. 12 MS. TAYLOR: Earl? 13 MR. SILVER: On Line 12, the "reviewer," 14 I just -- that whole thing, "name(s) and signature(s) 15 of the operator in charge of the occasion and document 16 preparer; and any reviewer," any -- 17 MR. SANDERSON: What page? 18 (Simultaneous responses) 19 MR. SILVER: Page 1. 20 Is that "any reviewer" mandatory -- 21 MR. SANDERSON: No. 22 MR. SILVER: -- on there? 23 Okay. 24 MS. LOPEZ: So it could just be the 25 operator. Right? 0037 1 MR. SANDERSON: It could just be the 2 operator or -- 3 MS. LOPEZ: Okay. Just as -- 4 MR. SANDERSON: -- if it's a person 5 that's not the operator that prepared the document, 6 then it would be the document preparer. If it's 7 someone -- and then if someone actually reviewed it 8 and approved it, then we'd like to have their name on 9 there also. 10 MS. TAYLOR: So could we change this to 11 say "and reviewer, if any"? 12 MR. SILVER: "Or any reviewer." 13 MS. TAYLOR: Just take the "any" out 14 and stick in "and reviewer." 15 (Simultaneous discussion) 16 MS. LOPEZ: I like that more. 17 MR. SILVER: Instead of "and" put "or." 18 MR. SANDERSON: Well, the difference 19 between "and" and "or" -- if it's "or," then that 20 means that only one of those three people have to sign 21 it, and what we're wanting is whoever actually 22 prepares and observes the reconciliation of the bingo 23 occasion transactions. You may have the operator and 24 someone review it. You may have the cashier prepare 25 it and the operator may -- so there could be more than 0038 1 one signature on there. 2 MS. ROGERS: Phil, if you, on-line, have 3 it downloaded, the conductor forms where it does your 4 daily cash reports for you and everything and you 5 input all the numbers, all of this will be on there. 6 Correct? 7 MR. SANDERSON: Yes. 8 MS. ROGERS: Okay. So if you go to Page 9 3, Line 18, it does that at the bottom for you, and 10 that's all your -- that doesn't change anything. 11 Correct? When you put in there's two -- when you put 12 in there's two -- your prizes are 500 and there were 13 two winners, it splits it for you automatically? 14 MR. SANDERSON: Yes. 15 MS. ROGERS: That's the exact same -- 16 everything in here. Okay. 17 MS. TAYLOR: I'd like to go back to Page 18 1. On Line 13, am I reading that, that you have to 19 take -- you have to put every debit card receipt or 20 the receipt that prints out that says the total of the 21 debit cards? Is that the actual receipt? 22 MR. SANDERSON: That is not the actual 23 receipt. No. 24 MS. TAYLOR: Okay. 25 MR. SANDERSON: That is receipts from 0039 1 debit cards. 2 (Simultaneous discussion) 3 MS. TAYLOR: The total -- 4 MS. LOPEZ: But from our point of sales. 5 MR. SANDERSON: Total gross receipts. 6 MR. WHITTINGTON: Yes. 7 MR. SANDERSON: Total receipts. 8 MS. TAYLOR: The one receipt. So we're 9 going to put one thing there. Right? 10 MR. SANDERSON: The dollar amount. 11 MS. LOPEZ: From your point of sale. 12 Right? Like from your point of sale if it prints out 13 that it was a debit, that -- 14 MR. SANDERSON: That would be -- 15 whatever -- this is a daily cash report, is a term 16 I'll use, and it has a place for cash, has a place for 17 checks and a place for debit transactions, and so you 18 just put in the dollar amount of the debit 19 transactions. 20 MS. TAYLOR: Okay. I just wanted to 21 make sure that's all that was asking for. 22 Anything else on Page 1? 23 (No response) 24 MS. TAYLOR: Okay. Let's turn the page. 25 Page 2. 0040 1 MR. WHITTINGTON: Well, shouldn't he put 2 total -- all checks -- "all cash, checks and debit 3 card, total receipts available for deposit" so at 4 least we clarify more? Because you asked the question 5 and somebody else is going to ask it. 6 MS. TAYLOR: Okay. 7 MS. LOPEZ: Total receipts. 8 MS. TAYLOR: Total. Gotcha. That's a 9 good idea, Larry. 10 Okay. Page 2. We're going to start 11 with Earl. Any comments on Page 2, Earl? 12 MR. SILVER: Yeah, just on the first 13 line. I mean, I read through it and it just -- just, 14 "payout structure," that just seems -- I don't quite 15 understand that, the structure. I mean, we don't do 16 half-pays, and I was just a little confused by that. 17 MR. SANDERSON: Well, if you don't have 18 half-pays, then it may not apply to you, but, you 19 know, for people that do have half-pays or people who 20 adjust their prize payout based on attendance, based 21 on different factors, then if they've adjusted their, 22 you know, prize payout structure for this Monday night 23 that's different than all the other Monday nights, 24 that's what we're asking for, is what -- what 25 information for that particular night makes it 0041 1 different from some other night. 2 MS. LOPEZ: Would it mean -- like, for 3 example, if you did have, like, a special on a Monday 4 night that you normally don't have, just maybe a 5 simple memo attached to your cash -- I mean, to your 6 daily cash report for that night stating "On this 7 Monday night," you know, "we had a special." And 8 that's it. Right? 9 MR. SANDERSON: Yes. Yes. 10 MS. LOPEZ: Pretty much just a -- just a 11 documentation, a backup? 12 MR. SANDERSON: Yes. 13 MS. LOPEZ: Okay. 14 MS. TAYLOR: We're down to -- okay, 15 Rosie. 16 Did you have anything, Pat? 17 MS. GIFFORD: Well, I just want to ask 18 one question, make sure I'm doing it right. If there 19 are two winners and it's $100, do I just -- I put two 20 winners. Do I have to put, for instance, 50 a piece 21 or -- is that what you're talking about? 22 MR. SANDERSON: You would show that 23 there were two winners that -- 24 MS. GIFFORD: On one game? 25 MR. SANDERSON: -- that split $100. 0042 1 Yes. 2 MS. GIFFORD: Right. So I have to put, 3 for instance, 50 each? 4 MR. SANDERSON: I don't have that exact 5 form in front of me. There's -- 6 MS. TAYLOR: Well, not -- 7 MS. GIFFORD: It's not -- 8 MS. TAYLOR: -- on this page. 9 MS. GIFFORD: -- on what I've got -- 10 okay. All right. 11 MS. TAYLOR: Not on this page, but 12 coming up. Coming up. 13 (Laughter) 14 MS. TAYLOR: It will be there. 15 Kim, anything on this? 16 MS. ROGERS: No, ma'am. 17 MS. TAYLOR: Larry? 18 MR. WHITTINGTON: Huh-uh. 19 MS. TAYLOR: Markey? 20 MS. WEAVER: No, ma'am. 21 MS. TAYLOR: Okay. I have, on Line 22 20 -- I'm not quite sure that I'm reading that 23 correctly. It's "all card-minding device sales 24 transaction records by selling price, number of games 25 in each package, quantity of packages sold, and the 0043 1 number of faces purchased per game." 2 MS. WEAVER: It's actually each package. 3 MS. TAYLOR: For electronic card-minding 4 device sales reporting, I don't believe that -- on my 5 receipt, it doesn't say how many packages or how many 6 cards are in each package. It just says there's an 7 11-dollar pack, a 15-dollar pack and a 16-dollar pack. 8 It does not tell on my receipt how many -- how many -- 9 what makes up a 16-dollar pack. 10 So -- 11 MS. ROGERS: What -- you know, why is -- 12 MS. TAYLOR: -- that's why I'm confused 13 about this particular one. I mean, I don't have a 14 problem saying "We sold, you know, 30 16-dollar 15 packs," but on the receipt -- it's not contained on my 16 receipt currently. I know it's not. 17 MR. SANDERSON: Well, we'll have to look 18 and see, because we pulled this out of what's required 19 on the receipts from the card-minding systems. 20 MS. TAYLOR: Okay. So -- okay. Because 21 this is on the reporting. I'm talking reports, not 22 the individual receipts that are given to the 23 customer, but this says "For electronic card-minding 24 device sales reporting." So is this not the report 25 that prints at the end of the night? 0044 1 MR. SANDERSON: That is the report that 2 prints at the end of the night. That is what is -- 3 the card-minding system rule says should be on the 4 report. 5 MS. TAYLOR: What makes up each 6 individual package? How many cards are in each 7 16-dollar pack? I just -- I've had several different 8 systems and I've never seen that on the 9 end-of-the-night report. I've seen that on individual 10 receipts. 11 MR. SANDERSON: It's probably on there 12 in a code of some sort that you just don't recognize. 13 MS. TAYLOR: Yeah. 14 (Laughter) 15 MS. TAYLOR: Darin, could I ask you to 16 tell me, is that on my report? 17 MR. PETERS: Yes, but we have a 18 manufacturer here if you want to ask them. 19 MS. TAYLOR: Can I ask that from one of 20 you? Is that on our report at the end of the night 21 that we print? 22 MR. NEWTON: Mark Newton again with 23 Video King. 24 The systems record all that information, 25 and it's just a different report you would run. 0045 1 Depending on what information you want to get at the 2 end of the session, you can run summary reports or 3 detailed reports, but all the cards that are included 4 in each packet and how many cards were sold for each 5 game is all contained within the databases. 6 MS. TAYLOR: How big is the detailed 7 report? 8 MR. NEWTON: How big is your session? 9 MS. TAYLOR: About how long would that 10 be when I print that detailed report out? 11 MR. NEWTON: (Indicating). 12 MS. TAYLOR: Yes. That's what I'm 13 thinking. You're talking about that thing that's 14 about 3 feet long; you're not talking about the one 15 that we print that's yay big? 16 MR. NEWTON: You can get a card sold 17 summary report that will just give you the total 18 quantities of cards sold on a per-game basis from each 19 of your packages, and it would be like two pages long. 20 It depends how big your session is. If 21 you have 300 games, then you have to have a line for 22 each game. Right? 23 MS. ROGERS: What company are you with, 24 sir? What -- 25 MR. NEWTON: Video King. 0046 1 MS. ROGERS: Video King. 2 MS. TAYLOR: And I'm sorry. What was 3 your name again? 4 MR. NEWTON: Mark. Mark Newton. 5 MS. TAYLOR: I'm sorry? 6 MR. NEWTON: Mark. 7 MS. TAYLOR: For our -- 8 MR. NEWTON: M-a-r-k N-e-w-t-o-n. 9 MS. TAYLOR: Do you have that? 10 THE REPORTER: Yes. 11 MS. TAYLOR: Okay. Well, I -- I know 12 that I've never -- that's never been with our 13 paperwork and I've never seen an auditor ask for that. 14 So this is -- this is something totally new to me 15 that -- this would be -- 16 MR. NEWTON: One of the things, too, is 17 with these things to these rules like this, the 18 manufacturers, of course, are going to start creating 19 these reports for you, just because it would make your 20 life easier and it's a better sales feature for us to 21 have that report available for you. So once we have 22 this enacted or in place, then we can start working 23 towards having systems that will automate it for you. 24 MS. ROGERS: I have a question for you, 25 Phil. 0047 1 MS. TAYLOR: Thank you very much, Mark. 2 MS. ROGERS: Thank you, Mark. 3 I understand it's as it was there, but 4 what good does this do? I'm asking: What does 5 this -- what information does this give the auditor or 6 the -- what? 7 MR. SANDERSON: I don't have that answer 8 at this time. 9 (Laughter) 10 MS. TAYLOR: Because he can't think of a 11 good reason either. 12 (Laughter) 13 MS. ROGERS: No. If an auditor walks in 14 there and says, "Okay. Where are your packages? 15 Okay. You sold 16 cards, 36 cards," I don't see 16 where -- what that gives them, what information that 17 gives them to assist them in their job, is what I'm 18 trying to say. I truly don't. 19 MR. WHITTINGTON: But, Kim, you know 20 they're going to -- they're going to ask for this, but 21 the final analysis, they're going to look at the total 22 receipt anyway -- 23 MS. ROGERS: Right. 24 MR. WHITTINGTON: -- that prints out. 25 So that's going to be the final thing, "Oh, it matched 0048 1 your total." I mean, so -- 2 MS. ROGERS: And if it makes -- if it 3 gives them -- 4 MS. TAYLOR: One at a time, please. 5 MS. ROGERS: -- information that helps 6 them -- if it gives them information that helps them, 7 I have no problem with it, but if it just gives them 8 more information that gives -- makes their job 9 harder -- 10 MR. WHITTINGTON: Right. 11 MS. ROGERS: -- and makes our job 12 harder, then I don't understand the reason behind it. 13 MR. SANDERSON: I don't think this is 14 requesting a detailed transaction listing. I think 15 it's a summary, a total listing, just like it shows 16 how many -- you know, "You've got a 20-dollar computer 17 that's got 66 card faces on it and there's five games. 18 How many of those did you sell?" "50." "You've got a 19 10-dollar computer that's got 48 faces on it for five 20 games. How many of those did you sell?" "15." 21 That's -- 22 MR. WHITTINGTON: But what does the 23 faces got to do with the money? That's what I'm 24 saying. No matter how many faces you sell, as long as 25 you got the money amount down for what you sold the 0049 1 computer for -- and that's what they're going to 2 audit, the money, not the faces. Faces doesn't 3 matter. It's not required that you've got to sell 33 4 faces for half the price of 36 -- 66 faces. That's 5 not required. It's the money amount. 6 MS. WEAVER: But maybe what they're 7 trying to do is compare from one hall to another hall, 8 collect data to see. Is that a possibility? 9 MR. SANDERSON: I don't know if that's a 10 possibility, because this is information that's just 11 on your -- you're not reporting it to us quarterly or 12 annually; so it's just documentation for an audit. 13 MS. WEAVER: Eventually, maybe we will, 14 but you're asking for this information now. 15 MR. SANDERSON: Not at this time, I'm 16 not. No. 17 MS. TAYLOR: Well, they'd better audit 18 us right quick, because with the thermal paper, it all 19 disappears in about a year anyway. 20 (Laughter) 21 MS. TAYLOR: Any -- okay. We've got 22 this page. Anything else on Page 2? 23 MR. WHITTINGTON: Well, what's going to 24 be done about it? 25 MR. SANDERSON: We'll look at clarifying 0050 1 it. 2 MR. WHITTINGTON: Okay. 3 MS. TAYLOR: Okay. Thank you. 4 Page 3. Any comment on 3? 5 MR. SILVER: On Line 7, "recorded at 6 fair market value," is the fair market value at 7 retail, and then how is that going to be reflected -- 8 or substantiated in an audit if it's retail or fair 9 market value price or -- 10 MR. SANDERSON: I would say that the 11 receipt that you used to purchase the merchandise will 12 probably be a good indicator of what the fair market 13 value is. 14 MR. SILVER: Okay. So it's not at the 15 retail price? Because sometimes you may get a 16 donation from somebody at a little bit of a discount. 17 MR. SANDERSON: Yes. 18 MR. SILVER: Yes. 19 MS. TAYLOR: Anything else on this page? 20 MR. SILVER: On Line 14 -- well, 21 actually, 13 and 14 is "an explanation of any" -- "for 22 any deviation from the prize amount offered and the 23 prize actually awarded." Is that just going to be a 24 line item on the DCR or is it going to require 25 additional paperwork to explain that? 0051 1 MR. SANDERSON: It would just be -- 2 probably a line item on the daily cash report or the 3 schedule of prizes. 4 MS. TAYLOR: I -- does anybody else have 5 anything? 6 (No response) 7 MS. TAYLOR: Okay. Down here on 15 8 through 23 on the instant bingo, which I really think 9 it should say "deal" instead of "deals" -- "for each 10 instant bingo deals played"? 11 Anyway, on that one, on the paperwork 12 that we use and that I've seen other charities use, 13 the total amount of the income off of the deals is 14 normally at the bottom of the page, and then the 15 prizes are subtracted and multiplied by 5 percent, but 16 in this now it wants you to do the individual prize 17 fees per deal, which I don't see what difference it 18 makes as long as it's at the bottom of the page for 19 all the deals combined that you've sold for the 20 session. 21 MR. WHITTINGTON: Still going to be 22 5 percent. 23 MS. TAYLOR: But now we've got it on 24 each individual deal. So I don't see what difference 25 it would make as long as we have it shown where the 0052 1 tax has been collected off the deals that have been 2 sold throughout the session. Because -- "the actual 3 amount awarded patrons after the prize fees were 4 collected." So if we could put that at the bottom of 5 the page and say "Gross was 1,000 minus," you know -- 6 whatever -- "715 prizes, and," you know, "plus the 7 taxes." 8 MR. SANDERSON: Okay. We'll look at 9 that. 10 MS. TAYLOR: Is that a possibility? 11 MS. ROGERS: On 15, I think when they 12 say "deals" they mean "boxes." In other words -- 13 correct? Each box. 14 MR. SANDERSON: No. It would be each 15 deal. 16 MS. ROGERS: Each deal. 17 MR. WHITTINGTON: No, not necessarily. 18 MR. SANDERSON: Because there's some 19 deals that have multiple boxes. 20 MS. ROGERS: That's true. That's true. 21 MR. WHITTINGTON: Bags. 22 MR. SANDERSON: Or bags. 23 (Simultaneous discussion) 24 MR. WHITTINGTON: Event tickets. Like 25 each bag you sell is a deal, not a bag. 0053 1 MS. ROGERS: But each one has its own 2 serial number. 3 MR. WHITTINGTON: Yes. 4 MS. ROGERS: Okay. So each 5 individual -- okay. 6 MR. WHITTINGTON: Yeah. I mean, I do 7 agree that the serial number needs to be listed so you 8 can then put the total down. Yes. 9 MS. ROGERS: Right, because we use the 10 computer and it -- I mean, if you have one serial 11 number, then it does it for you. Okay. 12 MR. WHITTINGTON: Yes. 13 MS. TAYLOR: Anything else on this page? 14 (No response) 15 MS. TAYLOR: Let's go to Page 4. 16 Earl, anything on this one? 17 MR. SILVER: On -- basically, on Line 18 23, the organizing, conducting, what about the units? 19 Is that going to -- 20 MS. TAYLOR: Remember, the unit doesn't 21 conduct the bingo game. The organization conducts the 22 game. However, as Kim and I have already discussed, 23 our receipts don't say the individual names of the 24 organizations. It just says the name of the hall on 25 the receipt. 0054 1 So is that something that has to be 2 changed to reflect the name of the organization 3 conducting the game? 4 MS. ROGERS: And I would -- my comment 5 on this is: Once again, what's the advantage? Whose 6 job does this make easier or help with auditing or -- 7 I don't -- 8 MS. TAYLOR: What we're reading here is 9 where it says "the POS displays the name of the 10 organization conducting the bingo occasion, the hall 11 game and the correct time and date." Right now I know 12 it just says "the hall name," not individual 13 organizations. 14 Is that a problem? 15 You can reflect I'm asking Darin. 16 MR. PETERS: It's a problem if you're 17 selling two sessions at one time. 18 Darin Peters, GoodTime Action Games. 19 It's a problem if you sell two sessions. If you log 20 in -- as you know, you put the charity name first as 21 you log in for your first session, but if you're 22 selling doubling sessions, it could be a problem 23 there, because it will show -- then it won't show back 24 up until you're -- if you're selling first session and 25 second session but you're on the first-session 0055 1 charity, you'll have to re-sell it or reclassify for 2 your second session. 3 Now, I'm not sure if Video King has has 4 that same problem, but -- 5 MS. TAYLOR: Well, because -- I mean, 6 normally, right now, I know when we print a receipt, 7 it either says S-1 or S-2 -- 8 MR. WHITTINGTON: Exactly. 9 MS. TAYLOR: -- but there's only one 10 name at the top of the receipt. 11 MS. LOPEZ: That's correct. 12 MS. TAYLOR: So that's what I'm 13 wondering: How is it going to do this if we have to 14 have individual organization names and there's two 15 different organizations for the sessions? We all sell 16 them together. You know, when people come in, they 17 don't want to have to get in line a second -- we hope 18 they don't want to get in line a second time. 19 MR. WHITTINGTON: Right. We want the 20 extra sessions, but on top of that, too, we also have 21 our stamps to identify what charity is at the end of 22 the night. At the paper, we've got a stamp. 23 MS. TAYLOR: Right. When you print the 24 report for Session -- 25 MR. WHITTINGTON: Yeah. Yeah. We have 0056 1 to stamp -- we stamp -- 2 MS. TAYLOR: -- 1, it goes to Session 1. 3 MS. LOPEZ: Session 1 and then Session 4 2. 5 MR. WHITTINGTON: Right. We stamp it. 6 Yes. 7 MS. ROGERS: Maybe if this read "hall 8 name, slash, conducting organization." 9 MS. TAYLOR: "And/or." The hall is not 10 "or." 11 MS. ROGERS: "And conducting the bingo," 12 though. 13 MR. WHITTINGTON: Yes. 14 MR. SANDERSON: Well, I think -- we 15 license the organization to conduct bingo. I think we 16 want the organization's names on the receipts that are 17 being used for the purchase of the bingo products. 