Mar 22, 2022 Regular Commission Meeting

[00:00:01]

THE FIRST AGENDA ITEM IS THE CALL TO ORDER.

[1. Opening Items]

MOUNTAIN TIME, 1037 IN AUSTIN ON TUESDAY, MARCH 22ND.

WE HAVE A QUORUM.

GOOD MORNING. I'M KEVIN LILLY, CHAIRMAN OF THE TEXAS ALCOHOLIC BEVERAGE COMMISSION.

ON BEHALF OF MY FELLOW COMMISSIONERS, I'D LIKE TO WELCOME EVERYONE TO THE BEAUTIFUL CITY, EL PASO.

THE LAST TIME WE MET, COMMISSIONER MORENO WAS GRACIOUS ENOUGH TO HAVE US AT THE HISTORIC A WONDERFUL CITY OF SAN ANTONIO.

AND WE HAVE NOW KEPT THAT TRADITION BY MOVING TO YET ANOTHER BEAUTIFUL AND HISTORIC CITY OF EL PASO.

AND I'D LIKE TO THANK COMMISSIONER SCOTT ATKINS, WHO IS OUR HOST AND A PROMINENT CITIZEN OF THIS GREAT CITY.

SO THANK YOU, SCOTT.

I APPRECIATE IT. BEFORE WE BEGIN, I WANTED TO SHARE A BIT OF SAD NEWS.

WE AS AN AGENCY, WE OPERATE OFTEN AS A FAMILY AND SOMETIMES IN MANY TIMES WE SPEND MORE TIME TOGETHER THAN WE DO WITH OUR OWN FAMILIES.

AND SO LAST NIGHT, TRAGICALLY, AGENT JOEY DAVIDSON OF LUFKIN PASSED AWAY UNEXPECTEDLY.

AND IT'S OBVIOUSLY DEVASTATING NEWS.

JOEY WAS NOT ONLY A TREMENDOUS EMPLOYEE, BUT HE WAS ALSO AN EXTRAORDINARY PERSON.

I THINK EVERYONE IN THE AGENCY THOUGHT SO HIGHLY OF HIM, AND HE WAS ONE OF THOSE THAT REALLY VIEWED PUBLIC SERVICE MORE THAN JUST A JOB.

HE WAS A PERPETUAL VOLUNTEER SERVING ON VARIOUS CAPACITIES WITHIN OUR ENFORCEMENT DIVISION, ALL VOLUNTARY.

AND FOR A YOUNG MAN TO LEAVE THIS EARTH SO TRAGICALLY AND SO UNEXPECTEDLY IS A MOMENT OF SADNESS FOR ALL OF US.

AND SO WE WISH JOEY'S FAMILY OBVIOUSLY THE BEST IN THIS VERY TRAGIC TIME AND SHARE OUR THOUGHTS AND PRAYERS WITH THEM.

AND I'D JUST LIKE TO PAUSE FOR A MOMENT OF REFLECTION.

THANK YOU. TODAY ALSO IS BITTERSWEET IN OTHER WAYS, BUT BOTH HAPPY AND SAD AS WE'RE GOING TO BE HONORING A PAIR OF FORMER ABC EMPLOYEES WHO HAVE CONTRIBUTED TO OUR AGENCY IN THE STATE AS THEY WILL BE INDUCTED INTO THE ABC HALL OF HONOR. AND THERE'S REALLY NO GREATER PLEASURE IN MY CAPACITY THAN RECOGNIZING TREMENDOUS EMPLOYEES AND SERVANTS OF THE GREAT STATE OF TEXAS AND THEIR LEGENDARY ACHIEVEMENT. AND TODAY, THEY'LL JOIN AN EVER GROWING NUMBER OF HONOREES THAT WILL FOREVER BE ENSHRINED INTO ABC HISTORY.

ALSO, WE'RE GOING TO HONOR A ABC LEGEND, DEPUTY DIRECTOR OF AUDIT AND INVESTIGATIONS, JEAN BOWMAN.

JEAN IS OUR TOM BRADY OF OF THE ABC BECAUSE HE'S RETIRED ONCE BEFORE AND HE SERVED THE AGENCY FROM 71 TO 2003 AND FOR FOUR, FORTUNATELY FOR ALL OF US, AS WELL AS PERHAPS PEOPLE OF TAMPA BAY.

JEAN RETURNED TO WORK IN 2004 AND CONTINUE TO SERVE OUR STATE FOR A 50 YEAR PUBLIC SERVICE CAREER, WHICH IS JUST MIND BOGGLING.

JEAN, WE THANK YOU SO MUCH FOR YOUR LONG YEARS OF SERVICE.

AND THEN FINALLY, OUR OWN GENERAL BENTLEY NETTLES, OUR EXECUTIVE DIRECTOR, WILL RETIRE AT THE END OF APRIL.

WE'LL HAVE I'LL HAVE A MORE FORMAL REFLECTION FOR HIM IN A MOMENT.

BUT I'M JUST REALLY HAPPY AND PROUD TO SAY THAT HE WAS THE FIRST PERSON I HIRED WHEN I CAME ON AS CHAIRMAN IN 2017. ABC WILL NOT BE THE SAME WITHOUT HIM, BUT WE'RE CONFIDENT GOING FORWARD THAT OUR MISSION NEVER STOPS.

THE PEOPLE COME AND GO.

CHANGE IS WHAT WE EXPERIENCE IN LIFE EARTH, DEATH, THE PASSING OF LOVED ONES AND THE RETIREMENT AND CHANGE OF EMPLOYEES. AND SO BUT LIKE ANYTHING ELSE, WE CONTINUE TO MOVE FORWARD TIRELESSLY IN THE MISSION THAT HAS BEEN GIVEN TO US BY THIS GREAT STATE.

AND SO BUT WITH THAT, WE HAVE A LOT TO DO.

BUT I'D LIKE TO TURN IT OVER TO MY COMMISSIONERS, STARTING WITH OUR HOST, SCOTT ADKINS.

WELL, THANK YOU VERY MUCH.

I JUST WANT TO THANK EVERYBODY FOR COMING OUT HERE TO THE CITY OF EL PASO.

THERE'S THERE'S A PERCEPTION OF EL PASO AS A SMALL WEST TEXAS TOWN.

BUT THE REALITY IS WE'RE PART OF A BINATIONAL METROPLEX OF OVER 2 MILLION PEOPLE.

WE ARE AN INTERNATIONAL COMMUNITY THAT FLOWS ACROSS OUR BORDERS WITH $80 BILLION A YEAR OF GOODS AND SERVICES COMING ACROSS THESE BORDERS, CREATING A

[00:05:07]

SO I WANT TO THANK GENERAL NETTLES AND THE CHAIRMAN FOR SUGGESTING THAT WE TAKE THESE MEETINGS ON THE ROAD BECAUSE IT'S BEEN INCREDIBLY IMPACTFUL TO BE MEETING WITH INDUSTRY OUT HERE IN EL PASO AND FOR THEM TO HAVE A CHANCE TO MEET US AT ABC.

I WANT TO THANK HUNT COMPANIES FOR ALLOWING US TO USE OF THIS FACILITY, WHICH WE GREATLY APPRECIATE.

AND AGAIN, EXCITED FOR ALL OF YOU TO SEE THIS CITY AND THE IMPORTANT ROLE THAT ABC PLAYS HERE ON OUR BORDER, PROTECTING TEXAS BUSINESSES AND KEEPING TEXANS SAFE.

THANK YOU ALL. THANK YOU, SIR.

MR. MAYOR, I'VE BEEN JUST IN ALL OF THE CITY, THE CULTURE, IT'S STRANGE.

A LOT OF PEOPLE FROM OTHER STATES, WHEN YOU TELL THEM YOU'RE TAKING A FLIGHT, YOU'RE GOING FROM ANOTHER CITY IN TEXAS TO ANOTHER CITY IN TEXAS.

THEY'RE JUST YOU TAKE A ONE HOUR FLIGHT.

HOW BIG IS YOUR STATE? IT'S A HUGE STATE. AND AS SCOTT JUST MENTIONED, THE ECONOMIC TRADE THAT GOES THROUGH THESE BORDERS HERE IS JUST AMAZING.

THESE NUMBERS ARE JUST STAGGERING.

AND SO IT JUST KIND OF MAKES ME THANK YOU AND SAY WE NEED TO GO AROUND, WE NEED TO KEEP DOING THIS.

WE NEED TO GO TO THE DIFFERENT CITIES.

AND IT DOESN'T NECESSARILY HAVE TO BE A CITY WHERE WE CAN GET AROUND THE ENTIRE STATE AND SEE WHAT GOOD WORK OUR AGENTS ARE DOING.

YOU'VE BEEN A GRACIOUS HOST.

I APPRECIATE YOUR HOSPITALITY.

I WANT TO SEE MORE OF EL PASO.

I WANT TO COME BACK. THIS IS MY FIRST TIME, ANY TIME BACK.

SO I APPRECIATE IT.

AND YOU GUYS HAVE DONE VERY WELL AND REMOTELY.

COMMISSIONER BOATWRIGHT, MORENO, ANY COMMENTS? OPENING COMMENTS BEFORE WE BEGIN? ALL RIGHT.

I THINK I MISSED SOMETHING.

WELL, I WAS GOING TO LET COMMISSIONER MORENO GO FIRST, BUT I'M JUST SORRY I CAN'T BE OUT THERE.

I LOVE EL PASO.

INCREDIBLE PLACE.

AND Y'ALL ARE LUCKY TO BE OUT THERE TODAY.

IF YOU DO COME TO DALLAS, BE CAREFUL.

THIS IS DANGEROUSLY CLOSE TO OKLAHOMA.

JUST. WE'LL PLAN ACCORDINGLY.

ANYWAY. GLAD TO.

GLAD TO BE HERE. BUT WISH IT WEREN'T REMOTELY.

AND I COULDN'T GET MY UNMUTE BUTTON OFF FAST ENOUGH.

SO AGAIN, I'M GLAD THAT WE'RE HERE AND I APPLAUD THE STAFF FOR MOVING THE LOGISTICS AROUND SO QUICKLY SO WE CAN BE MOBILE AS TBC COMMISSIONERS AND AN AGENCY.

WE WANT TO BE OUT IN THE COMMUNITY AND I THINK THESE TYPES OF FORUMS ARE SOMETHING THAT HOPEFULLY WE CAN CONTINUE TO INVEST IN IN THE FUTURE.

THANK YOU, MA'AM. ALL RIGHT.

SO LET'S MOVE TO THE NEXT AGENDA ITEM AND LET'S HONOR OUR GREAT NATION.

PLEASE JOIN ME IN RECITING THE PLEDGE OF ALLEGIANCE.

I PLEDGE ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA AND THE REPUBLIC FOR WHICH IT STANDS ONE NATION, UNDER GOD, INDIVISIBLE, WITH LIBERTY AND JUSTICE FOR ALL.

NEXT AGENDA ITEM IS APPROVAL OF COMMISSION MEETING MINUTES AS OF JANUARY 25TH, 2022.

I SO MOVE IS THERE SET BACK? THANK YOU, SIR. VOTE.

IT.

TWO VOTES CAST IS APPROVED AS WRITTEN.

[2. Recognitions]

TOM BRADY. JEAN BOWMAN, FORMER DIRECTOR OF AUDIT.

DEXTER JONES WILL PRESIDE OVER THE CEREMONY REMOTELY FROM AUSTIN.

WHEN CHAIRMAN LIDDY AND COMMISSIONERS, I TAKE GREAT PRIDE AND PLEASURE.

THAT'S THE SAME TWO TIME RETIRING GENE BOWMAN.

WE RECOGNITION THIS MORNING.

MY NAME IS DEXTER JONES.

I RETIRE FORMER CHIEF AND DIRECTOR OF AUDIT INVESTIGATIONS.

GENE BOWMAN BEGAN HIS CAREER WITH THE AGENCY IN 1971, WITH THE PASSAGE OF LIQUOR BY THE DRINK AS A FIELD AUDITOR STATIONED IN HOUSTON, TEXAS.

HE LATER BECAME THE ASSISTANT DIRECTOR OF HOUSTON AUDITING INDUSTRY.

[00:10:03]

IN 1984, JANE BECAME THE DIRECTOR OF ADMINISTRATIVE SERVICES, WHICH TODAY IS KNOWN AS BUSINESS SERVICES.

RETIRED FROM THE AGENCY IN 2003 AND RETIRED IN 2004 AS AN AUDITOR ASSIGNED TO THE HOMELAND SECURITY DIVISION OF THE AGENCY AND WAS STATIONED IN AUSTIN, WACO AND VICTORIA, TEXAS.

2005, JEANNE BECAME THE REGIONAL COMPLIANCE SUPERVISOR FOR THE AUSTIN REGION.

HE CURRENTLY SERVES AS THE DEPUTY DIRECTOR OF AUDIT INVESTIGATIONS, WHICH ENCOMPASSES OVERSIGHT FOR THE STATE'S FIVE AUDIT REGIONS AND THE MARKETING AND INVESTIGATIONS UNIT.

JANE IS A GRADUATE OF THE UNIVERSITY OF TEXAS AT AUSTIN.

THE BBA DEGREE IN FINANCE AND HOLDS CERTIFICATES IN HUMAN RESOURCE MANAGEMENT AND TELECOMMUNICATIONS FROM THE UNIVERSITY OF TEXAS.

IS ALSO A LICENSED REAL ESTATE BROKER AND CERTIFIED PROFESSIONAL PROPERTY MANAGER.

JEANNE IS MARRIED TO HIS WIFE JEANNIE, AND THEY HAVE ONE DAUGHTER, CANDACE, WHO RESIDES IN CALIFORNIA.

JEANNE ENJOYS ALL TYPES OF SPORTS, AND THROUGH NO FAULT OF HIS OWN, HE WAS AND INDIRECTLY IS STILL ENGAGED IN EQUESTRIAN FAMILY ACTIVITIES.

OVER THE YEARS, JEANNE HAS SERVED ON MULTIPLE COMMITTEES.

BEEN ASSOCIATED WITH THE IMPLEMENTATION OF VARIOUS AGENCY PROJECTS.

SPOKE ON BEHALF OF THE AGENCY AT INDUSTRY, MEDIA, PUBLIC AND CIVIC GROUPS, AND HAS BEEN INSTRUMENTAL IN THE COORDINATION OF THE NEW AUDITORS ACADEMY AND ITS CHAIRMAN LADY HAD INDICATED. JEANNE SERVED THE STATE OF TEXAS FOR 50 YEARS WITH AN OUTSTANDING ACCOMPLISHMENT.

WITHOUT FURTHER ADO, I LIKE THE WAY WE PRESENT JANE WITH A COIN AND SUPPOSEDLY A FEW PICTURES HERE.

I'M JUST GOING TO PRESENT TO YOU, JEANNE, IN RECOGNITION OF 50 PLUS YEARS OF SERVICE TO THE STATE OF TEXAS.

CONGRATULATIONS, MY FRIEND.

THE PLEASURE OF WORKING WITH YOU.

WE ALSO HAVE FORMER DIRECTOR OF AUDITOR CHARLES HARE HERE, RETIRED FROM KBC 1991.

I BELIEVE YOU CAME BACK TO SHOW OUR SUPPORT AS WELL.

SO DON'T WALK IN.

WONDER WHAT YOU'RE GOING TO SAY WHEN YOU'RE IN THIS POSITION.

I'VE SERVED UNDER 12 OF THE 16 ADMINISTRATIONS THAT THE AGENCY'S HAD OVER THE YEARS.

EVERYONE WAS WENT IN A LITTLE DIFFERENT DIRECTION.

THE MOST PART, THEY'RE ALL.

THEY'RE ALL.

REALLY SPEARHEADED MOVING THE AGENCY FORWARD TO WHAT IT IS TODAY.

FORTUNATELY, I STARTED IN 1971.

IT WAS ABOUT 550.

TODAY WE HAVE PROBABLY 600 PLUS.

SO WE RAISED THE HAZARD ROUND WITH THE POPULATION INCREASE.

THE NUMBER OF INDUSTRY PEOPLE THAT ARE OUT THERE, THE NUMBER OF ACCOUNTS ARE SO VOID.

WE'RE KIND OF FALLING BEHIND THE TIME.

BUT WE MADE CHANGES, ESPECIALLY WITH THIS ADMINISTRATION THAT'S CURRENTLY HERE.

WE MOVED MORE INTO A VIRTUAL TYPE OF ENVIRONMENT WHERE WE ACTUALLY ARE OUT THERE WALKING INTO CLUBS ON AND OUT OF OUR RESTAURANTS OR DOING AUDITS ON EVERYTHING AS MUCH AS POSSIBLE IS DONE OVER THE INTERNET.

SO THE FACE OF THE AGENCY IS CHANGED.

WE'VE ADAPTED WITH RESOURCES TO GETTING TO WORK OUT THERE.

SO. ALWAYS SAID TODAY, DO WHAT YOU CAN TO DATE, MAKE THE BEST OF IT, BECAUSE TOMORROW, TODAY IS THE PAST.

I'VE GOT A LOT OF MEMORIES.

50 YEARS. AND FOR THE MOST PART, THEY'RE ALL WISH EACH OF YOU THAT ARE STILL EMPLOYED.

THERE'S QUITE A FEW IN THE AUDIENCE.

THE VERY BEST.

THANK YOU.

THANK YOU AGAIN, GENE.

THE NEXT AGENDA ITEM IS HALL OF HONOR RECOGNITIONS.

DIRECTOR FLETCHER ONE.

COMMISSIONERS FOR.

FOR THE RECORD, I'M AMANDA FLETCHER.

I SERVICE THE DIRECTOR OF HUMAN RESOURCES.

TODAY, I'M PLEASED TO PRESENT YOU WITH OUR NEXT SELECTIONS FOR TAX HALL OF HONOR.

PBC ESTABLISHED THE HALL OF HONOR IN 2020 TO RECOGNIZE OUTSTANDING SERVICE AND LEADERSHIP EXHIBITED BY RETIRED TMC EMPLOYEES DURING THEIR CAREER WITH THE AGENCY.

NEXT SLIDE, PLEASE.

[00:15:03]

THE ELIGIBILITY CRITERIA FOR INDUCTION INTO KBC'S HALL OF HONOR TARGETS EMPLOYEES WHO HAVE RETIRED DIRECTLY FROM TBC AT LEAST THREE YEARS AGO.

THEY MAY BE CIVILIANS OR CERTIFIED PEACE OFFICERS LIVING OR DECEASED, AND HAVE DISTINGUISHED THEMSELVES BY ONE OF THREE CATEGORIES.

FIRST, THEY EPITOMIZE TBC ORGANIZATIONAL VALUES, SUCH AS MODELING OUR CORNERSTONES SERVICE, COURTESY, INTEGRITY AND ACCOUNTABILITY.

SECOND, THEY ARE RECOGNIZED AS BEING A TRAILBLAZER WITH AN EXTRAORDINARY AND EXTRAORDINARY AND POSITIVE IMPACT TO TTC.

OR LASTLY, THEY SERVED AS A CRITICAL CHANGE AGENT, CHANGING THE OUTLOOK AND FOCUSED THE ORGANIZATION OR SHAPING THE ORGANIZATIONAL ENVIRONMENT IN A POSITIVE WAY FOR THE FUTURE.

THE NOMINATION COMMITTEE REVIEWED ALL NOMINATIONS AND MADE RECOMMENDATIONS TO THE EXECUTIVE DIRECTOR WHO MADE FINAL SELECTIONS.

TODAY, I HAVE THE PRIVILEGE OF INTRODUCING THE NEXT TWO INDIVIDUALS SELECTED FOR THE HALL OF HONOR.

NEXT SLIDE, PLEASE.

BUT BEFORE I INTRODUCE THE HONOREES, I WANT TO SHARE INFORMATION AGAIN ABOUT THE NEXT ROUND OF SELECTIONS IN JULY OR COMMUNICATIONS TEAM WILL ANNOUNCE THE ANNUAL CALL FOR NOMINATIONS. INFORMATION WILL BE SENT TO TPS EMPLOYEES AND INDUSTRY MEMBERS USING INDUSTRY AND EMPLOYEE NETWORKS AND TBC SOCIAL MEDIA PLATFORMS. THE DEADLINE FOR CONSIDERATION WILL BE SEPTEMBER 30TH.

ANY INDIVIDUALS NOMINATED BUT NOT SELECTED THIS YEAR WILL REMAIN IN THE POOL FOR CONSIDERATION NEXT YEAR.

PLEASE CONTACT HUMAN RESOURCES BY PHONE OR EMAIL TO SUBMIT NOMINATIONS IF YOU HAVE ANY QUESTIONS.

NOW, I'LL ASK CAPTAIN KELVIN DAVIS TO COME TO THE FRONT SO WE CAN SEE HIM ON CAMERA.

ALL RIGHT. OKAY.

ALL RIGHT. WE ARE HONORED TO HAVE RETIRED CAPTAIN CALVIN DAVIS JOIN US TODAY.

WELCOME, SIR. HE JOINED THE ABC IN 1970.

CAPTAIN DAVIS EMBODIES THE VERY BEST ATC, ITS VALUES MISSION, ITS VALUES AND MISSION, AS HIS NOMINATOR WROTE.

DAVIS'S COLLEAGUES PAINT THE SAME PICTURE OF A PUBLIC SERVANT WITH HONESTY AND INTEGRITY, A PASSION FOR MENTORING HIS COLLEAGUES AND AN ENCYCLOPEDIC KNOWLEDGE OF THE LAW.

AS HE'S KNOWN, HAD A PROFOUND IMPACT ON THE COMMUNITIES HE SERVED, INCLUDING FORT WORTH AND HOUSTON.

WHEN DAVIS WAS PROMOTED TO CAPTAIN, HE TRANSFERRED TO THE HOUSTON OFFICE TO MENTOR COLLEAGUES, SHARE HIS KNOWLEDGE, AND FOSTERED A GOOD RAPPORT WITH INDUSTRY MEMBERS.

AFTER MORE THAN TWO DECADES, TBS CAPTAIN DAVIS RETIRED IN 1993 INTO LAW ENFORCEMENT. RANDY NORRIS HERE IS GOING TO PRESENT YOU WITH OUR CERTIFICATE.

CONGRATULATIONS. THANK YOU FOR EVERYTHING.

THANK YOU. OTHER SPECIAL GUESTS IN ATTENDANCE INCLUDE NAOMI DAVIS, HIS WIFE, KEVIN DAVIS, HIS SON, MONICA DAVIS, DAUGHTER IN LAW, AND OTHER SPECIAL GUESTS, TANYA TRAVIS, FORMER COWORKER, AND KAREN SMITH, AS NOMINATOR.

