COMMISSION MEETING January 24, 2017

Texas Alcoholic Beverage Commission 5806 Mesa Drive

Austin, Texas 78731

José Cuevas, Jr., Presiding Officer Steven M. Weinberg, MD, JD, Member Ida Clement Steen, Member Midland Colleyville San Antonio

TABLE OF CONTENTS

TITLE PAGE

Agenda--TABC Commission Meeting - January 24, 2017 ................................ 1

Minutes--TABC Commission Meeting - January 24, 2017 ............................... 3

Attachment 1: Administrative Rules, Agenda Items 10-13 Attachment 2: Commission Report: Executive Director and Agency

Legislative Activities Attachment 3: CY17 Rule Review Plan Update

Activities, Budget Issues, Staff Achievements,

Attachment 4: Enforcement Division Update Attachment 5: Human Resources Division Update

Certification of Minutes ..................................................................................... 34

AGENDA

REGULAR COMMISSION MEETING

10:00 a.m. - January 24, 2017

Sterling Event Center 6134 US 290 E,

Austin, Texas 78731

José Cuevas, Jr. Presiding Officer-Midland

Steven M. Weinberg, MD, JD Member-Colleyville

Ida Clement Steen Member-San Antonio

Sherry CookExecutive Director

Tuesday, January 24, 2017 10:00 a.m.

Agenda

1. Call to Order José Cuevas, Jr. 2. Approval of Commission Meeting Minutes of

November 17, 2016 José Cuevas, Jr.

3. Recognition of TABC Promotional Employees – John Reney, Chief of Ports of Entry; Sonia Salinas, Lieutenant - Region 4; Tana Travis, Regional Supervisor, Licensing Division; Donn Rupp, Director, Human Resources Division

Robert Saenz Earl Pearson Amy Harrison Ed Swedberg

4. Recognition of TABC Service Award Recipients (Enforcement Division, Audit & Investigations, Ports of Entry, Licensing Division, Business Services Division)

Earl Pearson Gene Bowman John Reney Amy Harrison Vanessa Mayo

5. Reception Honoring TABC Promotional and Service Award Recipients

José Cuevas, Jr

6. Commission Report: Executive Director and Agency Activities, Budget Issues, Staff Achievements, Legislative Activities

Sherry Cook

7. CY 2017 Rule Review Plan Update Ed Swedberg

8. Enforcement Division Update Earl Pearson

9. Human Resources Division Update Donn Rupp

10. Adopt Amendments to Rule §45.85, Approval of Labels Martin Wilson

11. Approve Publication of Proposed Amendments to Rule §35.21, Assist Defined

Martin Wilson

12. Approve Publication of Proposed Amendments to Rule §45.107, Alcoholic Beverages Utilized for Cooking Purposes at On-Premise Locations

Martin Wilson

13. Approve Publication of Proposed Amendments to Rule §45.80, Net Contents

Martin Wilson

14. Executive Session to Consult with Legal Counsel Regarding Pending and Anticipated Litigation Against the Agency and to Deliberate on the Appointment, Employment, Evaluation, and Duties of the Positions of Executive Director and General Counsel (Govt. Code §551.071, §551.074, and Texas Alcoholic Beverage Code §5.11)

José Cuevas, Jr.

15. Action on Items Discussed in Executive Session José Cuevas, Jr.

16. Public Comments José Cuevas, Jr.

17. Next Meeting Date: Tuesday, March 28, 2017 José Cuevas, Jr.

18. Adjournment José Cuevas, Jr.

Note: Items may not necessarily be considered in the order they appear on the agenda. Executive session for advice of Counsel (pursuant to §551.071 of the Government Code) may be called regarding any agenda item. Action may be taken on any agenda item.

NOTICE OF ASSISTANCE AT PUBLIC MEETINGS

Persons with disabilities who plan to attend this meeting and who may need auxiliary aids or services (such as interpreters for persons who are deaf, hearing impaired readers, large print, or Braille) are requested to contact Gloria Darden Reed at (512) 206-3221 (voice) (512) 206-3259 (fax). Relay Texas at 1-800-735-2989 (TTY/TDD), at least three (3) days prior to the meeting so that appropriate arrangements can be made.

MINUTES

REGULAR COMMISSION MEETING

10:00 a.m. - January 24, 2017

Sterling Event Center 6134 US 290 E,

Austin, Texas 78731

COMMISSION MEETING MINUTES January 24, 2017

The Commissioners of the Texas Alcoholic Beverage Commission (TABC) met in Regular Session on Tuesday, January 24, 2017 at the Sterling Event Center, 6134 US 290 Frontage Road, Austin, Texas.

COMMISSIONERS José Cuevas, Jr. PRESENT: Steven Weinberg, MD, JD

Ida Clement Steen

STAFF PRESENT: Sherry Cook, Executive Director

Gilbert Alba, Sergeant, Conroe Enforcement Office Josh Alexander, Supervisor, Audit & Investigations Division William Allen, Sergeant, San Antonio Enforcement Regional Office John Altum, Lieutenant, Enforcement Administration Donny Betts, Assistant Supervisor, Houston Audit Regional Office Brittany Bankhead, License and Permit Specialist, Licensing Division Gene Bowman, Director, Audit & Investigations Division David Brandon, Assistant Director, Information Resources Division Doug Burgess, Auditor, Houston Audit Regional Office Mindy Carroll, Director, Education & Prevention Division Dustin Carter, Quality Assurance Specialist, Ports of Entry Division Anna Castillo, Administrative Assistant, Enforcement Administration Cathleen Cavazos, Lieutenant, Austin Enforcement Regional Office Joe Cavazos, Lieutenant, Houston Regional Enforcement Office Amanda Collins, Regional Supervisor, Arlington Audit Regional Office Gina Eisman, License and Permit Specialist, Licensing Division Askia Evans, Auditor, Austin Audit Regional Office Jennifer Evans, Accounts Examiner, Licensing Division Diana Figueroa, Executive Assistant, Office of Professional Responsibility Division Keon Flowers, Recruiter, Human Resources Division Tiffany Forister, Budget Analyst, Business Services Division