18 MS. TAYLOR: So my question for the 19 manufacturers is: Are the systems we have not capable 20 of doing this? 21 MR. WHITTINGTON: I don't think so. 22 MS. LOPEZ: So that means your point of 23 sale, your actual information is going to have to 24 change. If you have double sessions, you're going to 25 have change that -- I mean, you're going to have to -- 0057 1 in other words -- 2 MR. PETERS: Well, on yours, it's a 3 little easier. On yours, you'll have to probably put 4 both of those in when you start your session, put both 5 charities on there. 6 MS. LOPEZ: Oh, both. Okay. 7 MR. PETERS: And then we'll just make -- 8 ensure that it's printed on that receipt. You'll have 9 both charities on that receipt. 10 Would that be a problem? 11 MR. SANDERSON: I don't think so. 12 MS. ROGERS: And I understand and that's 13 great, but, once again, my comment is: What is the 14 purpose of this? Why are we -- I don't find -- and I 15 understand the organizations are the ones that are 16 licensed to conduct bingo and the Lottery has a great 17 map of who plays what session when and where, and so 18 do I in our hall, but having this to have to print 19 out -- which is fine. We can do it, but I don't see 20 the advantage of this when the auditor comes to help 21 you or do something, how this helps them. 22 MS. LOPEZ: Because, obviously, they 23 already know what session, who played what and, you 24 know -- 25 MR. WHITTINGTON: Well, we've got to 0058 1 know that. 2 MS. LOPEZ: Even if it's not on the 3 printed receipt. 4 MR. WHITTINGTON: We've got to stamp our 5 sessions. 6 MS. LOPEZ: Right. 7 MR. WHITTINGTON: No matter what kind of 8 receipt we have, we've still got to have the name of 9 that organization on that daily. 10 MS. LOPEZ: And, I mean, that shows up 11 on your actual deposit for that first session and your 12 deposit for the second session because you're 13 depositing for that charity. 14 MR. WHITTINGTON: Because I'd be more 15 worried for the -- as a matter of fact, everybody that 16 go in and try to put in the charity name in this, 17 because we change charities quite a bit, and we're 18 going to go back and change it over and over and over 19 when we just have first and second session. And 20 believe me, you come in my hall, you're going to -- 21 "What date we need?" "Okay. So-and-so and so-and-so 22 played." It's going to be stamped on the daily, "This 23 organization played and that organization," and that 24 receipt is going to be attached to that daily. So why 25 make more work for everybody? 0059 1 MR. SANDERSON: The manufacturers said 2 they can put it on there and it's printed on there; so 3 I don't know what more work there is. So -- 4 MS. TAYLOR: I don't know. When we go 5 in the hall, we don't have to put name of 6 organization. So -- I mean, we just turn it on, and 7 whatever screen is -- 8 MR. WHITTINGTON: Yes. 9 MS. TAYLOR: -- on is the screen we use. 10 So I'm -- I guess that there's going to have to be 11 something different because -- I mean, we pick which 12 session we're using -- "Are we using the Wednesday 13 session or the Friday session or the Saturday 14 session" -- but it doesn't have any names of 15 organizations that I can see on our POS at this time. 16 So that's something that's going to have 17 to be changed, because, otherwise, we wouldn't be in 18 compliance. And I don't know where at on there you go 19 to -- we used to have to, with the other system, pick 20 a name of an organization, but we don't with the 21 system we have now. So -- okay. Okay. 22 MR. WHITTINGTON: I'm not finished. 23 Just like on the dailies, Phil, we really -- the 24 dailies got to match that tape -- that first and 25 second session tape. Okay? And on the dailies, we do 0060 1 have the organizations on there. So why does it got 2 to be on the receipt and the POS? It don't make no 3 sense. 4 Because that's what you're going by. 5 You're going by, "Okay. Let me look at your printout 6 from your POS." And that daily got to have that, 7 because that's when the auditors get crazy if we don't 8 have it, exactly what's on that daily anyway. 9 So the organization is always stamped. 10 We stamp our organization, who played that day. And 11 that first session is attached. We got a double 12 session played, we break it down and put it on Session 13 2. And then we have a Session 2 tape -- Tape 2 14 along -- along with the first session, and there are 15 stamps on each day, and that's what they come in and 16 look at. "Oh, okay. So-and-so played. Oak Hill 17 played first session. St. Anthony played second 18 session." Then they have that one tape from POS, 19 which makes it very simple instead of going through 20 what we're trying to do here, putting a name on it. 21 It's really going to be a problem. 22 MR. SILVER: If the manufacturers can do 23 it and not cause undue burden on the charities or the 24 bingo workers or anybody like that, then -- I mean, I 25 wouldn't see an issue with it, but if it can lead to 0061 1 an opportunity for a charity to have a violation, then 2 I would have issues with it. 3 MR. SANDERSON: Well, the only violation 4 would be that if they didn't play when they were 5 supposed to -- 6 MR. SILVER: Yeah. 7 MR. SANDERSON: -- and that's another 8 issue. 9 MR. SILVER: Yeah. That's a whole other 10 can of worms. 11 MS. TAYLOR: Okay. Let's go on to Page 12 5. 13 Earl, do you have anything to say about 14 Page 5? 15 MR. SILVER: I just have one comment on 16 Line 14. 17 Now, I'm not familiar with all the 18 reports that come out of the POS system and stuff like 19 that. And I'm not familiar with how all the ball 20 callers work or anything like that. However, can -- 21 is it possible to have a list of every ball that's 22 called when you're playing bingo? 23 MR. SANDERSON: Yes. 24 MS. TAYLOR: Well, I know that this 25 prints on our winners, because we have every winner 0062 1 print up at the front counter and I know it prints, 2 but we take the winner, we rip it off, we post the 3 paper face up on the boards. 4 So I guess that we wouldn't be able to 5 close the session or leave the hall until 30 minutes 6 after the session is over since those have to remain 7 posted, it's my understanding, for 30 minutes. Right? 8 MR. SANDERSON: The winning cards have 9 to be posted for 30 minutes. Yeah. 10 MS. TAYLOR: So since the balls called 11 are on the winning cards -- I don't know if -- 12 MR. SANDERSON: This only applies if the 13 prize is awarded based on the number of balls that are 14 called. 15 MR. WHITTINGTON: Oh, you mean a 16 progressive game or something -- 17 MR. SANDERSON: Progressive -- 18 MR. WHITTINGTON: -- ball -- 19 MR. SANDERSON: -- consolation, 20 whatever -- jackpot games, whatever you want to call 21 them. 22 MR. WHITTINGTON: Okay. 50 numbers or 23 more or whatever that you're talking about. 24 MS. TAYLOR: So, really, this No. 2 is 25 in reference to that No. 1? 0063 1 MR. SANDERSON: Yes. 2 MS. TAYLOR: Oh. It doesn't read like 3 that to me. 4 MS. ROGERS: I didn't read it like that 5 either. I'm glad, but -- that's better. 6 MS. TAYLOR: Because it sounded like -- 7 me, too. I had it high-lighted also because it sounds 8 like "This is a requirement also." 9 MR. WHITTINGTON: Well, it should just 10 go right past "maintained" and just continue. 11 MR. SANDERSON: We'll fix it. 12 MR. WHITTINGTON: Yeah, continue. 13 Instead of 2 -- 2 don't even need to be there. It 14 should be all 1. 15 MS. TAYLOR: Then I don't care about it. 16 (Laughter) 17 MS. WEAVER: Lady Chair, I had a 18 question. 19 On the inventory requirements, this is a 20 question on -- I don't know if your hall has it. I 21 assume all halls have it until we get the Lottery 22 Commission to come down and destroy them, whether we 23 whittle them down or whether we burn them or whatever. 24 Are we supposed to keep a running inventory at that -- 25 continuously of those tab -- of those boxes waiting to 0064 1 be destroyed on a daily basis or is that something 2 that, like, we do right before we destroy it we set 3 in -- because we lose our pull-tab managers all the 4 time. So is this something that's supposed to be done 5 on a daily basis and are we falling behind on this or 6 is this as you're getting ready to destroy it and then 7 you do your inventory on that, on the inventory 8 requirement? 9 MS. TAYLOR: As you seal your tabs, you 10 take them out of your inventory. So if you sit down 11 and seal 50 boxes of tabs at the same time, ones that 12 you're not using anymore, at the time you seal them, 13 then you would show that they were sealed and removed 14 from the inventory. 15 MS. WEAVER: But we have to keep an 16 inventory of the boxes to destroy. So is that 17 inventory also included in this -- 18 MS. TAYLOR: Well, that is your 19 inventory. The only thing that would be different, 20 because you would show you removed this from your 21 inventory when you sealed them, and you list them on 22 that paper that you hand over to the auditors. 23 MS. WEAVER: But is that supposed to be 24 done every day or every -- no. I'm serious. I'm 25 asking. 0065 1 MS. TAYLOR: I don't know. We seal 2 tabs -- about once a quarter, we'll go in and seal 3 tabs. So, I mean, I think that would be your 4 preference of when you want to actually seal the boxes 5 and remove them from your inventory. 6 But it takes some time for the auditors 7 to get there. This time, it took them almost a year. 8 (Laughter) 9 MS. WEAVER: I know. 10 MS. TAYLOR: Eight months. I called 11 them January 4th and they just finished coming. 12 MS. WEAVER: Yeah. I have a roomful. 13 MS. TAYLOR: I wanted to ask a question 14 about Line 6, "Each set of" -- "Each type of 15 disposable cards or set of cards sold for differing 16 price amounts must be distinguished by some 17 identifying characteristic." 18 So if you're bringing in and your first 19 book is $4 and extra books are $2 or $1 or whatever, 20 so you're saying that one could be a border and the 21 other one would have to be a screen or could you say 22 that this set is a screen because it's -- I just need 23 to understand exactly what that's asking for there for 24 full-pay, half-pay, because, I mean, most halls, your 25 first book is a little bit more than additional books, 0066 1 price-wise. So does that mean that if you have all 2 border books that you can't use all border books 3 anymore or -- what is that asking for? 4 MR. SANDERSON: That is asking that if 5 you've got a -- you know, a book at one price and 6 you've got a book at a different price, then the paper 7 has to have some distinguishable identifying 8 characteristic. 9 MS. LOPEZ: For that night. 10 MR. SANDERSON: One would have to be a 11 border; one would have to be a screen. 12 MS. LOPEZ: Screen, okay. 13 MS. TAYLOR: And what if you have -- so 14 you can't have screen books, that, "This set of books, 15 when you bring it in, is this price, and this set of 16 books is going to be this price"? I mean, I know at 17 one time we said -- there was something somewhere that 18 we've read which said, "When the books come in, at 19 that time, you have to say what they're going be sold 20 for." And so I'm guessing that this is kind of in 21 reference to that that we've seen in the past. 22 MR. SANDERSON: Yeah, and I think that 23 came out. I don't think that's -- that was in one of 24 these rules that we didn't go through with. 25 MS. TAYLOR: So the halls that only 0067 1 have -- a lot of halls in town have -- what is that 2 called? Prepattern -- pattern paper. So how would 3 they do that with pattern paper since pattern paper is 4 all screen paper? 5 Darin, if you could, get up here and 6 tell me that. 7 MR. PETERS: Probably by series. Use a 8 9,000 for your regular pay and 18,000 for your 9 half-pay. 10 MS. TAYLOR: Would that work out? 11 MR. SANDERSON: I would think it 12 probably would. Yes. 13 MR. PETERS: It's going to cause you 14 some inventory problems, quite a bit, but that's how 15 you can do it. 16 MS. TAYLOR: So we would need additional 17 inventory to -- okay. 18 Okay. We don't like this one either, 19 just on the record. 20 (Laughter) 21 MS. TAYLOR: Okay. Any other discussion 22 on this particular page? 23 MR. WHITTINGTON: 17. I know it's 24 written, but I'm trying to understand what really -- 25 MS. TAYLOR: 17 says "Any coupons or 0068 1 gift certificates redeemed for bingo products, details 2 on products redeemed and value of redeemed products." 3 MS. LOPEZ: That's like when you have 4 discounts and if you've got coupon cards or whatever, 5 just -- you know, if they're, obviously, brought in 6 for that session or for that night, you just file them 7 away with that session. Right? Is that how I 8 understand that? 9 MR. SANDERSON: Yes. That's correct. 10 MS. LOPEZ: Okay. 11 MS. TAYLOR: Anything else? 12 MS. THOMPSON: I want to ask something. 13 MS. TAYLOR: Sure -- well, let us finish 14 this, and then we're going to call for public comment. 15 Okay. And then on Page 6, anything on 16 Page 6, Committee Members? 17 MS. LOPEZ: I think the only thing that 18 I see that's new, obviously, is a description and fair 19 market value of all door prizes awarded at that 20 occasion. I don't think that that had ever been asked 21 in the past, for you to have, you know -- I guess, 22 again, that would just basically be almost like a 23 little documentation sheet saying "On Monday night, we 24 gave away hot dogs," or whatever it was -- right -- 25 basically? Just -- I mean, I'm just using that as an 0069 1 example -- "and it was $250 worth of hot dogs we gave 2 away." That -- 3 MS. TAYLOR: Would you count hot dogs as 4 a door prize? 5 MS. LOPEZ: Would that be -- no? 6 MR. SANDERSON: I wouldn't consider hot 7 dogs a door prize. 8 MS. LOPEZ: Oh, door prize. Oh. Never 9 mind. Okay. 10 MS. ROGERS: So if you gave away a TV 11 door prize and you want -- in other words, being a 12 separate sheet that would list -- 13 MR. SANDERSON: It doesn't have to be a 14 separate sheet. 15 MS. TAYLOR: Just write it somewhere on 16 the occasion sheet? 17 MR. SANDERSON: If there's a door prize, 18 yeah. 19 MS. ROGERS: It would be nice if Tom 20 could make an extra sheet for the computer part and it 21 all would look uniform. 22 (Laughter) 23 MS. TAYLOR: Okay. Any other discussion 24 by the Committee? 25 (No response) 0070 1 MS. TAYLOR: Okay. Then public comment, 2 I have Steve Bresnen. 3 MR. BRESNEN: Thank you, Madam Chair. 4 I'm Steve Bresnen on behalf of the Bingo Interest 5 Group, and I have a lot of comments. If I can 6 remember that somebody's raised them, I'll be brief or 7 just acknowledge them and go on. 8 As I understand the earlier discussion, 9 on Page 1, Line 13, you're going to -- you've 10 recommended substituting -- instead of "cash, checks 11 and debit cards," just the word total -- or "total 12 receipts available for deposit." Is that -- 13 MS. LOPEZ: That's correct. 14 MR. BRESNEN: -- right? 15 Okay. Good. Because I couldn't figure 16 out any other kind of payment that you could have 17 except those three kinds of things. 18 I'd like to back up to Line 11 and talk 19 about -- the way this is written, I don't think it 20 coincides with the description of the effect. On Line 21 11, it says you've got to have the signature of any -- 22 of each person who was the -- first of all, all 23 operators are going to have to sign. If the operator 24 is different from the document preparer, that will be 25 a different signature. And I'm assuming a person 0071 1 that's doing reviewing has to be different from 2 somebody who is a document preparer, although they 3 could be an operator. So in that line, you're going 4 to have at least two signatures. You'll have at least 5 two signatures. 6 And then down on Line 19 -- starting on 7 Line 19, it says they shall be counted by the bingo 8 chairperson or operator and attested to by another 9 bingo worker. It looks to me like since a -- I guess 10 the bingo chairperson could be the operator, under 11 Line 11, could be the document preparer or could be a 12 reviewer, but not necessarily. I guess I'm trying to 13 understand how 19 and 20 relate to 11. 14 You're going to end up having -- you're 15 going to have a bunch of signatures, and it seems to 16 me what you're doing is you're setting up a single 17 failure within the report to knock multiple people off 18 of the registry, because each of these people, except 19 for maybe the bingo chairperson, is going to have to 20 be on the registry. And if there's a single error in 21 the report, then, all of a sudden, three of your major 22 people -- two or three of your major people that are 23 on the registry could be knocked out of being on the 24 registry. 25 I think -- you know, this may work in a 0072 1 General Motors' size operation, but the biggest 2 problem that I see in all of these rules is the 3 difficulty you have, Phil, of regulating very small 4 operations up to very large operations. I think this 5 theme has been mentioned before, but I've got a real 6 problem -- I think I do, anyway, with the way those 7 three lines work together. It looks to me like you've 8 got everybody bound up on a single piece of paper, the 9 result of which could be to knock a whole bunch of 10 people -- a bunch of key people off of the registry at 11 a given time, and I'd like for you to think about just 12 the cost of doing that. 13 As I understand it -- and, again, I 14 don't work in the bingo hall every day; so I'm a 15 little bit of a deficit, but, then again, I'm fresh 16 eyes looking at this. As I understand it, these 17 reports typically get produced by the cashier -- 18 MR. WHITTINGTON: Yeah. That's correct. 19 Exactly. 20 MR. BRESNEN: -- who I guess would be 21 the document preparer under the item that starts on 22 Line 11, but then there's got to be another person 23 that's going to stay there after the session and 24 review the report and verify it, at least one more 25 person, and sign it. Is that -- am I understanding it 0073 1 right? 2 So a single person right now may be 3 staying after the session and producing these reports. 4 There's going to be an additional person -- at a 5 minimum, one other person that's going to be there to 6 attest to the report. That means I think you're 7 driving your personnel costs up. 8 MR. SANDERSON: I think No. 11 is 9 attesting to the deposit, not necessarily the report. 10 MR. BRESNEN: Well -- okay -- oh, not 11 Line 11 but Item 11. 12 MR. SANDERSON: I'm sorry. Line 19, 13 Item 11. Yes. 14 MR. BRESNEN: Well, item -- the item 15 that's on Line 11 is all about the occasion 16 reconciliation report, and the item that's on Line 19 17 is also part of the reconciliation report. So maybe 18 it's a language problem there that the -- the portion 19 in parentheses only applies to the amount deposited. 20 Now, I'm assuming that the amount, you 21 know, deposited here is not the amount that actually 22 made it to the bank, because you're closing these 23 things out at midnight or one o'clock in the morning. 24 It's a deposit that's made up with a bag of money and 25 checks and debit card receipts that go to the bank -- 0074 1 or whatever goes into the deposit. It's the amount 2 that's going to go to the bank and be deposited when 3 the proceeds are deposited. Is that right? 4 (Laughter) 5 MR. BRESNEN: Do you see what I mean? 6 My bookkeeper -- I can tell my 7 bookkeeper, "Hey, deposit this check," and that -- in 8 one way, that's the amount deposited. But until she 9 actually goes to the bank and does her thing and 10 deposits it, it has not been deposited. So if there's 11 a discrepancy between what actually makes it to the 12 bank and what was attested to that night, you've got 13 three people on the hook -- two or three people on the 14 hook for something that got deviated from after they 15 signed their signatures. 16 MS. TAYLOR: Right. So if it was the 17 total amount prepared for deposit, then that would 18 work for you there. Right? 19 MR. BRESNEN: Probably so. I just -- I 20 think you need to be thinking about the ramifications 21 of this, both, from a cost point of view and a 22 practicality point of view. I'm not going to -- I 23 don't want to, you know, take the whole day going 24 through the permutations and combinations, and I won't 25 do that on every one of these, but, anyway, just a 0075 1 suggestion that that language needs reworking. 2 I'm now looking at the item that begins 3 on Line 21 on Page 1, and, specifically, the last 4 three words that are on Line 22, which is "or game 5 schedules variations." It's my understanding that a 6 lot happens in a bingo hall on the fly. So you might 7 have the game schedule and it might be completely 8 complied with, but then you've got money left over or 9 prize money that you can still give out or half an 10 hour left in your session, and so you -- on the fly, 11 you say, "Okay. This next game, we're going to do 12 so-and-so." 13 Now, is that a game schedule variation? 