Y'ALL MAY JOIN CAPTAIN DAVIS FOR PHOTO IF YOU'D LIKE SPECIAL GUESTS.

ALL RIGHT, LOOK THIS WAY, PLEASE.

ONE MORE. THANK YOU.

ALL RIGHT. I WOULD JUST LIKE TO SAY I KNOW SHARON MADE THAT NOMINATION.

I DID IT BECAUSE I WANTED TO TRY TO GIVE MORE INFORMATION TO AGENTS INVOLVED IN MY OFFICE.

SO I STARTED WITHIN 30 MINUTES.

THE SUPERVISOR, 85, IF HE HAD ANY OBJECTIONS TO ME, START GIVING THEM THIS MEETING.

HE SAID, GO FOR IT.

SO WE DID IN 93.

THAT X RAY PROMOTION EXAMS, DALLAS.

VERY, VERY HAPPY. I WENT HOME AND TOLD MY WIFE.

I SAID I'M AS HAPPY AS A NEWBORN BECAUSE THE FOURTH AGENT SCORED VERY, VERY HIGH MONDAY MORNING.

THEREAFTER, I GET A CALL FROM A FRIEND AND HE KNOWS I'VE GOT INFORMATION THAT YOU GAVE YOUR AGENTS TEST TO EXAM PEOPLE TAKING EXAMS. I SAID, THAT'S POSSIBLE.

HE SAID, ARE YOU GIVING IT TO HIM? I SAID, WELL, I'VE BEEN GIVING TEST AND QUITE TIME.

AUSTIN GETS A COPY OF IT, SO THEY'RE AWARE OF WHAT'S GOING ON.

[00:20:02]

AND THEN I HEAR LATER THAT THE SCORES BEGAN TO GET MUCH, MUCH BETTER BECAUSE THE WAS COMING OUT OF.

AND NOT ONLY WAS THAT TEACHING SOME THINGS TO THE AGES, I WAS LEARNING MORE AND MORE MYSELF.

THAT BOOK IS PRETTY HARD TO UNDERSTAND.

WE DID THE BEST WE COULD.

THANK YOU. SO.

ALL RIGHT, COMMISSIONERS, DO YOU HAVE ANY QUESTIONS OR COMMENTS? OKAY. NEXT, I'LL ASK MANAGEMENT TO COME TO THE FRONT FOR THE PRESENTATION OF AWARDS.

SO I'LL JUST HAVE TO. JUST FOR THE.

WENDY DAVIS WAS BORN IN STOCKDALE NEAR SAN ANTONIO IN 1912 MINUTES, JOINED WHAT WAS THEN THE TEXAS LIQUOR CONTROL BOARD IN 1943, PURSUING BOOTLEGGERS AND ILLEGAL ALCOHOL TRANSPORTERS.

FIRST STATION IN DENTON, HE WAS PROMOTED TO DISTRICT SUPERVISOR OF THE WACO DISTRICT AND SERVED AS A GUEST LECTURER ON LIQUOR LAW AT BAYLOR UNIVERSITY.

SINCE THEN, SUPERVISED THE AUSTIN DISTRICT, WHERE HE ALSO WORKED WITH THE TEXAS LEGISLATURE.

HE WORKED IN LONGVIEW BEFORE BEING PROMOTED TO SENIOR DISTRICT SUPERVISOR IN THE HOUSTON DISTRICT, WHERE HE REMAINED UNTIL HIS RETIREMENT IN 1968.

MINTZ WORKED CLOSELY WITH THE HOUSTON POLICE DEPARTMENT AND HARRIS COUNTY SHERIFF'S OFFICE TO CREATE TWO POLICY, TWO POLICE CARS DEDICATED TO LIQUOR LAW VIOLATIONS.

MINTZ WAS NAMED OUTSTANDING TEXAS LAW ENFORCEMENT OFFICER OF THE MONTH BY SOUTHWESTERN LAW MAGAZINE.

WHEN HE RETIRED, HE RECEIVED A LIFETIME HARRIS COUNTY SHERIFF'S BADGE AND CRIMINAL INVESTIGATORS ID.

MR. MANAGEMENT IS ACCEPTING ON BEHALF OF THIS FATHER.

A SPECIAL GUEST IN ATTENDANCE TODAY INCLUDE WOODY MINTZ, DAUGHTER MAXINE MINTZ, DOHERTY AND HER HUSBAND CARL AND JANET SULLIVAN, WIDOW OF FORMER CHIEF OF LAW ENFORCEMENT LARRY SULLIVAN.

YOU MAY NOW JOIN MR. MINTS FOR PHOTO.

ALL RIGHT. AND ONE MORE SAME THING ABOUT THE MOTHER.

WELL, I WAS BORN IN THE AGENCY IN 1944.

DAD HAD ALREADY WENT TO WORK FOR THE AGENCY.

AND SO I WAS RAISED IN.

AND HE RETIRED IN 68.

AND THAT'S WHEN I WENT TO WORK.

AND I STAYED 33 YEARS.

SO EVERY MEAL THAT I ATE IN MY LIFE WAS PAID FOR BY THIS AGENCY.

MY ONLY REGRET IS THAT I WASN'T WITH THE AGENCY BACK WHEN DAD STARTED.

THEY THEY WERE WESTERN.

I MEAN, HE TOLD ME THE STORIES ABOUT SHOOTING THE TIRES OFF THE CARS AND THE BOOTLEGGERS GOING TO OKLAHOMA.

AND IT WAS WILD WEST.

SO BACK TO YOU. AND I KNOW AND I HOPE THAT I GET TO SUBMIT SOMEBODY ELSE, BECAUSE I KNOW EVERY LEGEND THAT THERE WAS WITH THE DEPARTMENT FROM 1940S TO NOW, PEOPLE LIKE SHORTY RUSSELL AND PEOPLE LIKE THAT.

IF WE CAN DIG UP THE INFORMATION THEM, BUT THERE ARE SOME REAL LEGENDS OUT THERE.

AND THANK YOU SO MUCH FOR THIS.

COMMISSIONERS. THIS CONCLUDES MY PRESENTATION.

DO YOU HAVE ANY QUESTIONS OR COMMENTS? I JUST WANT TO I JUST WANT TO THANK EVERYBODY FOR THEIR THEIR CONTINUED SERVICE.

IT'S REALLY AMAZING TO HAVE SUCH LONGEVITY IN A IN AN AGENCY SUCH AS THIS.

AND I, FOR ONE, WOULD LOVE TO CAPTURE SOME OF THOSE STORIES OF THE WILD WEST FROM MR. MINTZ AND OTHERS.

SO WE MIGHT EVEN BE ABLE TO HAVE A COMPILATION OF STORIES KIND OF DATING BACK TO THOSE BOOTLEGGER DAYS.

[00:25:07]

WELL SAID. MAYBE WE GET SOME FOOTAGE OF SHOOTING OUT.

AS COMMISSIONER BOATRIGHT SAID, THEY ALL WANTED TO GO TO OKLAHOMA.

ALL RIGHT, NEXT, NEXT, NEXT.

NEXT IS THE RETIREMENT OF OUR EXECUTIVE DIRECTOR.

THEY SAID TODAY IS A BITTERSWEET DAY FOR FOR THE AGENCY.

ON APRIL 30TH, ADRIENNE BENTLEY NETTLES WILL RETIRE AS EXECUTIVE DIRECTOR OF THE TEXAS ALCOHOLIC BEVERAGE COMMISSION, CONCLUDING A FIVE YEAR TENURE THAT OVERSAW THE TRANSFORMATION OF THIS AGENCY INTO A STRONG, FAIR AND SERVICE ORIENTED REGULATORY THAT THE REGULATORY REGULATIONS OUR INDUSTRY REQUIRED.

WHEN I FIRST CAME ON AS CHAIRMAN IN 2017, WE ONLY HAD TWO COMMISSIONERS, MYSELF AND COMMISSIONER STEEN FROM SAN ANTONIO, AND WE BOTH SAT THROUGH I GUESS WE COULDN'T SIT TOGETHER BECAUSE THAT WOULD HAVE BEEN A QUORUM.

I THINK IT'S HARD NOW, BUT WE SAT THROUGH A NUMBER OF INTERVIEWS AND AS I SAID, MY GOAL AT THE TIME WAS TO FIND A PERSON THAT COULD RECOGNIZE THE UNIQUENESS OF THIS AGENCY AS WHAT I CALL A BIFURCATED AGENCY, BECAUSE WE HAVE TWO MISSIONS, TWO CRITICAL MISSIONS.

ONE IS TO REGULATE, OBVIOUSLY A $40 BILLION INDUSTRY THAT IS A HUGE EMPLOYER PROVIDER OF JOBS AND REVENUE FOR THE STATE WITH COMPLEX LAWS, BUT ALSO THE THIRD LARGEST STATE POLICE FORCE.

AND UNDERSTANDING THE CHANGING NATURE OF THE CRIMES INVOLVING ALCOHOL AND AROUND ALCOHOL AND HOW ORGANIZED CRIMINALS AND CARTEL MEMBERS USE OUR BARS AND RESTAURANTS SOMETIMES AS STOREFRONTS FOR CRIME.

SO THE COMPLEXITY OF NARCOTICS AND HUMAN TRAFFICKING, AS WELL AS THE TRACE PROGRAM AND DWI, VEHICULAR MANSLAUGHTER AND ALL THE THINGS THAT GO ALONG WITH A VERY, VERY, VERY SMALL PORTION OF THIS INDUSTRY, BUT YET COMMIT AND COMMITTED, ARE COMMITTED BY SOME OF THE MOST HEINOUS CRIMINALS IN COUNTRIES.

SO TO TAKE A PERSON TO UNDERSTAND THE DUAL NATURE OF OUR AGENCY WAS A VERY CHALLENGING TASK AND REMAIN SO AS WE LIVE IN A MUCH MORE COMPLICATED.

AND VIOLENT WORLD.

AND SO COMMISSIONER STEIN AND I WERE VERY, VERY PLEASED TO FIND GENERAL.

AND IN FACT, WE GAVE HIM HIS OFFER WHILST DRIVING TO COLLEGE STATION BEFORE WE EVEN HAD A CHANCE TO TELL YOUR WIFE.

SO WE'RE GLAD THAT YOU ACCEPT IT.

AND WE HAVE BEEN VERY, VERY BLESSED TO HAVE HIM.

WE KNEW HE WAS THE RIGHT PERSON FOR THE JOB.

AND OVER THE LAST FIVE YEARS, I THINK GENERAL METALS HAS DONE MUCH TO IMPROVE WHAT I WANT.

I CONSIDER THE CREATION AND PERPETUATION OF A PUBLIC PRIVATE PARTNERSHIP.

WE DON'T WANT TO BE THE HAMMER TO INDUSTRY.

WE WANT TO BE THE GUIDE RAILS.

OCCASIONALLY, IF SOMEONE GOES OFF, WE WANT TO PULL THEM BACK TO CENTER SO THAT THEY CAN CONTINUE TO PRODUCE AND OPERATE.

AND GENERAL NETTLES UNDERSTOOD THAT HE CREATED, ALONG WITH GERALD STAPLES, OUR OUTREACH PROGRAM AND IN FACT, OUR ROUND TABLES THAT WENT ON THROUGHOUT THE COUNTRY SO THAT WE WOULD DISRUPT ST SO THAT WE WOULD GO OUT AND VISIT WITH INDUSTRY LEADERS.

SO IT WASN'T JUST AN AUSTIN CENTRIC AGENCY.

GENERAL NETTLES WAS THE ONE THAT REALLY HELPED IN THAT EFFORT TO SAY WE NEED TO GO OUT TO INDUSTRY MEMBERS.

WE HAVE ONE HERE TODAY AND WE FREQUENTLY HAVE THEM SHOW UP AND THEY'VE BEEN GREAT SOURCES, BOTH GOOD NEWS AND BAD.

WE DON'T JUST WE DON'T FILTER WHAT WE HEAR.

THEY GIVE US THE UNVARNISHED, AS THEY SAY WITH THE BARK ON COMMENTS.

GENERAL NETTLES WAS WILLING TO GO OUT WITH THE KEVLAR ON AND TAKE THE GOOD SHOTS IN THE BAD ON BEHALF OF THIS AGENCY AND OUR 2019 SUNSET PERIOD, WE ALSO INCREASED OUR TECHNOLOGY.

WE CHANGE THE LAW ENFORCEMENT MISSION OR ADDED TO HUMAN TRAFFICKING AS ONE OF OUR PRIMARY, IF NOT OUR PRIMARY LAW ENFORCEMENT MISSIONS.

AND I WOULD ALSO SAY THAT UNDER GENERAL NETTLES TERM, WE WENT THROUGH THE MOST DIFFICULT PERIOD IN THE HISTORY OF THIS AGENCY, PROBABLY SINCE THE HEADY DAYS OF BOOTLEGGERS, AND THAT WAS COVID 19.

I THINK I CAN SAY WITH FAIRNESS AND WITH SOME DEGREE OF ACCURACY THAT OUR INDUSTRY THERE WAS NOT AN INDUSTRY MORE SEVERELY IMPACTED BY THE COVID

[00:30:08]

WE ALL SAW RESTAURANTS AND BARS UNDER SIEGE.

WE SAW GREAT COMPANIES AND LONG STANDING FAMILY OWNED BUSINESSES THAT HAD TO CLOSE THEIR DOORS FOREVER.

AND OFTENTIMES THIS AGENCY BORE THE BRUNT OF THE CRITICISM FOR THAT.

AND YET WE REALIZED THAT WE HAD A JOB TO DO, AND SOMETIMES IT WASN'T POPULAR.

AND WHEN YOU'RE IN THE REGULATORY BUSINESS, WHEN YOU'RE IN THE LAW ENFORCEMENT BUSINESS, YOU CAN'T ALWAYS FIGHT FOR POPULARITY.

BUT YOU HAVE TO DO WHAT YOU HAVE TO DO.

AND SO GENERAL NETTLES NAVIGATED THROUGH THAT VERY, VERY CHALLENGING TIME IN THE HISTORY OF THIS AGENCY.

AND ONE, FRANKLY, I HOPE, SIR, THAT WE DON'T HAVE TO GO THROUGH EVER AGAIN.

AND THE LIST OF HIS ACCOMPLISHMENTS ARE INCREDIBLY LONG.

I THINK PERSONALLY, FOR ME, AS I'VE SAID PUBLICLY, THE GREATEST ACCOMPLISHMENT THE GENERAL NETTLES HAS ACHIEVED NOT HERE, BUT IN SERVICE TO HIS COUNTRY AS A SENIOR OFFICER SERVING IN COMBAT AND BEING WOUNDED IN BATTLE AND LEAVING HIS BLOOD ON A FOREIGN SOIL IS SOMETHING THAT ALL OF US CAN NEVER, NEVER OVERESTIMATE.

WE ALL HAVE TO BE INCREDIBLY GRATEFUL THAT MEN AND WOMEN LIKE YOU ARE WILLING TO CHARGE TO THE TO THE SOUND OF THE GUNS AS THEY SAY, ON BEHALF OF OUR NATION, AND ESPECIALLY AS WE'RE GOING THROUGH A TRAGIC TIME IN EASTERN EUROPE.

WE ARE MINDFUL OF THOSE THAT THAT SERVE IN THAT CAPACITY.

AND AND THEN LASTLY, I WOULD SAY ONE OF THE GREAT ACCOMPLISHMENTS WAS AND WE CAN GO ON ALL DAY, BUT IN 2019, THE PORT OF ENTRY, WHICH WE HAVE YOU, MA'AM HERE REPRESENTING, WAS UNDER SIEGE BY THE STATE IN SOME CASES.

AND THERE WERE THOSE THAT WANTED TO SHUT US DOWN.

AND GENERAL NETTLES IMMEDIATELY FOUGHT FOR FOR RPO AND THE IMPORTANT JOB THAT THEY DO ON THE BORDER.

AND I THINK AT THAT TIME WE DIDN'T REALIZE EVEN HOW IMPORTANT NOW HAVING PRESENCE ON THE BORDER IS SO IMPORTANT.

AND SO WE SPENT A LOT OF TIME, GENERAL, IN THE PINK BUILDING IN THE CAPITOL, LOBBYING ON BEHALF OF OUR PEOPLE IN FRONT OF THE SUNSET COMMISSION.

AND WE WERE ABLE TO SAVE NOT ONLY 150 JOBS, BUT WE WERE ALSO TO WE WERE ABLE TO REALLY ENHANCE THE MISSION OF OUR PERSONNEL WHO BRAVED.

TOUGH HOURS, TOUGH CLIMATES.

THEY'RE OUTSIDE IN 110 DEGREE HEAT, DOING THEIR JOB EVERY DAY.

AND WE'RE SO GRATEFUL.

AND MA'AM, WE'RE SO GRATEFUL THAT YOU'RE HERE TO REPRESENT THE POPE AS WELL.

SO, GENERAL, YOU'VE SAID YOU'VE I KNOW YOU DON'T LIKE TO GET COMPLIMENTS.

I'M HAVING A BLAST UP HERE.

KEEP HIM UNDER SIEGE, AS IT WERE.

BUT, YOU KNOW, I THINK THAT YOU RECOGNIZE AND YOU TOLD ME THAT YOU WERE REALLY A CARETAKER, YOU WERE A CUSTODIAN, AND THAT THE MEN AND WOMEN OF THIS AGENCY ARE REALLY THE LIFEBLOOD. AND THEY DO THE WORK EVERY DAY.

AND SOMETIMES LEADERS GET CREDIT, SOMETIMES LEADERS GET CRITICISM.

AND I KNOW WE'VE ALL BEEN SUBJECT TO BOTH.

BUT I JUST WANT TO SAY THAT I AM PROUD OF YOUR SERVICE TO NOT ONLY OUR NATION, TO OUR STATE, TO THIS AGENCY.

AND I WISH YOU WELL, SIR.

AND I THANK YOU.

AND I WOULD LOVE FOR YOU TO STAND IN ME.

RECOGNIZE.

FOR ME AND WE LOVE THAT ONE IN THE MIDDLE TAKES YOU HAVE GOT SOME ITEMS IN THERE.

YEAH, EXACTLY. SO.

THE OFFICE OF THE GOVERNOR.

GREETINGS TO ADRIENNE BENTLEY NETTLES.

CONGRATULATIONS ON YOUR WELL DESERVED RETIREMENT AFTER FIVE YEARS OF SERVICE TO THE PEOPLE OF TEXAS.

PUBLIC SERVICE IS AN HONOR FOR ITS FOUNDATION, IS IN THE PUBLIC TRUST THAT DAILY STATE EMPLOYEES EARN THIS TRUST DEMONSTRATING DEPENDABILITY, INITIATIVE WISE STEWARDSHIP OF PUBLIC RESOURCES.

THEIR ENDLESS DEDICATION HIGHLIGHTS THAT THIS STATE'S GREATEST ASSET LIES WITH THE PEOPLE WHO CALL IT HOME.

FIRST LADY CECILIA ABBOTT JOINS ME IN SENDING BEST WISHES FOR AN ENJOYABLE AND FULFILLING RETIREMENT.

SINCERELY, GREG ABBOTT AND GOVERNOR.

[00:35:05]

PRESENTED TO ADRIAN BENTLEY NETTLES IN RECOGNITION OF OVER FIVE YEARS OF DEDICATED SERVICE.

UNSELFISHLY, THE TEXAS BEVERAGE COMMISSION ASSIGNED MATTHEW CHAPLIN, DEPUTY EXECUTOR, DIRECTOR.

AND AS.

SINCE I KNOW SHE WAS BUYING COINS OF ALL SIZES.

GENERAL.

OF. FOR.

SERVICE. THANK YOU.

WE HAVE A LITTLE FOR THOSE OF US WHO STARTED SINCE I CAME HERE.

AND THE EMPLOYEES TYPICALLY HAVE A HOLIDAY PARTY.

AND SO THEN WE STARTED THAT IN THE MILITARY TRADITION THAT WE SERVE THE AUDIENCE.

SO I GOT MYSELF AND THE DEPUTY DIRECTORS AND OTHER FOLKS.

WE'VE ACTUALLY SERVED THE EMPLOYEES WHEN THEY CAME TO GO ON.

SO THAT'S GREAT.

THANK YOU. THANK YOU, CHAIRMAN.

COMMISSIONERS, YOU SHOULD NEVER GIVE A ALL YOUR TIME, SO I'LL JUST HAVE A FEW COMMENTS.

SO FIRST OF ALL, I THINK ABOUT WHAT I WAS GOING TO SAY.

ONE OF MY FAVORITE SUPREME COURT JUSTICES IS JUSTICE SANDRA DAY O'CONNOR, WHO WAS SELECTED BY PRESIDENT REAGAN TO BE THE FIRST FEMALE JUSTICE ON THE SUPREME COURT OF THE UNITED STATES. ONE OF HER MANY QUOTES IS THAT WE ACCOMPLISHED NOTHING WORTHWHILE IN THIS WORLD BY OURSELVES.

AND OF COURSE, I'M PARAPHRASING THAT, BUT IT'S A NOTABLE POINT BECAUSE THE THINGS THAT ARE EXPERIENCED IS THE PEOPLE WE WORK WITH ARE ALL INTERWOVEN TO MAKE US WHO WE ARE AND THE DECISIONS THAT WE MAKE.

SO I ALWAYS THOUGHT THAT'S IMPORTANT, ESPECIALLY IN THIS JOB.

AND WHEN I CAME HERE IN 2017, SOME DARK DAYS FOR THE AGENCY, I DON'T KNOW.

TOO MANY PEOPLE WANTED THIS JOB.

QUITE FRANKLY, I'M NOT SURE WHY.

THE CHAIRMAN BUT MY QUESTION SO AND A LOT OF IT WAS ON SUBSTANTIALLY UNDESERVED CRITICISM OF THE AGENCY.

SO THAT'S ONE OF THE FIRST THINGS WE DID WAS TRY TO CHANGE THAT.

THE PART OF THAT I WANT TO THANK THE CHAIRMAN AND THE COMMISSION FOR GIVING ME A FREE HAND TO BE ABLE TO TRANSFORM THIS AGENCY, BECAUSE WITHOUT THAT, WE WOULD NOT HAVE GOTTEN TO WHERE WE ARE.

I'VE WORKED IN A LOT OF ORGANIZATIONS WHERE A LOT OF TEAMS IN COMBAT AROUND THE WORLD, AND IT'S ALWAYS START WITH THE SAME BASIC PREMISE.