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Melinda Fotinos, License Permits Specialist, Licensing Division Joe Fralin, Regional Manager, Ports of Entry Division Sandra Garza, Tax Compliance Officer, Brownsville Ports of Entry Segbe Golanyon, Assistant Supervisor, Arlington Audit Regional Office Nina Gonzales, Agent, San Antonio Enforcement Regional Office John Graham, Lieutenant, Corpus Christi Area Enforcement Office Nicholas Gutierrez, Lieutenant, Special Investigations Division Thomas Graham, Director, Tax & Marketing Practices Division Amy Harrison, Director, Licensing Division Cindy Hart, Program Specialist, Licensing Division Emily Helm, General Counsel, General Counsel Division Karen Henges, License and Permit Specialist, Licensing Division Melinda Ho, HR Generalist, Human Resources Division Michael Hunter, Agent, Georgetown Area Enforcement Outpost Joe Iagnemmo, Web Design Administrator, Information Resources

Division Stacy Jackson, Audit Supervisor, San Antonio Audit Regional Office Richard Jauregui, Major, San Antonio Enforcement Regional Office Dexter Jones, Chief, Audit and Investigations Division Joann Joseph, Assistant Director, Licensing Division Shaun Jordon, Supervisor, Austin Licensing Regional Office Avery Kelling, Program Specialist I, Seller Training Division Victor Kuykendoll, Major, Arlington Enforcement Regional Office Jeff Lashbrook, Agent, Austin Enforcement Regional Office Andrea Maceyra, Supervisor, Tax and Marketing Practices Division Vanessa Mayo, Chief Financial Officer, Business Services Division Maria Medrano, Supervisor, Brownsville Ports of Entry Laramie Mergerson, Agent, Arlington Enforcement Office Mariann Morelock, Director Government Relations, Executive

Division Harold Nanos, Captain, Austin Enforcement Division Earl Pearson, Chief, Enforcement Division Nicole Phillips, Audit Supervisor, Houston Audit Regional Office Jose Pineda, Supervisor, Licensing Division Khristi Polk, License and Permit Specialist, Licensing Division Chris Porter, Public Information Officer, Executive Division Yvette Price, Regional Supervisor, San Antonio Licensing Regional

Office Gloria Darden Reed, Executive Assistant, Executive Division Paula Reed, Deputy Chief Financial Officer, Business Services

Division John Reney, Chief, Ports of Entry Division Sharon Roberson, HR Specialist, Human Resources Division Albert Rodriguez, Captain, Training Division Audrey Rosales, Project Manager, Business Services Division Julie Ross, Supervisor, Licensing Division Monica Ross, Benefits Coordinator, Human Resources Division Donn Rupp, Director, Human Resources Division Kyle Russell, Regional Supervisor, Lubbock Licensing Regional

Office

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Robert Saenz, Executive Chief, Field Operations Administration Raul Salinas, Lieutenant, San Antonio Enforcement Regional Office Sonia Salinas, Lieutenant, Waco Enforcement Office Dexter Saterfield, License and Permit Specialist, Licensing Division Tammy Stucki, Administrative Assistant, Human Resources Division Ed Swedberg, Deputy Executive Director Ron Swenson, Captain, Special Investigations Unit Todd Talley, Regional Supervisor, Austin Audit Regional Office Lanatasha Thomas, License and Permit Specialist, Licensing Division Carla Thompson, Lieutenant, Arlington Enforcement Regional Office Maria Tonche, Assistant Supervisor, El Paso Ports of Entry Tana Travis, Regional Supervisor, Arlington Licensing Regional Office Mario Villarreal, Lieutenant, McAllen Enforcement Regional Office Nicole Walker, Lieutenant, Arlington Enforcement Regional Office Jay Webster, Director, Information Resources Division Geoffery Weise, Lieutenant, Arlington Enforcement Regional Office Brian Williams, Lieutenant, Lubbock Enforcement Regional Office Martin Wilson, Assistant General Counsel, Legal Division Carol Wright, License and Permit Specialist, Dickinson Licensing

Outpost

GUESTS PRESENT:

Zina Acevedo Vic Brooks, Vice President, Republic National Distributing Company Christi Koenig Brisky, Research & Program Specialist, Texans

Standing Tall Catherine Chamblee, Attorney, Gardere Wynne Sewell Ashley Copvey, Kyle Frazier and Associates Amy Cruz-Hunter Steve Greinert, Consultant, Wholesale Beer Distributors of Texas Kyle Hill, Attorney, Martin Frost and Hill Cheri Huddleston, Legislative Consultant, Southern Glazers Chelsy Hutchinson, Consultant, Republic National Distributing Co. Jessie Kirby Mysso Kirby Tanis Knelsen, Paralegal, Addison Law Firm Sarah Lerma Lance Lively, Executive Director, Texas Package Stores Matt Martin, Shareholder, Addison Law Firm Robert Menn Hope Ransom, Anew Briter Smile Patty Reney Tyler Rudd, Consultant, California Wine Institute Jose Santos Salinas JP Urrabazo, Vice President, Beer Alliance of Texas James Wright Randy Yarbrough, Consultant, Wholesale Beer Distributors of Texas

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CALL TO ORDER

The meeting of the Texas Alcoholic Beverage Commission was called to order at 10:10 a.m. by Presiding Officer José Cuevas.

APPROVAL OF COMMISSION MINUTES OF NOVEMBER 17, 2016.

Presiding Officer Cuevas called for approval of the Commission meetingminutes of November 17, 2016. Commissioner Ida Steen so moved to approve the minutes as written. Presiding Officer Cuevas seconded the motion and the motion passed.

Presiding Officer Cuevas called upon Assistant General Counsel Martin Wilson for the presentation of agenda Item 10.

ADOPT AMENDMENTS TO RULE §45.85, APPROVAL OF LABELS

Assistant General Counsel Martin Wilson stated agenda item 10, Rule §45.85 addresses applications for approval of malt beverage labels. He noted proposed amendments to §45.85, relating to Approval of Labels, without changes to the proposed text as published in the December 2, 2016, issue of the Texas Register (41 TexReg 9401). No comments were received.

