1 1 TRANSCRIPT OF PROCEEDINGS 2 BEFORE THE 3 TEXAS LOTTERY COMMISSION 4 AUSTIN, TEXAS 5 6 7 16 TEXAS ADMINISTRATIVE CODE § § 8 §402.110 § 9 10 11 12 13 PUBLIC COMMENT ON RULEMAKING 14 THURSDAY, JULY 14, 2011 15 16 17 18 BE IT REMEMBERED THAT on Thursday, the 14th 19 day of July 2011, the above-entitled public comment 20 hearing was held from 10:02 a.m. to 10:32 a.m., at the 21 Offices of the Texas Lottery Commission, 611 East 6th 22 Street, Austin, Texas 78701, before SANDRA JOSEPH, 23 SPECIAL COUNSEL. The following proceedings were 24 reported via machine shorthand by Aloma J. Kennedy, a 25 Certified Shorthand Reporter of the State of Texas. 2 1 APPEARANCES 2 SPECIAL COUNSEL, LEGAL DIVISION: 3 Ms. Sandra Joseph 4 DIRECTOR, CHARITABLE BINGO OPERATIONS: Mr. Philip D. Sanderson 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3 1 TABLE OF CONTENTS 2 PAGE 3 PROCEEDINGS - THURSDAY, JULY 14, 2011............. 4 4 COMMENTS ON BEHALF OF THE COALITION FOR THE SURVIVAL OF CHARITABLE BINGO (BRESNEN)........ 5 5 COMMENTS ON BEHALF OF K&B SALES, INC. 6 (CLARK)........................................... 6 7 COMMENTS ON BEHALF OF TEXAS CHARITY ADVOCATES/ TEXAS NEW COMMUNITY ALLIANCE (YOUNG).............. 7 8 COMMENTS ON BEHALF OF CEDAR CREEK BINGO 9 (SMITH)........................................... 9 10 COMMENTS ON BEHALF OF BIG TEX BINGO (DAILY)....... 10 11 COMMENTS ON BEHALF OF FORT WORTH BOOKKEEPING, INC. (IVES).......................... 10 12 COMMENTS ON BEHALF OF RIVER CITY BINGO, ET AL 13 (FENOGLIO)........................................ 11 14 COMMENTS ON BEHALF OF THE TEXAS ASSOCIATION FOR THE ADVANCEMENT OF 15 CHARITABLE BINGO (MINCH).......................... 18 16 COMMENTS ON BEHALF OF LITTLEFIELD CORPORATION (BUNKLEY)............................. 24 17 REPORTER'S CERTIFICATE............................ 27 18 FENOGLIO ATTACHMENTS 19 20 21 22 23 24 25 4 1 P R O C E E D I N G S 2 THURSDAY, JULY 14, 2011 3 (10:02 a.m.) 4 MS. JOSEPH: Good morning. For the 5 record, my name is Sandra Joseph. I'm Special Counsel 6 of the Legal Division. With me is Phil Sanderson, 7 Director of the Charitable Bingo Operations Division. 8 We're here this morning to receive public 9 comment on proposed new rule 16 TAC §402.110, Temporary 10 Increase of License Fees. The purpose of the proposed 11 new rule is to increase temporarily the license fees for 12 licenses to conduct bingo and for commercial licenses to 13 lease bingo premises in order to fund the redesign of 14 the automated charitable bingo system. 15 I have a number of witness affirmation 16 forms here. I would ask that if someone who speaks 17 before you has basically voiced your opinions, that you 18 might choose to simply say, "I agree with the comments" 19 of whoever it was, rather than repeat everything, just 20 to save everybody's time. 21 Has everyone turned in a witness 22 affirmation form at this time that would like to do so? 23 (No response) 24 MS. JOSEPH: All right. Then at this time 25 I would like to call on Steve Bresnen. 5 1 COMMENTS ON BEHALF OF THE COALITION FOR 2 THE SURVIVAL OF CHARITABLE BINGO 3 MR. BRESNEN: Thank you. My name is Steve 4 Bresnen. I'm here on behalf of the Coalition for the 5 Survival of Charitable Bingo. And because we have 6 several of our members here who have better command of 7 the numbers and the situations out there, I'm going to 8 let them speak to that. 9 I do want to register opposed to this 10 increase for the reason that it just -- bingo can't take 11 it, for all the reasons that you'll hear about in a few 12 minutes. And I would like to suggest that the agency 13 consider an alternative to adopting this rule. 14 We know that there is a requirement to do 15 some maintenance, or it's believed that there is a 16 requirement to do some maintenance, that I think the 17 numbers were in the range of about $400,000 during this 18 next biennium. And we would propose that the agency 19 look as to whether it has the authority in its existing 20 appropriations, outside of the $2.5 million contingency 21 rider in the General Appropriations Act. That, as I 22 understand it, is part of the capital budget. 