YOU HIRE THE RIGHT TEAM, WHICH I HAVE, AND WE HAVE SOME CHAPLAIN VICTOR KIRKENDALL, DENNIS BEALE, AMONGST ALL THE OTHER FOLKS HERE IN THIS ROOM ARE PART OF THE TEAM THAT WE BROUGHT IN OR ELEVATED TO ACHIEVE GREAT THINGS.

AND THEN YOU GIVE THEM YOU SET THE CONDITIONS FOR SUCCESS AND YOU EMPOWER YOUR PEOPLE TO DO THAT AND YOU'LL HAVE THE TRANSFORMATION IN THIS AGENCY.

ALL I DID WAS GIVE YOU THE OPPORTUNITY TO DO IT.

YOU ARE THE ONES WHO DID IT.

SO THANK YOU FOR ALLOWING ME TO TO SERVE.

IT'S REALLY BEEN A HECK OF A RIDE.

I'VE ENJOYED IT. I WISH YOU ALL MISSED A JOB.

BUT A LONG TIME AGO, WHEN I WAS IN BAGHDAD, GOD GIVES YOU GREEN LIGHTS AND RED LIGHTS.

SO WHEN I WAS BLOWN UP, I DECIDED MAYBE THAT WAS A GREEN LIGHT FROM GOD, TELLING ME THAT I NEED TO GET OFF MY REAR AND GET TO WORK AND START DOING THINGS TO HELP HIM.

WHEN HE REACHED THE FIVE YEAR POINT I ARE GETTING CLOSE TO, I TALKED TO MY WIFE AND SHE SAID, WELL.

YOU KNOW, I'VE NEVER BEEN TO AUSTIN, SO WHAT ARE YOU GOING TO DO? AND SO I DECIDED, AND I THINK RIGHTFULLY SO, THAT IT'S TIME FOR AFTER 37 YEARS OF PUBLIC SERVICE, LET SOMEONE ELSE DO THIS.

AND I KNOW THAT THE COMMISSION WILL BE ACTIVELY INVOLVED IN TRYING TO FIND MY REPLACEMENT.

[00:40:06]

I LOOK FORWARD TO SEEING YOU ALL DOWN THE ROAD WHEN I DON'T HAVE TO COME TO THE COMMISSION.

SO THANK YOU.

THANK YOU, COMMISSIONER. MR. CHAIRMAN.

THANK YOU.

ALL RIGHT. IT'S.

[3. Reports]

THE NEXT AGENDA ITEM IS INTERNAL AUDIT UPDATES.

DARLENE BROWN AND LIZ MYERS FROM MCCONNELL JONES LLP ARE JOINING US REMOTELY TO PROVIDE THE UPDATE.

GOOD MORNING, COMMISSIONERS AND CHAIRMEN.

FOR THE RECORD, MY NAME IS DARLENE BROWN, AND I AM A PARTNER WITH MCCONNELL JONES, A CPA FIRM THAT YOUR ORGANIZATION HIRED FOR YOUR INTERNAL AUDIT FUNCTION.

I ALSO HAVE LIZ MYERS JOINING ME ON THE CALL.

SHE'S A DIRECTOR OF IT AUDIT FOR A FIRM.

AND SHE'S GOING TO BE A KEY MEMBER OF YOUR INTERNAL AUDIT FUNCTION.

SHE ASSISTED ME ON CONDUCTING THIS RISK ASSESSMENT AND PREPARING A PROPOSED AUDIT PLAN FOR YOU, AND MOSTLY ON BEHALF OF ALL THE PARTNERS AND STAFF AT OUR FIRM, I WANT TO THANK YOU FOR SELECTING US AND YOUR TRUST.

NEXT SLIDE, PLEASE.

SO TODAY I'M GOING TO PRESENT THE RESULTS OF OUR COMPREHENSIVE RISK ASSESSMENT AND OUR PROPOSED AUDIT PLAN FOR FISCAL YEARS 22 AND FISCAL YEAR 23.

THIS IS A LENGTHY REPORT, AND I'M JUST GOING TO COVER SOME OF THE HIGHLIGHTS FOR YOU.

NEXT SLIDE, PLEASE.

SO IN ORDER TO COMPLETE THE RISK ASSESSMENT, WE IDENTIFIED THE POTENTIAL AUDIT UNIVERSE FIRST BY REVIEWING KEY DOCUMENTS SUCH AS YOUR STRATEGIC PLAN, YOUR LA, YOUR SUNSET COMMISSION REPORT AND YOUR BUDGET.

WE ALSO DEPLOYED AN ELECTRONIC SURVEY TO DIRECTORS AND ABOVE, AND WE CONDUCTED INTERVIEWS WITH THE EXECUTIVE TEAM.

WE COMPILED ALL OF THOSE RESULTS AND THEN WE CAME UP WITH A HEAT MAP AND PROPOSED PLAN.

NEXT SLIDE, PLEASE.

SO AS WE WERE GOING THROUGH THE RISK ASSESSMENT, OUR FOCUS WAS ON HOW DOES THIS DIVISION OR FUNCTION OR PROCESS IMPACT THE AGENCY'S MISSION VISION, OR FOR COURSE, FOUR CORNERSTONES.

EACH ONE WAS RANKED WITH DIFFERENT CONSUMER NEW NUMBER RISKS RATING ON LIKELIHOOD AND IMPACT.

NEXT SLIDE, PLEASE.

SO AS I STATED, WE CONDUCTED INTERVIEWS AND DEPLOYED AN ELECTRONIC SURVEY.

SO EVERYBODY ON THIS ORGANIZATION CHART ON YOUR EXECUTIVE TEAM LEVEL, EITHER EVERYBODY RECEIVED AN ELECTRONIC SURVEY AND THEY SOME OF THEM RECEIVED A VIRTUAL INTERVIEW.

SO EVERYBODY WAS INVOLVED IN THE PROCESS AND WE WERE ABLE TO GET SOME VERY GOOD INSIGHTS AND INPUT.

NEXT SLIDE, PLEASE.

YES. SO BASED UPON THE RESULTS OF OUR RISK ASSESSMENT, THIS IS OUR PROPOSED TWO YEAR AUDIT PLAN.

THIS YEAR, WE PLAN, WE PROPOSE TO CONDUCT AN AUDIT OF THE PORTS OF ENTRIES.

AND THEN NEXT YEAR, WE PROPOSE TO LOOK AT YOUR DATA SECURITY AND ALSO THE LICENSING PROCESSES.

EACH ONE OF THE YEARS, WE WILL ALSO FOLLOW UP ON OPEN AUDIT FINDINGS TO SEE THE STATUS OF IMPLEMENTATION OF ANY KEY RECOMMENDATIONS.

WE'LL ALSO COMPLETE THE ANNUAL AUDIT REPORT, WHICH IS REQUIRED BY THE STATUTE AND STATE AUDITOR'S OFFICE.

AND THESE ARE THE HOURS BY YEAR AND THEN THE THE DOLLAR, THE ESTIMATED FEES, AND THAT'S WITHIN OUR CONTRACTED VALUE.

NEXT SLIDE, PLEASE.

THE FIRST AUDIT THAT WE PLANNED FOR THIS YEAR IS THE PORT OF ENTRY AUDIT AND THIS RATE AT HIGH RISK BECAUSE OF THE HIGH VOLUME OF CASH OR DEBIT CARDS THAT ARE HANDLED AT THE PORTS, THE REMOTE LOCATION.

THEY ARE GETTING READY TO IMPLEMENT A NEW POINT OF SALE SYSTEM THAT'S GOING LIVE AND ALSO THE STAFFING REDUCTIONS AND VACANCIES WE HAVE SO THAT THAT HAS SIGNIFICANT

[00:45:10]

WE'RE GOING TO LOOK AT THE CASH AND CREDIT CARD COLLECTIONS AND HANDLING PROCESSES.

WE'RE GOING TO LOOK AT HOW THE TRANSACTIONS ARE RECORDED IN THE NEW POINT OF SYSTEM.

WE'RE GOING TO LOOK AT SEGREGATION OF DUTIES, SECURITY SYSTEMS OR PROCEDURES THAT ARE IN PLACE.

THE STAFFING, HOW IS IT DETERMINED WHO'S GOING TO WORK, WHERE AND WHEN? AND THEN ALSO COMPLIANCE WITH ANY APPLICABLE STATUTE RULES AND POLICIES.

SO WE ESTIMATE THAT THIS AUDIT IS GOING TO TAKE 181 HOURS.

NEXT SLIDE, PLEASE.

FOR THAT 2023 AUDITS.

THE FIRST THING THAT WE PROPOSE IS DATA SECURITY.

AND WE'RE ALL AWARE CYBER SECURITY IS A HUGE RISK.

AND IN FACT, THE REASON LIZ AND I AREN'T THERE IN PERSON IS WE'RE ACTUALLY AT A DATA RESILIENCE DATA RECOVERY, BUSINESS CONTINUITY AND RESILIENCY CONFERENCE. SO WE'RE LEARNING A LOT MORE OF WHAT'S REALLY GOING ON IN THE WORLD RIGHT NOW.

SO AND ADDITIONALLY, YOU HAVE A LARGE VOLUME OF SENSITIVE DATA THAT YOU'RE HANDLING DAY IN AND DAY OUT.

SO OUR PROPOSED SCOPE ARE WE'RE GOING TO LOOK AT HOW YOUR AGENCY IS PROTECTING THEMSELVES, YOUR NETWORK, YOUR SYSTEMS AGAINST CYBERSECURITY.

WE'RE GOING TO LOOK AT HOW IS DATA DATA HANDLED AND PROCESSED, THE CLASSIFICATION AND THE RETENTION PROCESSES, AND THEN COMPLIANCE WITH APPLICABLE SECTIONS OF TEXAS ADMINISTRATIVE CODE, WHICH IS MORE COMMONLY KNOWN AS TAC 202.

WE ESTIMATE ABOUT 150 HOURS ON THAT AUDIT.

THE NEXT SLIDE, PLEASE.

THE NEXT ORDER THAT WE PROPOSE FOR FISCAL YEAR 23 IS LOOKING AT LICENSING FUNCTION AND THAT RATED HIGH BECAUSE OF THE HIGH VOLUME OF TRANSACTIONS THAT YOU HAVE, THE COMPLIANCE COMPLEXITIES, THE SUNSET RECOMMENDATIONS AND THE FACT THAT YOU'VE RECENTLY IMPLEMENTED A NEW INFORMATION SYSTEM.

WE WILL FOCUS ON THE AIMS IMPLEMENTATION, WHAT HAS GONE RIGHT.

WE'RE MAKING SURE ALL THE DATA IS COMING ACROSS CORRECTLY AND BEING INPUT AND REPORTED OUT CORRECTLY.

WE'RE GOING TO LOOK AT THE STATUS OF THE RECOMMENDATIONS THAT SUNSET MADE WITH REGARDS TO THE LICENSING, AND THEN WE'LL ALSO LOOK AT COMPLIANCE WITH ANY STATUTE, RULES OR POLICIES THAT YOU HAVE.

SO WE ESTIMATE SPENDING 174 HOURS ON THAT AUDIT.

SO IF YOU WOULD SKIP TO MORE SLIDES, PLEASE, AND WE'LL GO TO THE HEAT MAP.

ONE MORE, PLEASE. I MISCOUNTED.

SO THIS IS A HEAT MAP OF WHERE THE RESULTS OF OUR RISK ASSESSMENT ENDED UP FOR EACH OF YOUR DIVISIONS.

SO IN ADDITION TO THE IMPACT, IT ALSO CONSIDERS, WHEN WAS THE LAST TIME THAT AN AUDIT WAS PERFORMED? WHAT'S GOING ON WITH THE IMPLEMENTATIONS OF YOUR NEW SYSTEMS? AND SO WE HAVE RATED PORTS OF ENTRY IS THE HIGHEST, LICENSING IS THE HIGHEST, BUT WE'RE PROPOSING THAT AUDIT FOR NEXT YEAR, THEN PORT OF ENTRY, THE EXECUTIVE DIVISION.

WHENEVER YOU HAVE A TRANSITION IN EXECUTIVE LEADERSHIP THAT CAUSES HIGHER RISK AND THEN YOUR INFORMATION TECHNOLOGY IN THE BUSINESS SERVICES DIVISION, THAT'S WHERE YOUR ACCOUNTING AND FINANCE FALLS IN AND THEN AUDIT, INVEST IN INVESTIGATIONS AND THEN SO ON DOWN THE LINE.

SO NEXT SLIDE, PLEASE.

AND THE NEXT ONE, PLEASE.

SO THROUGHOUT THE RISK ASSESSMENT PROCESS, WE IDENTIFIED 32 KEY FUNCTIONS OR ACTIVITIES WITHIN THE AGENCY.

NOW, I KNOW THERE'S A LOT MORE SUB ACTIVITIES, BUT WHAT WE DID IS THEN WE MAPPED THEM OUT WHO HAS A ROLE OR A HEAD AND ARE THEY A PRIMARY OWNER OF THAT FUNCTION OR A PRIMARY ROLE WITHIN THAT FUNCTION, OR ARE THEY A SUPPORT OR DO THEY JUST TOUCH IT OR GET THE INPUTS OR THE OUTPUTS? SO THAT'S WHAT THE NEXT TWO SLIDES IS, THAT THE REMAINING SLIDES IN YOUR MATERIALS.

THEY LIST OUT THE KEY RESPONSIBILITIES OF EACH DIVISION.

AND ALSO I'VE PROVIDED SOME HIGHLIGHTS OF THE RISK ASSESSMENT SURVEY RESPONSES FOR YOU AND NEVER THIS WILL AND TEMPTATION. TODAY, I'M HAPPY TO ANSWER ANY QUESTIONS YOU MAY HAVE EITHER TODAY OR AS YOU HAVE MORE TIME TO LOOK THROUGH THE MATERIALS.

[00:50:02]

VERY THOROUGH. APPRECIATE.

I LIKE THE VISUAL, THE HEAT MAP.

THAT KIND OF MAKES IT VERY EASY FOR ME TO FOLLOW WHAT'S SENSITIVE OR HIGH RISK, AS YOU SAY, WITH REGARDS TO THE AMOUNT OF TIME THAT YOU ALLOCATED TO EACH OF THE PARTICULAR AUDIT FUNCTIONS.

THAT'S JUST AN ESTIMATE, RIGHT? SO TO THE EXTENT YOU FIND ISSUES THAT WARRANT ADDITIONAL REVIEW, THAT ESTIMATE AND THE PORTION ALLOCATED TO IT CAN BE OPENED UP.

IS THAT CORRECT? THAT IS CORRECT.

SO IF WE FOUND AN AREA THAT WE THOUGHT WOULD REQUIRE SIGNIFICANT ADDITIONAL HOURS, WE WOULD BRING THAT BACK TO YOU FOR A DECISION WHETHER YOU WANTED US TO EXPAND THE SCOPE OF WHY WE'RE PERFORMING OUR AUDIT CURRENTLY OR PLACE IT ON ANOTHER AUDIT YEARS AUDIT PLAN.

AND DEPENDING ON THE NATURE, WE WOULD ALSO MAKE A RECOMMENDATION TO YOU WHETHER IT'S OKAY TO TO WAIT OR WE FELT IT WAS REALLY URGENT.

BUT WE DO OUR BEST TO STAY WITHIN BUDGET AND ON THE RISK ASSESSMENT METHODOLOGY.

IT'S THE FIRST BULLET.

THIS IS PAGE TWO OF THE POWERPOINT.

IT SAYS THAT THE FOLLOWING PROCEDURES AND CONDUCTING THE RISK RISK ASSESSMENT WERE FOLLOWED.

AND YOU REVIEWED OUR STRATEGIC PLAN, OUR FINANCIAL REPORT, OPERATING BUDGET.

AND THEN IT SAYS OUR SUN SETS SELF EVALUATION REPORT.

IS THIS. I GUESS MY QUESTION IS, WHY ARE WE REVIEWING OUR SELF EVALUATION REPORT VERSUS THE ACTUAL SUNSET REPORT RECOMMENDATIONS, OR ARE THEY THE SAME THING? SURE. THAT'S THAT'S A GOOD QUESTION.

WE ACTUALLY REVIEW BOTH BECAUSE THE SELF EVALUATION REPORT TOLD US A LITTLE BIT MORE IN DEPTH ABOUT WHAT EACH ONE OF YOUR DIVISIONS IS RESPONSIBLE FOR IN THEIR ACTIVITIES THAN WHAT THE SUNSET STAFF REPORT WAS.

AND THEN WE LOOKED AT THE FINAL SUNSET REPORT BECAUSE THAT PROVIDED US INSIGHT AS TO WHAT THEIR RECOMMENDATIONS WERE GOING FOR YOUR AGENCY. SO IN THE THE REVIEWS THAT YOU HAVE PLANNED FOR THE NEXT TWO YEARS, I DID NOT SEE IN THIS PRESENTATION THAT SUNSETS RECOMMENDATIONS WOULD BE REVIEWED IN THAT IN THIS REPORT.

IS THAT SOMETHING THAT WE CAN INCORPORATE INTO THE NEXT TWO YEAR REVIEWS? I WOULD RATHER HAVE BEEN THIS IS JUST MY PERSONAL.

OBSERVATION. I THINK IT'S A LITTLE.

THE LEGISLATURE GIVES US THESE SUNSET RECOMMENDATIONS.

AND TO THE EXTENT WE'RE THEN DOING A PLAN THAT'S BASED OFF OF OUR OWN SELF EVALUATION REPORT, I THINK THAT CAN KIND OF GET.

BESIDES WHAT THEY DIRECTED US TO DO AND SO THAT WE DON'T HAVE ANY DEVIATION IN THEIR RECOMMENDATIONS.

I PREFER IF WE COULD AUDIT BASED OFF OF THE DOCUMENT THAT WAS PASSED BY THE LEGISLATURE AND SIGNED BY THE GOVERNOR, I SHOULD SAY THE LEGISLATION. IS THAT A POSSIBILITY? THAT IS CORRECT AND THAT'S WHAT WE HAD PLANNED TO DO.

SO FOR EACH AUDIT THAT WE CONDUCT, WE'RE GOING TO GO BACK TO THE FINAL REPORT, THE ONE THAT WAS APPROVED AND PASSED BY THE LEGISLATURE.

TO LOOK AT THOSE RECOMMENDATIONS THAT WERE MADE AND SEE HOW THEY HAVE BEEN IMPLEMENTED.

AND THEN WE'RE THINKING THAT BETWEEN LICENSING AND THE FOLLOW UP ON ANY OTHER PRIOR AUDIT RECOMMENDATIONS, WE WILL CAPTURE MOST OF THEM. BUT IF THERE'S ANY SPECIFIC ONES THAT YOU FEEL WE'RE NOT CAPTURING, AND I CAN LIST THOSE OUT FOR YOU AND GET THOSE OUT TO YOU BEFORE THE NEXT MEETING, WE CAN ADD THOSE TO THE AUDIT PLAN.

MOST DEFINITELY.

OH, I DO APPRECIATE THAT.

SO LONG AS EACH OF THE RECOMMENDATIONS ARE MADE, A PART OF THE THIS AUDIT THAT'S BEING ADOPTED BY THE BOARD, I DON'T THINK THERE'S ANY MOTION CHANGES TO BE MADE. BUT TO THE EXTENT YOU'RE SAYING THAT IT IS INCORPORATED, I WILL TAKE YOU ON YOUR WORD AND TO SEE THOSE HOW WE'VE IMPLEMENTED THE RECOMMENDATIONS. SO I GUESS I'VE GOT TWO MORE AREAS.

I SAW THAT WE ARE DOING THE LICENSING REVIEW IN 2023 RATHER THAN THE 2022.

IS THERE ANY REASON WHY WE TO ME, THAT ONE IS ONE THAT I KIND OF FEEL LIKE THEY SHOULD BE INVERTED.

THAT ONE IS MORE PRESSING, BUT WE ARE WAITING TO DO THAT ONE A LITTLE BIT FURTHER OUT.

CAN YOU GIVE ME SOME OF THE BACKGROUND ON THE REASONING WHY WE MOVE THAT 1 TO 2023 VERSUS DOING IT IMMEDIATELY? YES, THERE'S TWO REASONS FOR THAT.

THE FIRST ONE BEING CAPACITY OF YOUR STAFF.

THEY ARE STILL DEALING WITH SOME IMPLEMENTATION ISSUES FROM THE AIMS AND TRYING TO SMOOTH THINGS OUT.

[00:55:08]

AND THE SECOND ONE, THE SECOND REASON OR JUSTIFICATION WE FEEL, IS BECAUSE WE WOULD RATHER LOOK AT YOUR PROCESSES WHEN YOU HAVE YOU, MEANING THE STAFF, HAVE DETERMINED WHAT THOSE ARE GOING TO LOOK LIKE FORWARD BASED UPON HOW YOU'RE ADJUSTING FOR THE INFORMATION SYSTEM THAT'S BEING IMPLEMENTED.

BECAUSE IF YOU TAKE A LOOK, IF WE WERE TO AUDIT A PROCESS THAT THE AGENCY KNOWS IS ALREADY GOING TO CHANGE, WE WOULD NOT BE IN A VERY GOOD POSITION TO TELL YOU WHETHER OR NOT THOSE CONTROLS ARE OPERATING EFFECTIVELY.

SO WE FEEL LIKE BY GIVING THEM A FEW MORE MONTHS TO GET GET THINGS CALMED DOWN, THEY'LL HAVE STAFF WILL HAVE ADDITIONAL TIME TO TO DEVOTE TO OUR NEEDS IN ADDITION TO HAVING BEING MORE STABILIZED.

THAT VERY REASONABLE.

THAT MAKES SENSE. OKAY. THANK YOU FOR THAT CLARIFICATION.

SURE. THIS IS MY LAST POINT.

I'M SORRY FOR TAKING SO MUCH TIME.

YOU HAVE IN LICENSING COMPLIANCE WITH STATUTES, RULES AND POLICIES.

AND I KNOW THAT'S NARROWLY TAILORED TO JUST THE LICENSING COMPONENT.

I FIND IT HELPFUL SOMETIMES TO JUST GO OVER THE ENABLING LEGISLATION FOR A STATE AGENCY AND TO DO A HOLISTIC REVIEW OF COMPLIANCE WITH STATUTE RULES AND POLICIES.

GIVEN THAT WE HAVEN'T HAD AN AUDIT, I BELIEVE, SINCE 2018 OR 2019.