Presiding Officer Cuevas called for a motion on the agenda item 10. Commissioner Steen moved to Adopt Amendments to Rule §45.85, Approval of Labels. Presiding Officer Cuevas seconded the motion and the motion passes.

Presiding Officer Cuevas called upon Assistant General Counsel Martin Wilson for the presentation of agenda Item 11.

APPROVE PUBLICATION OF PROPOSED AMENDMENTS TO RULE §35.21, ASSIST DEFINED

Assistant General Counsel Martin Wilson stated agenda item 11, Rule §35.21 is an interpretive rule clarifying the use of the word "assist" in Alcoholic Beverage Code §61.71(a)(12) and §106.09(a). Those subsections provide that a person may not employ a person under 18 years old to sell, serve, prepare, handle or dispense alcoholic beverages, or to assist in doing so. He stated the rule provides that merely being employed to work where alcoholic beverages are sold does not by itself mean that the minor is assisting in the prohibited activities, if the minor does not have a direct and immediate connection with any particular sale of alcoholic beverages.

He stated the proposed amendments are mostly grammatical and stylistic. The list of prohibited activities is modified to track the language of the relevant Alcoholic Beverage Code ("Code") subsections. He stated that the commission has reviewed the section pursuant to Government Code §2001.039 and has determined that the need for the rule continues to exist but that changes to the current rule are appropriate.

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Commissioner Steen moved to approve the Publication of agenda item 11, Rule§35.21, Assist Defined for a 30-day comment period in the Texas Register asrecommended by staff. Presiding Officer Cuevas seconded the motion and the motion passes.

Presiding Officer Cuevas called upon Assistant General Counsel Martin Wilson for the presentation of agenda Item 12.

APPROVE PUBLICATION OF PROPOSED AMENDMENTS TO RULE §45.107, ALCOHOLIC BEVERAGES UTILIZED FOR COOKING PURPOSES AT ON-PREMISE LOCATIONS

Assistant General Counsel Martin Wilson stated Rule §45.107 relates to Alcoholic Beverages Utilized for Cooking Purposes at On-Premise Locations. He added Rule §45.107 establishes the conditions under which wine and beer retailer's permittees and mixed beverage permit holders can possess and use certain alcoholic beverages on their premises for cooking purposes.

Commissioner Steen moved to approve the Publication of agenda item 12, Rule§45.107, Alcoholic Beverages Utilized for Cooking Purposes at On-premise Locations for a 30-day comment period in the Texas Register as recommended by staff. Presiding Officer Cuevas seconded the motion and the motion passes.

Presiding Officer Cuevas called upon Assistant General Counsel Martin Wilson for the presentation of agenda Item 13.

APPROVE PUBLICATION OF PROPOSED AMENDMENTS TO RULE §45.80, NET CONTENTS

Assistant General Counsel Martin Wilson stated Rule §45.80 relates to Net Contents. He stated Rule §45.80 prescribes how the net contents of a malt beverage must be stated on the label. Currently, subsection (a) applies to ale and malt liquor, while subsection (b) applies to beer. The requirements differ. He stated the rule also requires that all fractions be expressed in their lowest denominations, and allows the net contents to be blown, branded or burned on the bottle instead of being stated on the label.

Assistant General Counsel Wilson added proposed amendments delete current subsection (b) and apply the same standards to beer as are currently applied to ale and malt liquor in subsection (a). A new paragraph (5) is added to subsection (a) to account for containers larger than one gallon. Grammatical changes were also made.

Commissioner Steen moved to approve the Publication of agenda item 13, Rule§45.80, Net Contents for a 30-day comment period in the Texas Register as recommended by staff. Presiding Officer Cuevas seconded the motion and the motion passes.

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RECOGNITION OF TABC PROMOTIONAL EMPLOYEES – JOHN RENEY, CHIEF OF PORTS OF ENTRY; SONIA SALINAS, LIEUTENANT - REGION 4; DONN RUPP, DIRECTOR, HUMAN RESOURCES DIVISION; TANA TRAVIS, REGIONAL SUPERVISOR, LICENSING DIVISION; AND DANIEL CISTONE AND KORAH POUNDS, TRAINING DIVISION

Presiding Officer Cuevas called for agenda item 3 - Promotional Recognitions to be presented. Executive Chief Robert Saenz and Chief of Field Operations Earl Pearson came forward to introduce and read biographical information on the honorees:

Chief John Reney was born and raised in Brownsville, Texas. He joined the United States Air Force after graduating from high School. He separated with Honorable Discharge in 1980 and joined the Texas Department of Public Safety, completing the Highway Patrol Academy. He was stationed as a Highway Patrolman in Refugio, Corpus Christi, Bryan and Austin before retiring in 2011 as a Major, Highway Patrol Division. John joined TABC in 2012 and worked in the Office of Professional Responsibility until he assumed duty as Chief of Ports of Entry on October 1, 2016.

John has a Bachelor’s Degree from Corpus Christi State University and is a graduate of the Bill Blackwood Law Enforcement Management Institute and Northwestern University School of Police Staff and Command.

John is married to his wife Patricia and has two daughters, Natalie Choo, Lindsey Reney and a grand-daughter Elena Choo.

Lieutenant Sonia Salinas earned her Bachelor’s Degree in Criminal Justice from the Texas Pan American University in Edinburg, Texas in May 1991.

Salinas currently has over 24 years of State service working with different State agencies and departments. In January 1991, Sonia worked with the Texas Department of Criminal Justice Institutional Division as a Correctional Officer and was stationed in the Darrinton Male Maximum Prison in Rosharon, Texas. After working with TDCJ-ID, Sonia began her career with the Texas Alcoholic Beverage Commission on December 1992, with the Ports of Entry as an Inspector at the

Hidalgo and Progreso Ports of Entry bridges. Salinas transferred divisions from the Ports of Entry to the TABC Enforcement Division in May 1995 as an Agent Trainee being stationed in the Corpus Christi, McAllen and Richmond Enforcement offices. Salinas promoted to Sergeant in July 2012, where she was stationed in the Houston Regional Office. On September 2013, Salinas transferred to the Arlington Regional Office.