23 And we would like, per the agency, to look 24 at its existing authority to spend funds that are raised 25 through fees and see about either straddling that 6 1 $400,000 over the next two years or pushing it further 2 into the out years and delaying that maintenance as long 3 as possible until it's required, if you have to do 4 something. But, otherwise, we would be opposed to the 5 rule and would suggest that alternative approach be 6 looked at, including going to the LBB during the 7 interim, if need be, to make sure that you have the 8 authority and their acquiescence to doing that. 9 Thank you. 10 MS. JOSEPH: Thank you, Mr. Bresnen. 11 Michele Clark. 12 COMMENTS ON BEHALF OF K&B SALES, INC. 13 MS. CLARK: Good morning. I will be 14 brief, in anticipation of what the testimony of the 15 charities will be. I am here representing K&B Sales, 16 Inc., a distributor licensed in the State of Texas to 17 distribute bingo equipment and supplies. And in support 18 of how the majority of charities register their 19 anticipated opposition to the fee increase on them, K&B 20 does support that opposition. 21 I looked briefly at how the charitable 22 distributions have declined from the first two quarters 23 of 2010 to 2011 for a couple of K&B's largest customers, 24 and one experienced over a 73 percent decrease in its 25 charitable distributions between those two quarters, and 7 1 another reported a decrease of almost 39 percent. 2 So in addition to this not being the time 3 for charities to be able to support this computer 4 system, I also would urge that some more time and 5 attention and perhaps a workgroup be given to how much 6 realistically it is required to survive during these 7 tough economic times and not disadvantage the licensees 8 and the Commission any more than absolutely possible. 9 This concludes my comment. 10 MS. JOSEPH: Thank you. 11 MS. CLARK: Thank you. 12 MS. JOSEPH: Melissa Young. 13 COMMENTS ON BEHALF OF 14 TEXAS CHARITY ADVOCATES/TEXAS NEW COMMUNITY ALLIANCE 15 MS. YOUNG: My name is Melissa Young, for 16 the record, and I'm very concerned about the proposed 17 license fee increase. I'm looking at the impacts from 18 two different viewpoints. One is the Executive Director 19 for Texas Charity Advocates, which is a group that 20 represents bingo charities, about 325 at the current 21 time. And I'm also a board member for the Texas New 22 Community Alliance, and we are a recipient of bingo 23 funds. We play bingo in a hall in Conroe. 24 So as a board member for that charity, I 25 am desperate to help them find ways to raise money for 8 1 their programs, especially in light of the cuts that 2 they've received from the Legislature. So my comment is 3 really just that charitable bingo is in a terrible place 4 financially, and we've seen our distributions drop 5 consistently quarter after quarter for the Texas New 6 Community Alliance, and we're working really hard to 7 bring new players in and to keep our costs down. But 8 the bottom line is that we're really struggling. 9 As far as the Texas Charity Advocates are 10 concerned, I've been calling charities from all around 11 the state and asking them if they have any suggestions 12 that I could bring to you guys or just kind of asking 13 them how they feel like it's going to impact their 14 business, and they have the same sentiments. They're 15 just -- their business is down and they're looking for 16 ways to cut their expenses and bring more players in. 17 But the truth is, is that, you know, the money is just 18 not there. 19 So everybody is just kind of, you know, 20 screaming that, "We just cannot afford a 50 percent 21 license fee increase." There was one group of charities 22 that I spoke with that pointed out over the next two 23 years, it would be about a $95,000 bill to them to pay 24 for those increases in the computer system, and they are 25 going to have to pull this directly out of programs. 9 1 That's a group of charities, I guess I should clarity, 2 not just one, but anyway. And so I would just like to 3 ask you guys to seriously consider moving this out, 4 patching the system, or doing whatever we can for the 5 time period, until hopefully the economy turns around. 6 Thank you. 7 MS. JOSEPH: Thank you, Ms. Young. 8 William Smith. 9 COMMENTS ON BEHALF OF CEDAR CREEK BINGO 10 MR. SMITH: Good morning. My name is 11 William Smith. I watched a movie last night, and the 12 name of the movie was "Robin Hood." And, you know, I 13 think we've been down this road once before. We helped 14 pay for the existing computer system. And we were told 15 then that this would be a one-time deal and this would 16 never happen again. It's right back in our lap. So I 17 think we're kind of starting to feel like we're the 18 little peasant people that are being dinged every time 19 the king wants something. 