14 The schedule itself didn't vary, but it was, I guess, 15 effectively added to what actually occurred, and so 16 if -- so, you know, what information do you want about 17 that game? 18 I'm very concerned -- having worked at a 19 Target store when I was in undergraduate school for 20 five years -- not that it took me five years in 21 undergraduate school -- 22 (Laughter) 23 MR. BRESNEN: -- but, you know, we did a 24 lot of things. We did instant markdowns. We did all 25 kinds of things. Now, we did record those instant 0076 1 markdowns, but a lot of things happened on the fly and 2 I'm concerned that -- you don't want to diminish that, 3 because I gather that's where you make some extra 4 money, if you're smart and you're in touch with your 5 workers. 6 On top of Page 2 on Line 1 at the end, 7 "payout structure," if you-all -- that may be a term 8 of art in the industry and maybe you-all know what 9 that means -- oh, let me ask a clarifying question, 10 though, back on Page 1, Line 21. 11 Phil, it says: "This is additional 12 information that should be included." Is this a 13 guideline and recommendation or is this an enforceable 14 provision in the rule? 15 MR. SANDERSON: Well, if we do an audit 16 and we find that somebody, hypothetically, may have 17 awarded or not awarded prize money in accordance with 18 what their game schedule was, and over a period of 19 time, if that continues, there could be a high-dollar 20 amount missing. And if there's no recollection or no 21 documentation of, potentially, what occurred, then it 22 could cause some -- you know, financial concerns in 23 the audit for the organization. And all we're doing 24 is asking -- you know, we know there's a prize limit 25 of $2,500. Not everybody gives away 2,500 -- you 0077 1 know, a lot of people do, but there's some that 2 don't -- and there's some that change their playing 3 schedules. And if we look at, you know, the playing 4 schedule and they're only giving away 2,000 and they 5 had, you know, 500 left and decided "Oh, we got a big 6 crowd. We'll play another game," and they don't have 7 any documentation of it anywhere, then there's a 8 problem. 9 MR. BRESNEN: Well, I guess what I'm 10 driving at is -- I hate to raise this because I'm 11 taking away a legal argument from folks later on, but 12 I don't think you can enforce the word "should." I 13 think that's a -- you know, "should" is, you know, 14 something my Mama would tell me I should do, but she 15 couldn't very well punish me later on, although she 16 probably would have. 17 Okay. I'm on line -- on Page 2 at Line 18 10. I gather that the language that begins after 19 the -- well, that begins with "whether sold at the 20 register or on the floor," you're not asking that 21 those be demarcated as to whether they were sold on 22 the floor or at the register. You're just saying that 23 whatever gets sold, the information preceding it has 24 to be gathered. 25 MR. SANDERSON: Yes. 0078 1 MR. BRESNEN: Is that correct? 2 MR. SANDERSON: Yes. 3 MR. BRESNEN: I think it might be 4 helpful just to strike that last phrase, because every 5 type of disposable inventory sold includes everything, 6 whether it's sold on the floor or at the register. So 7 just -- it's words you don't need that I think can 8 lead to problems down the line. 9 I'm looking now down at Line 17 on Page 10 2 -- I'm sorry. The material that starts -- the 11 section that starts there, looking at Line 20, "all 12 card-minding device sales transaction records." 13 MR. SANDERSON: We're already looking at 14 clarifying that. 15 MR. BRESNEN: Okay. So you want me to 16 just -- well, I just want to make sure it doesn't 17 include customer receipts. 18 MR. SANDERSON: That's correct. 19 MR. BRESNEN: I'm assuming you're 20 wanting some kind of summary. 21 MR. SANDERSON: This is a summary 22 report. 23 MR. BRESNEN: Okay. Good. 24 Secondly, about that, though, when 25 you're thinking about it, I'd like to figure out whose 0079 1 responsibility that is. And if I can -- it's a little 2 out of order, but I'd like to switch over to Page 4, 3 Subsection (g) that starts on Line 19. 4 It seems to me that everything in this 5 rule is a requirement for the conducting charity, 6 except there's some responsibility here that their 7 card-minding devices have to do the following things. 8 They are prohibited by law from altering the 9 card-minding device after you have approved it, I 10 believe, and these look like responsibilities that 11 ought to be in a rule that affects manufacturers and 12 distributers. So I'd suggest moving those to a 13 different rule so the charities don't think they're 14 responsible for altering that equipment in any way. 15 You're going to get a bad result. 16 And, also, when you're reworking this, 17 on line -- the material that starts on Page 2, Line 18 20, where it refers to "all card-minding device sales 19 transaction records," I'm assuming those can be 20 maintained in electronic form. It's my understanding 21 the -- there's pretty large memories in this equipment 22 that will retain this information for a long period of 23 time. And so I think if you made it clear there that 24 this information can be maintained in electronic form, 25 it will keep people from, you know, producing the 0080 1 giant record and trying to figure out where they're 2 going to put it where the mice won't eat it. 3 Now I'm on Page 3 at Line 7. I 4 appreciate the discussion about fair market value, but 5 I think you can solve the problem there that just -- 6 if you just say -- and (C) just says "the amount or 7 value of any non-cash prize." I think for these -- I 8 understand people buy things over and over from a 9 given retailer; they cut the price for them. If 10 you're willing to take the receipt, what they paid for 11 it, then the amount of any non-cash prize or the value 12 of it, if that's the receipt, you don't need the 13 surplus at the end of that after the semicolon on Line 14 6. Just something to consider. 15 Looking on line -- starting on Line 8, I 16 would question why you need the item -- I'm sorry, on 17 Line 10, why you need that. It basically is requiring 18 a calculation of a person. It's one step that's not 19 needed. It seems to me, if you have the amount of 20 prizes on Line 8 and the number of winners for each 21 game, then you'll know the average prize per winner, 22 but I understand that there may be quarter-pay, 23 half-pay, full-pay, and you've got somebody up there 24 trying to break those out while they're paying and 25 make a record of it at the time. It looks to me 0081 1 like -- I'm not sure exactly what you get out of that. 2 If you know the amount that was paid and the number of 3 winners, it seems to me like that would be sufficient 4 information. 5 On Line 12, that -- is anybody 6 maintaining that information now? It seems to 7 require, for regular bingo game only, the amount of 8 the net payout -- I'm assuming that's the prize minus 9 the prize fee -- by winner by game and total. Is 10 that -- you-all maintain that by winner now? 11 MR. SANDERSON: It's on the prize 12 schedule sheet, yes. 13 MR. BRESNEN: And you keep the winner's 14 name? 15 MR. WHITTINGTON: Not the name, no. 16 Just what they won. 17 MR. SANDERSON: I don't see "name." 18 MR. BRESNEN: Well, by winner, how do 19 you -- how do you differentiate the winner? You've 20 just got a different line for each winner? Is that 21 the deal? 22 MR. SANDERSON: It goes back to, I 23 believe, (F), where it talks about the amount of prize 24 per winner. You've got a winner that's got -- you 25 know, they -- multiple winners of a game and one of 0082 1 them happens to be a half-pay; they get $50. So that 2 one winner at 50 minus 250 -- 3 MS. LOPEZ: 250. 4 MR. SANDERSON: -- paid out -- 5 MR. BRESNEN: So you just say -- you 6 just say one winner -- 7 MR. SANDERSON: Yes. 8 MR. BRESNEN: -- or you just say a 9 winner? 10 MR. SANDERSON: Yes. 11 MR. BRESNEN: Okay. It's not by name. 12 I'm with you now. 13 Okay. On -- looking at Item (I) there 14 starting on Line 13, if -- I'm not sure what would 15 constitute a satisfactory explanation there. It seems 16 vague to me. I don't know how long you have to have 17 it. 18 COMM. SCHENCK: Water. 19 (Laughter) 20 MR. BRESNEN: Hello? Commissioner, do 21 you need a drink of water? 22 (Laughter) 23 MR. BRESNEN: Thanks for attending, by 24 the way. And I like the Britney Spears thing there. 25 That's -- 0083 1 (Laughter) 2 MR. BRESNEN: I think you talked about 3 the item on -- the item on -- that starts on Line 15 4 with one exception. It seems to me -- kind of like 5 what I was talking about above, if you have the gross 6 amount of prizes paid and the amount of prize fees 7 withheld, it just seems to me like it's, you know, one 8 more calculation there for somebody to screw up, but 9 probably not the biggest deal in the -- when Trace 10 talks, he can talk about the limits of these cash 11 registers, but I think this is another place where 12 you're defining the criteria that a cash register at a 13 hall has to meet, and I would submit to you there's 14 probably a bunch of cash registers in the state that 15 don't meet these requirements. And if they don't, 16 they're going to have to go out and purchase new 17 equipment, and that's going to drive the cost up. 18 On Page 5 at Line 3, the inventory 19 requirement, this is where -- I think this is what I 20 was talking about, Phil, when I told you I'm kind of 21 lost in the big picture here. Don't we have -- 22 haven't you-all adopted the inventory requirements 23 already? I know we've been over the inventory rule 24 for a time -- 25 MR. SANDERSON: I believe we have. 0084 1 We'll go back and look at that just to make sure. 2 This used to be incorporated, I believe, 3 in the inventory rule, and I -- Earl made a 4 recommendation that we pull the occasion records out 5 of the inventory records, and this paragraph may have 6 been one that just got placed in here incorrectly. 7 MR. BRESNEN: Okay. Good. Good. 8 MR. SANDERSON: So we'll look at that. 9 MR. BRESNEN: All right. Great. 10 Thanks. 11 I'm going to let -- again, Trace, I 12 think, will go into more detail on this Item (i) here, 13 but I think I subscribed to everything that was said. 14 And one thing I don't know, in the Code 15 Construction Act, the word "include" which appears on 16 Line 7 at the end, means "including but not limited 17 to." 18 MR. SANDERSON: Which page? 19 MR. BRESNEN: Page 5, Line 7, the word 20 "include." It says "This may include variation in 21 appearance." The first sentence requires a -- some 22 identifying characteristic, which is broad. The 23 second sentence gives a couple of things that may be 24 done -- "may include" -- but it doesn't speak to a 25 limitation. That's if the Code Construction Act 0085 1 applies to a -- the construction of an administrative 2 rule, which I have no idea about. 3 I guess my question is: Is that 4 intended to be a limitation or is hole drilling 5 allowed? 6 MR. SANDERSON: I can't answer the hole 7 drilling question because we're doing some research on 8 that, but the first part of your question, it is not a 9 limitation. 10 MR. BRESNEN: Okay. You just want to be 11 able to tell one kind of paper from another. Is that 12 the -- 13 MR. SANDERSON: When we do inventory 14 analysis, yes. 15 MR. BRESNEN: Gotcha. Okay. 16 I think you've already -- I understand 17 that with respect to Item (j), which is a little, 18 biddy (j) on what I've got here, Item 10 -- that 19 starts on Line 10, that the intention is that 20 Subsection (j) only applies in games that are based -- 21 where the prize is based on the number of balls 22 called. 23 MR. SANDERSON: Yes. 24 MR. BRESNEN: Okay. All right. Because 25 the way it's written right now, I think the item 0086 1 that's on Line 14 would be a serious problem if 2 applied to all regular bingo. I think there are going 3 to be some people who know better than I that are 4 going to explain other problems with that, but I'll -- 5 MR. SANDERSON: We're looking at 6 rewording that. 7 MR. BRESNEN: Okay. I think one of the 8 problems with Item (k) -- Subsection (k) that starts 9 on Line 17 is it doesn't appear to be a complete 10 sentence. It's like it was pulled out of a list, but 11 I don't think the -- unless I'm missing something, 12 there's -- it's a series of three prepositional 13 phrases that are not connected with any kind of action 14 requirement. So you might look back at it. 15 MR. SANDERSON: Yes. 16 MR. BRESNEN: Okay. 17 COMM. SCHENCK: Actually, I believe that 18 was intended to be No. 4 -- 19 MR. BRESNEN: Pardon? 20 COMM. SCHENCK: -- (j). 21 MR. SANDERSON: Sir? Commissioner? 22 COMM. SCHENCK: I say, I think you may 23 have intended that to be No. 4 under (j). 24 MR. SANDERSON: It's -- 25 MR. BRESNEN: Okay. Anyway, it's not a 0087 1 complete sentence. 2 MR. SANDERSON: Yes. 3 MR. BRESNEN: And then on the last page, 4 you have fair market value. Again, the concept that 5 we talked about, I think if we can nail that down to 6 what you paid for it, it would be an improvement, but 7 I'm wondering why door prizes -- do door prizes fit 8 into the calculation of prize fees or anything you 9 really regulate? 10 MR. SANDERSON: Well, yeah. There's a 11 statutory provision that they can't exceed $250. 12 MR. BRESNEN: I gotcha. 13 Okay. I think, then, if you'd address 14 that by, you know, how much you paid for it, then that 15 would make it a hard-and-fast rule. 16 Yes, sir. 17 MR. WHITTINGTON: Steve, I'm going to 18 ask you a question. I'm going to go back to Page 1, 19 Line 11. 20 I'm totally in agreement with what you 21 said, because I really feel it should be the name of 22 the operator in charge of the occasion and a signature 23 from a document preparer. That's it. That's what I 24 think it should read. Very simple. 25 MR. BRESNEN: I think if the operator 0088 1 has a legal duty in relation to what goes on in the 2 session, then putting their name on there is 3 significant -- I mean, sufficient. It doesn't really 4 matter whether they -- 5 MR. WHITTINGTON: Right. 6 MR. BRESNEN: -- prepared it or not. 7 And then if the preparer signs it, 8 they're sitting right there anyway, and you don't have 9 to hold somebody after. And that might be a good way 10 to -- 11 MR. WHITTINGTON: That's all we need. 12 Very simple. 13 MR. BRESNEN: -- solve that and hold the 14 cost down. 15 Thanks. I'll be happy to answer any 16 other questions, if I'm able. 17 MS. TAYLOR: Any questions? 18 (No response) 19 MR. BRESNEN: Thanks. 20 MS. TAYLOR: Thank you. 21 MS. ROGERS: I have a question for Phil 22 right quick. Phil, any of this that goes through that 23 is adopted, the signatures and things of that nature, 24 that will be changed on the computer form. So if you 25 use -- 0089 1 MR. SANDERSON: Any changes -- 2 MS. ROGERS: So you'll have like two 3 spaces for signatures. Because, right now, it's only 4 one. 5 Okay. Back on Page 3, halls that -- we 6 don't have half-pay; so I don't really understand all 7 of it. But If they have half-pays, where you said 8 before, there's two winners, one was a full-pay, one 9 was a half-pay, will it be adjusted to work this out? 10 Because right now I know it has a place for "500 is 11 your prize." "How many winners?" "Two." It 12 automatically just divides it in half. 13 MR. SANDERSON: As far as the automated 14 forms manual? 15 MS. ROGERS: Right. 16 MR. SANDERSON: Yes. We'll make 17 adjustments to that. 18 MS. ROGERS: Okay. Before these go into 19 effect. 20 MR. SANDERSON: Yes. 21 MS. ROGERS: Okay. Thank you. 22 MS. LOPEZ: Because right now everything 23 is done manually. I mean, just have to do it 24 manually. 25 MS. ROGERS: No. If you have the 0090 1 downloaded automated forms, you have the daily cash 2 reports and it does it all for you. 3 MS. LOPEZ: Okay. 4 MS. ROGERS: But it doesn't -- I don't 5 know how it splits half-pay and full-pay and 6 everything. 7 MR. BRESNEN: I'm sorry. I just need to 8 add to my remarks. Steve Bresnen on behalf of the 9 Bingo Interest Group again. 10 I think one of the things that I left 11 out -- I think a very important thing I left out is 12 there's a lot of this information that seems to be 13 pretty easy if you're using electronics, but it's my 14 understanding that we still have a lot of paper-only 15 halls in the state and we also have people who play 16 paper and electronics separately. So I guess, you 17 know, ball calls -- things like ball calls and some of 18 that stuff could get caught anyway, but some of this 19 other information may not get caught in the same way. 20 I'd appreciate it if you'd consider what you're doing 21 to the paper-only folk out there. 22 I don't think the rules should operate 23 to influence people as to whether they use electronics 24 or don't use electronics, and I suspect that a lot of 25 the smaller places out there don't use them. So if 0091 1 you knock out the 75-seat VFW that plays three nights 2 a week because the recordkeeping requirements become 3 so onerous, I don't think you're going to help that 4 curve on -- that downward slide that might otherwise 5 be reversed. 6 Thanks. 7 MS. ROGERS: I agree with Steve. We 8 have to be very aware of the smaller halls that 9 don't -- we use electronic on computer, but not 10 everybody does. 11 MS. WEAVER: I have a question on the 12 fair market value of the door prizes again, if you 13 don't mind. What if it's a donation? How are you 14 going to have a receipt? 15 MR. SANDERSON: That's the reason we put 16 the fair market value in there, because there are a 17 lot of door prizes that are donated. So we'll have to 18 look at how we can clarify that language, because 19 there are individuals -- or complainants that we, you 20 know, get, that, "So-and-so is giving away these 21 massive trips and there's no way it's less than $250." 22 MS. LOPEZ: But if it's donated, are you 23 not getting a documentation from that donor source 24 saying "I donated a TV worth $250. This is Company A 25 that's donating it to Organization A"? I mean, isn't 0092 1 that -- 2 MR. SANDERSON: That's what we're asking 3 for here, is the documentation. 4 MS. LOPEZ: Okay. 5 MS. WEAVER: I have a question on the 6 donations, and it's just recently occurred. We have 7 our 20th anniversary coming up -- well, actually, it 8 was yesterday, but we're not celebrating it until next 9 month. We have a -- someone that has made a large 10 donation to the charity for the actual -- for them 11 to -- a prize, a flat screen TV. It is worth more 12 than $250, but they're trying to say "If they donate 13 it to the charity, could we give it away?" And I'm 14 going, "You know, I really don't know if it's a 15 donation to the charity and the charity wants to give 16 it away." 17 MR. SANDERSON: I can't answer that in 18 this setting. I'd have to have more analysis to 19 answer that question. 20 MS. LOPEZ: The one thing that I see 21 advantageous to this documentation is that for any, 22 say, company that is donating door prizes to an 23 organization, it's actually a tax write-off for them 24 at the end of the year because they have documentation 25 to show that they've donated X amount of dollars in 0093 1 door prizes to these nonprofit organizations. So I 2 see that as advantageous to a company that would do 3 that, or, you know, anybody that would do that. 4 MR. WHITTINGTON: Let me ask you a 5 question, Phil. If the -- no matter what the cost 6 of -- the retail cost, if somebody donates 7 something -- I don't care if it's $3,000 -- if that 8 charity want to actually pay for it and give up to 9 $250, what does it matter? They got their receipt for 10 $250 that they paid for this product that somebody 11 donated them to -- 12 MR. SANDERSON: Well, I think the 13 statute -- 14 MR. WHITTINGTON: Understand what I'm 15 saying? 16 MR. SANDERSON: I think the statute is 17 very clear. It says the value of the prize cannot be 18 more than $250. So we're trying to clarify what that 19 term "value" means. 20 MR. WHITTINGTON: Value from who? From 21 the person that donated it? It's no value to them. 22 They gave it. 23 MR. SANDERSON: That's why we put "fair 24 market value" in there. 25 MR. WHITTINGTON: Okay. 0094 1 MS. LOPEZ: But there is value if 2 someone donates a door prize to an organization 3 because you use it at the end of the year as a tax 4 write-off. 5 MR. WHITTINGTON: To them. I'm talking 6 about to the charity -- 7 MS. LOPEZ: Yeah, to whoever donated 8 that. It could be anybody. It could be an individual 9 that donated that. I mean, you still get a tax 10 write-off. 11 MS. TAYLOR: Right. Fair market 12 value -- I mean, "I'll give you $250 for that" -- 13 MR. WHITTINGTON: Right. 