CAN'T REMEMBER. WE PASSED ONE YEAR.

WE DIDN'T HAVE A. WE DIDN'T ADOPT AN AUDIT.

YOU MEAN THE ANNUAL AUDIT PLAN FOR 19 AND 2019 AND 20? THAT'S RIGHT. SO WE'VE BEEN REMOVED FROM THIS PROCESS.

AND I DO THINK IT MAY BE HELPFUL FOR US TO JUST DO AS PART OF YOUR ONBOARDING, A REVIEW OF OUR ENABLING LEGISLATION AND STATUTE RULES AND POLICIES AS PART OF THIS ENGAGEMENT.

AND I UNDERSTAND THAT THAT MAY CHANGE THE SCOPE.

I DON'T THINK THERE ARE ANY ISSUES I NEED TO BE WORRIED ABOUT IN THAT REGARD.

THIS MAY INFORM US ON THAT.

BUT IS THAT SOMETHING THAT WE CAN INCLUDE IN THIS EITHER 22 OR 23? ABSOLUTELY. AND THAT'S ANOTHER DOCUMENT THAT WE ALWAYS LOOK TO WHEN WE'RE RESPECTING SCOPING RESPECTIVE AUDITS.

SO WE EVERY SINGLE AUDIT THAT WE DO, WE LOOK AT THE STATUTE TO SAY WHAT SHOULD THAT FUNCTION BE DOING? WHAT SHOULD THAT AGENCY BE DOING AS FAR AS MEETING REQUIREMENTS AND INCORPORATE THAT INTO OUR AUDIT PLAN ALSO.

SO THAT'S WHERE IT COMES IN WITH COMPLIANCE WITH STATUTE.

BUT WE'D BE MORE THAN HAPPY TO TAKE A LOOK AT THE ENABLING ACT IN TOTAL AND SEE IF WE NEED TO REVISE ANY OF OUR PROPOSED AUDITS OR PUT THEM OUT TO LATER YEARS.

I APPRECIATE THAT. SO PRETTY MUCH ALL OF MY HIGHLIGHTS YOU ARE ALREADY COVERING WITH REGARDS TO THE SUNSET SELF EVALUATION, YOU'VE CONFIRMED THAT THAT'S ALSO ALL RECOMMENDATIONS. YOU'RE GOING TO FOLLOW UP ON THE PRIOR AUDIT FINDINGS.

IF YOU DO HAVE TO EXPAND THE SCOPE, WE CAN A LOT MORE DOLLARS TO THAT TO THE EXTENT YOU FIND ANYTHING MATERIAL.

AND THEN I UNDERSTAND THE REASONING ON LICENSING BEING 2023.

AND I GUESS THE ONLY REQUEST THAT I WOULD HAVE AS YOUR CHAIRMAN IS THAT WE LOOK AT BROADENING THE STATUTES, RULES AND POLICIES, NOT JUST FOR LICENSING, BUT JUST TO THE ENABLING LEGISLATION WHICH WILL PICK UP ON LICENSING.

AND ALSO UNDERSTAND THIS, MS..

BROWN AND MS.. MYERS, THAT THE COMMISSIONER MACK AND COMMISSIONER MORENO ARE THEY HAVE ESTABLISHED OUR NEWLY FORMED AUDIT COMMITTEE.

AND SO IF YOU DON'T KNOW THAT ALREADY, THEY ARE THE PERSONS IN CHARGE OF THAT PROCESS FROM A COMMISSION PERSPECTIVE.

YES. SO WE'VE ACTUALLY HAD A VERY NICE MEETING WITH THEM A FEW WEEKS AGO IN PREPARATION OF WHAT THEY LAID OUT FOR US TODAY AND LOOK FORWARD TO LEANING IN IN A DEEPER CONVERSATION AS WE KIND OF GO THROUGH THIS PROCESS.

SO, YES, WE ARE DEFINITELY ENGAGED.

ANY OTHER COMMENTS, COMMISSIONER? MR. MARINO. ANY COMMENTS WITH REGARD TO THE AUDIT? NO. I JUST EARLIER JUST MENTIONED THAT WE'RE WE HAD THE OPPORTUNITY TO PRE VISIT WITH THE AUDIT TEAM, AND I'M JUST REALLY HAPPY THAT WE HAVE A CHANCE TO NOW HAVE THESE WORKING COMMITTEES.

SO WHEN THINGS OF THIS NATURE DO COME TO THE BOARD, IT'S NOT COME TO US.

[01:00:05]

BUT AS KIND OF WORKING TOGETHER ON THE PROCESS, I THINK IS GOING TO MAKE IT A LOT EASIER FOR EVERYBODY.

AND I THINK ALSO THERE'S A MISNOMER ABOUT AUDIT.

PEOPLE SUFFER FROM THE MISAPPREHENSION THAT THEY'RE GOTCHA COMMITTEES, BUT THEY'RE NOT RIGHT.

IRON SHARPENS IRON AND HAVING AN EXTRA SET OF EYES ON ANYTHING, AT LEAST FOR ME, ANYTHING INVOLVING ACCOUNTING OR IS ALWAYS PRODUCTIVE.

SO IT'S NOT INTENDED TO TRAP ANYONE.

IT'S INTENDED INTENDED TO BE MORE THOROUGH.

AND IN FACT, I THINK YOUR POINT IS TO ENHANCE THE STAFF'S OPERATIONS AND AND TRY TO MAKE THIS A MORE SEAMLESS AND EFFICIENT PROCESS.

YEAH. AND THEY'VE ALREADY DONE THAT.

I MEAN, YOU CAN SEE FROM AND I AGREE, IT'S A GREAT REPORT.

IT'S GREAT. AND IT'S VERY ENCOMPASSING OF OUR AGENCY.

WHAT I THOUGHT WERE HOLES ARE NOT HOLES.

THEY ACTUALLY WERE CONTEMPLATED.

AND THAT'S REASSURING AS WELL.

I JUST WANT TO MAKE SURE THAT WE, AS WELL AS THE NEW AUDIT COMMITTEE, ARE HELPING YOU IN THIS NEW AUDIT AND THIS NEW PLAN.

AND I APPRECIATE THE TIME THAT YOU GUYS HAVE ALREADY GIVEN US TO KIND OF GUIDE US AS IT RELATES TO HOW WE GOING TO MOVE FORWARD WITH THIS AUDIT.

SO I APPRECIATE IT.

AND OPENING THAT STATUTES, RULES AND POLICIES, I THINK, AS CHAIRMAN SAID, IRON SHARPENS IRON.

IT'S A HEALTHY THING TO DO EVERY SO OFTEN TO MAKE SURE THAT WE LOOK AT OUR ENABLING LEGISLATION AS A WHOLE, AS DURING COVID AND ALL KINDS OF OTHER THINGS THAT GO DOWN. WE KIND OF HAVE TO BE MALLEABLE AND WE CHANGE OUR PROCEDURES AND PROCESSES.

AND I THINK GOING BACK TO YOUR ENABLING LEGISLATION TO DO ANOTHER REVIEW IS ALWAYS A GOOD THING FOR US.

SO I APPRECIATE YOU OPENING THAT UP AND LOOK FORWARD TO WORKING WITH YOU IN THIS AUDIT.

THANK YOU. ANY OTHER COMMENTS? LADIES, THANK YOU FOR YOUR TIME.

THANKS FOR YOUR EFFORT. THANK YOU.

IT'S AN EXEMPLARY FASHION, ALTHOUGH IT'S NOT.

SO THIS IS A PRELIMINARY REPORT.

YOU HAVE TO YOU HAVE TO APPROVE THE AUDIT PLAN AS PROPOSED OR MAKE CHANGES TO IT SO SHE CAN FILE IT WITH THE STATE AUDITOR.

SO YOU DO HAVE TO VOTE ON THE SIDE.

SO THE PLAN IS YOU PRESENTED TO AUDIT THE POA IN YEAR ONE AND TO AUDIT THE SECURITY SYSTEMS AND LICENSING IN YEAR TWO.

SO WE CAN WE CAN WE GET SOME LANGUAGE TO THAT? SURE. AND TO THE EXTENT WE JUST MAKE THAT ONE, I MEAN, AS PROPOSED, IT'S GREAT WITH THAT OPENING ON THE ENABLING LEGISLATION IF POSSIBLE.

FOR A MOTION. WE'RE LOOKING FOR A MOTION TO ADOPT.

HOW ABOUT YOU? CAN YOU.

CAN YOU. CAN YOU GO AHEAD AND MOVE IT? I MOVE THAT WE ADOPT THE AUDIT PLAN AS PROPOSED WITH THE AMENDMENT TO DO A REVIEW OF THE ENABLING LEGISLATION TO CONFIRM COMPLIANCE WITH TBC STATUTES, RULES AND POLICIES.

SECOND. SECOND.

NEED APPROVAL TO DO A VERBAL VOTE.

ALL IN FAVOR. I MOTION CARRIES.

THANK YOU. THANKS FOR THAT CLARIFICATION.

RIGHT. NEXT AGENDA ITEM IS TASK FORCE REPORT ON GRADUATED FEES FOR IN-STATE MANUFACTURERS DIRECTOR MORE LIKELY.

SLIDES. KETCHUP. THERE WE GO.

GREAT. SO WHEN THE COMMISSION SAID LICENSE AND PERMIT FEES IN AUGUST TO BE EFFECTIVE SEPTEMBER 1ST, 2021, THE COMMISSION DIRECTED A TASK FORCE TO EVALUATE CERTAIN CRITERIA BY THE END OF MARCH AND THE CRITERIA IN THE SLIDE.

BUT THE QUESTIONS WERE, CAN THE AGENCY ESTABLISH A SEPARATE FEE BASED ON THE SIZE OF AN APPLICANT'S BUSINESS? IF SO, WHAT WOULD BE THE DEFINITION OF A SMALL MANUFACTURER? WHAT SHOULD THE FEES BE FOR SMALL MANUFACTURERS? AND HOW WILL THE AGENCY DETERMINE IF A SMALL MANUFACTURER IS IN COMPLIANCE? AND HOW WOULD THE FEE STRUCTURE IMPACT AMES? AND SO THE FIRST THING WE DID IS MAKE SURE THAT WE DO HAVE THE LEGAL AUTHORITY AND WE DO.

THERE'S NOTHING IN THE CODE THAT PROHIBITS SUCH A FEE STRUCTURE.

NEXT SLIDE. SO THIS SLIDE OUTLINES SORT OF THE WORK OF THE TASK FORCE AND THE REPORT.

THERE ARE TWO SEPARATE REPORTS, BUT THIS IS A PRESENTATION OF THOSE REPORTS AND IT CONSIDERS THESE.

[01:05:07]

JUST SOMETHING TO WORK FROM.

SO A QUICK REVIEW.

TASK FORCE WAS SIMILAR TO OCTOBER.

IT WAS MADE UP OF STRATEGIC INITIATIVES AND PERFORMANCE IMPROVEMENT.

CIP 41.

AND THE RULES ATTORNEY SAY AN IMPORTANT AND THEN REPRESENTATIVES FROM IT'D TAX AND MARKETING PRACTICES LICENSING AND AUDIT.

AND THE ASSUMPTION OF THE TASK FORCE AT THE TIME BASED ON COMMENTS MADE DURING THAT AUGUST COMMISSION MEETING WERE TO FOCUS ON IN-STATE MANUFACTURERS.

AND SO THAT'S THAT'S WHAT WE PURSUED.

SO WE'RE TALKING ABOUT BREWERS FROM ALL BEVERAGES, WINERIES FOR WINE DISTILLERIES.

AND THEN WE ALSO INCLUDED BREWPUBS.

THEY ALSO MANUFACTURE MALT BEVERAGES.

THEY ARE A SUBORDINATE.

IT'S A SUBORDINATE PERMIT TO A RETAIL PERMIT, BUT THEY ARE STILL A MANUFACTURER.

SO WE INCLUDED THEM.

AND THAT LED US TO THE DATA.

AND THAT'S WHAT WE SPENT TIME ON IN THE FALL.

SO WE HAD FIGURED OUT HOW IT'S GOING TO WORK.

AND THEN WE DETERMINED A FEE SCENARIO FROM WHICH, I MEAN, I'M GOING TO TALK ABOUT ALL THIS, BUT THE ORIGINAL QUESTION WAS A SMALL MANUFACTURER.

WHAT YOU'LL SEE IS THAT WE CAME UP WITH SMALL, MEDIUM AND LARGE MANUFACTURER, BUT IT CAN BE DONE MULTIPLE WAYS.

SO NEXT SLIDE, TALK ABOUT THE DATA.

SO WE USED EXCISE TAX REPORTS.

SO THESE ARE SUBMITTED PRIMARILY MONTHLY BY THE WINERIES, DISTILLERIES AND BREWERS THAT I MENTIONED AND BREWPUBS.

THE DATA THAT WE USED COVERS CALENDAR YEAR 2018 AND 2019 2020 WE DIDN'T THINK WAS A REPRESENTATIVE YEAR.

AND THEN SINCE WE'RE DOING THIS IN THE FALL OF 2021, THAT DATA WOULDN'T BE AVAILABLE UNTIL JANUARY 2022.

SO WE STUCK WITH 2018 AND 2019, FELT LIKE THAT WAS A GOOD SOURCE JUST FOR THE PURPOSE OF FILLING THIS REPORT.

AND SO THE EXCISE TAX REPORTS PROVIDE DATA ON TWO THINGS OR MULTIPLE THINGS.

BUT WHAT WE FOCUSED ON WAS BOTTLED AND PURCHASED.

BOTTLED IS JUST WHAT YOU THINK IT IS.

IT'S THE NUMBER OF GALLONS THE PERMIT PRODUCES AND BOTTLES FOR CONSUMPTION PURCHASE ONLY APPLIES TO WINERIES AND BREWERIES.

AND IT'S THE NUMBER OF GALLONS PURCHASED RECEIVED FROM ANOTHER PERMITTED USE BY THAT COMMITTEE.

TO THEN BOTTLE AND PROVIDE TO CONSUMERS.

SO AGAIN, IT'S ONLY WINERIES AND BREWERIES THAT THAT APPLIES TO.

AND I CAN GO INTO ALL THE FUN DETAILS ON THAT ONE.

BUT THE TASK FORCE THOUGHT THAT THE DATA THAT BEST REPRESENTS ANNUAL PRODUCTION OF A PERMIT T IS THIS DATA.

SO HOW MUCH THEY PRODUCE BOTTLE AND MAKE AVAILABLE TO CONSUMERS.

SO I'M GOING TO USE PRODUCTION NUMBERS.

WHAT I'M REFERRING TO IS THAT BOTTLE TO PRODUCE.

I JUST TALKED ABOUT. SO THEN WE HAD TO FIGURE OUT HOW ARE WE GOING TO BREAK DOWN THE DATA TO DETERMINE WHAT'S A SMALL MANUFACTURER? AND NEXT SLIDE, PLEASE.

SO LOTS OF NUMBERS.

SO I'M GOING TO BREAK IT DOWN.

BUT WE HAD TO DETERMINE SORT OF THE RANGES OR THE GRADES, AS I REFER TO THEM.

SO IT WORKED OUT THAT THE SAME RANGES OF DATA OR THE GRADES APPLY TO WINERIES AND BREWPUBS AND THE SAME APPLY TO BREWERS AND DISTILLERS, WHICH WILL BE THE NEXT SLIDE. SO IN GRAY ARE THE THREE COLUMNS REPRESENTING THE DIFFERENT RANGES OF PRODUCTION, THE GRADES.

SO LESS THAN 10,000 WOULD BE A SMALL PRODUCER.

AT 10,000 100,000, MEDIUM 100,000 PLUS WOULD BE A LARGE.

THE FIRST ROW REPRESENTS A NUMBER OF PROPERTIES THAT FALL INTO EACH GRADE.

SO FOR ALL FOR BREWERY, WINERY, DISTILLERY AND BREWPUB, THE MAJORITY OF PERMITTEES FALL INTO THAT SMALL RANGE.

AND THEN THE NEXT TWO ROWS SHOW SORT OF THE HIGHS AND LOWS OF EACH GRADE IN TERMS OF PRODUCTION VOLUME.

AND WE HAD TO GO THROUGH THIS STAGE TO GET TO THE DOLLARS.

SO AND IT'S UP TO THE COMMISSION.

Y'ALL CAN DO IT.

SO MANY DIFFERENT WAYS. IT CAN BE SMALL, MEDIUM, LARGE.

YOU CAN BREAK IT INTO A SMALL, LARGE.

YOU CAN DO IT IN FIVE GRADES.

THERE'S A LOT OF DIFFERENT WAYS TO DO IT.

THIS MADE THE MOST SENSE TO THE TASK FORCE BASED ON THE NUMBERS THAT WERE PRESENTED TO US.

AND THE TOUGH PART, NO MATTER WHAT NUMBERS YOU'RE LOOKING AT, IS WHERE DO YOU CUT IT OFF? SO IF YOU DO JUST SMALL AND LARGE, YOU CUT IT OFF AT THE 10,000 MARK OR THE 100,000 MARK.

THOSE ARE THE DECISIONS OF THE COMMISSION IF YOU CHOOSE TO GO THAT ROUTE.

THE NEXT SLIDE, PLEASE. SO LOOKING AT BREWERS AND DISTILLERS, THE SAME SETUP, DIFFERENT NUMBERS.

[01:10:04]

SO AGAIN, IT COMES DOWN TO WHERE DO YOU WHERE DO YOU CUT IT OFF? AND GETTING INTO THE NITTY GRITTY, THERE'S SIGNIFICANT DISPARITY BETWEEN THE GRADES.

SO IF YOU LOOK AT THE DISTILLERS, THE LARGEST SMALL DISTILLER PRODUCES 42,000 GALLONS.

THE NEXT HIGHEST PRODUCTION AMOUNT IS UNDER 38,000.

AND YOU LOOK, AGAIN, I MEAN, THAT'S A PRETTY BIG JUMP.

BUT IF YOU LOOK AT THE LARGEST IN THE MIDDLE, SECTION 738,000.

THE NEXT HIGH STEP IS 1.8 MILLION.

THERE'S SOME BIG JUMPS.

THAT'S WHY WE THOUGHT BREAKING INTO THREE PARTS, PROBABLY THE MOST SENSIBLE TO US.

NEXT SLIDE, PLEASE.

SO AGAIN, REGARDLESS WHETHER IT'S TWO GRADES, THREE, 22, WHATEVER IT IS, WE HAD TO FIGURE OUT HOW WE'RE GOING TO MAKE IT WORK.

AND SO THIS IS WHAT WE CAME UP WITH, IS THAT FOR AN EXISTING MANUFACTURER, THOSE THAT ARE ALREADY IN BUSINESS, WE WHEN THEY GO TO AMES TO REDO THAT, WE LOOK AT THEIR EXCISE TAX REPORTS AND OTHER INFORMATION AND WE LOOK AT THEIR MONTHLY PRODUCTION AVERAGE FOR THE LAST 24 MONTHS.

SO FOR THE PAST TWO YEARS, AND DEPENDING ON WHERE THEY FALL ON THE RANGE, THAT WOULD DETERMINE THE FEE THAT THEY WOULD PAY.

AND THEN FOR SOMEONE THAT IS NOT IN THE BUSINESS YET, PRESENTING AN ORIGINAL APPLICATION COULD GO ABOUT IT TWO WAYS.

YOU COULD SAY EVERY ORIGINAL APPLICATION PAYS THE LOWEST FEE OR THE HIGHEST.

THE OTHER APPROACH WOULD BE SIMILAR TO WHAT SOMEONE DOES IF THEY'RE APPLYING FOR A FOOD AND BEVERAGE CERTIFICATE.

THEY THEY ESTIMATE WHAT THEY ARE GOING TO IN THIS CASE, WHAT THEY WOULD PRODUCE.

SO THEY EXPECT TO PRODUCE WITHIN THAT WHEREVER THEY FALL WITHIN THAT RANGE, THAT'S WHAT THEY WOULD PAY.

SO THAT AGAIN, WOULD BE UP TO THE COMMISSION, WOULD BE PUT IN RULE.

SO REGARDLESS OF THE NUMBER OF GRADES OR THE DOLLAR AMOUNT, THE CATEGORY THE MANUFACTURER FALLS INTO WOULD BE DETERMINED ON SELF REPORTED PRODUCTION NUMBERS. WHICH THEY PROVIDE THROUGH THEIR EXCISE TAX REPORTS.

SO THEY REPORT THE WRONG NUMBERS.

THEY WOULD BE PUT IN THE WRONG CATEGORY.

THE ONLY WAY TO CHECK ON THAT TO ENSURE COMPLIANCE IS THROUGH AUDIT.

AUDIT HAS ALWAYS DONE EXCISE TAX REPORTS BEGINNING THIS FISCAL YEAR AND 2022.

THEY'VE ENHANCED THAT, SO THEY INCREASE THEIR FOCUS ON EXCISE TAX AUDITS.

SO THAT'S THE WAY THAT WE WOULD SURE ENSURE COMPLIANCE TO MAKE SURE THAT PEOPLE ARE PAYING THE APPROPRIATE AMOUNT BASED ON THEIR PRODUCTION.

SO BASED ON ACTIONS OF THE COMMISSION IN AUGUST, WHEN YOU SET THESE DETERMINED THAT IF YOU DID, GRADUATE FEES PROBABLY DON'T WANT TO INCREASE FEES.

SO IF ANYTHING, THE THE DOLLAR AMOUNT YOU SET FOR THE WINERIES, DISTILLERIES AND BREWERIES, YOU SAID THAT AT 3000.

SO USING THE SMALL, MEDIUM AND LARGE SCENARIO, 3000 WOULD BE FOR THE LARGE PRODUCER.

SO ANYTHING A MEDIUM PRODUCER WOULD BE LESS.

A SMALL PRODUCER WOULD PAY LESS, SO NOT GO ANY HIGHER THAN THE FEE CURRENTLY SET BY THE COMMISSION TODAY.

NEXT. SO BASED ON THAT FEE, LET'S ROLL RIGHT NOW AT 3004 BREWERY WINERY DISTILLERY, WE DECIDED WE'RE GOING TO CUT IT BY 33%.

SO WHEN YOU DO THAT, YOU GET IN 2002 THOUSAND FOR A MEDIUM PRODUCER THAT CUT IT ANOTHER 33%.

YOU HAVE 1000 FOR A SMALL PRODUCER OF WINE OR DISTILLED SPIRITS.

SO SAME THING FOR THE BREWPUBS.