Salinas promoted to Lieutenant at the Waco Area Enforcement Office on October 1, 2016. She holds a Master Peace Officers Certification, Firearms Instructors Certification, Instructors Proficiency Certification and Field Training Officer Certification from TCOLE.

During her time off, Lt. Salinas enjoys barbecuing, fishing, karaoke and spending time with family and friends.

NEW EMPLOYEES/EMPLOYEE MOVES

Deputy Executive Director Ed Swedberg, Director of Licensing Amy Harrison and Director of Training Albert Rodriguez came forward to introduce TABC’s newest employees and employee moves:

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Donn Rupp joined TABC as the Director of Human Resources Division in December 2016. He has over 25 years of progressive and innovative human resources experience. He is originally from Montana and started his human resources career in Seattle, Washington with Verizon Wireless as a senior recruiter where he was responsible for hiring dynamic talent in seven states.

During his tenure with Verizon Wireless, he was promoted into a HR business partner strategic role. In 2004, Donn was recruited by Microsoft as a HR Business Partner where he supported IT and the gaming platform groups. A

year later, he accepted an opportunity as a HR Manager and was promoted to Site Senior Director of HR for Bayer Pharmaceuticals where he and his team supported a diverse international client group. In 2015, Donn accepted the position of National HR Manager with Envolve Peoplecare with the healthcare industry in Austin, Texas.

Donn holds a Bachelor’s Degree in Human Resources Management from the Montana State University. He is also SHRM certified and is a National Certified Master Mediator.

Tana Travis has over 29 years of state service. She joined the TABC from the State Board of Pardons and Paroles in 1989 in Amarillo.

In 2006, Tana was recognized for her work as coordinator on many Shattered Dreams programs in the DFW and surrounding areas. In 2008, Tana promoted to Sergeant and later promoted to Lieutenant for the Houston Office in 2012. In 2014, Tana transferred to the Waco Office.

In July of 2016, Tana retired from the Enforcement Division with 27 years of service with the TABC. Tana holds a Master Peace Officer Certificate and Instructor's License. Tana is also the Vice-President for the Retired TABC Officer’s Association.

Tana returned to the TABC on November 1, 2016 as the Arlington Regional Licensing Supervisor.

Daniel Cistone joined TABC as the Agency’s new LMS Administrator in January 2017.

Before joining TABC, Specialist Cistone was working in a similar role in the Education, Training and Research (ETR) Division at the Texas Department of Public Safety since 2010. At ETR, he was part of the instructional team of the Leadership Training Program and Technical programs offered to DPS employees.

Training Specialist Cistone is also a certified TCOLE Basic and Advanced Instructor and a Life Languages Advanced Instructor. He is an expert user of the Microsoft Office Suite.

Dan is an Army veteran with over 20 years of active service, and a professional musician, playing bass for most of his life.

Korah Pounds joined the Training Division in January 2017. Sergeant Pounds was hired as an Agent with TABC in April 2009. He has worked his entire career in the Arlington District Office and was assigned to the Fort Worth sector of Tarrant County.

Sergeant Korah began his law enforcement career in 2004 with the Mississippi Alcoholic Beverage Control and was stationed on the Mississippi Gulf Coast where he worked permitted, unlicensed, and moonshine (distillery) detection investigations.

Sergeant Pounds holds a Bachelor’s Degree in Political Science/Criminal Justice from the University of Mississippi (Ole Miss) and just completed his Master’s Degree from the University of Texas at Arlington in Criminology/Criminal Justice Administration. He holds a TCOLE Basic

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Instructor Certificate and is a Master Peace Officer. Sergeant Pounds is also a Field Training Officer, Arrest and Control Tactics Instructor, Physical Readiness Instructor, an Instructor/Role Player at the TABC Undercover School. Outside the academic arena, Sergeant Pounds also holds a 5th Degree Black Belt in DiaKido Kwando, a 3rd Degree Black Belt in Traditional Tae Kwon Do, and a Brown Belt in Combat Hapkido.

Away from work, Sergeant Pounds enjoys working out, traveling, and spending time with his two dogs (Blanca and Jock).

RECOGNITION OF TABC SERVICE AWARD RECIPIENTS (ENFORCEMENTDIVISION, AUDIT & INVESTIGATIONS, PORTS OF ENTRY, LICENSING DIVISION, BUSINESS SERVICES DIVISION)

Presiding Officer Cuevas called for agenda item 4 – Recognition of TABC Service Award Recipients to be presented.

Chief Earl Pearson, Director of Audit Gene Bowman, Chief of Ports of Entry John Reney, Director of Licensing Amy Harrison and Chief Financial Officer Vanessa Mayo came forward to introduce and read biographical information on the honorees:

RETIREMENT

Noe Castaneda - Noe Castaneda retired after 32 years of service as a Taxpayer Compliance Officer III at the Brownsville Ports of Entry. He began his career with TABC in October 1985.

Noe was born and raised in Brownsville, Texas. After graduating from Homer Hanna High School, he obtained hours in criminal justice at Texas Southmost College in Brownsville.

When he is not working, Noe enjoys barbecuing, listening to music, fishing, and going to the beach with his family and friends.

YEARS OF SERVICE AWARDS

Carol Wright (35 years) is a License and Permit Specialist IV in the Dickinson Licensing Outpost. She began her career with the TABC as a secretary on July 27, 1981. During her service to the agency, Carol received several prestigious awards including: the President’s Award from the Texas Restaurant Association’s Galveston County Chapter as well as appreciation awards from the Dickinson Memorial Post and Ladies Auxiliary.

Carol and her husband, James, have been married for 43 years. They have two sons: James Jr. and Patrick, and four grandchildren: Colton, Mallory,

Landon and Caden. In Carol’s spare time, she enjoys volunteering at church, spending time with her grandchildren, ocean cruising with friends, gardening, exercising, and spending time at her ranch in Moulton, Texas.

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William “Bill” Allen (25 years) is a Sergeant in the San Antonio Regional Office. He began his career with the TABC in January of 1992 after graduating from the Harris County Sheriff’s Academy. He also retired from the United States Air Force with the rank of Master Sergeant after serving 10 years on active duty and 10 years in the Reserves from 1983 to 2003.