14 MS. TAYLOR: -- "TV set, by the way," if 15 that's all they want for it. But, I mean, fair is 16 fair and I know the rule is written to try and lessen 17 the impact of people giving away a car at the bingo 18 hall. 19 Any other discussion by the Committee? 20 If not, we have some more public comment. 21 (No response) 22 MS. TAYLOR: Trace Smith. 23 MR. SMITH: Good morning, everyone. 24 Trace Smith. I'm representing Texarkana Sheltered 25 Workshop, which we are a rehabilitation charity in 0095 1 Texarkana. 2 Just to kind of go over what Steve had 3 said earlier, on 402.512, on -- my notes are a little 4 different than you-all's. I don't have the line 5 numbers; so you'll have to bear with me. (b)(4), the 6 name signatures, I want to reiterate that. That's 7 kind of what Steve said, creates a problem if there's 8 a transposition in numbers or there's an accidental 9 mistake or something like that. You could 10 considerably knock out several key people off the 11 registry. 12 I want to skip down to Item (c). I 13 believe that's Line 21. "Additional information that 14 should be included in the occasion records: Any 15 advertisements, flyers, or game schedule variations." 16 We do our bingo on the fly a lot. We do have a 17 certain number of games that are usually the same 18 every day; 80 percent of them are not. We do a lot of 19 on-the-fly games like jackpot games, you know, 60/40 20 games, stuff like that. If we had to document every 21 game and why we did that, it gets to be inundating. 22 There's a lot of documentation there. 23 "Information for any specials, selling 24 discounts, or changes in pricing or payout," what it 25 seems to me there is that we're going to have to 0096 1 document why and what for every time we want to change 2 our prices. I don't believe that's the intention of 3 the Enabling Act, for us to have to do that every time 4 we want to do something. I do understand that when we 5 do document it on the daily cash report, that's the 6 documentation. That's what we sold it for that day. 7 That's what it was. I don't know why we have to have 8 a reason to do that. 9 Skip on over to -- let me see here. 10 Okay. I want to skip on over to item -- hang on just 11 a second. It would be on Page 3, Line 13, (I), "an 12 explanation for any deviation from the prize amount 13 offered and the prize amount actually awarded." 14 Sometimes if you have half-pays or quarter-pays in 15 your halls -- we're a small hall. We're not a big 16 hall. Sometimes we have four levels of pay. If we 17 had to explain why we didn't pay out $100 on a 18 particular game, "because Marcy only played a 19 quarter-pay that day," that's going to get lengthy in 20 a hurry, especially if you're playing 30 or 40 games a 21 night at $50 and there's a half-pay or a half-half or 22 quarter-pay or whatever. That's going to get lengthy 23 and it's going to get -- things are going to get 24 transposed and it's going to get left out. 25 And I think we need to keep in mind that 0097 1 a lot of people in the smaller halls are not highly 2 paid or highly skilled employees. They're basic 3 people just like -- well, all of us. They're not 4 highly educated. They're doing the best they can to 5 get by on a day-to-day basis. They live paycheck to 6 paycheck. So the learning curve and the expectations 7 sometimes do not meet. That's difficult to do. I 8 don't know if that's a problem for everyone else in 9 the bingo industry, but hiring skilled employees is a 10 great concern of ours. 11 Going to skip down to (f), the cash 12 register and card-minding system requirements. The 13 cost to the charities on this is going to be 14 outrageous. A lot of this stuff the cash registers do 15 do, but I know in a lot of the smaller halls, the VFW 16 halls, the Elks Lodges, the Moose Lodges that play 17 once, twice, maybe three times a week, their cash 18 registers, they're outdated. They don't have the 19 funds to go out and purchase a 600-dollar cash 20 register for three days a week. You're going to knock 21 out your smaller halls by doing this. 22 As long as it's documented, as long as 23 it's the way it is right now, it should be sufficient. 24 I think it -- we're getting very technical and we're 25 gearing towards an electronic industry. A lot of the 0098 1 paper-only halls don't have the capabilities that the 2 electronic halls have, but I'll get to that in a 3 second. 4 It says on (C) -- let me flip over here. 5 On Page 4, Line 4, "Record all transactions, customer 6 receipt numbers," I'd like clarification on what a 7 customer receipt number is. I'm not real sure about 8 that. Our customers don't currently get receipt 9 numbers. They get a receipt, but they don't get a 10 receipt number. I'm not sure what that means. 11 "And control totals on the internal 12 tape," a lot of the cash registers that are older 13 don't have an internal tape. That could be a big 14 problem. 15 And what are we -- it says, on Line 6, 16 "The cash register internal tape must be imprinted 17 with the following information." I have yet to see 18 anywhere in this where we're supposed to store or keep 19 the internal tape. Are we supposed to be doing that 20 currently? 21 MR. SANDERSON: I don't know if there's 22 a current requirement to keep the internal tape, but 23 that's -- 24 MR. SMITH: Is this suggesting we will 25 have to keep the internal tape? 0099 1 MR. SANDERSON: The detailed tape of the 2 registry, yes. 3 MR. SMITH: Okay. So in addition to the 4 actual X tape or the Z tape that prints out, we're 5 also going to have to keep a copy of that from the 6 internal tape? 7 MR. SANDERSON: Yes. 8 MR. SMITH: I'm not real familiar with 9 that. So we have to keep two of the same thing? 10 MR. SANDERSON: Well, the internal tape 11 is a detailed listing of all the transactions that are 12 wrung up on the cash register. The Z tape or the X 13 tape is a summary of the tape. 14 MR. SMITH: Okay. So under this, we're 15 going to have to keep the internal tape -- 16 MR. SANDERSON: Yes. 17 MR. SMITH: -- which could be how big? 18 MR. SANDERSON: Oh, they could probably 19 be from here to the end of that room, but you can fold 20 it up in a little -- you know -- 21 MR. SMITH: Okay. Well, that addresses 22 another situation, is in storage. Our charity does 23 not have a lot of significant storage, but that's -- 24 I'll get to that in a second. 25 Not all registers keep a consecutive 0100 1 customer receipt number, which is Line 13. I know in 2 our hall we have multiple registers and the cashiers 3 that do the cashier receipt tapes are not always using 4 the same register to do their Z tapes on. The receipt 5 tapes are going to be different for each register, and 6 you-all are asking for identification number 7 consecutively generated for each end-of-session 8 occurrence. 9 They're not always going to be doing the 10 Z tape on the same register. Sometimes they sell them 11 on this register; sometimes they sell on another 12 register, depending on where they are in the session. 13 Sometimes, you know -- we have three different lines 14 and sometimes Session 1 is sold in Line 1 and Session 15 2 is sold in Line 2 and Session 3 is sold in Line 3 16 and sometimes those get mixed around. Sometimes 17 Session 1 is sold in Line 3. 18 So that creates a problem for us. I'm 19 not only sure that's just for us, but I'm sure that's 20 for everyone. 21 Going down to Line 19, "The card-minding 22 device system must perform the following functions," I 23 agree that -- I don't believe that's our problem. We 24 can't go into the systems that we have. We don't have 25 those passwords and we're not allowed to do that 0101 1 anyway, not that I would even want to begin to try to 2 do that. We've got enough to do already. 3 On Page 5, I believe, on inventory 4 requirements, we're doing a perpetual inventory anyway 5 and you're asking us to reconcile it. That's Lines 3 6 through 5 on Page 5. 7 If you're doing a perpetual inventory, 8 it's reconciled anyway. I'm not understanding that. 9 Are you telling me that we can do a perpetual 10 inventory once a quarter; we can take a reading at the 11 beginning of the quarter and then finish it up at the 12 end of the quarter? I'm not understanding that 13 exactly. 14 MR. SANDERSON: I think what we're 15 saying here is that what you have on your disposable 16 card sales summaries, your inventory, each quarter you 17 reconcile it to what's actually sitting in the cabinet 18 to make sure it's correct. 19 MR. SMITH: Okay. Okay. 20 Go down to (i), "Each type of disposable 21 cards or set of cards sold for differing price amounts 22 must be distinguished by some identifying 23 characteristic. That may include variation in 24 appearance such as border color printing and screen 25 printing or card face orientation." 0102 1 We have a lot of pay levels and we do 2 our best to keep a good inventory of different cards. 3 There are only so many different types of cards that 4 are offered in different series numbers. If you have 5 a full-pay series and a half-pay series and a 6 half-half series and a quarter-pay discount series, 7 you're getting into multiple series that may look the 8 same, but the series may be different. Am I to 9 understand that a border card that is a 1 to 9,000 10 series and a border card that is 9 to 18,000, that's 11 that's differentiated enough? 12 MR. SANDERSON: That could be 13 differentiated enough, yes. 14 MR. SMITH: Okay. Now, my next question 15 is: Where are we going to put all of this stuff? We 16 only have a limited amount of space in our halls. 17 MR. SANDERSON: Well, I think that's a 18 business decision. I mean, you've got to look at what 19 you're offering. 20 MR. SMITH: Okay. All right. So the 21 smaller halls that don't have enough stuff are limited 22 to what they offer by their inventory space. Gotcha. 23 (j), "Additional Requirements." On Line 24 13, the balls called, a ball call sheet must be 25 maintained, I don't know if -- I mean, if you-all are 0103 1 familiar with this, but I was understanding that you 2 were talking about the number of ball calls in 3 relationship to jackpot games or progressive games -- 4 that's correct -- the ball call sheet? 5 MR. SANDERSON: If the winner is based 6 off the number of balls that are called, then you'd 7 have to have that report. 8 MR. SMITH: Okay. All right. I don't 9 know if many of you-all are familiar with bingo 10 calling at all, but it's definitely a very tedious 11 job. It's not as simple as pulling a ball out and 12 plugging it in the hole anymore. 13 I know these people are human. I've 14 been a bingo caller since I was 18 and I'm 35 now; so 15 the progression from the old-style bingo playing where 16 you just pulled the ball out, you call it and you put 17 it in the hole is not the same as it is now. You 18 still do that, but you have to check your computers, 19 also, to make sure they're functioning properly after 20 each ball call. You've only got a limited amount of 21 time to do that on a paper game. 22 On an electronic game, no problem. It 23 does that for you. It prints it out on the winner, 24 like you said earlier, Suzanne. You've got that 25 maintained. Not a problem. On a paper game, for 0104 1 instance, a -- I'm sure you-all are familiar with 2 speedball games, which I'm sure all of you-all play. 3 I'm sure that the caller is not going to have time to 4 sit there and write down each ball called right in the 5 middle of a speedball game. If you have to do that at 6 the end of the speedball game and you've got 68 7 numbers called, you're holding your game up; you're 8 limiting the number of games you can play in your time 9 frame. That's -- basically, you're handicapping your 10 charity from making money by doing that. Not only 11 that, but that's another record that we've got to keep 12 up with for X number of years. 13 I know that there are some halls that 14 I've heard of in -- I believe it's Killeen, they play 15 All-Speed or English Bingo, I believe, and they do 16 call the balls one every second. If you're 17 maintaining your integrity of your game, like we're 18 supposed to, you can't focus on writing down the 19 number of balls called while you're calling your game. 20 That creates the next problem. You're 21 going to have to pay an extra person to sit up there 22 and do that. You can't ask a customer to do that. 23 You're not going to get an accurate report. 24 It's very -- it gets complicated. I'm 25 not saying that you don't need that, but there is some 0105 1 integrity there that we've been asked to, you know, 2 provide that we've gone through background checks and 3 we've said we're good people. There has to be some 4 kind of trust there. 5 I want to skip down to Line 20, I 6 believe it is, on Page 5, "Records of all progressive 7 or jackpot bingo games played to include." A lot of 8 the bigger halls in Dallas, Houston -- you know, I'm 9 assuming Austin. I haven't been to a lot of halls in 10 Austin yet -- but they don't play jackpot games. 11 These are mainly your small halls, your VFWs, you 12 know. The name of a progressive or jackpot game 13 played, the amount carried over from the previous 14 occasion, the receipts from the current occasion -- 15 the receipts from the current occasion is what really 16 baffles me. I'm assuming that's your gross receipts 17 on that game. 18 If one session has ended and it doesn't 19 play again until next Thursday, you're going to have 20 to go back to your bookkeeper to get that and write 21 down how much you brought in on that game last time to 22 record it for this time. That's not readily kept. 23 The amount paid out for the current occasion, the 24 amount paid out -- or the amount carried forward to 25 the next occasion and a description and fair market -- 0106 1 well, anyway, all that is really inundating. 2 I don't know if everybody has looked at 3 this or not, but our gross is not going up a whole 4 lot. Our costs, however, are. I know that some 5 distributors have issued notices here lately that 6 they're going up at least 8 percent across the board. 7 That is a huge detriment to the charities in the state 8 of Texas. 9 All the recordkeeping that we're having 10 to do relates to more bookkeeping, more bookkeeping 11 relates to more cost. We're driving our costs up. I 12 think that the charities are being overwhelmed with 13 all the bookkeeping that they're having to start. I 14 think that we're forgetting our purpose by doing all 15 this and just letting the charities make their money. 16 I feel like that we're not concentrating on the main 17 thing, which is for the charities to raise funds. 18 Any questions? 19 MR. WHITTINGTON: Trace, let me ask you 20 a question. So you're basically saying that a lot of 21 rules that have been written basically don't know the 22 ins and outs of running a bingo hall and just being -- 23 just surviving at a bingo hall on a day-to-day basis. 24 MR. SMITH: Yes. Absolutely. It think 25 it's not -- it's -- some of the rules -- I do 0107 1 understand that a lot of rules that are introduced do 2 deal with specific problems. However, I think that 3 some of the rules are introduced to deal with specific 4 problems in specific halls. I don't think that it's 5 beneficial to curb the entire industry with certain 6 rules when it doesn't apply to them, and I think that 7 a lot of the rules are not based on a practicality 8 measure. I don't think that they -- I think they're 9 introduced without having worked in a bingo hall or 10 having experienced the day-to-day operations in a 11 bingo hall. 12 MR. WHITTINGTON: Well, I appreciate 13 that, because it's a big concern of mine, too, because 14 it's a lot of red tape that probably 80 percent of 15 this can be completely stricken from the books and 16 records completely, because we don't need it. I just 17 think we need to be more on-hand experience in a bingo 18 hall that's struggling and trying to make it; maybe 19 they can understand a lot better when they write these 20 rules instead of just sitting around a round table 21 thinking about, "Oh, what are we going to write next? 22 How can we affect the charities now?" 23 You're right. We definitely should look 24 at that more, try to change this, make them 25 simplified. 0108 1 MR. SMITH: The charities are the 2 ultimate goal, not the audits. That's not the 3 ultimate goal of the charities in bingo. It's for the 4 charities to raise money. 5 MS. ROGERS: And I think you said it 6 right there at the end. You're correct. I think a 7 lot of this is being written because one hall did 8 something incorrectly, knowingly or not -- whatever -- 9 and now they're -- so we're sliding in another rule. 10 And we have to remember that not 11 everybody is a large, commercial hall. There are the 12 small VFWs. There are the small -- and it doesn't 13 matter what the world turns out to be, how many ATMs, 14 how many electronics, how many computers or what we go 15 to, they have to be watched out for, and this is 16 becoming too -- everything in here has the same thing. 17 Yourself, Steve, the BAC Members, we've all -- it's 18 the same ones. We're just -- we're marking the same 19 exact problems. 20 And I ask -- I plead with the Lottery -- 21 the Bingo Division to please take a look at why you're 22 putting this in here. What good is it going to do the 23 auditors when they come in? Is it truly going to give 24 them the information that they're looking for? 25 Because it's making it -- we're having to keep so much 0109 1 more paperwork, and it is a concern that charities 2 have to keep rooms of paper -- internal paper, and the 3 Commissioners, Suzanne, I ask that we make sure 4 Commissioners know -- I know the one Commissioner was 5 listening -- what a concern this is to the public and 6 to individuals, that we don't let the little guys -- 7 MS. LOPEZ: Again, our focus is to, 8 obviously, ultimately increase attendance, you know, 9 in everybody's bingo halls across the state, but with 10 what comes a lot of overwhelming responsibilities, it 11 seems, and, you know, again, it's square -- it's back 12 to square one. It's ultimately the charity who is 13 totally responsible for the operation of bingo. 14 Without the charities, commercial lessors, 15 manufacturers, distributors do not exist. That is the 16 whole purpose of why bingo is in the state of Texas, 17 is because of the charities. 18 MR. SMITH: And please let me add, I 19 don't think any of the charities would knowingly -- or 20 none of our charities, at least, anyway would 21 knowingly violate any of these statutes or laws or 22 rules or anything. We want to comply, but I know I've 23 talked to many, many charities that we've asked to 24 come play bingo or they've said, "Hey, what about 25 bingo? You know, can we" -- "how do we do that," and 0110 1 we start explaining it to them, and they go, "Forget 2 it. That's too complicated for us. We don't have the 3 time. We don't have the manpower. We don't have the 4 resource to do all that." 5 MR. WHITTINGTON: Well, with the 6 paperwork piling up, it's definitely going to -- it's 7 not going to help the charities, it's going to drive 8 them out of business, because they don't understand. 9 And they're going to eventually do something wrong 10 if -- as the rules and regulations, that you got to 11 keep this and keep that for every occasion that you 12 hold bingo, it's going to run into a big problem. So, 13 later, we're going to lose more. 14 MS. LOPEZ: And not only that, remember 15 that most organizations that are licensed in this 16 state have been licensed for numerous years, and with 17 that, some of these organizations that have been 18 playing bingo since 1982, some of these folks are 19 getting up there in age, and they're not being 20 replaced by new volunteer people on these 21 organizations that want to take the responsibility to 22 make sure that the organizations are in compliance. 23 And so that is a problem. It is a big issue. I mean, 24 I see that. 25 MS. TAYLOR: So as a committee we agree 0111 1 with your statement, I take it, that we not curb the 2 entire industry for problems with a few halls. 3 MR. SMITH: Thank you. 4 Any other questions? 5 (No response) 6 MS. LOPEZ: Thank you. 7 MR. SMITH: Okay. Thank you. 8 MS. TAYLOR: We need to take a short 9 break to give our transcriptionist who can't get up 10 and leave a chance to go do what she needs to do; 11 so -- and so we can possibly see if the 12 Commissioner, did he want to be hooked back up? 13 MR. SANDERSON: He can call in. 14 MS. TAYLOR: Okay. He's not present any 15 longer. 16 Anyway, this is going to be, really, a 17 brief break. Five minutes. We're going to be back in 18 five minutes -- okay. We'll make it six minutes. 