YOU SAID THAT FOR RIGHT NOW AND RULE AT 100.

SO 1100 TO 700 SMALL PRODUCER, 500.

SO ANY PERCENTAGE COULD BE USED.

WE WENT WITH 33%.

SO THAT WAS A GOOD AMOUNT.

BUT JUST LIKE WE DID IN AUGUST WHEN WE STARTED PLAYING WITH THE PERCENTAGES THAT WOULD BE FOR THE COMMISSION, WE'RE ABLE TO.

I'M ALWAYS HAPPY WITH MY EXCEL FILE TO JUST DO WHATEVER YOU ALL WANT ME TO DO, AND THEN THE CHART JUST SO THAT YOU REALIZE THAT THE CHART SHOWS THE NUMBER OF THE SMALL, MEDIUM AND LARGE MANUFACTURERS ASSOCIATED WITH EACH PERMIT TYPE.

IF YOU LOOK AT ALL THAT AND ANALYZE IT FOR A LITTLE WHILE, WHAT YOU'LL SEE IS THAT ULTIMATELY, IF THESE WERE ADOPTED AS PRESENTED AND NOTHING ELSE CHANGED.

80% OF IN-STATE MANUFACTURERS PAY THE LOWEST FEE.

LESS THAN 5% WILL PAY THE HIGHEST FEE.

[01:15:08]

IF THE GRADUATED FEES THAT I PRESENTED HERE.

SO IN THIS SCENARIO WERE ADOPTED FOR THE FOUR PERMIT TYPES AND EVERYTHING ELSE STAYED THE SAME.

MAXIMUM REVENUE EXPECTED TO BE GENERATED OVER THAT TWO YEAR PERIOD, THE 158 MILLION, IT'S ONLY A $2 MILLION DIFFERENCE.

WHICH REPRESENTS ABOUT 1% OF OVERALL REVENUE.

AND THE REASON WHY IS BECAUSE IN-STATE MANUFACTURERS REPRESENT LESS THAN 2% OF ALL PERMIT HOLDERS.

LET'S JUST.

SO THE OTHER THING IS HOW IS THIS GOING TO IMPACT AIMS AND COST? SO TO ACCOMMODATE THE GRADUATED FEES AND TO WHAT IS NOW A 1 TO 1 CORRELATION BETWEEN A LICENSE TYPE AND A FEE.

SO RIGHT NOW OVER PAYS ONE AMOUNT, EVERYTHING IS 1 TO 1 RATIO.

WE WOULD HAVE TO RE-ENGINEER AIMS FOR THE END STATE MANUFACTURERS.

AND I'M GOING TO READ THIS BECAUSE I DON'T WANT TO MESS THIS UP.

FROM A HIGH LEVEL, THIS RE-ENGINEERING WOULD HAVE TO INCLUDE A TIE IN BETWEEN THE LICENSING AND EXCISE TAX MODULES FOR PRODUCTION AMOUNTS FOR EXISTING LICENSES TO BE TAKEN INTO ACCOUNT, DETERMINE WHICH FEE APPLIES FOR A RENEWAL APPLICATION.

IT ALSO HAS TO BE RE-ENGINEERED FOR ORIGINAL APPLICANTS.

AGAIN, UP TO ALL, WHETHER IT'S A FLAT FEE OR IF IT'S BASED ON THEIR PROJECTIONS.

WE DID NOT PROVIDE DETAILS TO THE VENDOR TO GET AN ESTIMATE YET, BUT BASED ON SORT OF IN-HOUSE EXPERIENCE, THE ESTIMATION IS ABOUT 250,000.

AND THEN ADDITION TO THIS DEVELOPMENT COST, WE ANTICIPATE AN INCREASE IN SUBSCRIPTION RATES ONCE A NEW FUNCTIONALITY IS IN PLACE.

NAMES. AND THEN IN RESPONSE TO A QUERY THAT SEATTLE MOSLEY GOT IN OCTOBER, SHE SAID THAT THE AGENCY WOULD NOT MAKE AN EXCEPTIONAL ITEM REQUEST FRAMES IN THE COMING BIENNIUM, AND THE CURRENT FUNDING FOR PHASE TWO OF AIMS COVERS THREE PART FUNCTIONALITY NECESSARY TO COMPLETE AIMS. THEREFORE, WORK COULD NOT BEGIN UNTIL THE EARLIEST.

SEPTEMBER 2023.

SO SEPTEMBER NEXT YEAR AND THEN ONLY IF THE FUNDING IS ATTRIBUTED TO THE PROJECT FROM THE TEAM'S MAINTENANCE AND SUPPORT FUNDING OR TBC OPERATIONAL FUNDS.

EXCELLENT. SO JUST A FEW CONSIDERATIONS FOR THE COMMISSION GOING FORWARD.

SO PHASE TWO OF AIMS IS ALREADY IN FLIGHT AND WE HAVE TO COMPLETE IT THIS BIENNIUM IN ORDER TO ENSURE ALL DEPENDENCIES ON LEGACY SYSTEMS ARE PROPERLY REPLACED AND COST FOR THE AGENCY.

LEGACY SYSTEMS ARE GONE BY AUGUST 31ST, 2023.

KEEP USING THESE SYSTEMS WOULD BE HAVE A NEGATIVE IMPACT TO INDUSTRY AND STAFF WORK TO THE BEST ESTIMATE FOR ROLLOUT IS NO LATER THAN AUGUST 31ST, 2025.

AND IT FUNDED WOULD START AFTER SEPTEMBER 1ST, 2023.

AND IDEALLY WOULD HAVE TO MAKE SOME DECISIONS IN THE NEXT COUPLE OF MONTHS IN ORDER FOR US TO START WORKING ON THE EXCEPTIONAL ITEM REQUEST TO GO INTO THE LA, WHICH IS THE END OF SUMMER. AND THEN THE EFFORT TO DEVELOP, TEST AND IMPLEMENT THE GRADUATED FEES.

WE HAVE TO WORK INTO A NEW PHASE THREE PLAN FOR AMES.

AND WHEN SETTING FEES.

THE CODE DIRECTS THE COMMISSION TO CONSIDER RELEVANT INFORMATION, INCLUDING THE LEVEL OF REGULATORY ACTIVITY FOR COMMITTEES FOR PERMIT TYPES.

AND SURE, NO BUSINESS SECTOR IS OVERLY PENALIZED AND OTHER GUIDANCE FEES THAT WE RECOMMENDED IN JULY, AND THEY ALL ADOPTED AN AUGUST.

WE'RE BASED AT ITS FOUNDATION ON A REGULATORY EFFORT TO ENFORCE THE LAW AND TO ENSURE COMPLIANCE AND OTHER FACTORS.

GRADUATED FEES WOULD BE BASED ON A DIFFERENT SET OF CRITERIA.

SO JUST SOMETHING TO CONSIDER.

ONE WOULD BE BASED ON PRODUCTION.

THE OTHER WOULD BE BASED UPON THOSE OTHER FACTORS THAT I JUST MENTIONED.

AND THEN THERE'S A QUESTION OF WHAT IS A MANUFACTURER? WE CHOSE TO GO WITH THE IN-STATE MANUFACTURERS, DISTILLERS, WINERIES, BREWERIES AND BREWPUBS.

BUT THERE ARE OUT-OF-STATE MANUFACTURERS AS WELL, OR OUT-OF-STATE DIRECT SHIPPERS, DIFFERENT PRIVILEGES ASSOCIATED WITH THEM.

YOU COULD ALSO IS A BREWPUB CONSIDERED A MANUFACTURER.

BUT THEY ARE IT IS A SUBORDINATE PERMIT.

[01:20:01]

SO A LOT TO CONSIDER.

AND THEN, OF COURSE, THE QUESTION IS GOING TO BE WHY ONLY MANUFACTURERS OR A GRADUATED FEE? AND I WANT TO POINT OUT THAT, FIRST OF ALL, IS A DIFFERENT TASK FORCE.

SAME THING CAME UP IN 2019, RIGHT AFTER SESSION WHEN WE STARTED WORKING ON A LICENSE AND PERMIT FEES.

WE ASKED THAT SAME QUESTION LIKE, DID WE DO GRADUATED? SO ONE THING IS THAT UNLIKE THE TAX REPORTS THAT ARE SUBMITTED MONTHLY BY THE MANUFACTURERS, RETAILERS DON'T SUBMIT REGULAR REPORTS TO TBC. SO WE HAVE NO IDEA ABOUT THEIR REVENUE, THEIR TAXES OR SALES.

SO WE COULD NOT FIND A WAY TO MEASURE THE RETAIL SHARE.

SO JUST AGAIN, SOMETHING TO KEEP IN MIND AND.

NEXT SLIDE. WOW.

ANY QUESTIONS ON THAT? OKAY.

SO WE IF YOU HAVE 1.9 MILLION IN A REVENUE SHORTFALL, PLUS AN ADDITIONAL 250,000 TO IMPLEMENT THE CHANGE, THAT'S 2 MILLION AND CHANGE 2,150,000.

WHERE DOES THAT COME FROM? WHERE DOES THAT MEAN WE'RE LOSING IT? IT'S A REVENUE LOSS.

SO IS THAT TO TO KEEP THIS NEUTRAL? I GUESS YOU CAN. IT WOULD JUST BE LESS MONEY GOING TO GENERAL REVENUE.

IT'S ALSO LIKE THIS WHERE ALL OF OUR MONEY GOES, WE DON'T GET TO KEEP.

SO. QUESTION.

SO THE DECISION TO NOT DO THIS, I UNDERSTAND YOUR RECOMMENDATION ON DECREASING THE SMALLER TREATING.

ONE OF THE TINY BREWPUBS A MAJOR BREWERY IS THE SAME.

I CAN UNDERSTAND THE LOGIC BEHIND THAT, BUT WHY NOT INCREASE ON THE LARGER END? AGAIN, WE JUST PRESENTED SOME OF THESE.

I MEAN, IT'S NOTHING.

THAT'S THE FEE THAT YOU'LL SET IN AUGUST.

SO THAT'S JUST THE BASIS THAT WE WENT FROM.

JUST BASED ON SORT OF THE CLIMATE IN AUGUST, WE ASSUME THAT YOU DIDN'T WANT TO INCREASE.

OH, YOU KNOW, I'M NOT RECOMMENDING THAT WE ARE.

I JUST IT WAS THAT SEEMED LIKE A SORT OF A IMAGINAL LINE, WHICH I KNOW WE DON'T WANT TO INCREASE FEES, AND THAT'S NOT OUR INTENT.

IT'S JUST A QUESTION.

NOT A RECOMMENDATION.

WELL, IT'S GOING TO HAVE A SMALL IMPACT, WHICH IS 5% IN THAT CATEGORY.

RIGHT. YEAH.

SO IT WOULD HAVE TO BE AN ENORMOUS, SUPER BIG.

I THINK I DID THE MATH. ABOUT 47,000 FOR.

WE'RE NOT GOING TO DO THAT. IT'S A LOT OF INFORMATION AND VERY WELL PRESENTED.

SO THANK YOU. YEAH.

I DON'T KNOW HOW YOU DO IT. SO THIS IS THIS IS BOATWRIGHT.

I TO I WANT TO THANK YOU ALL FOR THE PRESENTATION.

IT WAS WELL DONE. AS YOU ALL MIGHT REMEMBER, I VOTED AGAINST MOVING FORWARD WITH GRADUATED FEES WHEN IT WAS PROPOSED BACK IN AUGUST.

I UNDERSTAND WHERE MY FELLOW COMMISSIONERS WERE COMING FROM WHEN THEY ASKED FOR ALL THIS BACK THEN, AND I RESPECT YOUR POINT OF VIEW, BUT I THOUGHT IT PROBABLY WASN'T A GOOD IDEA BACK THEN BECAUSE IT WOULD COMPLICATE FEES AND PICK WINNERS AND LOSERS BASED ON ALMOST PURELY SUBJECTIVE CRITERIA FOR DETERMINING CUTOFFS FOR THE VARIOUS TIERS.

AND I CONTINUE TO THINK THAT WE SHOULDN'T DO THIS.

IT'S EXTREMELY COMPLICATED STILL.

I'LL BE HONEST WITH YOU, I DIDN'T UNDERSTAND A LOT OF THAT, EVEN THOUGH IT WAS WELL PRESENTED.

IT'S STILL SUBJECTIVE.

I DON'T KNOW WHAT THE CRITERIA REALLY ARE, AND I DON'T REALLY UNDERSTAND THEM, EVEN THOUGH I PAID ATTENTION.

AND I DON'T SEE HOW THIS FITS WITH OUR STATUTE EITHER.

AND I APPRECIATE THIS COMMENT FROM MARIANNE.

YOU KNOW THAT THE THE CRITERIA FOR FOR SETTING THESE THINGS IS DIFFERENT, FOR SETTING THE GRADUATED FEES RATHER AS DIFFERENT FROM FROM THE CRITERIA THAT WERE USED TO SET THE FEES BACK IN AUGUST.

ANYWAY, OUR STATUTE THAT APPLIES TO ALL OF OUR FEES, THESE FEES, THE FEES THAT WE SET BACK IN AUGUST, ALL OF OUR FEES, THEY HAVE TO BE SET BY STATUTE AT REASONABLE AMOUNTS THAT COVER OUR ADMINISTRATIVE COSTS.

BUT THERE'S NO RELATIONSHIP BETWEEN THESE PROPOSED FEES OR OUR FEES BACK IN AUGUST AND THAT LAW.

ANYWAY, THANKS AGAIN FOR THE PROPOSAL, BUT I URGE MY FELLOW COMMISSIONERS TO ABANDON THIS IDEA.

[01:25:03]

UNDERSTAND THAT THIS WOULD GENERATE A $2 MILLION DROP IN OUR REVENUE.

THAT'S A FEATURE, NOT A BUG.

THAT'S THAT'S AWESOME.

WE COLLECT TOO MUCH REVENUE FROM FROM FROM FEES ANYWAY.

BUT. BUT ANYWAY, LET'S MAKE THINGS SIMPLER RATHER THAN MORE COMPLICATED.

THIS WOULD BE A GIGANTIC MESS IF WE WENT FORWARD WITH IT.

THANK YOU. I WOULD JUST SAY THAT I DO THINK THE INFORMATION IS COMPLICATED INFORMATION, BUT YOU DID COMPILE IT IN A WAY THAT MADE IT EASY TO UNDERSTAND.

AND I KNOW THAT'S HARD TO DO.

THAT'S THE FIRST TASK. AND I THINK WE WE PUT SO MUCH ON YOU GUYS AND SAY, HERE'S THIS GRANDIOSE IDEA.

WE WANT YOU TO BRING IT BACK IN A NICE BOW.

AND YOU DO THAT EVERY SINGLE TIME.

I THINK AT THE BEGINNING WE REALLY JUST WANTED THE INFORMATION AND THAT'S WHAT YOU'VE GIVEN US.

AND THIS IS NOW OUR OBLIGATION TO KIND OF LOOK AT THIS, EXTRAPOLATED, ASK SOME LEGAL QUESTIONS, AND I DO HAVE SOME.

WE DID MENTION THE COMMERCE CLAUSE, SO I'M INTERESTED TO GET CLERKS TAKE ON THAT BECAUSE I DO WANT TO UNDERSTAND HOW THAT INTERPLAY AFFECTS ANY DECISIONS THAT WE MAKE.

BUT AT THE END OF THE DAY, YOU GIVE US INFORMATION AND YOU GIVE IT TO US, AND THEN IT'S OUR OBLIGATION TO SET THE POLICY AND MOVE FORWARD.

THANK YOU FOR WHAT YOU'VE DONE.

YOU ALWAYS PRODUCE, YOU ALWAYS HIT HOMERUNS.

YOU'RE GIVING US, I THINK, MORE THAN ENOUGH INFORMATION TO MOVE DOWN THE ROAD.

BUT I DO WANT TO I DON'T MY MEMORY IS FAILING ON THIS.

I DON'T KNOW IF WE SAID WE WERE GUARANTEED TO VOTE ON SOMETHING OTHER THAN JUST SEEING WHAT THE PRESENTATION.

SO I THOUGHT THAT TODAY YOU WERE CHECKING THE BOX AND MEETING OUR REQUESTS TO SEE THE INFORMATION.

AND SO I THINK IT'S NOW INCUMBENT UPON US TO REVIEW IT AND WE HAVE ADDITIONAL QUESTIONS.

WE'LL FOLLOW UP WITH THE CLERK AND THE GROUP TO GET FURTHER CLARIFICATION.

BUT I DO WANT TO SAY THANK YOU FOR WHAT YOU'VE DONE.

I'M GLAD WE MOVED FORWARD WITH THE EXERCISE.

I THINK BASED UPON INDUSTRY FEEDBACK AT THE TIME, IT MADE SENSE TO EXPLORE IT FURTHER.

AND IT'S OBVIOUSLY A VERY COMPLICATED ISSUE AND A LOT, A LOT OF CONSIDERATIONS.

SO REALLY APPRECIATE YOU GOING THROUGH THE PROCESS AND IT WAS A LOT OF WORK AND TELL HOW MUCH WORK WAS PUT INTO THIS, BUT IT WAS GREAT FEEDBACK AND I THINK WE NEEDED TO HEAR FROM OUR CITIZENS.

I'M GLAD YOU LIKED IT. OBVIOUSLY A LOT.

SO THANK YOU FOR YOUR TIME.

A LOT OF GOOD REPORTS TONIGHT, THE NICE YOUNG AS THEY SAID.

SO LET'S MOVE TO THE NEXT MORNING.

GOOD AFTERNOON.

THANK YOU FOR COMING ON BOARD TO TALK ABOUT AN AMES UPDATE.

GOOD AFTERNOON. MY NAME FOR THE RECORD IS RITA.

MOSTLY I AM CHIEF INFORMATION OFFICER FOR TO SEE.

NEXT SLIDE, PLEASE.

I AM HERE TO GIVE YOU AN UPDATE ON THE UPDATE THAT I GAVE YOU ALL IN JANUARY AND SAN ANTONIO.

THE NUMBERS THAT ARE REFLECTED HERE ARE AS OF MARCH 1ST.

THE MORNING. SO BASICALLY WHAT WE HAD ACHIEVED THROUGH MARCH, FEBRUARY 28TH OF THIS YEAR.

WE AT THAT POINT HAD INVITED, AS YOU ALL KNOW, WE'RE DOING A STAGGERED INVITATION TO ON BOARD TO BASICALLY ASSIST THE LICENSING TEAM, NOT BEING OVERWHELMED BY EVERYONE TRYING TO COME IN AT ONE TIME.

SO AT THIS POINT THROUGH MARCH, ELIGIBLE TO ON BOARD OUR 33,668 WE.

AS OF FEBRUARY 28TH THAT NIGHT HAD 18,351 WHO HAD SUBMITTED THEIR REQUEST TO BE ONBOARDED AS OF THIS MORNING.

AND I WOULD LIKE TO REMIND THE COMMISSION THAT MESSAGING WENT OUT AFTER MARCH 1ST.

I DON'T REMEMBER THE EXACT DATE, BUT MESSAGING WENT OUT THAT MARCH 31ST WOULD BE THE LAST DAY OF THE TEMPORARY RELEASE FOR PEOPLE TO NOT HAVE TO FILE THEIR RENEWALS, THE GRACE PERIOD.

AND AS SOON AS THAT CAME OUT, WE STARTED RAMPING UP BECAUSE WE KNEW THAT ACTIVITY WOULD POP UP.

SO AS OF THIS MORNING, THAT 18,000 NUMBER IS NOW 21,843.

SO THAT ACTIVITY DID STEP UP, THAT INCREASE THE RATIO THAT YOU SEE THERE, 54.5.

ONE OF THOSE INVITED WHO HAVE SUBMITTED, THAT'S NOW UP TO AS OF THIS MORNING, 65%.

SO ACTIVITY IS THERE AND IT IS WORKING AS AS DESIGNED.

NEXT SLIDE, PLEASE, ON BUSINESS TRANSACTIONS, ORIGINALS AND ALL OF THESE WERE AS FEBRUARY 28TH.

AND I DO HAVE SOME UPDATED NUMBERS FOR YOU AS WELL.

[01:30:02]

I KNOW THIS LOOKS LIKE A SMALL NUMBER.

IT IS, BUT EACH ONE OF THOSE REPRESENTS A PHONE CALL OR AN EMAIL THAT LICENSING STAFF DOES NOT HAVE TO TAKE CARE OF BECAUSE PEOPLE ARE DOING IT THEMSELVES ONLINE.

SO THAT IS ACTUALLY AN EFFICIENCY THAT SHOWS UP IN THIS METRIC OF THAT.

1722 AS OF THIS MORNING, IT WAS INCREASED TO 2034.

I PUT THE NON PROFIT TEMPORARY EVENTS AND TEMPORARY EVENTS ON HERE BECAUSE THOSE WERE TWO OF THE METRICS THAT WE HAD ACCESS TO WHEN WE FIRST ROLLED OUT.

SO I JUST CONTINUE TO REPORT THOSE FOR YOU.

BUT THE ORIGINALS AND RENEWALS OBVIOUSLY ARE OUR BIGGEST ONES.

NEXT SLIDE, PLEASE.

WHAT WE DID NOT DO IN JANUARY WAS LOOK AT PERFORMANCE METRICS.

SO I AM REPORTING BASICALLY ON BEHALF OF THE PEOPLE WHO ACTUALLY DO THE WORK WITHIN THE SYSTEM INSTEAD OF ME, JUST ONE THAT PULLING DATA ABOUT IT.

BUT OUR PROCESSING TIMES, OUR PERFORMANCE MEASURES FOR ORIGINAL APPLICATIONS, OUR PREVIOUS WAS 41 DAYS.

ALL THE DATA THAT I WAS GIVEN, OUR CURRENT, IT'S DROPPED DOWN TO 29 DAYS.

THAT'S 12 DAYS THAT PEOPLE ARE IN BUSINESS THAT THEY WERE NOT IN BUSINESS PRIOR TO THAT.

SO EACH DAY AND PROVIDES INCOME FOR THE STATE FOR THROUGH SALES TAX AS WELL AS THE OTHER ACTIVITIES THAT ARE FEES AND LICENSES ON THE MIXED BEVERAGE WITH A FOOD AND BEVERAGE CERTIFICATE, AS WELL AS THE WINE AND MALT BEVERAGE RETAILERS PERMIT THE B AND B G APPLICATIONS.

I WENT FROM 42 DROP DOWN TO 28 DAYS.

ANOTHER GREAT INCREASE OUR RENEWAL APPLICATIONS.