20 The charities just can't afford this right 21 now. The numbers show it. You know, my question would 22 be, No. 1, is if you have a charity that's only 23 making -- say showing a profit of $600 a year and they 24 have to go up $600 on their license fees, that makes 25 them show a profit of zero dollars. That puts them in 10 1 violation of their license. If they're already doing 2 all they can and then they have to pay more on their 3 license fees, which it shouldn't be in my opinion their 4 responsibility to pay for something the Legislature 5 won't give the Lottery Commission, you know, that puts 6 them in violation of their license. 7 Other than that, I agree with everything 8 everybody else has said. And thank you. 9 MS. JOSEPH: Thank you for your comments, 10 Mr. Smith. 11 Matthew Daily. 12 COMMENTS ON BEHALF OF BIG TEX BINGO 13 MR. DAILY: How are y'all this morning? 14 Matthew Daily, Houston, Texas, Big Tex Bingo. And I am 15 against this proposal. 16 MS. JOSEPH: Thank you, sir. 17 Sharon Ives. 18 COMMENTS ON BEHALF OF FORT WORTH BOOKKEEPING, INC. 19 MS. IVES: Good morning. Sharon Ives 20 here, Fort Worth Bookkeeping. 21 My office currently handles around 85 22 conductors and eight lessors. And under the proposed 23 rule, this would make a dollar difference on the lessors 24 currently paying in license fees or renewal fees, 25 $12,100 to the proposed of $12,450. That would make a 11 1 difference of $350 per year. 2 But my main concern is on the conductors. 3 Under the proposed rule, that would make a difference. 4 Out of the 85 conductors, their license fees would be 5 $306,300. That's a difference of $102,100 per year, and 6 that's just on the organizations that my office handles. 7 I just don't know where the money is going 8 to come from. Over the last two years, bingo has really 9 been on the decline. And out of the 85 conductors that 10 my office handles, only 29 of those are actually current 11 on their rent. So if they don't have the money to pay 12 the rent, you know, what makes the state think that 13 they're going to have money to pay the proposed increase 14 in license fees? 15 Thank you. 16 MS. JOSEPH: Thank you, Ms. Ives. 17 Stephen Fenoglio. 18 COMMENTS ON BEHALF OF RIVER CITY BINGO, ET AL 19 MR. FENOGLIO: Good morning. For the 20 record, my name is Stephen Fenoglio. And I'm giving the 21 Court Reporter a list of organizations I represent in 22 Victoria, Conroe and Austin. 23 Bingo is in the toilet, pure and simple. 24 And I brought with me the public records available from 25 the Lottery Commission, just for the City of Austin, for 12 1 Calendar Year 2009 and 2010. I have one for the Court 2 Reporter I will provide in a moment. 3 And what I want to paint the picture of is 4 that historically, Austin has kind of been a nice island 5 for charitable bingo, and the reason are several fold. 6 No. 1, it's isolated geographically from North Texas and 7 East Texas and far West Texas, where you have casino- 8 style gaming in Mexico, Oklahoma, Louisiana. It's a 9 long drive to get there, to any of those places, as 10 opposed to what you see bingo halls in the Dallas/Fort 11 Worth area have been in dire straits for quite a while. 12 And the same is true in Texarkana. You 13 know, it's an hour's drive to river boat casinos. In 14 Lubbock, it's about a two-hour drive to casinos. 15 Amarillo, a two- or three-hour drive which, if you live 16 in West Texas, is not a big deal to do a three-hour 17 drive. So geographically Austin has been isolated. 18 Also because of the stringent development 19 rules mandated by the City of Austin and their building 20 code requirements, it is very difficult to develop 21 properties for a bingo hall. They have stringent 22 parking requirements and will no code or not allow a 23 bingo hall to open if it doesn't have sufficient 24 parking. Many other cities that I represent clients in, 25 they don't even care. 13 1 There are also setback requirements and 2 other development restrictions. There's a hall that is 3 trying to open on Balcones and 183, and I represent the 4 Boys Club that's one of the charities that's licensed, 5 and they still haven't gotten all their permitting, and 6 they started the process last summer. And as of a 7 couple of weeks ago, they still didn't have it 8 permitted. 