19 It's five -- ten after 12:00. By 12:15 we're going to 20 be back here. 21 (Recess: 12:10 p.m. to 12:16 p.m.) 22 MS. TAYLOR: Okay. We're going to go 23 ahead and call the meeting back to order at this time. 24 We have another public comment. At this 25 time, we're going to call Jane Thompson. 0112 1 MS. THOMPSON: I'M Jane Thompson. 2 Thompson Allstate Bingo Supply. 3 And I'm not going to dwell on the 4 subject since it's already been talked about. It's on 5 Page 5, Line 10, on additional requirements on the 6 keeping track of the balls called. I just want to 7 make one more point. 8 This says if you -- you keep track of 9 this if you have an electronic card-minding system. 10 So I assume -- well, I shouldn't assume anything. 11 What if you don't have an electronic card system? 12 Does that mean that, manually, you will have to keep 13 track of it? 14 The one thing that I researched about it 15 is I know there are a number of consoles out there 16 that do keep track of the number of balls called, but 17 that's on all of the newer equipment. So many of 18 these smaller VFWs and American Legions have old 19 outdated equipment, and they're not going to have that 20 capability; so I'd like for you to keep that in mind 21 as well when you're requiring the -- a list of the 22 balls called. 23 And that's it. Thank you. 24 MS. TAYLOR: Thank you. 25 And the last person that we have a 0113 1 witness affirmation form here for is Jeff Minch -- oh, 2 and we do have one after that. 3 MR. MINCH: Hello. My name is Jeff 4 Minch. I had a long series of comments that I wanted 5 to make; all of them have been covered. 6 I do want to make kind of a general 7 comment, and I want to give you a frame of reference. 8 I'm involved with charitable bingo in three other 9 states, and I would say to you that increasing the 10 degree of complexity in reporting perfects audits. It 11 has no favorable benefit to the operation of bingo, 12 and so this increasing degree of complexity is really 13 an enforcement issue and I would encourage, before 14 these rules are enacted, to make a very serious 15 consideration as to what the public benefit is -- in 16 particular, benefit for the charities -- as a result 17 of the enactment of these rules. I don't think that 18 it's a legitimate public purpose to make it easier for 19 auditors to conduct audits. That's not really the 20 primary mission of charitable bingo. 21 I would also share with you in other 22 states that I find that states that use mystery 23 shoppers as an enforcement mechanism is to actually 24 send an enforcement person into a bingo hall, that 25 they actually find the wrong-doers more quickly. So, 0114 1 as an example, all of the things that could be 2 prevented by this complex increase in degree of 3 reporting is off-times something that may be an 4 illegal or inappropriate action, and I think that 5 they're found more discretely as a result of using 6 mystery shoppers. 7 Thank you very much. 8 MS. TAYLOR: Thank you. 9 And David Heinlein. 10 MR. HEINLEIN: David Heinlein 11 representing charities. 12 I just told Steve, I said, you know, 13 maybe if they pass all these rules, each bingo hall 14 will have to hire their own attorney just to interpret 15 them, because I don't know when the word "should" be 16 used, when it should be "would" or "shall." 17 This particular rule has certainly been 18 covered pretty well, but I would really share what 19 Mr. Minch just said, too. That's kind of the process 20 that's going through my mind right now, is, it seems 21 that there should be some alternative testing 22 procedure for the staff to be able to use. We 23 certainly want to weed out any wrong-doings in the 24 bingo industry. We want to be reputable. We want to 25 conduct a fair bingo game that stands up under 0115 1 scrutiny, and we need the types of records that will 2 do that. 3 The Bingo Enabling Act is pretty clear 4 on, really, what you have to keep, and we're just 5 modifying and adding to this constantly to the extent 6 that I'm not sure that I'm in compliance with 7 everything, because as I read more of today -- and, in 8 fact, some of the comments you've made today said to 9 me I need to relook at something. 10 I'm speaking with some charities next 11 Monday that are considering getting into bingo, and 12 with this information, if they were here today, they 13 would probably say, "No. I'm not going to get into 14 bingo. It's too complex," and I think we have lost a 15 lot of charities that can't function any longer in 16 this particular environment. 17 I just think we need to seek some -- 18 really a whole change in procedure of how we go about 19 finding out how someone is doing something wrong, like 20 visiting personally. That's one way. 21 It seems to me that we spoke, Phil, a 22 year, two years ago about a different method of 23 writing rules. Instead of in the language that we're 24 using here, which is very often legal terminology with 25 the "should" and -- you know, I get just really blown 0116 1 away by when you can use "should" and when you 2 shouldn't use "should." 3 We talked about having rules that were 4 based on user-friendly language such as "Should I do 5 this and this," and the answer being "Yes, and this is 6 how you can do it." I forgot what the terminology 7 was, but you-all even gave an example of another 8 agency in the state that had changed their method of 9 writing rules to that format. 10 Can you tell me what that format was, 11 Phil? I forgot what it was. 12 MR. SANDERSON: I believe you're 13 referring to the plain language rule. 14 MR. HEINLEIN: Yeah. The plain language 15 rule. That's what we talked about. What happened to 16 going in that particular direction instead of the 17 legalistic format? 18 MR. SANDERSON: I don't know if there's 19 any "going in a different direction." I think there 20 were some rules that we drafted that had -- that that 21 format fit better. 22 MR. HEINLEIN: Pretty early on. 23 MR. SANDERSON: And this one, you know, 24 may also -- we may look at this one and we could -- 25 quite possibly could look at maybe changing this one 0117 1 to be clearer and simpler to understand, if that is 2 what the situation is. 3 MR. HEINLEIN: And I understand that 4 your -- you know, your problems in auditing and having 5 to have it in such a way that you're able to prosecute 6 a violation -- and I know that's where you're headed, 7 you're trying to do that -- but if you had plain 8 language, it seems that it would even help that 9 prosecution, too. 10 If it's plain language, one plus one 11 equals two. I like it in accounting terms, you know. 12 One plus one doesn't equal three. And if you could 13 make it like that, I think it would be a lot easier, 14 because the Bingo Enabling Act itself really covers 15 the occasion, the conductors doing that occasion. 16 There's got to be an operator there. All those kinds 17 of things we already do, and the integrity of the game 18 is going to be sustained by the current method that we 19 use that by. 20 That's my only comment. Any questions, 21 I'll be glad to answer. And don't ask me about the 22 margin tax. 23 (Laughter) 24 MR. WHITTINGTON: Come on, David. 25 (Laughter) 0118 1 MR. WHITTINGTON: How many of your 2 charities -- the people that run your charities, how 3 many got Ph.D.s? 4 MR. HEINLEIN: How many? 5 MR. WHITTINGTON: Do any of them have 6 Ph.D.s? 7 MR. HEINLEIN: No, they don't. They 8 don't. And it's difficult for them. They really have 9 to trust me a lot to do their work for them to try to 10 keep them in line, because they simply are overwhelmed 11 by it. Some things I hand them to sign, you know, and 12 they're willing to sign it because I told them to, but 13 they're not even sure what they're signing. It's 14 really difficult for them. 15 Some of them are getting older. As you 16 said, I've got some VFW people that are in their 80's 17 and 90's right now, and it's difficult for them to 18 even understand, sometimes, what I'm talking to them 19 about. 20 There's one lady that every -- for ten 21 years, she keeps coming, "Now, tell me about this 22 35 percent rule. Are we" -- you know, and I explain 23 to her again the 35 percent rule and she never -- you 24 know, next quarter, the same question, "What about 25 this 35 percent rule?" 0119 1 So it is hard for them and it is causing 2 their costs to go up because those smaller 3 organizations are having to really look at either 4 getting out or hiring a professional to come in and 5 take over their books for them. And I help a lot of 6 them in trying to do it without any costs to them, 7 but, you know, if you start doing it on a daily basis, 8 you've got to get paid to do it. And so I try to 9 steer them in a direction that will help them to keep 10 a set of books that will work for them, but when they 11 have to modify to this additional recordkeeping and 12 balls called -- oh, my goodness -- I think they'll 13 quit. 14 MS. TAYLOR: Thank you, David. 15 Any other comments? 16 (No response) 17 MS. TAYLOR: Committee Members, anything 18 else? 19 (No response) 20 AGENDA ITEM NO. 9 21 MS. TAYLOR: We'll go on to Item No. 9, 22 Report and possible discussion and/or action on Draft 23 amendments to 16 TAC 402.103 relating to operator 24 training program. 25 MR. SANDERSON: Members, this rule 0120 1 402.103, training program, is amendments as a result 2 of moving the training on-line. I don't believe 3 there's really been any substantive change. There has 4 been one change, I think, that most people will be 5 looking at, is there was a provision that you could 6 only be a certified -- attend the class for one 7 organization, and we've taken that out. However, 8 we've also added that anybody that's listed as an 9 operator on the license must have the training. 10 MR. WHITTINGTON: And they can train 11 on-line for more than one operator? Can they go back 12 and train -- understand what I'm saying? Once they're 13 trained -- you said they can train for one charity or 14 one -- but can they go back and train for -- to be an 15 operator on another charity that they're involved 16 with? I'm asking that question. 17 MR. SANDERSON: I'm trying to -- if 18 you're -- the previous rule -- the current rule -- 19 MR. WHITTINGTON: Right. 20 MR. SANDERSON: -- says you can only be 21 an operator certified training for one organization. 22 MR. WHITTINGTON: Right. 23 MR. SANDERSON: We've taken that out. 24 MR. WHITTINGTON: Right. 25 MR. SANDERSON: So if you've gone to the 0121 1 training, you can be an operator for ten 2 organizations. 3 MS. LOPEZ: Oh, multiple. Okay. 4 MR. WHITTINGTON: Thanks for clarifying. 5 Okay. 6 MS. LOPEZ: That's much better. 7 MR. WHITTINGTON: That's good. Okay. 8 MS. TAYLOR: Previously, this just said 9 the primary operator, or did it specify the operator 10 had to have taken the training? 11 MR. SANDERSON: Previously it said at 12 least one operator had to have taken the training. 13 MS. TAYLOR: Any other comments, 14 questions or concerns? 15 MR. SILVER: Yeah. I just have one. I 16 mean, just -- I've been with my son all summer; so 17 we've been having conflicts, but on Page 2, Line 7, I 18 think a good cause may need to be looked at, because 19 definition of a good cause with him and a good cause 20 with me is completely different. I just think that 21 may need to be expanded upon and defined or -- because 22 who's going to determine what a good cause is and 23 whose value is going to determine what the good cause 24 is? And it just may need to be expanded upon. 25 MS. LOPEZ: Also, I guess, it doesn't 0122 1 really specify how many times -- if you take the test 2 and you don't pass it, how many times will you allow 3 someone to retake the test. 4 (Laughter) 5 MR. SANDERSON: We haven't set a limit 6 yet. 7 (Laughter) 8 MS. TAYLOR: But we know at least three. 9 MS. LOPEZ: Three strikes, you're out. 10 Kind of like, you know, the violations, three strikes, 11 you're out, pretty much. 12 MR. WHITTINGTON: But this operating 13 training on-line is really something special, because 14 that does help in a lot of ways. Not only drive time, 15 not only setting up a time you can go somewhere to 16 take it, you can actually do it, and that's a big help 17 to the charities and the operators. It really is. 18 MS. TAYLOR: Okay. Is there any public 19 comment? 20 Steve Bresnen or David Heinlein or Darin 21 Peters? 22 Do you have public comment on the 23 training? 24 MR. PETERS: No. 25 MS. TAYLOR: Okay. 0123 1 MR. HEINLEIN: David Heinlein. 2 I have done the on-site training, and 3 I've, actually, always enjoyed it because I get to see 4 a lot of people and speak to the ones that are 5 presenting, and, you know, I find it, you know, good 6 to do. But I was able to -- Bruce Miner gave me a 7 copy of this on-line training and I looked at that, 8 and, you know, for the person who doesn't want to 9 travel or go to one of these places, that's an 10 excellent tool. It's very well done. So my 11 compliments to Richard Frysinger and Bruce Miner on 12 doing a great job. 13 And it really helps to -- for them to 14 succeed; of course, they need to be computer-oriented 15 to do it. 16 The access to the website for Charitable 17 Bingo, it's just an awesome website. I mean, it just 18 continues to improve. And the way that Richard guides 19 you through that process, I even learned something 20 when I did it that I hadn't been doing, you know, just 21 quickly going up to the search and just entering 22 something and then it -- boy, it clicks up just all 23 the stuff. It looks like the State Comptroller's 24 website. "Wow, they must have copied this." 25 (Laughter) 0124 1 MR. HEINLEIN: But you did a good job; 2 so I compliment you on that. 3 MS. TAYLOR: Steve Bresnen. 4 MR. BRESNEN: I'll pass. 5 MS. TAYLOR: Okay. Jeff Minch. 6 MR. MINCH: No, thank you. 7 MS. TAYLOR: Any other public comment? 8 (No response) 9 AGENDA ITEM NO. 10 10 MS. TAYLOR: We'll go on to Item No. 10, 11 Report and possible discussion and/or action on Draft 12 16 TAC 402.410 relating to amendment of a License 13 General Provisions. 14 MR. SANDERSON: Members, 402.410, 15 Amendment of a License General Provisions, was one of 16 the many draft rules that were presented, I believe, 17 back in November of last year for you-all to create 18 subcommittees and review. This is a revised draft 19 based on the comments that were received from the work 20 group. As I said earlier, we made some changes to it, 21 but we may not have made all the changes that was 22 requested through the work group. So it's now 23 available for your comment and consideration. 24 MS. TAYLOR: Any comments from the 25 Members? 0125 1 (No response) 2 MS. TAYLOR: Public comment, David 3 Heinlein. 4 MR. HEINLEIN: David Heinlein again. 5 402.510 (sic), I don't see any fee 6 attached to it. Is there no fee? "A licensee must 7 file an application to amend their license for any of 8 the following reasons." That's -- but does this, 9 then, follow up with 422? 422 says you have to have a 10 10-dollar fee to amend a license, and it's for the 11 same reasons. It looks like these two rules are the 12 same. 13 MR. SANDERSON: We can add that language 14 to it. The statute provides for a 10-dollar amendment 15 fee; so -- these were drafted at different times, but 16 that's a good -- 17 MR. HEINLEIN: Why are they two 18 different rules? Why are -- 19 MR. SANDERSON: One is a general license 20 to conduct bingo. 21 MR. HEINLEIN: But it's all the same 22 things. 23 MR. SANDERSON: Well, the other one is 24 for -- 422 is a license to conduct bingo. This one 25 here is for all different types of license 0126 1 applications that have amendment notifications. 2 MR. HEINLEIN: Like a lessor license? 3 MR. SANDERSON: Like a lessor license. 4 MR. HEINLEIN: But a lessor doesn't have 5 a playing day or a playing time or a primary 6 operator -- is a business location, maybe. 7 MR. SANDERSON: And a playing location. 8 MR. HEINLEIN: Yeah. It seems like a 9 duplication and would -- any application would have to 10 have a 10-dollar fee. 11 That's basically all I saw there. 12 MR. WHITTINGTON: Phil, what does the 13 adjoining county, charity-wide, what -- how did we 14 deal with that? I thought we was dealing with that at 15 one time where it was in another county, close to the 16 other county, they could be approved, the county next 17 to them. Are we still working on that anywhere? 18 MR. SANDERSON: That's in statute. 19 MR. WHITTINGTON: Okay. Okay. 20 COMM. SCHENCK: Phil? 21 MR. SANDERSON: Yes, Commissioner. 22 COMM. SCHENCK: Can you make sure -- I'm 23 going to have to sign off here in a minute. I'm 24 sorry. I thought Chairman Cox was going to be joining 25 us, but can you make sure in the next Advisory 0127 1 Committee we have scheduled to discuss the fees and 2 fines and the regulations -- I'm sorry -- the 3 amendments we were talking about approaching the 4 Legislature on so that everyone here has an 5 opportunity to participate in that conversation? 6 MR. SANDERSON: Yes, sir. We can do 7 that. I'll add that as an agenda item. 8 COMM. SCHENCK: Okay. Thank you. 9 MS. TAYLOR: David. 10 MR. HEINLEIN: I just had a correction, 11 and I thought when I came up here it was 410, but it's 12 422. Those are the two rules that are there that -- 13 on-line. "10-dollar fee to amend their licensed," it 14 should be "license." It's just a spelling error 15 there. 16 MS. TAYLOR: Steve Bresnen. 17 MR. BRESNEN: Thank you, Madam Chairman. 18 I'm Steve Bresnen on behalf of the Bingo Interest 19 Group, and this comment will be brief, as will the 20 rest of the comments that I make today. 21 MR. SANDERSON: Thank you. 22 (Laughter) 23 MR. BRESNEN: I've been asked by one of 24 my members to have you talk a little bit about -- 25 Phil, about what kind of proof, under Line 17 on my 0128 1 version here, the Subsection (e), "Upon the request of 2 the Commission, the licensee may be required to submit 3 sufficient proof of authority to act on behalf of the 4 organization." Could you elaborate on what you'd be 5 looking for at that? 6 MS. LOPEZ: What page are you on? 7 MR. BRESNEN: Page 1, Line -- 8 MS. TAYLOR: He's on Rule 410 still. 9 MS. LOPEZ: Oh, 410. I'm on -- okay. 10 MR. BRESNEN: Oh. I beg your pardon. I 11 thought we were on 410. 12 MS. TAYLOR: We are. 13 MR. SANDERSON: We are. 14 MS. LOPEZ: Sorry. 15 MR. BRESNEN: Well, then I don't beg 16 your pardon. 17 (Laughter) 18 MR. SANDERSON: You know, I don't know 19 if that would be a notice, a certified statement. You 20 know, I don't know if we want to get into power of 21 attorneys. You know, one item that we're addressing 22 with this particular paragraph -- and I'll ask Bruce 23 to step in if I don't say it correctly, but sometimes 24 we'll have someone sign the application that -- and we 25 try -- you know, try to contact them about the 0129 1 application or the process or the amendment and find 2 out that they're not an officer or they haven't been 3 listed as an officer or they're not the operator. 4 MR. BRESNEN: As a rogue. 5 MR. SANDERSON: And then we find out, 6 "Oh, well, the operator told me to go ahead and sign 7 it." And so we just want proof that the organization 8 is aware of who's signing the applications. 9 MR. BRESNEN: Okay. So maybe something 10 from an officer or director, a letter or something 11 like that? 12 MR. SANDERSON: Yes. 13 MR. BRESNEN: Okay. My main -- I'm 14 struggling with Item (f), the Subsection (f) on Line 15 20. I mean, it literally says that a license can't be 16 amended unless you have a renewal application in. 17 MR. SANDERSON: I think what (f) is 18 actually saying is that you cannot amend a license for 19 which we have not received the renewal application. 20 So, for example, if your license is expiring on August 21 the 15th, you cannot send in an amendment to playing 22 times starting August the 22nd because we haven't 23 received your renewal application yet. 24 MR. BRESNEN: I think this needs a 25 little work. Because read literally, if I wanted to 0130 1 play -- change my playing time and I've not submitted 2 my renewal application yet -- 3 MS. TAYLOR: Even though it's not due. 4 MR. BRESNEN: -- it would be -- 5 technically, it's an amendment to my license -- 6 right -- but I can send in my money and notify you and 7 start playing, but I couldn't do it under this. I 8 couldn't even do it the day after my license was 9 issued. 10 MR. SANDERSON: Yes, you could, because 11 you're amending a license at that point. A license 12 has been issued and a license has a specific time 13 period. What we're saying is you cannot file an 14 amendment that would impact anything after your 15 expiration date because we have not received the 16 renewal application for you to amend. 