WE HAD A HIGH NUMBER ON THAT AS 66 DAYS.

IT IS DOWN TO 18, WHICH IS GREAT.

WE WERE WHEN WE WERE IN SAN ANTONIO, A GENTLEMAN WHO WORKS FOR A LICENSING SERVICE BASED IN DALLAS STOPPED ME AND HE SAID, I DIDN'T THINK I WOULD EVER BE ABLE TO SAY THIS TO ANYONE. HE SAID IT, BUT HE SAID WE HAD ONE RENEWAL APPROVED A 24 HOURS.

HE WAS LIKE WE WE DECIDED IT WAS A MISTAKE AND TRIED TO PUSH BACK ON IT.

BUT HE SAID IT ACTUALLY WAS APPROVED.

SO THERE AREN'T I DON'T THINK THAT'S GOING TO EVER BE THE THE AVERAGE.

BUT 18 DAYS IS OBVIOUSLY A SIGNIFICANT IMPROVEMENT.

AND THEN PRODUCT REGISTRATION HAS DROPPED FROM 28 DAYS TO EIGHT DAYS.

SO, AGAIN, A LOT OF SUCCESS STORIES ARE COMING OUT.

WHAT'S NOT ON ANY OF THE SCREENS HERE FOR YOU AS WE CONTINUE TO IMPROVE THE PRODUCT AND AND WORK ON IT? THERE ARE NO SHOWSTOPPERS THAT WE TALKED ABOUT IN OCTOBER.

THOSE THINGS ARE CALLED STEP BY STEP ONES AND SEVENTIES.

YES, I APOLOGIZE FOR DROPPING GEEKY WORDS EVERY ONCE IN A WHILE, BUT THANK YOU FOR ADOPTING IT.

I DO APPRECIATE THAT.

SO BUT WE DO CONTINUE THAT.

WE DO. WE WENT FROM TWICE A WEEK, WHICH IS A HARD, HARD TEST TO TO MAINTAIN.

WE HAVE TO EVERY THREE WEEKS FOR MAJOR DEPLOYMENTS.

WE DO THEM ON FRIDAY EVENINGS TO MINIMIZE ANY UPSET TO STAFF WORKING.

BUT WE ALSO DO KEEP IN MIND THAT OUR AGENTS ARE OUT IN THE FIELD DURING THAT TIME.

SO WE'RE COGNIZANT OF THAT AS WELL.

100 FISHING GOES ON WITH THAT VERY SHORT AND SWEET TODAY.

SO IN CASE NEXT SLIDE, PLEASE, JUST IF YOU HAVE ANY QUESTIONS, JUST A COMMENT.

WE HEARD IT YESTERDAY AT THE ROUNDTABLE DIRECT FROM THE INDUSTRY AT HOW THE SYSTEM IS HELPING AND WORKING FOR THEM.

AND NOW TO HAVE ALMOST 22,000 BUSINESSES NOW SUCCESSFULLY USING IT IS JUST FANTASTIC.

SO THERE WAS CHALLENGES FOR THROWING THIS OUT.

THERE'S CHALLENGES WITH ANY CHANGE.

IT'S GOING TO CONTINUE TO BE CHALLENGES, BUT ON TOP OF IT, ADDRESSING IT, DOING AN EXCELLENT JOB OR HEARING FROM INDUSTRY THAT IT'S WORKING.

AND ONE OF THE COMMENTS THAT I HAD EVEN RECOGNIZED YESTERDAY WAS MOST OF US IN THE INDUSTRY WORK 5 P.M.

TO MIDNIGHT OR NINE, 8 TO 5, AND THIS IS A TOOL THAT ALLOWS THEM TO WORK DURING THEIR WORKING HOURS AND GET THINGS DONE.

AND SO THAT ON TOP OF THE PERFORMANCE METRICS THAT YOU SEE HERE, AGAIN, I THINK IT'S A SUCCESS AND I APPRECIATE ALL YOUR HARD WORK.

THANK YOU. SO. YOUR COMMENTS.

YEAH. BUT RIGHT NOW, MY SENSE IS THAT THINGS HAVE GOTTEN A LOT BETTER AND THAT'S A PRODUCT OF A COLOSSAL AMOUNT OF WORK.

[01:35:04]

I THINK THAT'S WONDERFUL.

I'M SURE THERE'S THERE'S MORE PROGRESS TO BE MADE.

THERE'S MORE CHALLENGES TO SURMOUNT.

PEOPLE WILL STILL HAVE PROBLEMS HERE AND THERE.

I WANT TO WANT TO PAY ATTENTION TO THOSE AND WANT TO KEEP THOSE IN MIND.

BUT BUT I THINK WE'VE REACHED A POINT WHERE WE CAN CONGRATULATE OURSELVES ON ON HAVING ON HAVING TURNED THE CORNER AND AND DONE SOMETHING WE CAN BE PROUD OF.

SO THANK YOU SINCERELY FOR ALL YOUR WORK ON THAT.

THANK YOU, COACH. I APPRECIATE THAT.

WELL DONE. THANK YOU, SIR.

APPRECIATE IT. COME.

AND NOW OUR MOST FAVORITE SUBJECT.

IT'S MY MOST FAVORITE.

I DON'T KNOW. INTRODUCE YOU, THOUGH.

ALL RIGHT. YOU'LL HAVE TO EXCUSE ME.

I'M GOING TO WORK FROM THE SURFACE TODAY AS I DID.

NEXT AGENDA ITEM IS BUDGET REVENUE AND PERFORMANCE MEASURES.

MID-YEAR UPDATE WITH DIRECTOR MAYO.

MA'AM, GOOD AFTERNOON.

GOOD AFTERNOON, CHAIRMAN.

COMMISSIONERS, THANK YOU FOR HAVING ME AGAIN.

FOR THE RECORD, MY NAME IS VANESSA MAYO, AND I SERVE AS THE CHIEF FINANCIAL OFFICER FOR THE AGENCY.

TODAY, I WILL PRESENT A MAJOR UPDATE ON BOTH THE BUDGET AND REVENUE COLLECTION, AND I WILL COVER THE FIRST QUARTER PERFORMANCE MEASURES FOR FY 22.

THIS SLIDE HERE SHOWS THIS IS BUDGET BY STRATEGY AS OF 228.

THIS IS OUR MID-YEAR SPENDING IS ON TARGET FOR MID-YEAR RANKS AND MOST STRATEGIES HAVE ENCUMBERED ALL THEIR FUNDS.

A FEW ITEMS THAT I WANT TO NOTE IN LOOKING AT THESE SLIDES.

CENTRAL ADMINISTRATION HERE YOU SHOW THAT THEY HAVE A 9.18% REMAINING BUDGET.

THAT IS AS OF THE END OF FEBRUARY.

PLEASE NOTE THAT THERE IS A 250,000 TRANSFER THAT WE DO ANNUALLY FROM TVC TO THE DEPARTMENT OF AGG AS PART OF THE WINE MARKETING PROGRAM.

THAT IS STATUTORY.

THAT IS A TRANSFER THAT IS INITIATED AND COMPLETED BY THE COMPTROLLER'S OFFICE.

AND UNFORTUNATELY THEY'VE BEEN INCREDIBLY BUSY WITH THE FEDERAL FUNDS COMING THROUGH FOR CORONAVIRUS RELIEF FUNDS AND THEY WERE UNABLE TO PROCESS IT SOONER IN THE YEAR.

HOWEVER, IT HAS PROCESSED AS OF TODAY, SO THAT 250,000 HAS BEEN TAKEN OUT IN THE CENTRAL ADMINISTRATION NOW IS AT A POSITIVE 1%.

SO THAT 9% IS A LITTLE MISLEADING WITH THAT 250,000 THAT'S THAT'S BEEN TAKEN OUT.

ALL THIS FRONT. SEVERAL BUDGETS ARE CAPITAL BUDGETS WHERE THEY ARE ABLE TO ROLL INTO THE NEXT YEAR.

SO THINGS THAT SHE HASN'T SPENT OR ENCUMBERED YET, SHE ANTICIPATES TO ENCUMBER NEXT YEAR.

SO THAT 10% IS A LITTLE MISLEADING.

SO I DID WANT TO POINT THAT OUT.

AND THEN AGAIN, FOR CLARIFICATION, COMPLIANCE MONITORING, THAT'S THE NAME OF OUR STRATEGY AS SET FORTH IN OUR BILL PATTERN, BUT THAT INCLUDES OUR AUDIT DIVISION AND OUR SELLER TRAINING FOLKS. AND THAT'S AN OLD DEFINITION THAT WE'VE HAD FOR SEVERAL YEARS, BUT UNFORTUNATELY THAT'S STILL HOW IT'S BUDGETED.

ANY QUESTIONS ON THE BUDGET AND EXPENSES ON OUR MID-YEAR UPDATE.

NEXT SLIDE, PLEASE. SO THIS IS OUR MID-YEAR UPDATE ON REVENUE.

AGAIN, THIS IS OUR UPDATE AS OF 228.

SO CLOSING OUT OF THE MONTH.

THIS IS A SUMMARY OF WHAT YOU'LL NORMALLY SEE IN YOUR MONTHLY COMMISSIONER MEETINGS AND SOME MINUTES I'M SORRY ME A REPORTS COMMISSION REPORTS THAT WE DO ON A MONTHLY BASIS.

EXCUSE ME, I'VE TAKEN A LOT OF ALLERGY MEDICATION SINCE WE'VE BEEN HERE IN EL PASO, SO I'M A LITTLE AMPED UP LOOKING AT THE REVENUE UPDATES HERE.

I'VE CONDENSED IT INTO A FEW DIFFERENT CATEGORIES.

LICENSE AND PERMIT FEES, MISCELLANEOUS REVENUE AND CREDIT CARD FEES.

PLEASE NOTE THAT CREDIT CARD FEES DO GO TOWARDS OUR APPROPRIATION.

HOWEVER, THEY'RE OFFSET 100% BY AN EXPENSE THAT WE PAY BACK TO VISA AND MASTERCARD.

SO THAT'S BASICALLY A NO IMPACT.

LOOKING AT REVENUE HERE.

ALSO, I WANTED TO KIND OF MAKE A NOTE.

THIS IS A YEAR TO DAY COMPARISON OF THIS BIENNIUM TO OUR PREVIOUS BIENNIUM.

SO I KNOW SOMETIMES THE NUMBERS ARE DIFFICULT TO FOLLOW.

BUT KEEP IN MIND WITH OUR TWO YEAR RENEWALS AND OUR HEAVY RENEWALS IN THE FIRST YEAR OF THE BIENNIUM, WE HAVE TO COMPARE BIENNIUM TO BIENNIUM AS OPPOSED TO YEAR TO YEAR BECAUSE THE ANNUAL COMPARISON WOULD NOT BE FAIR OR ACCURATE.

SO HERE WE'RE COMPARING YEAR TO DATE FOR THIS BIENNIUM COMPARED TO THE PREVIOUS YEAR TO SHOW TRUE GROWTH OR DEFICITS IN CERTAIN AREAS, WHICH WAS COVID EFFECT.

YES. MISCELLANEOUS FEES.

THOSE ARE SEVERAL DIFFERENT FEES.

THAT INCLUDES ADMINISTRATIVE FEES AND BOTH LICENSING AND PORTS OF ENTRY INCLUDES OUR CIVIL PENALTIES AND OUR PRODUCT REGISTRATIONS.

[01:40:01]

AND YOU'LL SEE HERE I KIND OF SEPARATED THE TOTAL REVENUE TOWARDS APPROPRIATION, WHICH IS MANDATED BY RIDER SEVEN IN THE AGENCY'S BILL PATTERN SET FORTH IN THE GENERAL APPROPRIATIONS ACT.

SO THAT IS THE AMOUNT THAT GOES TOWARDS OUR APPROPRIATION.

AND THEN THE LAST LINE THERE SHOWS OUR EXCISE TAXES AND AUDIT COLLECTED TAXES.

SO ANY AUDITS FOR DELINQUENT FEES WILL BE IN THERE AS WELL.

AND THAT SHOWS OUR TOTAL REVENUE OF BIENNIUM TO DATE.

SO THAT IS OUR TOTAL COMPARED TO THE PREVIOUS BIENNIUM.

ANY QUESTIONS ON OUR REVENUE NUMBERS? I DON'T HAVE ANY QUESTIONS ON THE THESE NUMBERS, BUT I DO HAVE AN OVERALL QUESTION ABOUT THE BUDGET.

SO, CHAIRMAN, WHEN THAT'S APPROPRIATE, PLEASE LET ME KNOW.

MR. MARINO. OKAY, GREAT.

THANK YOU. FIRST OF ALL, I WANT TO THANK ALL THE STAFF FOR YOUR OUTSTANDING WORK TODAY.

AGAIN, YOU ALL HAVE HIT IT OUT OF THE PARK.

WHENEVER WE ASK FOR NUMBERS, YOU ALL BECOME PREPARED AND WELL VERSED AND REALLY APPRECIATE THE TIME THAT IT TAKES FOR YOU TO DO ALL OF THIS. MY QUESTION IS ON THE OVERALL BUDGET.

WHEN I BELIEVE THAT MARCH APRIL TIMEFRAME IS WHEN WE NEED TO HAVE OUR OUR OUR BUDGET TO THE LBB OR AT LEAST OUR APPROPRIATIONS REQUEST.

IS THAT SOMETHING THAT WE ARE GOING TO BE ABLE TO SEE IN THE NEXT MEETING CYCLE? OR COULD YOU KIND OF ADDRESS THE TIMING OF THAT? SO OUR LA OR OUR LEGISLATIVE APPROPRIATION REQUEST IS DUE TO THE LBB NORMALLY IN AUGUST, DUE TO COVID IN THE PREVIOUS BIENNIUM, WE DID NOT SUBMIT, I BELIEVE, UNTIL MID SEPTEMBER. SO THERE WAS A DELAY THERE.

SEPTEMBER WAS NICE BECAUSE WE HAD ACTUAL YEAR END DATA THAT WE COULD USE FOR THEM.

SO THAT'S STILL UP IN THE AIR WHEN IT WILL BE DUE AUGUST OR SEPTEMBER.

SO OUR FINAL DOCUMENT WILL BE DUE IN MID-AUGUST AND ONLY AROUND THE 16TH OR 19TH.

THE LBB WILL SET OUT INSTRUCTIONS IN EARLY JULY.

HOWEVER, THE STAFF AND THE BUDGET AREAS AND THE DIVISION HEADS WILL START TALKING ABOUT IT.

ACTUALLY, NEXT WEEK, WHEN I GET BACK TO THE OFFICE, WE'LL BE TALKING ABOUT EXCEPTIONAL ITEMS, POTENTIAL EXCEPTIONAL ITEMS. SO THAT STARTS IN ABOUT THIS TIME FRAME.

IN APRIL.

WE PRESENT THAT TO THE EXECUTIVE TEAM.

SO THE GEDS AND THE ED, THESE ARE THE THINGS THAT THE DIVISION HEADS HAVE DECIDED MIGHT WARRANT EXCEPTIONAL ITEMS. AND THEN THERE ARE SOME DECISIONS MADE BY THE EXECUTIVE TEAM AS TO WHAT WE WOULD MOVE FORWARD WITH BY THE MAY MEETING.

THERE SHOULD BE AN IDEA OF WHAT EXCEPTIONAL ITEMS WE ARE MOVING FORWARD WITH, BUT THOSE WOULD NOT BE FINAL NUMBERS.

OBVIOUSLY, THERE'S A LOT OF TIMING DIFFERENCES.

SO BY THE MAIN MEANING, BY THE TIME SOMETHING IS SUBMITTED IN AUGUST OR SEPTEMBER, THERE MAY BE SOME COST CHANGES, ESPECIALLY WITH IT.

THAT STUFF CHANGES PRETTY QUICKLY.

BUT I THINK BY MAY THERE SHOULD BE AT LEAST A DRAFT OF EXCEPTIONAL ITEMS THAT THE AGENCIES COME UP WITH.

OKAY, I KNOW YOU HAVE TO WORK BACKWARDS.

SO I FIGURED THAT THIS MARCH, APRIL TIME FRAME.

SO BY SO THAT'S ABOUT RIGHT.

ALL RIGHT. WELL, I LOOK FORWARD TO SEEING WHAT WE CAN DO TO PUT TOGETHER A REALLY STRONG BUDGET AND REALLY KIND OF START HOPEFULLY HAVE A GOOD SESSION AND GOOD CONVERSATIONS WITH THOSE THAT MAKE THOSE DECISIONS OVER THERE IN THE PINK BUILDING.

THANK YOU, CHAIRMAN.

THANK YOU, COMMISSIONER.

I HAVE A QUESTION, VANESSA.

WHY? I NOTICED IT.

THANKS FOR YOUR PRESENTATION.

IN THE REVENUE UPDATE, YOU SEPARATED OUT TAXES FROM TOTAL REVENUE TOWARDS APPROPRIATION.

AND IT SEEMS LIKE UNDER RIDER SEVEN AND THEN UNDER SECTION 205.2 OF OUR CODE, THAT TAXES ARE INCLUDED IN THE REVENUES THAT GO TOWARDS APPROPRIATION.

WHY ISN'T THAT SO? SO IN MY TEN YEARS IN BUDGET HERE AT TVC AS CFO AND PRIOR TO DEPUTY CFO, WE HAVE NEVER INCLUDED TAXES AS THE REVENUE TOWARDS OUR APPROPRIATION.

THIS IS NOT A CALL THAT WE HAVE MADE PERSONALLY OR PERSONALLY, MYSELF OR THE AGENCY.

THIS IS POLICY AND PROCEDURE THAT'S BEEN DICTATED BY THE COMPTROLLER'S OFFICE.

SO THERE ARE DIFFERENT REVENUE CODES THAT REPRESENT DIFFERENT THINGS, OBJECT CODES AS THEY CALL THEM.

AND THE OBJECT CODES THAT WE HAVE FOR OUR REVENUE THAT GOES TOWARDS OUR APPROPRIATION IS NAMED SPECIFICALLY BY THEM.

AND SO EXCISE TAX HAS NEVER BEEN CONSIDERED.

AND I'VE LOOKED BACK BECAUSE I KNOW THIS QUESTION HAS COME UP BEFORE.

I'VE LOOKED BACK AND DONE SOME RESEARCH AND I WENT BACK 20 YEARS AND COULD NOT SEE WHERE EXCISE TAX WAS EVER INCLUDED IN OUR REVENUE APPROPRIATION

[01:45:01]

I GUESS THAT IT SEEMS LIKE THE AND THIS ISN'T AN ARGUMENT, JUST IT'S AN OBSERVATION MAYBE FOR FOR FUTURE DISCUSSION.

IT SEEMS LIKE THE PLAIN MEANING OF OF THE BUDGET RIDER AND THEN THE SECTION OF OUR CODE THAT IT THAT IT REFERENCES SECTION 205.2 OF THE ALCOHOLIC BEVERAGE CODE PLAINLY INCLUDES TAXES IN THE AMOUNTS THAT GO TOWARDS APPROPRIATION.

IT SEEMS LIKE THE PLAIN MEANING OF THE STATUTE THAT GOVERNS THIS AND THE RIDER THAT REFERENCES IT INCLUDES TAXES WITH THE REVENUES THAT GO TOWARDS APPROPRIATION.

SO I APPRECIATE YOUR COMMENT ABOUT ABOUT WHAT WE'VE DONE FOR FOR MANY, MANY YEARS.

I UNDERSTAND THAT. I THINK I EVEN UNDERSTAND SOME OF THE CODING THAT THE COMMISSIONER'S OFFICE MIGHT MIGHT KIND OF FORCE US INTO HERE AND THERE.

I JUST WANTED TO TO NOTE PUBLICLY THAT THAT IT SEEMS LIKE OUR REVENUE DOES CONSIST OF TAXES FOR PURPOSES OF OF BUDGET.

AND AND I THINK THAT MATTERS AS YOU CAN PROBABLY ANTICIPATE.

I THINK THAT MATTERS BECAUSE THAT GOES INTO OUR CALCULATION FOR FOR WHAT FOR WHAT WE NEED TO GENERATE IN ORDER TO COVER THE COST FOR OUR APPROPRIATION.

AND AND OBVIOUSLY THAT IS A CRITERION OR HAS BEEN IN THE PAST, AT LEAST IT WAS IN AUGUST FOR FOR SETTING OUR LICENSE AND PERMIT FEES. SO I WANTED TO BRING THAT UP.

I HOPE THAT PEOPLE THINK ABOUT THAT.

IF IF I'VE GOT PART OF THAT WRONG, I WANT TO KNOW.

BUT IT SEEMS LIKE JUST A A VERY SIMPLE READING OF VERY SIMPLE ENGLISH WORDS IN BOTH THE RIDER AND THE STATUTE MAKES TAXES VERY MUCH A PART OF OUR REVENUE.

AND AND I THINK IT MATTERS FOR FOR SETTING OUR FEES.

THANK YOU. IF I COULD JUST ADD QUICKLY, COMMISSIONER BOATWRIGHT, ONE THING I FAILED TO MENTION, IN ADDITION TO THE OBJECT CODES THAT ARE KIND OF DICTATED BY THE COMPTROLLER, THE WAY WE COLLECT THE FUNDS IS COMPLETELY DIFFERENT.

EXCISE TAXES. ESSENTIALLY, WE HAVE PAPERWORK THAT COMES IN FROM OUR MANUFACTURER DISTRIBUTORS HERE AND WE PROCESS DEPOSIT THAT MONEY AND IT GOES STRAIGHT INTO YOUR AND LITERALLY INTO THE COMPTROLLER'S ACCOUNT WHERE THE LICENSE FEES, THE MISCELLANEOUS REVENUE, ETC.

THAT COMES INTO KIND OF A WHOLE TBK ACCOUNT.

AND THEN WE IDENTIFY WHERE IT GOES, RIGHT? WE MIX BEVERAGES, DISTRIBUTOR, CREDIT CARD FEE, WE IDENTIFY THEM, AND THEN IT GOES TO THE COMPTROLLER.

SO JUST FROM A PROCESS PERSPECTIVE, THEY'RE ALSO HANDLED COMPLETELY DIFFERENTLY.

AND AGAIN, I WENT BACK ABOUT 20 YEARS AND THAT'S AS FAR AS I'VE GOTTEN TO TO MAYBE GET SOME ANSWERS ON THIS, BECAUSE I HAVE DISCUSSED THIS WITH OTHER STAFF.

BUT THIS MAY BE A BIGGER OR LONGER CONVERSATION.