Sergeant Allen served as part of a Presidential call up to active duty after the 9/11 terrorist attacks in support of Operation Enduring Freedom. He spent

nearly two years on active duty serving as the Non-Commissioned Officer in Charge (NCOIC) of the Security Forces Investigations Unit and as a Security Forces Flight Sergeant. Allen also served on active duty during the conflicts of Operation Desert Storm and Operation Just Cause. In 2003, he was promoted to the rank of Sergeant in the San Antonio Regional Office.

Sergeant Allen holds a Master Peace Officer Certification and Instructors Certificate from TCOLE. Sergeant Allen grew up in Galesburg, Illinois. He has two children: Darian (age 27) and Danielle (age 23). Bill enjoys motorcycle riding, hunting and fishing.

Sandra Garza (25 years) is a Taxpayer Compliance Officer III at the Brownsville Ports of Entry. She began her career as an Inspector I with the TABC on July 1, 1991. Prior to her employment with the TABC, she obtained her degree in Dentistry with Honors specializing in dentures from the Universidad Autonoma de Coahuila in Torreon Coahuila, Mexico in 1981 and worked as a medical assistant in Mexico.

Sandra, a certified dentist in Mexico, is a member of the American Dental Association, the American Red Cross, the American Cancer Society, the

Mexican Dental Association, and the Study Group of Dentistry of Matamoros Tamaulipas, Mexico.

During her spare time, she is involved in her community, spends time with family and friends, and enjoys her hobbies: arts and crafts, gardening, barbecuing, and exercising. Sandra also enjoys listening to jazz and bossa nova.

Laramie Mergerson (25 years) is an Enforcement Analyst in the Arlington Region 2 Office. He began his career with the TABC in 1992 after graduating from the Harris County Sheriff’s Office Academy. Agent Mergerson was assigned to the Dallas District Office and has continued working in that location throughout his tenure. He holds a TCOLE Master Peace Officer Certification, and has been involved with many special projects such as the Special Investigations Unit, Homeland Security, and revising the Field Training Program.

Agent Mergerson obtained his Bachelor of Science Degree in Criminal Justice at the Midwestern State University in Wichita Falls.

He has been married to his wife Loretta for 35 years. They have four children: Laramie Jr., Mariana, Veronica, and Luke. They also have four grandchildren. Laramie’s hobbies include coaching, watching basketball, gardening and grandpa duties.

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Maria Tonche (25 years) is an Assistant Supervisor at the El Paso Ports of Entry. She began her career with the TABC on November 15, 1991 and encountered the many changes and growth of the TABC. Maria was promoted to Assistant Supervisor in 2007.

Maria was born and raised in El Paso, Texas. She is the mother to Carlos R. Tonche and fiancée to Ricky Flores. She has three step children: Ricky, Jr., Jimmy and Erick Flores. In her spare time, Maria enjoys spending time with her

family and pets. She also enjoys traveling.

Gilbert Alba (20 years) is a Sergeant in the Conroe Area Enforcement Office. He began his career with the TABC on June 1, 1996, as an Agent Trainee stationed in the Houston District Office. In 1998, he transferred to the Denton Outpost, Huntsville Outpost in 2003, and Bryan Area Office in 2005. In 2012, he promoted to Sergeant.

Sergeant Alba graduated from Texas A&M University with a B.A. in Political Science and is a current graduate student at the Bush School of Government

and Public Service seeking a Master’s Certificate in Homeland Security. He holds a Master Peace Officer Certification, Advanced Instructor Certification and Firearms Instructor Certification from TCOLE.

Sergeant Alba is married to Lisa Gergley and they have two children together: Nick and Dianna Grace. Any free time is spent with his family and friends at select basketball practice or tournaments.

Douglas Burgess (20 years) is an Auditor V in the Houston Regional Audit Office. He worked for the TABC as a Gross Receipt’s Auditor for 10 ½ years in Houston and separated with the TABC as an Auditor IV. Before returning to the TABC, Douglas was employed with Landry’s Restaurant Inc.’s Corporate Office for 13½ years and separated with Landry’s as an Associate Director of Operations Analysis.

In 2008, Doug returned to the TABC and has served as the Acting Assistant Regional Supervisor on two occasions. Doug graduated from the University of Texas at Austin, with a degree in Finance.

Marc Decatur (20 years) is a Major in the Houston Enforcement Regional Office. He began his career with the TABC on June 1, 1996. In 2002, he was promoted to the rank of Sergeant and assigned to the McAllen District Office. In 2004, he was promoted to Lieutenant in the El Paso Office. Major Decatur was promoted to his present position as a Major on March 1, 2013.

During the twenty years he has served with the agency, Major Decatur has transferred to 11 different offices. When Major Decatur isn’t working, he is usually found spending time with his grandchildren. Marc enjoys motorcycle riding, outdoor cooking and fishing.

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Tiffany Forrister (20 years) is a Budget Analyst III in the Austin Headquarters Office. She began her career with the TABC on April 15, 1996, as a Secretary in the Seller Training Section. Tiffany later transferred to Credit Law as an Administrative Assistant and served in that capacity for three years.

In March of 2001, Tiffany returned to the TABC as the Administrative Assistant in the Human Resources Division. She spent 14 years of her tenure in Human Resources where she served as a Human Resources Specialist and promoted to the lead HR Generalist. In April of 2015, Tiffany transferred to the Business

Services Division as a Budget Analyst.

Tiffany is a graduate of the Texas Fiscal Officers Academy. Tiffany and her fiancé, TABC Agent Jorge Alfaro have two daughters; Cirina (age 3) and Aiyana (age 15).

Nina Gonzales (20 years) is an Agent in the San Antonio Enforcement Regional Office. She began her career with the TABC on June 1, 1996 assigned to Longview, where she worked for seven days and was reassigned to the Austin District Office. Agent Gonzales served at the Austin District Office for a year until she was transferred to her present location at the San Antonio Enforcement Regional Office.