9 The neighborhood associations are fighting 10 it vehemently. It probably won't open. There is only a 11 length of time they can stay. And the building is 12 vacant. It's an old Kroger grocery store style strip 13 center. But they have not had any success. 14 And so for the second reason, because of 15 the development restrictions, it's difficult to develop 16 properties in Austin for bingo. And what that means is 17 that on a per capita basis, unlike, say, Corpus Christi, 18 which is roughly the same size as Austin population- 19 wise, you've got significantly more charitable bingo 20 operations in Corpus where they don't have these 21 restrictions, than you do in Austin. And if you look at 22 San Antonio on a per capita basis, the same is true. 23 And so what the numbers are showing us 24 from '09 -- and the last two are units. And I will, 25 before the record closes, supplement this -- but if you 14 1 just look at the last page of each of these for '09 and. 2 '10. In '09, River City Bingo Unit Trust had profits of 3 $606,430. That's five charities operating as a unit. 4 They're their own commercial lessor. Parenthetically, 5 American Bingo Unit -- and I see Richard Bunkley and 6 Jeff Minch here -- had a good year, 264, of for-profit 7 commercial lessor-run location, but charities did well. 8 What happened in 2010? And you're 9 starting to see what's happened. Our profits went down 10 over 20 percent, $476,000 at River City, and the profits 11 at the American Bingo plummeted to $72,000. We don't 12 have the data yet available for the first six months of 13 2010, but I can tell you at River City, our distribution 14 profits went down about 18 percent for the first quarter 15 of 2011 versus 2010 and our, quote, other profit, 16 meaning the money we hold back legally to fund 17 additional operations or future distributions, went down 18 over 50 percent -- 50 percent in real dollars that we 19 don't have. 20 And again, it's my belief, having worked 21 in the bingo industry from representing lessors, 22 conductors, distributors and manufacturers as well as 23 bingo and the management team at River City Bingo, 24 Austin has been an enviable island. There are many 25 folks who want to come to Austin to open bingo halls. 15 1 And when they find out how extensive and time-consuming 2 it is, they don't. And this is the island where it's 3 now really, really bad. 4 I'm hearing reports that charities aren't 5 going to get a distribution for a quarter or a full 6 month, where historically they've gotten thousands of 7 dollars in previous, so it is tough. And what does that 8 mean? At the same time these charities, The ARC of The 9 Capital Area, which helps families with developmental 10 disabilities or Family Eldercare, the needy seniors, 11 their revenues are also getting slashed by state, local 12 and federal funding. 13 All of them have enviable fundraising 14 activities where -- you know, big time events, black tie 15 style events. Those numbers are down 20, 30 percent. 16 The regular contributions are down. So it's not just 17 bingo that's down. They're funded by state, local and 18 federal governments, are down, and by private donors are 19 down. 20 And I know we're seeing that at the state 21 agency level, at the Charitable Bingo Division. And 22 this week, TEA is laying off an additional 180 or so 23 folks with more perhaps to come. But these are some of 24 the things that charities have had to face now for two 25 years, with reduced funding from traditional donors. 16 1 Historically -- and again, if you just look at 2009 2 versus '10, it's still pretty good. But what we're 3 seeing for '11 is -- it's ugly. 4 So having said that, we have -- the 5 charities have to do more with less. There's more 6 demand for the social services. No big surprise when 7 the economy is in the toilet, and so we don't think now 8 is the time to do that. These charities have to defer 9 maintenance on their physical plants, their office 10 buildings, defer maintenance on their software and 11 hardware. And we think, unfortunately, that this is the 12 message that the Commission has to have, is that we 13 can't do it now, we can't put this burden on charities. 