17 MR. BRESNEN: Okay. Well, I think 18 that's where the problem is. You're wanting to 19 address times that occur after the expiration of the 20 license, but, literally, the way this is written, if 21 you issue me a license today and two weeks from now I 22 want to file an amendment, even though I'm only two 23 weeks into my one- or two-year license period, I 24 can't -- you can't -- I can't amend the license 25 without submitting a renewal application. I know you 0131 1 don't mean that, but the way it's literally written, 2 it's -- it don't work. 3 MS. TAYLOR: Maybe if you just add at 4 the end if the license has expired. 5 MR. BRESNEN: Well, it just -- you can't 6 amend something that's outside the license period. Is 7 that what you're driving at? 8 MR. SANDERSON: Yes. 9 MR. BRESNEN: All right. Thanks. 10 MS. TAYLOR: And Mr. Minch? 11 (No verbal response) 12 MS. TAYLOR: Any other comments? 13 (No response) 14 AGENDA ITEM NO. 11 15 MS. TAYLOR: We'll go on with No. 11, 16 Report and possible discussion and/or action on Draft 17 16 TAC 402.422 relating to amendment to a license to 18 conduct charitable bingo. 19 MR. SANDERSON: This is similar to the 20 one we just got through discussing, 410, except it's 21 more specific to only a license to conduct bingo. 22 MS. WEAVER: I have comments on Knowles' 23 behalf. 24 MS. TAYLOR: Okay. Do you have any 25 comments of your own first? 0132 1 MS. WEAVER: No, ma'am. 2 MS. TAYLOR: Anybody else have any other 3 comments? 4 (No response) 5 MS. TAYLOR: I just noticed, once again, 6 on Page 2, Line 10, where it's (f), "An organization 7 amending their bingo chairperson must ensure the new 8 bingo chairperson is an officer or director of the 9 organization." So just remember that outside of your 10 operators, one of the members of that board is going 11 to have to do this bingo operator training also to be 12 the bingo chairperson. 13 MS. LOPEZ: But it could be the same 14 person. The operator could be the bingo chairperson. 15 MS. TAYLOR: It could be. 16 MS. LOPEZ: I have a question. Does the 17 Lottery Commission have -- I mean, with all the 18 charities that are conductors, do you guys have, like, 19 the data that identifies whether each organization -- 20 what type of classification of IRS charity they are, 21 if they're a 501(c)(3), a (c)(6), (c)(4), whatever it 22 might be? 23 MR. SANDERSON: Yes. 24 MS. LOPEZ: You do have that. Okay. 25 Is it, like, on-line to be viewed or -- 0133 1 MR. SANDERSON: I can check. I believe 2 it is on the Bingo Services Center. 3 MS. LOPEZ: Okay. 4 MS. TAYLOR: Okay. Let's hear Knowles' 5 comments, Markey. 6 MS. WEAVER: They're all typed and 7 everything, but there's only one copy of them. I 8 apologize. 9 On Page 2, Line 9, he's questioning the 10 word "address." He says, "Is this currently required? 11 If not, why is this now required?" 12 MR. SANDERSON: Sorry. Which one? 13 MS. WEAVER: Line 9, on Page 2, the word 14 "address." He said, "Is this currently required? If 15 not, why is it now required?" 16 MR. SANDERSON: It is currently 17 required. 18 MS. WEAVER: And on Line 11, 19 "organization," he said, "Why is the training 20 completion not required on the new chairperson?" 21 MR. SANDERSON: It is. 22 MS. WEAVER: That's all of his comments. 23 MS. TAYLOR: I do have a question about 24 that. How long, when these rules are implemented, is 25 the chairperson going to have if they're not already 0134 1 an operator to finish the training? Do they have 2 until the license renewal or is there going to be a 3 time period? 4 MR. SANDERSON: I believe it's addressed 5 in the training rule. They have 12 months. 6 MS. TAYLOR: 12 months from the 7 implementation of the rule or from -- 8 MR. SANDERSON: 12 months from when 9 they're named the bingo chairperson. 10 MS. TAYLOR: Okay. Is there a form that 11 each organization is going to fill out naming the 12 bingo chairperson? 13 MR. SANDERSON: Yes. 14 MS. TAYLOR: Is that going to be sent 15 out to each organization? 16 MR. SANDERSON: It's going to be on all 17 the renewal applications, and it's the -- the bingo 18 chairperson designation and signing of the application 19 and forms is -- I think we're placing where we right 20 now capture the primary operator on the applications. 21 MS. TAYLOR: Okay. 22 MS. ROGERS: And I just have one thing 23 to say on what you asked, Suzanne. Back on Page 5, on 24 that time requirements back in the on-line training, 25 it just says that the bingo chairperson and at least 0135 1 one other person must have the certificate before the 2 license can be issued or amended. So if that holds 3 true, then that means that that -- when that comes in 4 effect -- let's say it comes in effect October 1st, 5 you can't -- unless that bingo chairperson has taken 6 that course, you can't amend your license for 7 October 5th? 8 MR. SANDERSON: You can't amend a 9 regular license. 10 MS. ROGERS: Must have a valid 11 certificate. 12 MR. SANDERSON: Yes. 13 MS. TAYLOR: So instead of 12 months, it 14 might be days. Right? 15 MR. SANDERSON: Well, they -- we took 16 out the months and just said that it has to be -- they 17 have to have the training completion before a regular 18 license -- before a license is issued and -- or before 19 a license amendment to change the primary operator is 20 issued. So it's not any license amendment. It's just 21 only to change primary operator. 22 MS. TAYLOR: Okay. Any public comment? 23 MR. SMITH: Thank you. Trace Smith with 24 Texarkana Sheltered Workshop. Would you please mark 25 me down for this? I forgot to -- I missed a little 0136 1 something here. 2 I'm not sure what line on -- what line 3 it's on, but it's under -- thank you very much. It 4 would be Line 18, Item (3), and on 21, Item (4). What 5 happened to the temporaries? On No. (4) (sic), "The 6 playing days or times specified does not exceed the 7 maximum number of bingo occasions per day allowed 8 under the Texas Occupations Code," and then "The 9 playing days and times specified does not exceed three 10 occasions during a calendar week or for four hours per 11 occasion." What about the temporaries? 12 MR. SANDERSON: This applies to annual 13 licenses. You don't amend a temporary. 14 MR. SMITH: Okay. Right, but don't you 15 amend the annual license to hold a temporary? 16 MR. SANDERSON: No. 17 MR. SMITH: Okay. Thank you. 18 MS. LOPEZ: So maybe up where it says, 19 on Line 1, Page 1, "Amendment to a License to Conduct 20 Charitable Bingo," maybe it should say "to an annual 21 license." That way, it specifies that it's an annual 22 license. 23 MR. SANDERSON: Okay. 24 MS. LOPEZ: Can you do that? 25 MR. WHITTINGTON: Yeah. Yeah. That 0137 1 would start if off. Yeah. 2 MR. SANDERSON: I think we used the term 3 "regular license" because that's in statute right now. 4 MS. LOPEZ: Okay. Regular license. 5 That's fine. Just -- 6 MS. TAYLOR: David Heinlein? 7 MR. HEINLEIN: No comment. 8 MS. TAYLOR: Any other public comment? 9 (No response) 10 MS. TAYLOR: Any other BAC comment? 11 (No response) 12 AGENDA ITEM NO. 12 13 MS. TAYLOR: Then we go on to Item No. 14 12, Report and possible discussion and/or action on 15 Draft 16 TAC 402.444 relating to common roof/common 16 foundation. 17 MR. SANDERSON: This rule is to help 18 clarify and to specify what constitutes a common roof 19 or common foundation as it relates to the section of 20 the statute. 21 MS. TAYLOR: Any comment, BAC Members? 22 (No response) 23 MS. TAYLOR: Public comment? 24 MS. LOPEZ: Are there any -- I have a 25 question. On Page 1/9, it says, "A licensed 0138 1 authorized organization that subleases the premises to 2 one or more other licensed authorized organizations 3 for the conduct of bingo may be licensed at a premise 4 that shares a common roof or common foundation with 5 another license bingo premise provided that the bingo 6 premise will be leased from a commercial lessor who is 7 licensed at the same location." Has that always been 8 in the rule or is that an addition to -- 9 MR. SANDERSON: Well, we've never had 10 the rule. There's Section 2001.403, common roof or 11 foundation, indicates that there can be no more than 12 one bingo premises may exist under a common roof or 13 over a common foundation, and it says that as long as 14 the premise lawfully existed under a common roof or 15 common foundation prior to May 23rd, 1997. 16 This -- Paragraph (d) applies to only 17 the tier structure. For example, if you have a 18 commercial lessor that has been at this location for 19 more -- since 1997 and his -- he's got the -- not the 20 grandfather lessor, but the other lessor license, he 21 can only lease to one organization to play bingo. 22 Then this allows us to issue -- if that organization 23 he's leasing to that holds the conductor and the 24 lessor license, if they move off or go away or quit 25 and they have to issue another lessor license for that 0139 1 same location, this is saying that because the top 2 chair lessor has continued to be in existence, we can 3 issue the lessor license for that conductor to be a 4 conductor lessor. 5 MS. LOPEZ: Okay. 6 MS. TAYLOR: Okay. Any public comment? 7 Mr. Minch. 8 MR. MINCH: My name is Jeff Minch. I'm 9 representing the Texas Association for the Advancement 10 of Charitable Bingo. 11 Phil, if you wouldn't mind, would you 12 read the first section of 2001.403, that first 13 Parentheses (a). 14 MR. SANDERSON: "Except as provided by 15 this section, no more than one bingo premises may 16 exist under a common roof or over a common 17 foundation." 18 MR. MINCH: Okay. The first thing I'd 19 say is that I don't think that this rule is necessary, 20 inasmuch as I think that the law is very clear on its 21 face. It talks only about foundations and roofs; it 22 does not talk about walls. And so I think the 23 addition of that definition of "walls" exceeds the 24 authority that's in the original Enabling Act. 25 I've made a couple of sketches. And let 0140 1 me tell you by way of background, I'm a civil engineer 2 and I was formerly a structural engineer; so I've 3 built buildings similar to what bingo buildings are, 4 hundreds of them in my lifetime. 5 I've only got a limited number of copies 6 here. So I'll hand these over to you; if you'll pass 7 them along. 8 The first sketch that I've made there 9 has a "1" in the lower right-hand corner. And if you 10 look at, from the bottom up, this is the frame that 11 you would see, which would be a typical pre-engineered 12 metal building. And so in many of the buildings that 13 bingo is conducted in, this is the kind of building it 14 would be. This would be a Butler building or a 15 metallic building. 16 If you look at the sketch from the 17 bottom up, you have the substructure and the soil upon 18 which the building is founded. You have the 19 foundation floor which carries the loads from the 20 superstructure. The superstructure is made up of the 21 columns and the beams and the purlins which carry the 22 scheme of the building. 23 This rule only applies to the foundation 24 and the roof. It doesn't say anything about the skin. 25 It doesn't say anything about the walls. 0141 1 If you look at the second sketch, here's 2 two pre-engineered metal buildings side by side. I 3 think under the current definition, these two 4 buildings both could have bingo halls in them. They 5 currently have separate foundations. They currently 6 have separate roofs. 7 If you look at the third sketch, here's 8 two buildings which the only change is that you've 9 moved the wall in between the buildings to the inside 10 edge of the superstructure. So if you look at the 11 middle of the building and compare Sketch 2 to Sketch 12 3, in Sketch 2, the wall is on the outside edge of the 13 superstructure, and in Sketch 3, the wall is on the 14 inside edge of the superstructure. This is how you 15 would commonly join two buildings. 16 And if you look at Sketch 4, that's how 17 those two buildings would be if they had been snuggled 18 up to each other, separate foundations, separate 19 roofs. Clearly, the superstructure sits on the 20 foundation of each. Clearly, the roof sits on top of 21 the superstructure, and the walls are totally 22 irrelevant to the definition of the Enabling Act. The 23 wall does not figure into the equation at all. 24 Next sketch, Sketch No. 5, shows a 25 typical tilt-up panel frame and foundation 0142 1 construction. So this would be like many warehouses 2 or strip centers are built. Again, it has the soil 3 and the substructure at the bottom. It has a 4 foundation and floor which holds up the 5 superstructure. In this case, the superstructure 6 would be tilt-up panels that were cast on top of the 7 floor, tilted up by a crane, and then they were 8 welded; typically, to joists. And so the red line 9 that connects the two tilt-up panels, left and right, 10 that would be a joist, and on top of that sits the 11 roof. And, again, you can identify every single 12 element, the foundation and the roof. The wall, 13 again, is irrelevant. 14 Now, a subtlety that often occurs with 15 these kinds of buildings, and one of the reasons that 16 you would pick a tilt-up panel building as opposed to 17 another type of building is that you have 18 extraordinary fire protection created by the panels. 19 So in this particular sketch, Sketch No. 20 6, you have two panels side by side, and each one of 21 them could be rated for a two-hour fire protection 22 rating. This becomes very important from an insurance 23 vantage point. It also might be something that would 24 be required in certain jurisdictions to comply with 25 building codes. 0143 1 So in that particular instance, you have 2 two buildings side by side, separate foundations, 3 separate roofs. Very clearly, that would be something 4 that today would be licensed to be able to have two 5 bingo halls. 6 The next sketch, Sketch No. 7, shows a 7 very common building technique. If you look at Sketch 8 No. 6, you have two 2-hour walls side by side for a 9 total protection of four hours. If we were building 10 this building today, we knew that we were going to 11 build several of these buildings side by side, we 12 would economize by making one 4-hour wall. An example 13 of a way that you would make a 4-hour wall would be a 14 16-inch masonry block filled with certain 15 reinforcement. The way you'd make a 2-hour wall would 16 be an 8-inch masonry block filled with certain 17 reinforcement. 18 But if you look at that Sketch No. 7, 19 there's clearly a separate roof and there's clearly a 20 separate foundation. Under the change that's proposed 21 here -- so a change in and affecting the Enabling 22 legislation, making a new law through this rule, that 23 would not be acceptable because it has in common a 24 separate -- it has in common a wall. The Enabling Act 25 does not mention walls in any way at all. It just 0144 1 talks about foundations and it just talks about roofs. 2 If you look at Sketch No. 8, here's how 3 a fellow would fix that problem. And so in Sketch No. 4 8, if this new rule were enacted, somebody wanted to 5 have two bingo halls side by side, would come in and 6 build that solid red wall. That red wall, under the 7 Building Code, would not be required to be rated, 8 because you already have the 4-hour rating created by 9 the adjoining wall, and it would just be a sheetrock 10 wall that would be stood up only to comply with the 11 change in the rule. For no public purpose, for no 12 benefits for charitable bingo, for no more money in 13 the charities' pocket. Only to comply with this 14 changed condition. Okay? 15 And I would suggest to you that this 16 rule change as it pertains to just that one section, 17 (a), where they add the requirements for the walls to 18 be independent is not what the Enabling Act says. 19 It's not a rule that's based upon the authority 20 granted in the Enabling Act. It adds a structural 21 element. And bear in mind, we're talking about things 22 that architects and engineers and building codes and 23 cities that have -- that regulate building codes deal 24 with all the time, and these are elements of art that 25 have nothing at all to do with bingo. They have to do 0145 1 with building buildings. 2 And you would go in there and build a -- 3 the Development Department would say "Why are you 4 building this wall?" It has no fire protection 5 purpose. It has no building code purpose, and 6 somebody would say "Just to comply with the bingo 7 code." It doesn't serve any public policy issue. It 8 doesn't have any impact on -- what would -- how you 9 would conduct bingo in those buildings. 10 And the last sketch, Sketch No. 9, just 11 from a vantage point of completion -- completeness, 12 shows a tilt-up panel building built next to a 13 pre-engineered metal building, and so this could be a 14 situation where two different building types would be 15 side by side. And, again, there's no necessity to 16 look at the walls. You're only required, under the 17 Enabling Act, to look at the roof and foundation, and, 18 clearly, those are separate. 19 So I would suggest to you that this rule 20 as proposed exceeds the authority that's granted in 21 the Enabling Act, has no public policy purpose. It 22 doesn't have any impact at all. It's not consistent 23 with normal building codes as to how buildings are 24 built. And it really just creates an extra 25 requirement that has absolutely no benefit to 0146 1 charitable bingo. 2 Thank you. 3 MS. TAYLOR: Mr. Bresnen? 4 MR. BRESNEN: I've got a suggestion. I 5 was at ground zero when this provision was put into 6 the statute and I believe there's good legislative 7 intent material on the tapes from the '97 session when 8 this was enacted, and I -- you can probably find the 9 purposes for it specified on those tapes; so I would 10 recommend that you use them. 11 My recollection is there was a 12 complaint -- I can't even tell you who was 13 complaining, that the limitations on the hours of play 14 at given locations was being circumvented by 15 splitting, which I think -- what I think were 16 abandoned Walmarts at the time into, you know, what 17 looked like these antique malls where everybody has a 18 separate booth and they were conducting, you know, 19 24-hours, 365-days-a-year bingo stuff. You know, 20 whether that's evil or not, it's in the eye of 21 beholder, and, frankly, I don't care, because I don't 22 think it really affects, indirectly, any of my current 23 members, but I suggest that you do that. 24 And to help the Commission, what you're 25 dealing with here is a problem of statutory 0147 1 construction. One school of statutory construction 2 that's embodied in a case called Fleming Foods, 3 Incorporated versus Rylander, which Sandy is probably 4 familiar with, would give this a plain language 5 construction. I personally believe that that's an 6 aberrant decision and that's the intention of the 7 Legislature that governs. But I just suggest that you 8 refer to the tapes to find out, you know, what was 9 intended and why and then figure out if you're on 10 solid ground in terms of the Enabling Act by referring 11 to that material. 12 I do have a couple of questions, though. 13 I don't have my Bingo Enabling Act on me, Phil, but as 14 I recall, licenses that were in existence where there 15 was a common roof, common foundation before -- it's 16 probably this date, May 23rd, '97 that's in here, 17 those are grandfathered, if you will, from the 18 prohibition on more than one bingo hall at a common -- 19 under a common roof or over a common foundation. Am I 20 correct about that? 21 MR. SANDERSON: As long as they continue 22 to renew, if that -- 23 MR. BRESNEN: As long as they continue 24 to exist, which is one of the reasons you're trying to 25 decide -- you're trying to define whether they 0148 1 continue to exist? 2 MR. SANDERSON: Yes. 3 MR. BRESNEN: I would question whether a 4 license that has -- whether it ceases to exist where a 5 license has been suspended, or in Item No. (4), when 6 the license is placed on administrative hold. I 7 think, clearly, if somebody has surrendered their 8 license, it's been revoked or it's been denied -- I 9 mean, I think it would be helpful to have some 10 language in there that says that it's finally denied 11 or something where the administrative process has 12 completely run. I think the question whether somebody 13 is suspended, I think they have a license and it's an 14 unintended consequence to visit on somebody a total 15 loss of their -- one of their bingo halls if the 16 license has been suspended and not revoked. 