Agent Gonzales is an instructor at Alamo Area Council of Government and trains incoming law enforcement cadets on various topics as well as at the San Antonio Police Department Academy. She obtained a B.A. in Sociology and

holds a TCOLE Master Peace Officer Certification.

Michael Hunter (20 years) is an Agent in the Georgetown Area Enforcement Outpost. He began his career with the TABC in June 1996 and was assigned to the Houston Office. In 1998, Agent Hunter transferred to the Austin District Office. In 2002, he began serving as the sole agent for all of Williamson County. He served in this capacity for several years and his duty station became known as the Georgetown Outpost.

During his tenure, Agent Hunter has received numerous certificates of recognition for his community service from Lifesteps and the Williamson County Coalition on Underage Drinking. In 2007, Agent Hunter was awarded

TABC Agent of the Year. He holds a Basic Instructor and Master Peace Officer Certification from TCOLE.

Agent Hunter was born in Omaha, Nebraska and moved to Austin, Texas on a golf scholarship. He is a graduate of Southwest Texas State University (currently known as Texas State) with a Bachelors in Criminal Justice specializing in Law Enforcement. Agent Hunter and his wife Amelia Cruz Hunter have been married for 17 years. They have one daughter, Alexandria. In his spare time, Mike enjoys golfing, fishing and hunting.

Mark Menn (20 years) is a Major in the Lubbock Enforcement Regional Office. He began his career with the TABC in 1996 as an Agent. He worked as an Agent for eight years in different offices such as: Houston, Corpus Christi and Galveston. In 2003, Major Menn promoted to the rank of Sergeant and served four years in the Houston Office. He was later promoted to the rank of Lieutenant and served in the Corpus Christi and Victoria District offices. In November of 2011, he promoted to Captain of Region 1, the Lubbock Region. Then in August of 2014, he promoted again to Major of Region 1, the Lubbock Region.

During his duty as an agent, Major Menn has served as a Project SAVE presenter and trainer, and a Firearms Instructor. During the Hurricane Katrina evacuation, he supervised a TABC security team at the George R. Brown Convention Center relief shelter in

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Houston. Major Menn has also participated as a featured actor in a series of TABC education and training videos.

Major Menn holds a TCOLE Master Peace Officer Certification, Basic Instructor and Firearms Instructor certifications, and basic Spanish language certification. He obtained an Associate degree in Theater from Bee County College in 1991, and a Bachelor of Arts degree with Honors in English from Southwest Texas State University (currently known as Texas State) in 1994. He has also served an eight-year enlistment in the Texas Army National Guard.

Major Menn is married to Margaret. He has two children: Miranda and Marshall. During his spare time, Mark enjoys spending time with his family, participating as a Den Leader in his son’s Cub Scout pack, and pursuing a part time career in film and television acting.

Khristi Polk (20years) is a License and Permit Specialist IV in the Austin – Headquarters office. She began her career with the TABC on July 1, 1996 as a Data Entry Operator II. In May 2001, she was promoted to an Administrative Technician II and to an Accounts Examiner IV in July 2006. Khristi was an Employee of the Year nominee in 2009. During her tenure, she has served on several holiday committees.

In Khristi’s spare time, she enjoys shopping, traveling, playing cards and dominoes as well as spending time with her friends and family. Khristi has two sons: Ryan (age 24) and James (age 22).

Paul Sanchez (20 years) is an Agent in the Arlington Enforcement Regional Office. He began his career with the TABC on June 1, 1996. Prior to his employment with the TABC, he was a Lieutenant for the Department of Defense Police at Bergstrom Air Force Base in Austin, Texas and also served as a reserve Sheriff’s Deputy for the Bastrop County Sheriff’s Office in Bastrop.

Agent Sanchez is the founding member of the Commission’s Special Response Team (SRT). He has over 33 years of military service and is currently assigned to the 321st Civil Affairs Brigade located in San Antonio where he is the Brigade Command Sergeant Major, responsible for approximately 1,200 Soldiers in four Battalions within the state of Texas.

Agent Sanchez is married to Kelly and together they have one son, Joshua (age 11).

Brian Williams (20 years) is a Lieutenant in the Lubbock Enforcement Regional Office. He began his career with the TABC on June 1, 1996 as an Agent in the Baytown Outpost and later worked in the Houston Regional Office and Galveston Outpost.

Lieutenant Williams was promoted to the rank of Sergeant in 2002 and promoted to the rank of Lieutenant in 2004. Prior to his employment with the TABC, he started his law enforcement career as a deputy with the Jefferson County Sheriff’s Office in 1990.

Lieutenant Williams was awarded the 100 Club of Harris County Officer of the Year award in 2000. He holds a TCOLE Master Peace Officer Certification, Basic Instructor Certification, SFST Instructor Certification, Firearms Instructor Certification, and a Drug Recognition Expert Certification.

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Additionally, Lt. Williams has a BS in Criminal Justice from Lamar University, is a graduate of the FBI LEEDA Program, and a graduate of the Leadership Command College at the Bill Blackwood Institute in Huntsville where his research paper on “Identity Theft” was published in the Texas Police Journal. He is also currently pursuing a Master’s Degree in Public Service Administration from Texas A&M University in College Station.

Lieutenant Williams and his wife Kathy have been married for 28 years. They have three children together, Nicole, Jacob and Taylor.

Commissioner Weinberg commented that 1996 was a great year. Many of the service awards being presented today were for 20 years of service. He noted that the longevity of employees adds to the family environment of the agency. Commissioner Steen agreed long tenure of employees adds to the family atmosphere and she is grateful to be a part of the agency.

Presiding Officer Cuevas stated the agency has come a long way and he is very proud of the agency he sees today. He added the talent the agency has today continues to improve and will continue to improve. He thanked the employees for their loyalty to the agency and appreciated their part in making the agency successful.

RECEPTION HONORING TABC PROMOTIONAL RECOGNITIONS AND EMPLOYEE SERVICE AWARD RECIPIENTS

Presiding Officer Cuevas called for agenda item 5 – Reception Honoring TABC Promotional Recognitions and Employee Service Award Recipients. The meeting adjourned at 11:19 a.m. for the reception honorees.