14 You know, it was interesting in the public 15 debate in the Texas Legislature, which finally went 16 home, and now the national Legislature, where the 17 discourse is: No new taxes. We're not going to -- and, 18 you know, the Legislature proudly determined and 19 Governor Perry proudly determined there will be no new 20 taxes. 21 This is a tax to charities. And I say 22 that because, as the record will be well-developed and 23 as everyone else in the room knows; the Legislature 24 makes a profit, the Texas government makes a profit on 25 bingo, unlike racing, which by their very organizing 17 1 instruments, if they recover a dollar over what it costs 2 to regulate, they rebate that back to the industry. 3 In our case, it's a 10 to 12 million each 4 and every year goes into the coffers of the State of 5 Texas far over and above what it costs to regulate. And 6 I'm not saying that that's the Lottery's problem; it's 7 not. Y'all don't write the laws; the Charitable Bingo 8 Division doesn't write the laws. But at a time when 9 we're already overpaying -- "we" the industry: 10 Customers, charities, the lessors, distributors and 11 manufacturers -- it's all one entertainment dollar and 12 it starts and ends with what the charities do in their 13 bingo hall at a time when they're already paying more 14 than their load. 15 We oppose the proposed changes. I would 16 be happy to answer any questions. 17 MS. JOSEPH: Any questions? 18 MR. FENOGLIO: I will give the other 19 handout to the Court Reporter now. And again, I will 20 supplement before July 31st some additional data. Thank 21 you. 22 MS. JOSEPH: All right. Thank you, 23 Mr. Fenoglio. 24 Jeff Minch. 25 18 1 COMMENTS ON BEHALF OF THE TEXAS ASSOCIATION 2 FOR THE ADVANCEMENT OF CHARITABLE BINGO 3 MR. MINCH: Good morning. The story of my 4 life, batting clean-up after Steve Fenoglio. 5 (Laughter) 6 So I want to make a couple of comments in 7 regard to the problem that you're trying to solve, the 8 state of the economy and the state of bingo. The first 9 thing I want to say to you is that as a fellow running a 10 public company with very similar reporting requirements, 11 I believe the solution that you have devised, your plan, 12 is not necessarily the right solution, and to duplicate 13 what is perhaps in your view an archaic enterprise level 14 piece of software may not be the right answer. 15 In the development of software and 16 accounting and any kind of reporting capabilities, you 17 have a very, very small comparative challenge in 18 comparison to other state agencies. And I believe that 19 there is a solution out there that is not an enterprise 20 level piece of software, is not an Oracle-based solution 21 that may be much less expensive; and, therefore, it may 22 be something that you could undertake now, because it 23 might cost 10 percent of what you contemplate doing now. 24 We have, at best, about 1100 unique 25 conductors in the system. And compared to other things 19 1 like Medicare or Medicaid in the State of Texas, which 2 clearly screams out for an enterprise level piece of 3 software, that's well within the capabilities of 4 off-the-shelf and customizable programs with Microsoft 5 access. 6 So the first thing I would say to you is 7 that I think that, you know, when you go out to buy a 8 hammer, everything looks like a nail. I mean, you go 9 out to buy an enterprise piece of software, it's always 10 going to be extremely expensive. And I think that you 11 can handle your reporting and automation problems with a 12 piece of software that would start in a customizable 13 off-the-shelf piece of software, and the entire effort I 14 believe would cost about 10 percent of what you 15 contemplate doing. 16 And so I would urge you that regardless of 17 what this conversation ends up with in this rule, to at 18 least ask somebody -- staff -- that and see whether or 19 not that's not a more cost-effective approach, because I 20 think that your actual challenge, the technological 21 challenge is actually quite a small one and we can 22 develop a software system. The last time that you did 23 this I believe was well within the bounds of off-the- 24 shelf customizable software. 