17 I think it's a judgment and policy call 18 on you-all's part, but it ties your hands. At that 19 point, someone could agree to a suspension, but you'd 20 have no ability to make an agreement with them that it 21 didn't wipe out one of those halls. So I wouldn't tie 22 your hands if I was doing it. 23 And then, on administrative hold, it's 24 my understanding that those licenses are -- they 25 exist. The license exists. And when someone -- this 0149 1 is by way of a question. When someone has a license 2 on administrative hold and then they seek to activate 3 it, if they want to activate it at the location that 4 it was originally issued for, do they have to do 5 anything in addition, or if they reactivate it but 6 they want to take it to another location, is that the 7 point at which they have to amend it to make it 8 applicable to another location? In other words, is a 9 license on hold applicable to a particular location? 10 MR. SANDERSON: A license on hold is not 11 applicable to any particular location. And when they 12 reactivate the license, they have to file an amendment 13 and indicate what the playing location will be. 14 MR. BRESNEN: Okay. I'd like to reserve 15 the ability to comment a little further on this where 16 I can find out what the practical implications of that 17 are, but, otherwise, I'd like to just call that into 18 question. I'm not sure if somebody puts something on 19 hold, if they're intending to give up their -- you 20 know, their right to use that -- you know, dual hall 21 situation, and it might preclude someone from doing 22 something that was commercially reasonable. They 23 might want to put the thing on hold to engage in a 24 wholesale remodeling, maybe, of both sides. I don't 25 know why -- other reasons why people might do it, but 0150 1 I don't think you want to keep them from doing 2 something that's commercially reasonable there. 3 Those would be my comments on the rule. 4 Thanks. 5 MS. TAYLOR: Any other comment? 6 (No response) 7 AGENDA ITEM NO. 13 8 MS. TAYLOR: Item No. 13, Report and 9 possible discussion and/or action on Draft 16 TAC 10 402.421 relating to affiliated organization. 11 MR. SANDERSON: Members, there's a 12 statutory provision that we are not able to license 13 more than two affiliated organizations at one 14 location. 402.421 is clarifying what is defined and 15 is determined to be "affiliated organizations." 16 MS. TAYLOR: Any comment? 17 MS. WEAVER: Comments from Knowles. 18 MS. TAYLOR: Okay. Markey says she has 19 some comments from Knowles; so if you'd like to read 20 those. 21 MS. WEAVER: Okay. Line 16, 22 "operators," Knowles is questioning -- says there are 23 anomalies in which organizations coincidentally 24 contain similar directors. 25 That's his comment. 0151 1 MR. SANDERSON: Okay. 2 MS. LOPEZ: Give us some examples of 3 some organizations that are associated with another -- 4 a dependent or subordinate organization. Can you give 5 us some examples? 6 MR. WHITTINGTON: Yeah. I mean, like 7 the -- you got -- the physically impaired, they could 8 have the auxiliary women out there. That's an 9 affiliate through that organization. 10 MS. LOPEZ: Okay. 11 MS. TAYLOR: But, you know, which I 12 didn't really -- I mean, I read this, but I didn't 13 read this. Do your organizations share the same 14 operators at the bingo hall? 15 MR. WHITTINGTON: No. 16 MS. TAYLOR: They all have different 17 operators? 18 MR. WHITTINGTON: Yeah. 19 MS. TAYLOR: Do yours have all different 20 operators? 21 MS. WEAVER: No. 22 MS. TAYLOR: So according to this, then 23 they're an affiliated organization because of line -- 24 No. (7), "The organizations share more than 50 percent 25 of the same officers, directors, and/or operators." 0152 1 MS. WEAVER: Not more than 50 percent. 2 I only have one that's common. 3 MS. TAYLOR: So I can see this as a 4 problem, because we have the same people working at 5 the hall, you know, because we've got -- so, anyway, I 6 think this could cause a problem. 7 MR. SILVER: I mean, you can have 8 members of a police officer's association that happen 9 to be on the board or officers of there and then also 10 in a Noon Lion's Club and -- something to that effect. 11 Two completely different organizations, but somebody 12 is just really charity driven and decides to be on a 13 charity board here and a charity board there because 14 they have valuable insight. 15 MS. TAYLOR: I don't think it should 16 be -- operators -- a member of the organization, 17 because you're a member and not necessarily an officer 18 or director, I don't think that makes you 19 affiliated -- that the organizations themselves are 20 affiliated because you choose to be on multiple 21 boards. 22 MR. SANDERSON: It says 50 percent of 23 the -- more than 50 percent have to be the same 24 person. So -- I mean, I would think that if you had a 25 controlling board -- 0153 1 MS. TAYLOR: More than 50 percent of the 2 board? 3 MS. LOPEZ: Or a combination of all of 4 those three? I mean, that's -- yeah. 5 MR. SANDERSON: Combination. 6 MS. LOPEZ: Combination. 7 MS. TAYLOR: Maybe we could -- you could 8 add -- add the word in there, because, right now, it 9 just says "The organizations share more than 10 50 percent of the same officers, directors or 11 operators." 12 I've got three organizations in my hall 13 that are pet organizations, and, I mean, we're not 14 affiliated in any way with each other except we all 15 play bingo at the same hall, but we've got -- there's 16 the same board members on several of those 17 organizations. 18 MR. SILVER: And the same operators. 19 MS. TAYLOR: But, I mean, the entire 20 board isn't 50 percent. I mean, it's not 50 percent 21 of the entire board, but, operator-wise, that could be 22 a problem. 23 MS. TAYLOR: Mr. Heinlein. 24 MR. HEINLEIN: David Heinlein. 25 Line 9, Item (4), "Decisions of one 0154 1 organization are subject to the approval by the other 2 organization." Well, all of my charities that are in 3 a unit are subject to approval by the other 4 organizations. 5 MS. LOPEZ: That's true. 6 MR. SANDERSON: This is their business 7 application, not their bingo decisions. 8 MR. HEINLEIN: This doesn't have 9 anything to do with their bingo license. 10 MR. SANDERSON: This has -- this -- I 11 don't want to say "It doesn't have anything to do with 12 their bingo license." 13 (Laughter) 14 MR. HEINLEIN: To get a license -- I 15 understood previously -- 16 MR. SANDERSON: It doesn't have anything 17 to do to get a license. All it -- 18 MR. HEINLEIN: -- you know, we've got a 19 VFW, we've got a VFW auxiliary; they can both be 20 licensed. But then if they had another associate 21 organization of those, they couldn't all three get a 22 bingo license. 23 MR. SANDERSON: Yes, they could. They 24 just couldn't play at the same location. 25 MR. HEINLEIN: I mean at the same 0155 1 location. Right. 2 MS. LOPEZ: They can't play at the same 3 location. 4 MR. HEINLEIN: Right. 5 MR. SANDERSON: Yes. We're not 6 prohibiting licenses for affiliations. It's just a -- 7 MS. LOPEZ: How many -- I'm sorry. Go 8 ahead. 9 How many affiliations are you allowing 10 to be under one? Just two? 11 MR. SANDERSON: The statute says two. 12 MS. LOPEZ: Okay. Two. 13 MR. HEINLEIN: So it matters, then, if 14 whether or not this affiliate organization applies to 15 people in a unit, I guess. I'd have to -- we'd have 16 to struggle with that, because if we have sometimes 17 five -- we have one that's seven organizations that 18 are in a unit, and that affiliates them, you know, for 19 a different way. 20 I need to think about that. We need an 21 attorney on that. 22 (Laughter) 23 (Simultaneous discussion) 24 MS. TAYLOR: Okay. Commissioner Schenck 25 is no longer with us and Kim also had to leave at 0156 1 quarter of 1:00. 2 MR. SMITH: And they'll surely be 3 missed. 4 MS. TAYLOR: Trace. 5 MR. SMITH: I didn't write this down 6 either, but just a point of interest. 7 I know in a lot of small towns -- you 8 know, towns around 5-, 6,000 people, a lot of times 9 the city fathers and the charity organizations, they 10 are all the same people because those are the people 11 that make the city run. Just like to keep that in 12 mind. 13 Also, on the part about the parent 14 organizations and stuff like that, you have a lot of 15 national organizations and a lot of state local 16 organizations and local organizations, and then they 17 have auxiliaries and stuff like that. We need to keep 18 that in mind, too, when we're doing this. 19 MR. BRESNEN: Steve Bresnen on behalf of 20 the Bingo Interest Group. 21 Phil, I don't envy you trying to figure 22 this out. 23 (Laughter) 24 MR. BRESNEN: But one thing I do know, 25 this -- I actually heard more concerns expressed about 0157 1 this rule than any of the others, and I think the -- I 2 think one of the problems you're going to have from an 3 enforcement point of view is you have some 4 organizations who would run afoul of this who have 5 been licensed for a very long time. So it reminds me 6 of the time when a product was approved multiple 7 times, and then with no change in the law, no change 8 in the rules, you went to try to not approve it, and 9 the Court turned that around. Not you, specifically, 10 but historically. 11 In this case, the Agency had to have 12 been interpreting the statute that -- for those 13 rules -- those entities to get licensed as not to have 14 been affiliated in violation of the statute. So I 15 think you're going to have to do something with this 16 rule that talks about going -- that addresses going 17 forward and that handles those people that are in 18 existence and doesn't deprive them of access to the 19 license when you've -- for literally 20 years, the 20 State's been granting those people a license. 21 Specifically about the rule, if I 22 understand the way it's -- item -- Subsection (1) is 23 written, if you've got a -- you've got a national VFW 24 and you've got a local chapter of a VFW and another 25 local chapter of a VFW, those two are not dependent on 0158 1 each other. They're dependent on the national 2 organization for their existence, but they're not 3 dependent on each other for their existence. That's 4 the way I would interpret the way No. (1) is written 5 now. 6 MR. SANDERSON: Yes. 7 MR. BRESNEN: Would you agree with that? 8 Okay. 9 Now, we also have a situation, I know, 10 over in the AMVETS front where I didn't realize until 11 Trace just pointed it out to me, that you've got 12 auxiliaries, and then you've got another organization, 13 Sad Sack, and both of those may relate back to a local 14 AMVETS chapter. So you've got a -- and they've been 15 licensed for a long time. I mean, since at least '96 16 when I first became aware of the existence of those 17 organizations. 18 So I'm concerned about the application 19 in No. (1) to those existing folks. I'm concerned 20 about No. (7) on the training rule -- I think it's in 21 the training rule -- whatever -- one of the rules we 22 just talked about. You indicated that an individual 23 can be an operator under that rule at more than one 24 location; so it looks to me like you're meeting 25 yourself coming the other direction when you start 0159 1 talking about "If more than 50 percent of the 2 operators at a location are the same as to both 3 charities." You've met yourself coming the other 4 direction. In other words, you've allowed them to be 5 involved with multiple charities and now you're 6 saying, "But at some point, if those operators who are 7 operating at multiple charities become more than 8 50 percent of the universe of operators at that hall, 9 then they're affiliated." 10 MR. SANDERSON: They're affiliated -- if 11 Charity A has ten operators and Charity B has ten 12 operators, and if six operators are the same on both 13 organizations, they'd be affiliated. 14 MR. BRESNEN: Right. 15 MR. SANDERSON: But there's another 16 eight that aren't affiliated. 17 MR. BRESNEN: Right. 18 MR. SANDERSON: So you have 14 operators 19 there. So that's -- the 50 percent is actually as it 20 relates to the organization itself. If there's 21 common -- 22 MR. BRESNEN: If six of my operators and 23 six of her operators are the same people, then under 24 this rule, we would be affiliated. 25 MR. SANDERSON: If you had ten operators 0160 1 on each one of your license applications. 2 MR. BRESNEN: Right. And it -- I don't 3 think that could be what the statute's, you know, 4 directed at, because the underlying organizations -- 5 the operators are strictly there to perform a bingo 6 function. They're not there to perform any sort of 7 function for what the charity does with its bingo 8 money. It's charitable purpose. 9 MR. SANDERSON: Well, they're supposed 10 to be, you know, members of the organization. 11 MR. BRESNEN: They are members, yes, but 12 they may not be officers or directors. They may just 13 be people who are actively involved in bingo. And we 14 all know that to be -- you know, put it out there -- 15 everybody knows is true -- that this bona fide member 16 requirement is fairly slick and hard to get a hold of. 17 So I think that you need to drop "operator" out of 18 that deal, and I don't think you can use "and/or" in a 19 rule. I mean, it's either "and" or "or." That don't 20 work. I've never seen a statute drafted with an 21 "and/or" in it. If there is one, I'll correct myself 22 later. 23 But if the objective is to say that 24 there's such a commonality of officers and directors 25 that the business of those organizations is so 0161 1 intertwined they'd have to be considered affiliated, 2 then that would be one thing, but I'm not sure the 3 language as drafted gets there. 4 And I don't know how in the world you're 5 ever going to enforce No. (5). It seems to have a 6 mens rea attached to it, that there was -- was it -- 7 you know, "Did they negligently obtain them?" "Did 8 they intentionally and knowingly obtain them" or 9 whatever. I just don't know how you're going to do 10 that. 11 I feel your pain, because there is a 12 statutory problem. In fact, somebody raising this 13 question said, "Well, that was in the statute, and we 14 took it out." Well, then I looked, and, you know, it 15 wasn't -- it's still in the statute. Maybe we ought 16 to take it out. 17 But bottom line is I think this one 18 needs a lot of work. I'm happy to try to help on it. 19 And we probably ought to get Brother Fenoglio involved 20 since he's got, you know, a broader experience than I 21 do with the kinds of arrangements that are out there. 22 But my number one deal would be to say: 23 Don't take people out of existence using this rule 24 when the State's been making -- whatever agency, it's 25 had a consistent interpretation over the years 0162 1 applicable to those existing licensees. 2 Thanks. Be happy to answer any 3 questions. Thank you-all. 4 MS. WEAVER: I do have a question now. 5 MS. TAYLOR: Yes, ma'am. 6 MS. WEAVER: So I have two charities in 7 my hall that are affiliated with each other. They 8 pretty much share the same board. There's a few 9 different members, but I wouldn't say -- I'm sure 10 they're more than 50 percent, both out of a Catholic 11 church. I have two other charities that is not -- am 12 I going to be in noncompliance now because I've got 13 two charities that are -- 14 MR. SANDERSON: No. 15 MS. WEAVER: -- over 50 percent? 16 MR. SANDERSON: You can have two. You 17 just can't have more than two. 18 MS. WEAVER: So I can't -- they can't 19 spawn off to another one? 20 MS. TAYLOR: They can. They just can't 21 play in your hall. 22 MR. WHITTINGTON: Yeah. Got to build 23 another bingo hall. 24 (Laughter) 25 MS. TAYLOR: Any other comments? 0163 1 (No response) 2 MS. TAYLOR: Item No. 14 -- 3 MR. WHITTINGTON: One more. 4 MS. TAYLOR: Oops. I'm sorry. 5 MR. MINCH: My name is Jeff Minch. 6 I think that the point that Steve makes 7 as it relates to operators is a very good point, 8 because that's really, you know, employee/employer 9 relationship as opposed to being an organizational 10 issue. And the issue related to affiliates really is 11 a licensing and organizational issue. So I think that 12 the reference to the "operator" should be struck. I 13 agree with the concern about trying to divine the 14 reasons why somebody went into bingo to obtain a 15 license. 16 I'm curious about one thing, though. 17 Does this rule make a provision for affiliates of 18 affiliates? 19 MR. SANDERSON: If they're affiliated. 20 (Laughter) 21 MR. MINCH: Well, I mean, in the example 22 that you gave before where you had somebody who was 23 affiliated -- and let's say that you had four 24 charities. One was a parent; one was an auxiliary. 25 Another one was an affiliate and another one was an 0164 1 affiliate of that affiliate. 2 Okay. So the organizational structure 3 would be such that one would be a parent, one would be 4 an auxiliary, one would be an affiliate and one was an 5 affiliate of that affiliate, and it's obvious by their 6 names that they're affiliates of an affiliate. I 7 believe what you described before, those four 8 charities could all play in two different halls. Each 9 one of those halls could have two. The affiliate of 10 the affiliate is not addressed in the rules. I mean, 11 using that logic, you can, in effect, have four bingo 12 halls, each one -- which has two affiliates or 13 affiliates of affiliates in the same jurisdiction. 14 MR. SANDERSON: Well, this is just the 15 same location? 16 MR. MINCH: No. Four different 17 locations. 18 MR. SANDERSON: Four different 19 locations? 20 MR. MINCH: No. They're not -- you 21 can -- somebody is either a parent or an affiliate. 22 So they're designated with either a "P" on their 23 forehead or an "A" on their forehead. You can only 24 have two "P" -- one "P" and one "A" in a bingo hall. 25 This implies that you could have two A's in another 0165 1 bingo hall. But how about if that second "A" in the 2 second bingo hall is not an affiliate of the parent, 3 they're an affiliate of the affiliate? 4 So an example of that would be something 5 similar to what was referred to with the American 6 Legion, or in the case of VFWs, VFWs often have an 7 organization -- I'm a veteran -- that is called the 8 Military Order of the Cooties and the Military Order 9 of the Cooties Auxiliary. The Military Order of the 10 Cooties Auxiliary is not an affiliate of the VFW. 11 It's an affiliate of the Military Order of the 12 Cooties. The Military Order of the Cooties is an 13 affiliate of the VFW. 14 MR. SANDERSON: Yes. So the -- 15 MR. MINCH: There wasn't a question 16 there, Phil. 17 (Laughter) 18 MR. SANDERSON: The Cootie's auxiliary 19 would not be affiliated with the VFW. 20 MR. MINCH: So they, in effect, would be 21 an affiliate of an affiliate. 22 MR. SANDERSON: Yes, if that's the way I 23 I'm understanding it. 24 MR. MINCH: Okay. So then, really, any 25 organization could create any number of affiliates 0166 1 that they wanted in order to be able to have as many 2 participants in bingo even though all of those funds 3 would be aggregated in one location at the parent? 4 MR. SANDERSON: That may be what No. (5) 5 is referring to. 6 MR. MINCH: Well, but I think (5) is one 7 of those things that it would be impossible to ever 8 prove that or divine that. 9 I don't think that any of the ones that 10 I've mentioned or anything related to the American 11 Legion are not legitimate. The question is whether or 12 not they meet the requirements of the Bingo Enabling 13 Act. They're all perfectly legitimate and good and 14 worthy causes. 15 MR. SANDERSON: Well, and that's the 16 purpose of us trying to define what is meant by 17 "affiliated organizations." 18 MR. MINCH: Okay. Well, then I'd 19 suggest to you that a little bit more work needs to be 20 done on that to clarify that; in particular, when you 21 have multiple affiliates playing in multiple bingo 22 halls in the same marketplace where all the funds are 23 being aggregated to the same parent. 24 I mean, in a corporate sense, that would 25 be a piercing the corporate veil or an alter ego 0167 1 issue; that, in effect, the party in interest would be 2 the parent as opposed to being the affiliates because 3 they're aggregating all of their funding to the same 4 location. The implications in a marketplace would be 5 that there might be a legitimate charity who would 6 like to play bingo but is unable to play bingo because 7 there's no room in a bingo hall because there's so 8 many affiliates of one organization. 9 MR. SANDERSON: Okay. I still don't 10 understand. The statute only prohibits two affiliated 11 organizations at the same location. So if there were 12 six organizations that were affiliated or 13 affiliated-affiliated and they're playing at three 14 different bingo halls, there's nothing in the statute 15 that prohibits that. 16 MR. MINCH: Right. I think the 17 difference -- let me say it a little bit different. 