The meeting reconvened at 11:44 a.m.

COMMISSION REPORT: EXECUTIVE DIRECTOR AND AGENCY ACTIVITIES, BUDGET ISSUES, STAFF ACHIEVEMENTS, LEGISLATIVE ACTIVITIES

Presiding Officer Cuevas called upon Executive Director Sherry Cook to present the Commission Report: Executive Director and Agency Activities, Budget Issues and Staff Achievements, and Legislative Activities.

Executive Director Sherry Cook welcomed the Commissioners, honorees and guests of the honorees and thanked them for joining us in recognizing the employees being honored for promotions and service.

Executive Director Cook began her presentation by announcing that the Information Resources Division (IRD) was re-branding the division as the Innovation & Technology Division (ITD). She added the new name updates the look and feel of how the Agency approaches technology.

Executive Director Cook stated the legislative session had already kicked off. She reviewed the 85th Legislative Session slide that depicted the demographics and noted a few changes. She commented that having few changes is good in that, there is consistency from the last legislative session, relationships with returning members

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makes it easier when working through the budget with the various committees throughout the session.

Executive Director Cook stated the House Appropriations will have a new chair and vice chair. She noted Chairman Otto didn’t run this last time and Sylvester Turner is now the Houston mayor; therefore, those vacant positions will be filled. The sub-committee for Article V, which is where our agency is funded from, will have at least 4 new House members. She noted again that Sylvester Turner was the chair and is now the Houston mayor will be replaced, Bryan Hughes and Borris Miles are now senators and will be replaced, and Ruth Jones McClendon did not run for re-election. She stated only Rick Miller (Vice Chair) and Greg Bonnen as of now are returning members of the House that served on the subcommittee last session. She added as of yet, the new members have not been named.

Executive Director Cook stated the LAP (Licensing and Administrative Procedures) committee will have a new chair and at least two new members. Doug Miller lost his bid for re-election and Borris Miles moved to the Senate side. She reiterated there are quite a few changes to the House, which includes for two key committees that the agency will be testifying in front of.

Executive Director Cook stated Jane Nelson will continue as Chair of Senate Finance and she has not wasted any time and committee hearings have already begun. She noted the agency is scheduled to go in front of Senate Finance February 8th which will be discussed more in detail later in the presentation.

Executive Director Cook stated Senator Hancock will continue to serve as Chair of Senate Business and Commerce as he served as the interim Chair last year.

Executive Director reviewed the slide titled “Bills of Interest as of 1/16/17” which illustrated a few of the bills being tracked:

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Executive Director Cook stated Mariann Morelock, Director of Government Relations is working with staff members regarding questions they have about the bills. Director Morelock also works with the agency staff to determine the impact the bills have and any issues that need to be brought to the Legislative members’ attention, if asked.

Commissioner Weinberg inquired whether SB 171 authored by Huffines applied to all State agency meetings. Executive Director affirmed it did apply to live streaming all State agency meetings. She added, Jay Webster, Director of ITD has already compiled a cost analysis and the agency has submitted a fiscal note for that bill. Commissioner Weinberg commented that the Senate already lives streams their meetings. Executive Director Cook affirmed that yes a lot of committee hearings are already live streamed, and for our agency the infrastructure has to be put in place which is what Director Webster and his team are working on. Commissioner Weinberg noted WebEx is currently utilized at the agency, it shouldn’t be a far stretch to live stream. Director Webster stated he believes HB 171 is strictly for TABC but is accompanied by a companion bill for all agencies which would begin in FY 2019. He stated the service being considered to use would entail purchasing high-end cameras and a subscription service that would enable the agency to stream, archive and store meetings. Director Webster stated the estimated cost for the fiscal year would be upwards of $70,000. Commissioner Weinberg stated that if the bill is required, funding would be provided. Presiding Officer Cuevas commented although the bill may be funded at the beginning, it does not guarantee funding in the future.

Presiding Officer Cuevas stated that SB 371 removes the requirement for Wine and Beer retailers permit holders to have a toilet or running water. He inquired what made the difference in requirements between them and Mixed Beverage permit holders. Executive Director Cook stated Wine & Beer and Mixed Beverage permit holders are located in different parts of the beverage code; therefore, treated differently. She stated that for businesses requesting Wine & Beer retailer’s permits located in

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historical areas, this becomes an issue. She added historical marker restrictions or limited space do not allow for additional bathrooms to be added to the structure and does not allow those business owners to apply for Wine & Beer permits. Presiding Officer Cuevas clarified that they do have a bathroom and running water, but just not separate bathrooms. Executive Director Cook stated the older historical buildings mostly only have one bathroom, not two separate men and women’s bathrooms. She added she hopes to get the agency out of the bathroom business and we will continue to track the bill.

Executive Director Cook stated the agency received the base GR number for when it goes before Senate Finance. She recalled that the budget and exceptional items were based on a number where our agency was instructed to begin which included a 4% cut. She added instead of requesting the 4% back, the agency built the budget along with exceptional items on what was believed to be needed to operate based on the growth and continued demand of our services. She stated there are slight differences from the Senate and the House, but for the most part our starting point is very close to the one submitted. Again, the base budget along with exceptional items included a 4% reduction. Below is a side-by-side of where the plus and minuses are coming from.