25 I think you need to take note of the fact 20 1 that the Texas Legislature, when faced with this 2 question, responded by saying "No." And really what 3 they said was "No this session." And I think that's the 4 tenor of the political world of the state. I think it's 5 the tenor of state financial governance, that today is 6 not the right time to be spending $2.5 million that's 7 generated from fees, and fees at the end of the day are, 8 in fact, taxes. 9 It's also not the right time, simply 10 because there are alternatives. Every business in 11 America is faced with canceling expensive programs, 12 delaying expensive programs or phasing expensive 13 programs. And the decision that's in front of you today 14 does not embrace any of those elements of wisdom. The 15 first thing is, you just simply take this and say, "Yep, 16 we recognize it as a problem. But we will delay it, 17 based upon the actual performance of the economy and the 18 industry, for some period of time," no differently than 19 you might in your personal life say you would sure like 20 to paint your house but this may not be a great time to 21 do it, simply because of the finances, not because it 22 doesn't need a painting, not because it wouldn't look 23 nice to be painted, but simply due to these harsh 24 economic realities indicate that now is not the time to 25 make that expenditure. 21 1 And so I would challenge you as to why 2 today would be, given the State of Texas economy and 3 given the state of the industry, why today would be the 4 time that you would want to spend $2.5 million, 5 particularly in light of the fact that when the same 6 question goes to the Legislature, returned the opposite 7 answer. And so I would urge you to say that this is not 8 an emergency and, therefore, you can delay it for two 9 years, in addition to what I said about finding another 10 piece of software. 11 I would like to reiterate the comments 12 that other folks have made in regard to the state of the 13 industry. I believe that the recession has come to 14 Texas two years later than other places in the country. 15 And since we operate in other states, I can tell you 16 that the economic cycle in Texas is a couple of years 17 behind the economic cycle, as an example, in South 18 Carolina. 19 Anecdotally, I believe in part that's 20 because much oil revenue comes to our state, to the 21 state itself, to corporations and to individuals. And I 22 think that that has propped up -- that new capital 23 coming has propped up certain elements of the state. 24 Also in Austin, Texas, if you happen to be a software 25 engineer, you probably don't realize that there is a 22 1 recession going on, and that's unique to Austin. But 2 the bottom line is that the recession has been later 3 coming here by any measure of unemployment or any other 4 objective, government statistic, but it's here now, and 5 now is not the time to make these huge capital 6 investments. It's a little bit late, having a child 7 going off to college and saying, "Gee, should we buy a 8 new house and get a new car at the same time?" And you 9 just time those things, and I think that the timing is 10 very bad. 11 I want to challenge you to a certain 12 measure and ask you: Are you a partner of the industry? 13 Do you care about the travails of the industry? Or are 14 you simply a heartless regulator who is going to simply 15 demand that what you want to have done has to be done? 16 Because right now the industry is saying to you in this 17 room and in other ways, the numbers that you see and all 18 the anecdotal information that you collect, that times 19 are tough out there. And this will have a huge impact 20 on the abilities -- the industry's ability to survive -- 21 not to thrive, to survive. 22 I also think that we're in a particularly 23 poor time in the history of the economy inasmuch as I 24 think you would get a general consensus among economists 25 that for every year that the economy trends downward, 23 1 that in recovery it will take twice as long to trend 2 upward, and that's been the history of every recession 3 in the history of the United States. I don't think 4 we're at the end of the beginning. I think that today's 5 employment numbers, as an example today, yet another 6 month with 400,000 new unemployment claims, I think it 7 clearly points us to the fact that we're continuing to 8 decline. I think we're going to see the Japanese lost a 9 decade and that we're going to have ten years of bad 10 economic data, and we have not yet begun to recover. 