18 As opposed to saying that it does not 19 prohibit them, it authorizes them. And so the issue 20 is: Is an affiliate of an affiliate an affiliate? 21 The statute is silent on the issue of the relationship 22 between an affiliate and another affiliate. Clearly, 23 the statute addresses the issue of a parent and an 24 affiliate and everything in this rule attempts to 25 clarify that. 0168 1 I'm talking about a situation where you 2 have an affiliate that's playing in a different bingo 3 hall and it has an affiliate. That organization is 4 not an affiliate of the parent. It's an affiliate of 5 the affiliate. 6 MR. WHITTINGTON: So basically what 7 you're saying is that if an organization got a -- like 8 my physically impaired got a women's auxiliary -- 9 okay -- that women's auxiliary go out and create 10 another part of them -- not physically impaired -- 11 MR. MINCH: Correct. 12 MR. WHITTINGTON: -- that -- you're 13 saying that they can play in the hall, too, which is 14 not -- 15 MR. MINCH: I'm not saying that they 16 can. I'm raising the question of "Could they?" 17 MR. WHITTINGTON: That's what he's 18 saying, affiliates can create something else that's 19 not connected to the main. 20 MR. MINCH: And, clearly, they couldn't 21 play in that first bingo hall. But now let's say that 22 they're in a second bingo and that affiliate, the 23 auxiliary is playing, can they create an affiliate 24 that's not an affiliate of the parent but it's an 25 affiliate of the affiliate? 0169 1 MR. WHITTINGTON: Why couldn't they play 2 in the first hall? 3 MR. MINCH: Because you'd have three. 4 MR. WHITTINGTON: They're not associated 5 with the first one, though. 6 MR. SANDERSON: Well, I think that 7 it's -- the scenario you're laying out is more of a 8 whether or not they're authorized to hold a license as 9 it relates to being an authorized organization, not 10 necessarily the affiliation issue. 11 MR. MINCH: Well, they're interrelated 12 in the context that you'd have to be anointed as an 13 affiliate in order to be eligible to obtain a license. 14 So if they were not anointed as an affiliate, clearly 15 they couldn't obtain a license. They'd have to have 16 some other independent status. So the two of them are 17 intertwined. 18 So my comment is I'd like to have that 19 addressed, and I don't -- I appreciate it's not 20 something you can necessarily answer off the top of 21 your head in this setting, but I think it should be 22 addressed. 23 Thank you. 24 MR. WHITTINGTON: Basically, I guess 25 what he's saying is can an affiliate create another 0170 1 affiliate for themselves only and be part of another 2 one themselves? That's basically what he's saying. I 3 mean, that's what I get. 4 MS. LOPEZ: I have a question. I mean, 5 is it just like fraternal type organizations that 6 would have affiliations? I guess -- because I -- I 7 guess I'm not real clear on this either. I mean, 8 would it just be like your VFWs, American Legions and 9 folks like this, because -- 10 MS. WEAVER: You can have your -- a 11 church -- 12 MS. LOPEZ: A church. 13 MS. WEAVER: -- and -- church and a 14 school and then the school has some other 15 organizations structured underneath it. It could be 16 anything. 17 MR. WHITTINGTON: Boys, girls, whatever. 18 MS. LOPEZ: So it could be several 19 layers. 20 MS. WEAVER: Right. 21 MS. LOPEZ: Any other discussion on Item 22 No. 13? 23 (No response) 24 AGENDA ITEM NO. 14 25 MS. TAYLOR: Okay. If not, we'll go on 0171 1 to Item No. 14, Report and possible discussion and/or 2 action on Draft 16 TAC 402.604 related to delinquent 3 purchasers. 4 MR. SANDERSON: This rule, 402.604, is 5 to -- it's a process rule. It lays out the process of 6 notification for delinquency of payments to a 7 manufacturer or distributor. It also indicates how we 8 can remove individuals from the delinquent purchaser 9 list if they cease to conduct bingo or if the 10 distributor ceases to conduct bingo and kind of 11 cleaned the distributor -- I mean, the delinquent 12 purchaser list to where it only applies to, primarily, 13 active organizations. 14 MS. WEAVER: It's for lessors and -- 15 MR. SANDERSON: I hope it's not lessors. 16 (Laughter) 17 MS. WEAVER: Well, I meant some 18 lessors you purchase ink or something like that to 19 give away or whatever. I mean, could they be -- 20 MR. SANDERSON: This applies strictly to 21 bingo equipment, bingo supplies. 22 MS. WEAVER: Thank you. 23 MS. TAYLOR: I had one problem with 24 this, and it was the very last page. 25 And I don't know if David Heinlein, if 0172 1 you're a unit manager or not -- 2 MR. HEINLEIN: No. 3 MS. TAYLOR: -- but this specifically 4 says that if a unit is set up under a unit account 5 agreement, when the unit manager becomes delinquent, 6 then the unit manager is a delinquent purchaser and 7 all units managed by the unit manager become 8 delinquent purchasers, which would mean that if David 9 has multiple halls and he's the unit manager, every 10 hall under him would become a delinquent purchaser 11 just because some unit that's not affiliated even in 12 the same county would become delinquent. So, anyway, 13 that's the only thing I had a problem with. 14 Any other discussion? 15 MR. WHITTINGTON: You don't want an 16 answer to that? Was somebody supposed to answer that? 17 MR. SANDERSON: Well, there's -- we 18 don't have a unit -- 19 MS. TAYLOR: I don't know if there is an 20 answer. I just -- that's one thing that I would have 21 concerns about. I don't know if there are -- are 22 there any unit managers? 23 MR. SANDERSON: No. 24 MS. TAYLOR: Okay. There are no unit 25 managers; so I guess that's a moot point. 0173 1 (Laughter) 2 MS. TAYLOR: But just in case there ever 3 were, I would think this would be problematic, because 4 I don't think one hall should suffer because another 5 hall didn't pay their bill. 6 MR. SANDERSON: In five years, we have 7 not had an application for a unit manager. 8 MR. WHITTINGTON: It costs a lot of 9 money to be a unit manager, Suzanne. 10 MS. WEAVER: Knowles has comments. 11 MS. TAYLOR: Okay. We're going to hear 12 Knowles' comments now. 13 MS. WEAVER: On Page 1, Line 5, the word 14 "delivery," this -- it says "There's no longer an 15 invoice date. How is delivery verified?" 16 MR. SANDERSON: I don't understand what 17 you mean by "There's no invoice date." 18 MS. WEAVER: No. He said "This is no 19 longer an invoice date. How is delivery verified?" 20 MR. SANDERSON: Well, I think that's 21 what the statute says. 22 MS. TAYLOR: I see. So what Knowles is 23 saying is that this should be 30 days after the 24 invoice date, not after the delivery date, is -- 25 MR. SANDERSON: That conflicts with the 0174 1 statute. 2 MS. TAYLOR: Okay. Next? 3 MS. WEAVER: Line 7, the word "day" 4 after "37th," he said "Is this the actual day or a 5 business day? 6 MR. SANDERSON: Actual day. 7 MS. WEAVER: "7 days, Line 10, the same 8 question, actual day or business day?" 9 MR. SANDERSON: Which -- Line -- 10 MS. WEAVER: Line 10. 11 MR. SANDERSON: -- 10? Actual day. 12 MS. WEAVER: And last is: "Line 14, how 13 often is this list updated, the word 'request'?" 14 MR. SANDERSON: I believe the list is 15 updated daily, and it's on the website. 16 MS. WEAVER: Knowles thanks you. 17 (Laughter) 18 MR. SANDERSON: And the statute does 19 clearly state that each sale or lease of bingo 20 supplies or equipment to a license holder under this 21 chapter must be on terms of immediate payment or on 22 terms requiring payment not later than the 30th day 23 after the date of actual delivery. 24 MS. WEAVER: Thank you. 25 MS. TAYLOR: Any other comments from 0175 1 Members? 2 (No response) 3 MS. TAYLOR: Public comment? 4 Jane Thompson. 5 MS. THOMPSON: One quick question. Jane 6 Thompson, Thompson Allstate. 7 Does this -- equipment and supplies, 8 that includes electronic bingo devices? 9 MR. SANDERSON: Yes. I believe there's 10 something in the provision, or if not, we may need to 11 add it to this one here, where when it comes to 12 leasing equipment it's based on the invoice date, if 13 I'm not mistaken. 14 MS. THOMPSON: Somewhere in this rule? 15 MR. SANDERSON: If it's not in this 16 rule, then we'll look at adding it. 17 MS. THOMPSON: Okay. Yeah. I think 18 that is -- that always comes up in the delinquent 19 purchaser, is, "How do you put somebody on COD when 20 it's electronic invoice?" So we need to keep that in 21 mind. 22 I don't know if that should be clarified 23 in this rule or not, but it would be a good point. 24 MR. SANDERSON: We can look at it. 25 MS. TAYLOR: Thank you. 0176 1 Any other public comment? 2 AGENDA ITEM NO. 15 3 MS. TAYLOR: If none, we'll go on with 4 Item No. 15, Report and possible discussion on the 5 activities of the Charitable Bingo Operations 6 Division. 7 MR. SANDERSON: Members, in your book is 8 the report of the Bingo Operations Division. If you 9 have any particular questions on any of the items, 10 I'll be glad to answer those. 11 Also included is the latest press 12 release from the first quarter allocations, and I do 13 know that we had at least one or two newspaper 14 articles that were -- newspapers that picked this up 15 and did articles on bingo in their county or their 16 area. 17 MS. TAYLOR: One thing that I have to 18 say that I thought was nice was the fact that the 19 Bingo Division sent out letters to the licensees that 20 had been affected by the latest hurricane telling them 21 that they could fill out this little, short 22 application and submit the quarterly report in 23 payments -- I believe it was three months later or 24 something. 25 MR. SANDERSON: Yeah, if they requested 0177 1 the extension. 2 MS. TAYLOR: So really nice. It was 3 nice to see the Lottery Commission working with the 4 licensees like that. 5 And I believe I also saw it on the 6 website. 7 MR. SANDERSON: We did put a notice on 8 the website. 9 MS. TAYLOR: Any other comments? 10 (No response) 11 MS. TAYLOR: Public comment? 12 (No response) 13 AGENDA ITEM NO. 16 14 MS. TAYLOR: Item 16, Public Comment. 15 Any public comments? 16 Mr. Bresnen. 17 MR. BRESNEN: Thank you, Madam Chair. 18 I'm Steve Bresnen for the Bingo Interest Group. 19 One of the issues that's going to come 20 up for legislation in the not-too-distant future is 21 funding for the Charitable Bingo Division. I don't 22 know if you-all are aware of it or not, but the 23 Division has not been satisfactorily funded for a very 24 long time. 25 I don't know, Phil, how many empty spots 0178 1 you've still got, but I know you've had trouble 2 filling them, and, you know, my view is that if these 3 laws are not enforced, it gets us a bad reputation in 4 the community and in the state, and at the Capitol, in 5 particular, and that, you know, we can do all this 6 work on the rules and everything, but if we don't have 7 a competent, decently paid staff with some experience 8 and longevity out there, it's not going to make any 9 difference. The same problems that were evident in 10 the internal audit report, which led to a lot of the 11 rulemaking, are going to just happen, you know, ad 12 infinitum. 13 There are different ways to address that 14 problem. One thing that's been under consideration by 15 the Commission is to have the administrative costs of 16 the Division absorbed by the bigger Lottery -- Texas 17 Lottery Commission, the agency, basically on the 18 Lottery side of the agency, which suits me just fine. 19 Another way to address it is to increase 20 the license fees or anything that's in the statute 21 that's not fixed in the statute that the agency would 22 have control over, which I suspect -- which has been 23 done before. If you'll remember, we paid for the new 24 computer system. Frankly, I think that was a big 25 benefit, ultimately, to Charitable Bingo. 0179 1 It wouldn't have happened, Phil, without 2 your leadership and sticking with it, because I know 3 that was hard to get done. 4 But, overall, watching the fees go up is 5 just going to take more monies from those charities. 6 To the extent that lessors' fees go up and the market 7 will bear it, they'll pass those costs along to the 8 charities. So that doesn't seem, to me, like the best 9 way to go. 10 Another way to do it is for the 11 Legislature to return some of the money that the State 12 gets from charitable bingo to the agency in order to 13 give the Charitable Bingo Operations Division 14 satisfactory funding to do its job. 15 There's probably something else I'm 16 leaving off, but I can tell you, on behalf of the 17 Bingo Interest Group, I'm going to be pursuing the 18 latter option first, the Lottery Commission absorbing 19 those indirect costs at the -- whatever we can cram 20 into that side second and the review of the fees last. 21 And I suppose, Phil, when this comes 22 up -- this is ultimately related to the issue that 23 Commissioner Schenck asked to be put on the agenda for 24 the next BAC meeting, and I will be here to talk about 25 that at that time if you don't hold it over the Labor 0180 1 Day weekend or the Thursday before it or the Tuesday 2 after it. 3 The other thing I want to say is, Phil, 4 I really appreciate the job that you're doing. I 5 know -- I think everybody is really frustrated with 6 the rule-making. I know you guys have put a lot, a 7 lot of time and effort into it and I know you get 8 hammered in every one of these meetings, but I also 9 know that you have an internal audit that you need to 10 be responsive to and I know that there's some bad 11 actors out there that need to -- you need to have the 12 ability to get after. But I certainly appreciate the 13 style you're working through them. It's a huge 14 improvement, and -- although, a lot of work and takes 15 a lot of reading. 16 Anyway, thank you-all for all you're 17 doing and I know you're not getting rich doing it. 18 That's all I've got to say. Thanks. 19 MS. TAYLOR: Thank you. 20 Any other public comment? 21 (No response) 22 AGENDA ITEM NO. 17 23 MS. TAYLOR: Then we'll go on to Item 24 No. 17, Consideration of and possible action on future 25 Bingo Advisory Committee Meeting dates and/or items to 0181 1 be considered for future meetings. 2 Phil, when is the Commission Meeting? 3 Any idea? 4 MR. SANDERSON: The August Commission 5 Meeting right now is tentatively scheduled for August 6 the 21st. 7 MS. TAYLOR: Has their agenda already 8 been set? 9 MR. SANDERSON: The agenda has not been 10 set. The agenda will be -- if it continues to be the 11 21st, the agenda will be posted on the 13th, I 12 believe. 13 MS. TAYLOR: So is our stuff going to be 14 on that agenda then? 15 MR. SANDERSON: I'm putting it on there 16 hoping that you can get your report to me as quickly 17 as possible. 18 MS. TAYLOR: Okay. Was that your 19 question? 20 MS. LOPEZ: I guess. Yes. 21 MS. TAYLOR: Okay. So in addition to 22 our -- I have the work plan on my computer; so I will 23 just change the dates on it and take it to the 24 Commission Meeting then. 25 MR. SANDERSON: If you'd e-mail it to 0182 1 me -- if you'll e-mail it to me, as soon as you do 2 that, I can put it in their notebook and they can have 3 a chance to look at it. 4 MS. TAYLOR: Okay. That's easy. 5 MR. SANDERSON: As well as your report 6 of this meeting, if you can. 7 I've discussed it with at least one 8 Commissioner, that we need to have it on the agenda 9 and it may not make it to the notebook, but I'd like 10 to get it as soon as possible so we can e-mail it to 11 them for their review before the meeting. 12 MS. TAYLOR: Okay. So in addition to 13 the other items, anything else that Members can think 14 of right this moment besides our normal items? 15 MS. LOPEZ: Market conduct. 16 MS. TAYLOR: Rosie would like to add 17 market conduct back on there. 18 MR. SANDERSON: The report -- 19 MS. TAYLOR: I don't believe that work 20 group has met, but I have been contacted by Chris 21 Keller asking us -- that he would like to get the work 22 group actively involved in market conduct. 23 I don't really remember who's on that 24 work group right at this moment. 25 MS. WEAVER: That would be me. 0183 1 MR. SANDERSON: I think it's Knowles and 2 Markey and Rosie. 3 MS. LOPEZ: I believe so. 4 MR. SILVER: I don't think it was 5 Knowles. I believe it was Markey, me and -- 6 MS. LOPEZ: Earl. 7 MR. SANDERSON: And Earl. Okay. 8 MS. WEAVER: Mr. Keller is very 9 persistent. 10 MR. SANDERSON: And Chris Keller and I 11 think Steve Fenoglio were public members, if I'm not 12 mistaken. 13 MS. TAYLOR: Okay. So I think we need 14 to add that to the agenda, your report, because I know 15 you'll have met by the next meeting. Many times, 16 probably. 17 Who is the Chair of that? 18 MS. WEAVER: That would be me. 19 (Laughter) 20 MS. WEAVER: I cannot -- we don't price 21 fix. I cannot -- you know, that's what the man wants, 22 and I can't help him. We can't help him. As a 23 Commission, we do not price fix electronics. We don't 24 price fix anything, to the best of my knowledge. 25 MS. TAYLOR: Well, I know previously -- 0184 1 years ago -- the Commission had the authority to set 2 prices by county. Ten or twelve years ago. 3 MR. SANDERSON: Well, we have the 4 authority to set prices statutorily, but that is not 5 by county. 6 MS. WEAVER: But it has never been done. 7 Is that correct? 8 MR. SANDERSON: That's correct. 9 MR. WHITTINGTON: That would be a 10 milestone. 11 MR. SANDERSON: Oh. Thomas Weekley is 12 also on that work group. And Steve -- Steve Bresnen 13 is on that work group, not Steve Fenoglio. 14 MR. BRESNEN: Sign me up. 15 MS. WEAVER: It's Bresnen? 16 MR. SANDERSON: Yeah. 17 MS. TAYLOR: I'm sorry. Who else 18 besides Steve Bresnen? 19 MR. SANDERSON: Markey is the Chair. 20 Markey is the Chair. Earl, Thomas Weekley and Rosie. 21 And then public members are Chris Keller and Steve 22 Bresnen. 23 MS. TAYLOR: Okay. Anything besides our 24 regular that you would like to add at this time, 25 anybody? 0185 1 (No response) 2 MS. TAYLOR: Okay. If you think of 3 something between now and the next agenda, if you'll 4 let myself or Phil or Worlanda know. 5 MR. SANDERSON: Let me give you those 6 tentative dates. If the Committee decides to hold a 7 forum, the next meeting would be November the 5th. We 8 would post the agenda for that meeting on November the 9 28th -- I'm sorry -- October the 28th, and I would 10 need any agenda items and documents for your notebooks 11 by the 23rd of October. 12 MS. TAYLOR: So at this time, does 13 November 5th work with everybody's schedules? 14 (No verbal response) 15 MS. TAYLOR: Okay. Then tentatively the 16 5th. 17 MR. SANDERSON: And you may have up to 18 three new members, possibly. So we may have to have 19 an agenda item on the BAC purpose or something of that 20 nature to -- orientation, I guess, so to speak. 21 MS. TAYLOR: Should -- the nominations 22 committee, we're just going to take the motion and -- 23 for the new members to the Commissioners, or do they 24 need to have a written report? 25 MR. SANDERSON: You can do it either 0186 1 way. We'll make our recommendations at the August 2 meeting and you can then -- you know, you can then 3 come up and make what the BAC recommends. And then 4 also, at that point, the Commissioners have the 5 opportunity to make the appointment or they can choose 6 to interview the nominees and make the appointment in 7 September. 8 MS. TAYLOR: I believe they interviewed 9 everybody last time. Didn't they? 10 MR. SANDERSON: They interviewed most 11 everybody, I believe. 12 MS. TAYLOR: Okay. Anything else on 13 this item? 14 (No response) 15 AGENDA ITEM NO. 18 16 MS. TAYLOR: Then this meeting stands 17 adjourned at 1:42. 18 (Proceedings concluded at 1:42 p.m.) 19 20 21 22 23 24 25 0187 1 C E R T I F I C A T E 2 3 STATE OF TEXAS ) 4 COUNTY OF TRAVIS ) 5 6 I, Patricia Gonzalez, a Certified 7 Shorthand Reporter in and for the State of Texas, do 8 hereby certify that the above-mentioned matter 9 occurred as hereinbefore set out. 10 I FURTHER CERTIFY THAT the proceedings 11 of such were reported by me or under my supervision, 12 later reduced to typewritten form under my supervision 13 and control and that the foregoing pages are a full, 14 true and correct transcription of the original notes. 15 IN WITNESS WHEREOF, I have hereunto set 16 my hand and seal this 20th day of August 2008. 17 18 _______________________________ 19 PATRICIA GONZALEZ Certified Shorthand Reporter 20 CSR No. 6367-Expires 12/31/08 21 Firm Certification No. 276 Kennedy Reporting Service, Inc. 22 Cambridge Tower 1801 Lavaca Street, Suite 115 23 Austin, Texas 78701 512.474.2233 24 25