BUT UNFORTUNATELY, WITH MY EXPERIENCE AND WHAT I'VE DONE SO FAR AND WHAT WE'VE WORKED WITH THE COMPTROLLER, THOSE REVENUE STREAMS HAVE BEEN HANDLED COMPLETELY DIFFERENT AND IT'S BEEN LIKE THAT FOR YEARS.

SO IT WOULDN'T SURPRISE ME AT ALL THAT THAT'S TRUE.

I HAVE NO REASON TO DOUBT YOU.

I'M SURE THAT'S RIGHT.

AND I'M SURE THAT THAT THAT COULD BE RELEVANT IN SOME WAYS.

AND I APPRECIATE YOU. TELL ME ABOUT THAT.

I'M JUST GOING ON THE MEANING OF THE WORDS THAT ARE IN THE RIDER, IN THE MEANING OF THE WORDS THAT ARE IN THE STATUTE THAT THAT IT REFERENCES, THAT IT REFERENCES.

THAT'S THAT'S ALL I HAVE TO GO BY.

ON THE OTHER HAND, THAT'S ALL THAT MATTERS.

SO ANYWAY, THANKS AGAIN.

YOU HAVE ONE MORE SLIDE.

ALL RIGHT. IF THERE ARE ANY MORE QUESTIONS ON REVENUE, I'LL MOVE ON TO THE NEXT NEXT SLIDE, PLEASE.

AND THIS IS A QUICK PERFORMANCE MEASURE UPDATE.

I WANTED TO TALK QUICKLY ABOUT OUR PERFORMANCE MEASURES.

AND FIRSTLY, THIS IS NOT A MID-YEAR UPDATE AS OUR SECOND QUARTER MEASURES HAVE NOT YET BEEN REPORTED.

THEY ARE DUE APRIL 1ST.

SO THIS IS A QUARTERLY UPDATE ON PERFORMANCE MEASURES.

AND QUICKLY, I WANTED TO JUST KIND OF QUOTE FROM FROM THE LEVY WHAT A PERFORMANCE MEASURE IS AND WHY IT'S IMPORTANT.

PERFORMANCE MEASURES DEFINITION MUST EXPLAIN THE MEASURE AND THE METHODOLOGY FOR ITS CALCULATION AND PROVIDE ENOUGH INFORMATION THAT CAN BE UNDERSTOOD CLEARLY.

THE DESCRIPTION OF A MEASURE IS CALCULATION MUST BE DETAILED ENOUGH TO ENABLE REPLICATION.

SO WHAT THAT BASICALLY MEANS IS IN THE STATE OF TEXAS, WE ARE PERFORMANCE BASED BUDGETING SYSTEM.

AND SO FOR THE BUDGET CYCLE AND THE DOLLARS THAT WE ASK FOR AND WE ARE APPROPRIATED, THERE ARE PERFORMANCE INDICATORS THAT WE MUST ACCOMPLISH IN RETURN. SO THESE ARE OUR QUARTERLY PERFORMANCE MEASURES.

I'M NOT GOING TO GO OVER THEM ALL IN DEPTH, BUT OBVIOUSLY THESE ARE OUTLINED ALSO IN THE GENERAL APPROPRIATIONS ACT.

SO THESE ARE STATUTORY.

OUR ENFORCEMENT ITEMS ARE UP HERE.

WE'VE GOT OUR LICENSE AND PERMITS, WHICH AS MENTIONED, THAT THOSE ARE GOING TO START LOOKING BETTER AND BETTER WITH AMES GETTING ON BOARD.

[01:50:06]

SO SOME OF THOSE TARGETS LOOK MAYBE NOT ON PAR FOR THE FIRST QUARTER, BUT I THINK OVERALL WE'VE DONE WELL IN PHASES.

ALSO THE FIRST QUARTER WITH COVID MITIGATION, I THINK WE HAD A DELTA AND DELTA, DELTA AND OMICRON.

I CAN'T KEEP TRACK OF THEM ANYMORE, BUT THAT WAS KIND OF AFFECTING US THROUGH THAT FIRST QUARTER AS WELL.

SO I WILL JUST POINT THAT OUT.

AND THEN LOOKING ON THE NEXT SLIDE, PLEASE.

SO THESE ARE EFFICIENCY MEASURES.

SORRY, I DIDN'T MENTION PREVIOUSLY THAT WAS OUTPUT MEASURES.

THESE ARE EFFICIENCY MEASURES.

HOW MUCH DOES IT COST FOR US TO PRODUCE THESE WIDGETS, WHICH IN TURN ARE NECESSARY FOR US TO GET OUR APPROPRIATION? AND AGAIN, WHEN WE HAVE OBVIOUSLY LESS WIDGETS, THE COST OF EACH WIDGET WILL GO UP.

BUT AS THE YEAR GOES ON, THE FISCAL YEAR GOES ON, WE'LL SEE THAT DOLLAR AMOUNT OR AVERAGE COST REDUCE AS WELL.

THAT IS ALL I HAVE FOR MY PRESENTATION.

ARE THERE ANY OTHER QUESTIONS THAT YOU.

YOU VERY MUCH. SO

[4. Public Comment]

GENERAL COUNSEL SMITH HAS ANYONE SIGNED UP FOR PUBLIC COMMENT? THAT COMMISSIONERS, I BELIEVE WE HAVE ONE PERSON SIGNED UP FOR PUBLIC COMMENTS.

MR. EDGAR KORZENIOWSKI.

EDGAR, IF YOU WANT TO GO AHEAD AND MEET YOURSELF, YOU HAVE 2 MINUTES.

ALL RIGHT. THANKS, CLARK.

GOOD AFTERNOON, COMMISSIONERS.

MY NAME IS EDGAR KORZENIOWSKI.

I WORK FOR THE LAW FIRM OF GRIFFITH AND HUGHES OR FIRM REPRESENTS MEMBERS OF THE INDUSTRY PRIMARILY IN THE RETAIL TIER.

I HAVE SEVERAL COMMENTS REGARDING RETIREMENTS AND PROPOSED DRAFT RULE OF 35.1 REGARDING BREACH REPORTING.

FIRST OF ALL, I WANT TO THANK GENERAL NETTLES FOR A SERVICE.

I LIKE A COUPLE OF HIS ACHIEVEMENTS.

LOOSENING THE REQUIREMENTS FOR REOPENING AS A RESTAURANT AND LOOSENING QUALIFICATIONS FOR FOOD BEVERAGE CERTIFICATE MADE A BIG IMPACT DURING THE HEIGHT OF THE COVID 19 PANDEMIC, AND WE'RE GRATEFUL FOR THAT.

AND GENERAL ALSO INCREASED THE COMMISSION'S ENGAGEMENT WITH THE REGULATED INDUSTRY AND THE STAKEHOLDER IN ROUNDTABLE MEETINGS NOT ONLY HELPED IMPROVE TRANSPARENCY AND DIALOG, BUT ALSO GAVE INDUSTRY MEMBERS A FORUM TO BE HEARD WITH RESPECT TO UPCOMING REGULATIONS AND EMERGING DEVELOPMENTS.

LET'S SEE WHAT ELSE. WANT TO ALSO BRIEFLY TOUCH ON GENE BOWMAN.

I WANT TO THANK HIM FOR HIS SERVICE.

I HAVE THE PLEASURE AND PRIVILEGE OF WORKING WITH HIM DURING MY TIME AT THE AGENCY.

HE HAS A WEALTH OF INSTITUTIONAL KNOWLEDGE, WHICH HE KINDLY AND GENEROUSLY SHARED WITH ME.

I NEVER GOT THE BUREAUCRATIC LINE.

THIS IS HOW WE'VE ALWAYS DONE IT.

GENE WOULD ALWAYS GIVE ME THE HISTORY LESSON, THE POLITICAL BACKDROP, AND THE RELEVANT PLAYERS.

I WALKED AWAY FROM EACH OF THOSE CONVERSATIONS KNOWING WHY A STATUTE RULE IS IN PLACE AND IRRATIONALLY RATIONALE FOR THE AGENCY ACTION.

EVEN WHEN I LEFT THE AGENCY GENE CONTINUING TO SHOW THAT SAME KINDNESS AND GENEROSITY WHEN I HAD QUESTIONS.

GENE IS A TREASURE.

WE'LL BE GREATLY MISSED.

AGENCY NEEDS MORE PEOPLE LIKE HIM WHO CAN NOT ONLY CHAMPION THE CAUSE, BUT ALSO EXPLAIN THE WHY.

RULE PROPOSED RULE 35.1 WE RECOMMEND THAT THE COMMISSION CONSIDER REVISING THE PROPOSED DRAFT RULE TO COVER ALL PERMITS AND DEFINE PREMISES UNDER THE CONTROL TO ENSURE CONSISTENCY AND ELIMINATE CONFUSION.

BUSINESS WITH MULTIPLE OUTLETS HOLDING DIFFERENT CLASSES OF PERMITS IS HAVING DIFFERENT OBLIGATIONS DEPENDING WHETHER A MIXED BEVERAGE PERMIT HOLDER OR WINE AND MALT BEVERAGE RETAILER. THE PHRASE UNDER THEIR CONTROL IS PROBLEMATIC BECAUSE ITS MEANING IS SUBJECT TO INTERPRETATION, WHICH MAY NOT PROVIDE FAIR NOTICE TO PERMIT AND COULD RESULT IN INCONSISTENT ENFORCEMENT.

IS THE PHRASE REFERRING TO DIRECT CONTROL, INDIRECT CONTROL OR JUST MERELY THE POSSIBILITY OF CONTROL.

SHARED BUILDING, SHARED PARKING LOTS.

PUBLIC ROADWAYS IMMEDIATELY COME TO MIND.

THAT RAISES ALL SORTS OF CONTROL ISSUES.

THANK YOU. THANK YOU, SIR.

APPRECIATE IT. THANK YOU FOR THOSE KIND COMMENTS.

RIGHT. SO.

ALL RIGHT. THE.

[5. Orders]

HEY, COMMISSIONERS, CAN EVERYONE HEAR ME OKAY? I'M NOT SEEING MY MY FACE THERE, BUT I BELIEVE YOU ALL CAN HEAR ME.

[01:55:01]

EXCELLENT. OKAY.

MY NAME IS SHAINA HORTON, AND I SERVE AS THE COMMISSION'S RULES ATTORNEY.

BUT ALSO HERE TODAY TO PRESENT TO YOU YOUR ANNUAL ORDER INCREASING PRODUCTION LIMITS.

ITEM 5.1 UNDER SECTION 62.1 22 F OF THE ALCOHOLIC BEVERAGE CODE.

THE COMMISSION IS TO ANNUALLY ADJUST THE PRODUCTION LIMIT FOR CERTAIN BREWERS IN AN AMOUNT EQUAL TO THE PERCENTAGE OF THE STATE'S POPULATION GROWTH FOR THE PREVIOUS YEAR AS DETERMINED BY THE STATE. DEMOGRAPHER.

ACCORDING TO THE STATE DEMOGRAPHER, THE POPULATION OF THE STATE OF TEXAS GREW BY 1.17% FROM JANUARY 1ST, 20, 21, TO DECEMBER 31ST, 2021. THE ORDER BEFORE YOU THEREFORE ADJUST THE LIMIT FOR 2022 TO 184406 BARRELS.

SUBJECT TO YOUR QUESTIONS, THIS ITEM IS NOW BEFORE YOU FOR YOUR VOTE.

CAN I ASK YOU TO REPEAT THAT LAST? THE LAST NUMBER, PLEASE? THE LAST NUMBER IS IT'S 184,406 BARRELS.

ALL RIGHT. COMMISSIONERS, ANY QUESTIONS OR COMMENTS? VERY WELL. I MOVED TO APPROVE THE ORDER, ADJUSTING PRODUCTION LIMITS UNDER ALCOHOLIC BEVERAGE CODE.

SECTION 62.122.

SECOND TO THIS MOTION.

SECOND. THANK YOU, MR. ATKINS. THANK YOU.

WE WILL KNOW ABOUT. JUST.

BODEN'S COMPLETE. MOTION CARRIES.

NEXT. NEXT.

[6. Rules]

CHAPTER 39 PO.

MS.. HORTON, IF YOU PLEASE, THIS IS YOUR ONLY REAL ITEM FOR ADOPTION THIS MONTH.

THE REVISED AND NEW RULES FOR PORTS OF ENTRY.

THE RULE REVISION ALLOWS FOR RECEIPTS AT PORTS OF ENTRY BY METHODS OTHER THAN STAMPS.

THE REMAINDER OF THE NEW RULES DESCRIBE HOW AGENTS DETERMINE THE NUMBER OF CONTAINERS OF ALCOHOLIC BEVERAGES TO COUNT AT PORTS OF ENTRY FOR TAXATION PURPOSES AND FEE PURPOSES, AND RESTATE STATUTORY STANDARDS AND OTHER STANDARDS WITH THE PURPOSE OF CONSOLIDATING ALL THE RELEVANT INFORMATION INTO ONE PLACE.

NO PUBLIC COMMENTS WERE RECEIVED REGARDING THESE PROPOSED RULES.

THEY ARE NOW BEFORE YOU FOR YOUR DELIBERATION AND DECISION ON FINAL ADOPTION.

DO WE HAVE ANY COMMENTS OR QUESTIONS? VERY WELL. I MOVE TO APPROVE ADOPTION OF NEW AND AMENDED CHAPTER 39 POE PORTS OF ENTRY AS RECOMMENDED BY STAFF.

IS THERE A SECOND, PLEASE? I'LL SECOND. THANK YOU, COMMISSIONER.

MARINA. YOU'LL NOW VOTE.

VOTING IS COMPLETE. MOTION CARRIES.

THANK YOU. MOVING ON TO AGENDA ITEMS IN CONSIDERATION AND POTENTIAL ACTION.

THE PUBLICATION OF PROPOSED NEW AND AMENDED CHAPTER 34 SCHEDULES OF SANCTIONS AND PENALTIES FOR SPORTING GOODS.

ITEM 6.2 IS THE PROPOSAL FOR REVISED CHAPTER 34.

THIS IS THE FIRST CHAPTER OF REVISIONS TO THE PUBLIC SAFETY RULE CHAPTERS PURSUANT TO THE REGULAR FOUR YEAR RULE REVIEW CYCLE PRESCRIBED BY THE GOVERNMENT CODE.

ONE SIGNIFICANT CHANGE IN THIS CHAPTER IS A RECONFIGURATION OF THE CHARTER OF RECOMMENDED PENALTIES FOR PUBLIC SAFETY VIOLATIONS.

THERE WE GO TO SUBSTANTIALLY MIRROR THE CHART THAT WE PREVIOUSLY ADOPTED FOR REGULATORY VIOLATIONS, ALONG WITH THE REST OF THE RULE CHAPTERS THAT WILL BE PRESENTED TO YOU FOR PROPOSAL TODAY.

CHAPTER 34 WAS A SUBJECT OF TWO WELL-ATTENDED AND VERY CONSTRUCTIVE STAKEHOLDER MEETINGS, AND WE APPRECIATE THE INVOLVEMENT OF ALL OF OUR STAKEHOLDERS IN GETTING US TO A DRAFT THAT WE FEEL GOOD ABOUT.

SO SUBJECT TO YOUR QUESTIONS.

THIS ITEM, REVISED CHAPTER 34, IS NOW BEFORE YOU FOR YOUR DELIBERATION AND DECISION ON PUBLICATION FOR PROPOSAL.

ANY QUESTIONS OR COMMENTS? I HAVE ONE. SHANE IT.

DOES IT INCREASE SANCTIONS IN ANY FOR IN ANY EVENT? I DON'T BELIEVE SO. IT SHOULD.

IT SHOULD BE.

THERE ARE SOME INSTANCES, I THINK ALL OF THE TRAFFICKING VIOLATIONS WERE SET TO BE THE SAME HIGH PENALTY AND THERE MAY HAVE BEEN A LOWER RANGE BEFORE.

BUT I'LL HAVE TO GET BACK TO YOU ON THAT.

I'LL TALK WITH THE WITH OUR ENFORCEMENT GUYS.

ALL RIGHT. THANKS. NO OTHER COMMENTS.

I MOVE TO APPROVE PUBLICATION OF THE PROPOSED NEW AND AMENDED CHAPTER 30 GOALS OF SANCTIONS AND PENALTIES, AS RECOMMENDED BY STAFF AS THEIR SECOND

[02:00:09]

THANK YOU.

BUT IT'S COMPLETE. THANK YOU.

MOTION CARRIES. NEXT IS CONSIDERATION OF POTENTIAL ACTION ON PUBLICATION OF PROPOSED NEW CHAPTER 35 ENFORCEMENT IMPORTANT, IF YOU PLEASE, MA'AM.

AS A SUBSEQUENT PROPOSALS TODAY, THE MAJORITY OF THE CHANGES WITHIN CHAPTER 35 ARE TO CONSOLIDATE RULES INTO FEWER CHAPTERS AND SUBDIVISIONS AND GROUP RELATED RULES TOGETHER TO FACILITATE USE OF THE RULES BY THE REGULATED COMMUNITY IN GENERAL PUBLIC.

ADDITIONALLY, BASED ON THE COMMISSION'S AUTHORITY AUTHORITY UNDER SECTION 28.11 OF THE ALCOHOLIC BEVERAGE CODE, THE DRAFT RULES HERE REQUIRE THAT MIXED BEVERAGE PERMIT HOLDERS REPORT CERTAIN BREACHES OF THE PEACE ON PROPERTY THAT, WHILE NOT PART OF THEIR DIAGRAM PREMISES, IS STILL UNDER THEIR CONTROL, SUCH AS A PARKING LOT SHARED WITH OTHER BARS AND RESTAURANTS.

THE DRAFT RULE ALSO ADDS AN EXCEPTION TO THIS REPORTING REQUIREMENT FOR TIMES WHEN THE BUSINESS IS CLOSED.

THIS IS WHAT OUR COMMENTARY WAS SPEAKING OF EARLIER, AND THE DEFINITION OF UNDER THE CONTROL IS SOMETHING THAT WE DO WANT TO DISCUSS DURING THE COMMENT PERIOD, BUT IS SOMETHING THAT IS THERE'S QUITE A BIT OF CASE LAW THAT WOULD HELP IN MAKING THAT DETERMINATION OF WHAT IS TRULY, AT LEAST PARTIALLY UNDER THE CONTROL.

AND THE REASON THAT WE DON'T EXTEND IT TO OTHERS BESIDES THE MIXED BEVERAGE PERMIT HOLDERS IS THAT THE AUTHORITY FOR THIS TO REQUIRE THESE PERMIT HOLDERS TO DO SOMETHING THAT IS NOT WITHIN THE CONFINES OF THEIR DIAGRAM PREMISES COMES FROM CHAPTER 28 AND ONLY APPLIES TO MIXED BEVERAGE PERMIT HOLDERS.

SO THAT'S JUST BY WAY OF EXPLANATION FOR THE DIFFERENCE THERE.

THE PURPOSE IS TO ENSURE THAT THE AGENCY IS NOTIFIED OF BREACHES OF THE PEACE TO WHICH POLICE OR MEDICAL PERSONNEL ARE CALLED.

EVEN IF IT OCCURS, LIKE I SAID, IN AN ADJACENT PARKING LOT RATHER THAN AN INSIDE THE ESTABLISHMENT, THIS WILL ENHANCE PUBLIC SAFETY BY HELPING ABC AGENTS IDENTIFY AREAS OF CONCERN NEXT TO MIXED BEVERAGE PERMITTED ESTABLISHMENTS.

THE OTHER CHANGES IN THIS CHAPTER ARE NON SUBSTANTIVE AND JUST FOR EASE OF USE.

IF THERE ARE ANY OTHER QUESTIONS, THIS ITEM IS READY FOR YOUR DECISION ON PUBLICATION FOR PROPOSAL.

ARE THERE ANY COMMENTS OR QUESTIONS? SHANE, WHAT DO YOU SAY ABOUT CASE LAW THAT IS THERE? IS THERE SOMETHING THAT YOU WANT TO DISCUSS MAYBE AT THE NEXT MEETING, AT THE NEXT STAGE OF THINGS, OR TALK ABOUT THAT NOW? MY MY ONLY COMMENT TO THAT WAS THAT RATHER THAN PUTTING OUR OWN COMING UP WITH OUR OWN DEFINITION OF WHAT IS UNDER THE UNDER THE CONTROL THAT OUR JUDGES WOULD BE LOOKING TO PRIOR CASE LAW IN THAT REGARD.

AND WE CAN AND I CAN DISCUSS THAT WITH YOU OFFLINE IF YOU'D LIKE.

THAT'S THAT'S FINE. THANK YOU.

VERY WELL. I MOVED TO A PUBLICATION OF PROPOSED CHAPTER 35 ENFORCEMENT AS RECOMMENDED BY STAFF AS THEIR SECOND TO THIS MOTION.

SIR. VERY WELL.

THANK YOU. AND SECOND FROM COMMISSIONER MACKLIN.

MUCH. ALL OF IT.

CONSIDERING THAT WE HAVE SEVEN OR EIGHT MORE OF THE POTENTIAL ACTION AND ITEMS TO DISCUSS AS WELL AS GOING INTO EXECUTIVE SESSION, I WOULD LIKE TO MOMENTARILY TAKE A FIVE MINUTE BREAK AS WE'VE BEEN IN HERE FOR 2 HOURS.

AND SO I'D LIKE TO TEMPORARILY ADJOURN THE TIME.

AND BY THE WAY, I'VE INVERTED THE TIME.

IT IS ACTUALLY 141.

AWESOME. AWESOME TIME AND 12:41 P.M.

MOUNTAIN TIME.

WE ARE TEMPORARILY SET FREE.

SO 5 MINUTES.

5 MINUTES. THAT.

[02:09:46]

ALL RIGHT, SO.

[02:10:04]

6.4. CHAPTER 35.

41.17%. CORRECT.

ALL RIGHT. THE NEXT AGENDA ITEM IS CONSIDERATION AND POTENTIAL ACTION AND PUBLICATION OF PROPOSED RULE 41.173 41.27. RECORDING OF REPORTS.

MS.. HORTON. THANK YOU.

ACTUALLY, THESE RULES ARE NOT NEW AND THAT THEY ARE REALLY ONLY BEING MOVED A LITTLE BIT TO MAKE ROOM FOR INSERTION OF THE BOTTLE CAPPING DEVICES RULE, WHICH IS CURRENTLY IN A SORT OF STANDALONE SUBCHAPTER IN RULE 35 WITHOUT RELATIONSHIP TO ANY OF THE RULES AROUND IT.