11 So I ask you: Are you partners with us? 12 Are you feeling the same thing? Are you going to act 13 with the same real-world motivations, real-world 14 information, real-world data that the industry is 15 struggling with? 16 So I would end simply by saying that -- 17 the other thing is that if, in fact, you do decide to go 18 forward, then I would ask you to manage the finances in 19 a shrewd and clever way. There is no reason to collect 20 100 percent of the fees for a system that is only going 21 to last for 20 years. And so if you are going to 22 increase, make that increase over a five- or six-year 23 period, make it as painless as you possibly can and 24 spread those costs out. 25 So even if we don't agree with your 24 1 decision, that the management of it is as clever as the 2 industry and as any business in Texas is forced to deal 3 with these kinds of expenditures. Don't collect it all 4 in a single year, and spread it out as far as you 5 possibly can. 6 Thank you very much. 7 MS. JOSEPH: Thank you, Mr. Minch. 8 Mr. Minch, would you please -- I'm not 9 sure if you stated who you're representing and your name 10 for the record. 11 MR. MINCH: Jeff Minch, Texas Association 12 for the Advancement of Charitable Bingo. 13 MS. JOSEPH: Thank you. 14 MR. MINCH: You're welcome. 15 MS. JOSEPH: Richard Bunkley. 16 COMMENTS ON BEHALF OF LITTLEFIELD CORPORATION 17 MR. BUNKLEY: Hello. Thank you very much 18 for allowing me to speak today. My name is Richard 19 Bunkley, and I'm speaking on behalf of Littlefield 20 Corporation. And we oppose this rule and license fee 21 increase. 22 We've got 80 charities in Texas, and they 23 stand to pay $200,000 in increased taxes, and they also 24 oppose this increase. While I understand the Commission 25 staff has a difficult time in managing this recession 25 1 and the cutbacks that it brings with it, the industry 2 does as well, and the industry is suffering. And it 3 simply can't afford a two and a half million dollar tax 4 increase at this time. 5 As Commissioner Krause mentioned at the 6 last meeting, the Texas Legislature could easily solve 7 this problem with increased allocations, but they 8 didn't. They thought that this was not a high enough 9 priority or that now just simply isn't the time. Every 10 agency is Texas is having to cut back. The Lottery 11 Commission should be no different. The Commission was 12 somehow able to operate 10 or 15 years ago without newer 13 pieces and with twice as many licensees. While not 14 suggesting that we go back to the days of paper and 15 pencil, we know that it's very possible to cut back. 16 So in closing, I would implore you to not 17 be one of the only, if not the only agency in Texas, 18 that instead of belt-tightening, increase taxes by two 19 and a half million dollars, to the detriment of Texas 20 charities. 21 Thank you very much. 22 MS. JOSEPH: Thank you, Mr. Bunkley. 23 I believe that's all of the witness 24 affirmation forms that I have. Is there anyone else who 25 I have overlooked who wishes to offer some comment? 26 1 (No response) 2 MS. JOSEPH: All right. We greatly 3 appreciate y'all's taking time to be here. We know you 4 have plenty of things to do. We always appreciate your 5 input. 6 So at this time we'll recess the hearing. 7 It's 10:32. Let's actually adjourn the hearing. 8 (Hearing adjourned at 10:32 a.m.) 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 27 1 C E R T I F I C A T E 2 STATE OF TEXAS ) 3 COUNTY OF TRAVIS ) 4 I, Aloma J. Kennedy, a Certified Shorthand 5 Reporter in and for the State of Texas, do hereby 6 certify that the above-mentioned matter occurred as 7 hereinbefore set out. 8 I FURTHER CERTIFY THAT the proceedings of 9 such were reported by me or under my supervision, later 10 reduced to typewritten form under my supervision and 11 control and that the foregoing pages are a full, true 12 and correct transcription of the original notes. 13 IN WITNESS WHEREOF, I have hereunto set my 14 hand and seal this 18th day of July 2011. 15 16 17 ________________________________ 18 Aloma J. Kennedy Certified Shorthand Reporter 19 CSR No. 494 - Expires 12/31/12 20 Firm Registration No. 276 Kennedy Reporting Service, Inc. 21 8140 North Mo-Pac Expressway Suite II-120 22 Austin, Texas 78759 23 24 25