WE ARE PROPOSING TO MOVE IT INTO CHAPTER 41, ADJACENT TO THE RULE THAT WE RECENTLY CREATED IN LIGHT OF THE ALCOHOL TO GO PHENOMENON, TO SAY WHAT KINDS OF TAMPER PROOF SEALS WE RECOGNIZE, WHAT KINDS OF WAYS OF SEALING ARE ACCEPTABLE FOR THAT PURPOSE.

AND SO WHAT WE'RE DOING HERE IS PROPOSING TO MOVE THE BOTTLE CAPPING DEVICES RULE, WHICH SAYS YOU CANNOT YOU CAN'T OWN OR HAVE A BOTTLE CAPPING DEVICE FOR AN ILLEGAL PURPOSE AND PUT IT ADJACENT TO THE RULE THAT SAYS BUT FOR THE ILLEGAL PURPOSE OF ALCOHOL TO GO HERE ARE HERE ARE THE TYPES OF DEVICES THAT YOU CAN HAVE.

SO THAT'S THE REASON FOR MOVING IT FROM FROM SORT OF JUST OUT THERE IN SPACE AND PUTTING IT ADJACENT TO A RELATED RULE.

AND SO WHAT WE'RE DOING IN ITEM 6.4 IS SIMPLY BUMPING DOWN THOSE OTHER RULES IN CHAPTER 41 TO MAKE ROOM FOR THAT ADJACENT RULE MOVE.

THANK YOU, MA'AM. ANY COMMENTS OR QUESTIONS? THEN I MOVED TO A PUBLICATION, THE NEW RULE 41.17 THROUGH 41.27 RECORD KEEPING OR REPORTS AS RECOMMENDED BY STAFF.

IS THERE A SECOND? SECOND, MR. ADAMS. THANK YOU. WE'LL NOW VOTE.

ALL VOTED IN MOTION CARRIES NEXT GEN ITEMS CONSIDERATION OF POTENTIAL ACTION ON PUBLICATION OF PROPOSED NEW RULE 50.33 ALCOHOL DELIVERY COMPLIANCE SPORT IN THIS ORDER PROPOSED NEW RULE 50.33 IS IDENTICAL TO CURRENT RULE 35.7 ALCOHOL DELIVERY COMPLIANCE SOFTWARE APPLICATIONS.

AND AGAIN, WE'RE JUST PROPOSING TO SIMULTANEOUSLY REPEAL IT FROM THAT LOCATION AND MOVE IT INTO CHAPTER 50, BECAUSE CHAPTER 50 CONTAINS OTHER RULES RELATED TO ALCOHOL DELIVERY.

SO IT IS A LOGICAL PLACE TO LOOK FOR THAT RULE AND WE'LL ELIMINATE ANOTHER SUBCHAPTER OF CHAPTER 35.

SO THAT'S THE PURPOSE FOR FOR THIS ADOPTION.

AND THIS IS NOW BEFORE YOU IF YOU HAVE ANY QUESTIONS, I'M HAPPY TO ANSWER.

NO QUESTIONS OR COMMENTS.

I MOVE TO APPROVE PUBLICATION AND PROPOSED NEW RULE 50.33 ALCOHOL DELIVERY COMPLIANCE AS RECOMMENDED BY STAFF.

IS THERE A SECOND TO THE MOTION? MR. MACK. THANK YOU, SIR.

YOU'LL VOTE.

MOTION IS APPROVED.

NEXT AGENDA ITEM IS CONSIDERATION POTENTIAL ACTION ON PUBLICATION A PROPOSED REPEAL OF RULES 34.3 THROUGH 34 640. THE REMAINDER OF THE RULE PROPOSAL ITEMS ARE REPEALS RELATED TO MOVING RULES TO NEW LOCATIONS FOR MORE LOGICAL, STREAMLINED ORGANIZATION. UNFORTUNATELY, DUE TO TEXAS REGISTER REQUIREMENTS AND PUBLICATION REQUIREMENTS, WE HAVE TO BOTH PROPOSE THE RULE IN ITS NEW LOCATION AND THEN REPEAL THE PLACE THAT IT USED TO BE AT THE SAME TIME.

SO THAT'S WHY WE'RE HAVING TO DO SEPARATE VOTES ON EACH OF THESE.

SO I'LL TRY TO BE QUICK.

SIMULTANEOUSLY WITH THIS PROPOSAL, WE ARE PROPOSING TO ADOPT A NEW RULE 34.10 TO CONTAIN THE CONTENT OF RULE 34.3, WITH AMENDMENTS AS CONSIDERED EARLIER IN THE NEW RULE PROPOSALS.

ADDITIONALLY, ITS PROPOSAL WOULD MOVE RULES 34.4 TO 30 .4.6 TO NEW RULES.

34.22 22 TO FACILITATE MOVING THEM AGAIN LATER INTO ANOTHER RULE CHAPTER THAT'S CURRENTLY UNDER DEVELOPMENT, ESSENTIALLY WITHOUT IMPACTING THE OTHER RULES.

SO WE'RE BUMPING THEM DOWN SO THAT LATER WE CAN CUT THEM OUT WITHOUT IMPACTING ANY OF THE OTHER RULES IN THE CHAPTER.

THESE REPEALS ARE NECESSARY TO EFFECTUATE THE CHANGES PROPOSED TO RULE 34.3 AND THE REARRANGEMENT OF CHAPTER 34 TO DIVIDE IT INTO TWO PARTS FOR.

[02:15:09]

THAT'S KIND OF THE OVERALL PURPOSE OF THE OF THE SHIFTS IS TO MAKE IT ALL THE PUBLIC SAFETY UP FRONT.

AND THEN THERE'S A LITTLE BIT OF A BREAK.

AND THEN WE HAVE ALL OF THE REGULATORY AND THERE'S A BIT OF DIFFERENT DIFFERENTIATION THERE SO THAT PEOPLE CAN MAKE SURE THEY'RE REFERENCING THE RIGHT PORTION.

THIS ITEM IS NOW BEFORE YOU FOR YOUR DELIBERATION AND DECISION ON PUBLICATION FOR PROPOSAL.

AND I'M HAPPY TO ANSWER ANY QUESTIONS, ANY QUESTIONS, COMMENTS.

HAVING HEARD NONE, I MOVED TO APPROVE PUBLICATION POST REPEAL OF RULES 34.3 THROUGH 34.6 AS RECOMMENDED BY STAFF.

IS THERE A SECOND TO THIS MOTION I SERVE? ALL ABOUT IT. MOTION IS APPROVED.

THE NEXT AGENDA ITEM IS CONSIDERATION OF POTENTIAL ACTION ON PUBLICATION OF THE REPEAL OF RULES.

35 .7.

11.21 3132 4150 AND 35.54.

THIS ITEM INCLUDES PROPOSED REPEALS RELATED TO CHAPTER 35 TO REORGANIZE AND CONSOLIDATE THE RULES FOR EFFICIENCY AND EASE OF USE RULES.

35.7 AND 11.

YOU HAVE PREVIOUSLY IN THIS MEETING VOTED TO PROPOSE MOVING TO A NEW LOCATION.

THIS ITEM IS NOW BEFORE YOU IF YOU HAVE ANY QUESTIONS, HAPPY TO ANSWER THEM.

ON PUBLICATION FOR PROPOSAL OF THE REPEALS THE QUESTIONS I HEARD NONE.

I MOVE TO APPROVE PUBLICATION AND REPEAL OF RULES LISTED IN AGENDA ITEM 6.7 AS RECOMMENDED BY STAFF.

IS THERE A SECOND SECOND VOTE? FULL VOTED, WHICH IS APPROVED.

NEXT AGENDA ITEM IS CONSIDERATION OF POTENTIAL ACTION ON PUBLICATION OF REPEALED RULE 36.1.

THIS WORDING PLEASE.

CURRENT RULE 36.1.

POSSESSION AND SALE OF FIREARMS ON LICENSED PREMISES IS THE SOLE RULE IN CHAPTER 36.

SO STAFF PROPOSES TO REPEAL THAT RULE AND THEN SIMULTANEOUSLY RE ADOPT IT WITH SOME AMENDMENTS.

JUST FOR CLARITY. EDITORIAL THINGS INTO CHAPTER 35 ENFORCEMENT.

DOING SO CONSOLIDATES WITH OTHER ENFORCEMENT RULES AND ELIMINATES AN UNNECESSARY SUBCHAPTER SORRY CHAPTER DELINEATION.

SUBJECT TO YOUR QUESTIONS, THIS ITEM IS NOW BEFORE YOU FOR YOUR DECISION ON PROPOSAL.

SO WE'RE GOING FROM 36 TO 35, RIGHT? SO WE'RE ELIMINATING CHAPTER 36 ENTIRELY BECAUSE IT HAS ONLY ONE RULE AND WE'RE MOVING THE GUN RELATED THAT GUN RELATED RULE UP INTO ENFORCEMENT.

CHAPTER 35.

SO THERE'S NO SUBSTANTIVE, SUBSTANTIVE CHANGE AT ALL.

IT'S PURE REORGANIZATION, CORRECT.

ANY OTHER QUESTIONS? THANK YOU.

I MOVE TO APPROVE PUBLICATION REPEAL OF 36.1 AS RECOMMENDED BY STAFF.

IS THERE A SECOND TO THE MOTION, SIR? MR. MACK WILL NOW VOTE.

ALL VOTED APPROVED.

NEXT AGENDA ITEMS CONSIDERATION OF POTENTIAL ACTION ON PUBLICATION OF REPEAL OF RULE 37.61 IS FOR YOU, PLEASE.

CURRENT RULE 37.61 SUSPENSIONS CONTAINS A LIST OF REASONS.

THE ADMINISTRATOR I'M SORRY, THE EXECUTIVE DIRECTOR CAN DENY A LICENSE, LICENSEE OR PERMIT THE OPTION OF PAYING A FINE IN LIEU OF A SUSPENSION AND REASON.

IN OTHER WORDS, THE REASONS THAT WE CAN SUSPEND A LICENSE OR PERMIT THAT, TO ME DOES NOT BELONG IN CHAPTER 37 LEGAL AND IS MORE LOGICALLY PLACED IN CHAPTER 34 SCHEDULE OF SANCTIONS AND PENALTIES AS IT IS A SANCTION OPTION THAT WE HAVE IN ADDITION TO THE PENALTIES THAT ARE ALL LAID OUT THERE IN CHAPTER 34.

SO THIS WOULD JUST MAKE THAT A COMPLETE SET OF OUR OPTIONS RATHER THAN HAVING ONE OPTION IN THIS SEPARATE SECTION IN IN LEGAL,

[02:20:01]

AND WE THINK THIS WILL MAKE MORE SENSE HERE AND PEOPLE BE ABLE TO FIND IT MORE EASILY.

IT'S UP TO YOUR QUESTIONS.

THIS ITEM IS NOW BEFORE YOU FOR DECISION ON PUBLICATION FOR PROPOSAL, COMMENTS OR QUESTIONS.

HAVING HEARD NONE, I MOVED TO APPROVE PUBLICATION AND REPEAL OF 37.61 IS RECOMMENDED BY STAFF.

IS THERE A SECOND? SECOND.

THANK YOU, COMMISSIONER MACK.

NOW BOTH.

ALL THE VOTED APPROVED NEXT AGENDA ITEMS CONSIDERATION OF POTENTIAL ACTION ON PUBLICATION.

REPEAL OF RULES 41.17 41.26.

THIS IS RELATED TO THE EARLIER ITEM MOVING THE BOTTLE CAPPING DEVICES ROLL INTO CHAPTER 41.

SO PREVIOUSLY YOU VOTED TO ADOPT THESE RULES BY SHIFTING THEM DOWN ONE AND THIS IS THE CORRESPONDING REPEAL OF THOSE RULES FROM THEIR CURRENT POSITIONS. VERY WELL.

THANK YOU. ANY COMMENTS ON BOTTLE CAP? HAVING HEARD NONE.

WE SHALL VOTE.

OR I NEED A SECOND. SECOND.

VERY WELL. I MOVE TO APPROVE PUBLICATION OF REPEAL OF RULES 41.17 THROUGH 41.26 AS RECOMMENDED BY STAFF.

COMMISSIONER ATKINS HAS SECONDED THE MOTION.

WE WILL NOW VOTE. ALL THE VOTED.

NEXT GEN ITEM IS CONSIDERATION AND PUBLICATION OF NOTICE OF INTENT TO REVIEW CHAPTER 37 LEGAL ESCORT.

THIS ITEM IS ENTITLED NOTICE OF REVIEW BECAUSE AFTER THE REPEAL OF 37.61, WHICH YOU HAVE PROPOSED UNDER ITEM 610 I'M SORRY, UNDER ITEM 6.9, THE REMAINDER OF THE CHAPTER ENTITLED LEGAL.

WE INTEND TO LEAVE AS IS.

HOWEVER, THIS LETS THE PUBLIC KNOW THAT THIS RULE CHAPTER IS OPEN AND UNDER CONSIDERATION FOR COMMENTS, AND IT WILL ALSO CREATE A RECORD OF THE REVIEW AND RE ADOPTION OF THE CHAPTER WITHOUT CHANGES SUBJECT TO YOUR QUESTIONS.

THIS ITEM IS BEFORE YOU FOR YOUR DECISION ON PUBLICATION FOR PROPOSAL.

QUESTIONS OR COMMENTS.

I MOVE TO APPROVE PUBLICATION OF NOTICE OF INTENT TO REVIEW CHAPTER 37, LEGAL AS RECOMMENDED BY STAFF.

IS THERE A SECOND DISTRICT, MR. MACK. THANK YOU, SIR.

WE WILL NOW VOTE.

PUBLIC VOTED ELECTION IS APPROVED, RIGHT.

WE HAVE BEFORE YOU ANOTHER BREAK.

[7. Executive Session]

THE COMMISSION WILL NOW GO INTO EXECUTIVE SESSION UNDER GOVERNMENT CODE 5511074 AND 551071.

REGULAR OPEN SESSION.

THE TEXAS PUBLIC SERVICE COMMISSION WILL BE IN RECESS THE TIME AT 1 P.M.

MOUNTAIN TIME. TUESDAY, MARCH 22ND, 2022.

[02:53:34]

[02:53:38]

[02:53:39]

[8. Closing Items]

[02:53:43]

[02:53:48]

[02:53:55]

NEXT IS POTENTIAL ACTION ITEMS ON ITEMS DISCUSSED IN EXECUTIVE SESSION AND THEIR ACTION ITEMS TO BE TAKEN.

THE NEXT ITEM I WOULD LIKE TO MAKE A MOTION THAT WE PLACE ON THE AGENDA OF THE NEXT COMMISSION MEETING AN AMENDMENT TO RULE 31.1 REGARDING THE PUBLIC SAFETY ADVISORY COMMITTEE, AS YOU MAY RECALL.

WE HAVE CREATED THREE ADDITIONAL COMMITTEES, ONE OF WHICH WE DISCUSSED EARLIER, AND THE PUBLIC SAFETY ADVISORY COMMITTEE.

THE AMENDMENT WOULD EXPAND THE ELIGIBILITY CRITERIA FOR PUBLIC MEMBERS TO INCLUDE ANY PEACE OFFICER RETIRED FROM A STATEWIDE OR FEDERAL LAW ENFORCEMENT AGENCY, WHEREAS CURRENTLY ONLY RETIRED AGENCY PEACE OFFICERS QUALIFIED.

THE RATIONALE BEHIND THAT IS JUST TO OFFER MORE OF A DIVERSE APPLICATION AND THE POTENTIAL CANDIDATES.

IT'S NOT NECESSARILY A SET POLICY, BUT IT IS TO GET FEEDBACK FROM ANYONE THAT'S BEEN INVOLVED IN A LAW ENFORCEMENT AGENCY.

[02:55:01]

AND IF WE LIMIT IT ONLY TO OUR OWN PEOPLE, I THINK IT PERHAPS MAY LIMIT WHAT WE CAN DO AND WHO WE CAN GET.

NOT TO SAY THAT WE WILL NOT HAVE IN FORMER ABC OFFICER, BUT I JUST WANT WE WANT THE ABILITY TO OPEN IT TO A SLIGHTLY WIDER AUDIENCE POTENTIALLY. SO THAT IS THE MOTION TO HAVE A SECOND OR ACTUALLY ANY DISCUSSIONS.

OKAY, SABRINA, THANK YOU FOR YOUR SECOND.

YOU'LL NOW VOTE AND IT HAS TO BE A VERBAL VOTE ALL IN FAVOR.

I, I, I FIRST THANK YOU.

ALL RIGHT. NEXT IS THE ANNOUNCEMENT OF THE NEXT MEETING TODAY, WHICH IS SCHEDULED FOR MAY 24TH, 2022, AND THAT IS GRADUATION WEEK.

WE HAVE A CONFLICT GRADUATING SUNDAY IN A HELL OF A RIDE.

I'LL SEE IF I CAN MOVE THAT. ALL RIGHT.

ANYONE ELSE ACCOMPLISHED GOOD? YES. HOPEFULLY, IF ONE CHILD GETS THROUGH HIS EXAMS, HE WILL BE OUT BY MAY 21.

YES, I THINK WE ARE IN OPTIONS, RIGHT? YEAH, MAKES SENSE.

ALL RIGHT. NEXT COMMISSION MEETING IS SCHEDULED FOR TUESDAY, MAY 24TH.

MR. CHAIRMAN, SIR, MAY I PROPOSE AN AGENDA ITEM FOR THE NEXT MEETING? I BEG YOUR PARDON. MAY I PROPOSE AN AGENDA ITEM FOR THE NEXT MEETING? ABSOLUTELY. AS YOU ALL KNOW, I THINK THAT OUR FEES SHOULD BE REVENUE NEUTRAL.

I DON'T THINK THERE WAS ANY REASON FOR US TO RAISE THEM.

I THINK IT WAS MORALLY WRONG TO TO RAISE THEM.

AND AND IT WAS ALSO INCONSISTENT WITH OUR STATUTE THAT REQUIRES US TO SET FEES AT REASONABLE AMOUNT AMOUNTS THAT ARE NECESSARY TO COVER OUR ADMINISTRATIVE COSTS. AND AND I THINK IT'S IMPORTANT THAT WE NOT RAISE OUR FEES AND THAT WE HAVE REVENUE NEUTRAL FEES.

AND AND SO I'D LIKE TO PUT FEES BACK ON THE AGENDA FOR FOR THE NEXT MEETING.

I'LL MAKE IT GENERAL AGAIN, NOT NOT TOO SPECIFIC, BUT BUT I DO THINK THAT WE NEED TO DISCUSS THEM.

I THINK THAT WE HAVE AN OBLIGATION TO DO THAT TO THE PEOPLE OF THE STATE.

YOU KNOW, PEOPLE ARE COMING TO TEXAS, FLEEING THIS KIND OF THING.

WE'RE SUPPOSED TO BE ABOUT OPPORTUNITY, NOT ERECTING BARRIERS BETWEEN PEOPLE IN THEIR ABILITY TO MAKE A LIVING.

WE WE SHOULD BE TEXANS HERE AND WE SHOULD NOT RAISE FEES PEOPLE ON ON PEOPLE FOR ABSOLUTELY NO REASON.

SO I MOVE, MR. CHAIRMAN, THAT WE PLACE FEES ON THE AGENDA OF OUR NEXT MEETING.

OR SECOND, I'LL SECOND ALL IN FAVOR.

ALL RIGHT, ALL RIGHT, ALL RIGHT.

ANY OPPOSED? ALL RIGHT. VERY WELL.

MOTION CARRIES. ANYONE ELSE? ALL RIGHT. ALL RIGHT.

I WOULD. BEFORE WE DEPART, I WANT TO SAY JUST A COUPLE OF THINGS ABOUT THIS MEETING.

AND FOR THOSE OF US THAT SORT OF AIRDROP IN TO A CITY AND WALK INTO THIS BEAUTIFUL BUILDING WITH ALL THIS TECHNOLOGY, WITH ALL THE SETUP, WE JUST SORT OF THINK IT HAPPENS AND IT DOES.

I CAN PROMISE YOU THAT THE PLANNING FOR THIS MEETING STARTED THE DAY AFTER OUR LAST MEETING ADJOURNED, AND THE AMOUNT OF WORK FOR THOSE OF US THAT ARE HERE SETTING THIS UP TO TECHNOLOGY.

JOE, YOU ARE AN UNSUNG HERO, MY FRIEND.

YOU AND YOUR TEAM AND ALL THE WORK THAT YOU DO TO SET UP THIS TECHNOLOGY AND ABSOLUTELY TO HAVE IT WORK.

FLAWLESS IS IS GIVING CREDIT TO COMMISSIONER ATKINS.

SO IT'S A STRIKE THAT FROM THE MINUTE I DO THAT, BUT I JUST DO ALL THE WORK THAT YOU GUYS DO AND EVERYONE IN THE STAFF. I MEAN, IT IS THIS IS A MONUMENTAL EFFORT THAT A LOT OF PEOPLE WORK VERY, VERY HARD TO COMPLETE.

IT'S AN EXTRAORDINARY EFFORT, I THINK, ON BEHALF OF THE COMMISSION WHAT EVERYONE DOES AND DON'T THINK IT DOESN'T GO UNNOTICED.

AND AS GENERAL PATTON SAID, I HAVE A LOT OF FAULTS, BUT INGRATITUDE IS NOT ONE OF THEM.

AND SO I'M GRATEFUL FOR EVERYONE AND ALL THE WORK THAT YOU DO BEHIND THE SCENES PREPARING THESE PRESENTATIONS, THE AMOUNT OF HOURS THAT

[03:00:02]

AND SO I JUST APPLAUD ALL OF YOU FOR EVERYTHING THAT YOU'VE DONE.

AND THANK YOU.

YOU JUST WALKED IN. I SPOKE A LOT ABOUT YOU AND YOU WEREN'T EVEN.

SO, ANYWAY, THANK YOU ALL VERY MUCH.

WE HOPE THAT EVERYONE HAD A SUCCESSFUL SPRING BREAK.

THE STATE IS STILL OPERATING, THE BEACHES ARE STILL FUNCTIONING.

AND SO MY CHILDREN DID NOT DESTROY ANYTHING THAT I KNOW.

THE NEXT IS A GERMAN. THE TIME IS NOW.

1:37 P.M.

MOUNTAIN TIME. AND WE ARE.

THANK YOU ALL.

* This transcript was compiled from uncorrected Closed Captioning.