FY 2018 TABC Base

A.1.1. Enforcement Strategy

Request Dollars

$24,948,351 B.1.1. Licensing and Investigations 5,004,855 C.1.1. Compliance Monitoring 6,652,429 C.2.1. Ports of Entry 5,577,837 D.1.1. Central Administration 2,785,821 D.1.2. Information Resources 2,558,961 D.1.3. Other Support Services 509,739

$48,037,993

House Introduced

Dollars $25,337,125

5,077,365 6,641,347 5,565,942 2,717,203 2,814,661

508,364

$48,662,007

Difference Dollars $388,774 $72,510

($11,082) ($11,895) ($68,618) $255,700

($1,375)

$624,014

% Change Dollars

1.56% 1.45%

-0.17% -0.21% -2.46% 9.99%

-0.27%

1.30%

FY 2019

Senate Introduced Difference % Change

Dollars Dollars Dollars 25,326,786 $378,435 1.49% 5,077,365 72,510 1.43% 6,641,347 (11,082) -0.17% 5,565,942 (11,895) -0.21% 2,717,203 (68,618) -2.53% 2,814,661 255,700 9.08%

508,364 (1,375) -0.27%

48,651,668 $613,675 1.30%

Senate Introduced Difference % Change

Dollars Dollars Dollars $25,701,976.00 $378,434 1.47% $5,102,198.00 $72,510.00 1.42% $6,696,180.00 ($11,082.00) -0.17% $5,579,993.00 ($11,895.00) -0.21% $2,616,609.00 ($174,622.00) -6.67% $2,909,336.00 $341,070.00 11.72%

$511,344.00 ($1,375.00) -0.27% $49,117,636.00 $593,040 1.24%

TABC Base

A.1.1. Enforcement Strategy

Request Dollars

$25,323,542 B.1.1. C.1.1. C.2.1. D.1.1.

Licensing and Investigations Compliance Monitoring Ports of Entry Central Administration

5,029,688 6,707,262 5,591,888 2,791,231

D.1.2. Information Resources 2,568,266 D.1.3. Other Support Services 512,719

$48,524,596

House Introduced

Dollars $25,712,315

5,102,198 6,696,180 5,579,993 2,616,609 2,909,336

511,344 $49,127,975

Difference Dollars $388,773 $72,510

($11,082) ($11,895)

($174,622) $341,070

($1,375) $603,379

% Change Dollars

1.54% 1.44%

-0.17% -0.21% -6.26% 13.28% -0.27% 1.24%

FY 2018 - FY 2019 TABC Base

A.1.1. Enforcement Strategy

Request Dollars

$50,271,893 B.1.1. Licensing and Investigations $10,034,543 C.1.1. Compliance Monitoring $13,359,691 C.2.1. Ports of Entry $11,169,725 D.1.1. Central Administration $5,577,052 D.1.2. Information Resources $5,127,227 D.1.3. Other Support Services $1,022,458

$96,562,589

House Introduced

Dollars $51,049,440 $10,179,563 $13,337,527 $11,145,935 $5,333,812 $5,723,997 $1,019,708

$97,789,982

Difference Dollars $777,547 $145,020 ($22,164) ($23,790)

($243,240) $596,770

($2,750) $1,227,393

% Change Dollars

1.55% 1.45%

-0.17% -0.21% -4.36% 11.64% -0.27% 1.27%

Senate Introduced Difference % Change

Dollars Dollars Dollars $51,028,762.00 $756,869 1.48% $10,179,563.00 $145,020 1.42% $13,337,527.00 ($22,164) -0.17% $11,145,935.00 ($23,790) -0.21% $5,333,812.00 ($243,240) -4.56% $5,723,997.00 $596,770 10.43% $1,019,708.00 ($2,750) -0.27%

$97,769,304.00 $1,206,715 1.23%

Commissioner Weinberg commented it appears the House and Senate gave more funds than requested. Executive Director Cook stated it’s actually less about $20,000 which will be explained in more detail. She recalled that one of the Exceptional Items presented included Data Center Services expenses. She stated the Legislative Budget Board and Senate Finance funded the Data Center Exceptional Item and it was added to the base budget, so the agency removed it from the Exceptional Items

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list. She added the Central Administration (CAAPS position)-Exceptional Item V was requested which was originally included in the 4% reduction since the CAAPS position was only approved for 2016/17. She explained it was determined later that the funding for the CAAPS position should never have been included in the 4% cut; however, that was not presented in the instructions from the LBB. She stated that it complicates the budget structure due to the strategy of where the funds were removed. She elaborated that Central Administration-1 FTE includes Business Services, Executive and General Counsel. She stated all positions in that strategy are filled with the exception of one position which is in the process of being filled. She stated money can’t be transferred into that strategy as it is prohibited by statute from doing that. She indicated a meeting was scheduled for tomorrow with the LBB to discuss the Exceptional Item and the funds will be requested back into the Central Administration strategy, or if necessary, request to take the reduction from a different strategy. The Central Administration-1 FTE Exceptional Item may change based on the meeting results.

Commissioner Weinberg reiterated that the CAAPS position effected was currently filled and if the agency doesn’t get the funds back the CAAPS FTE is lost. Executive Director Cook affirmed the position was currently filled. Presiding Officer Cuevas inquired if it was prohibited by the statute to request the funds back. Executive Director Cook explained the statute prohibits money being transferred into the Central Administration strategy. She noted, if given the latitude, the agency could probably adjust the funds from other strategies to meet the 4% reduction. She explained the statute limitations for Central Administration were put in place quite a few years back to make the “foot print” at HQ smaller and push the FTEs out into the field.

Executive Director Cook stated in instructions received to build our packets to Senate Finance, it indicated in Article VIIII to further reduce budgets by 1.5%. She added there is no instruction on where to make the cuts, only that schedules should be submitted to include the 1.5% cuts. She stated the agency scrubbed hard to make cuts, and if the 1.5% is taken out of the budget, we may potentially need to lay off positions and/or close an office. She stated there is no fat in the budget and no room for error or unknowns. If TABC were to receive another big legal case, which can easily mount up legal fees, the agency may have serious challenges in 18/19 to figure out how to cover those costs. She stated instructions have indicated to focus on Exceptional Items. She stated we will continue to monitor this bill and will provide reports to the Commissioners once more information is obtained.

Commissioner Weinberg inquired about the Cybersecurity Exceptional Item and whether the State would consider passing a bill to distribute funds to various agencies. Executive Director Cook stated the subject has come up, that if there was a state-wide initiative for Cybersecurity, the Department of Information Resources could theoretically manage and distribute the monies for various agencies. However, as of now, agencies are asked to include Cybersecurity in their LARs and it will be figured out during the session. She also stated during a breakfast committee meeting she attended, it was mentioned there is a push to move to a 6-year desktop computer replacement cycle. She noted, this concerns her on that software and hardware companies stop providing updates sooner than 6 years, which is especially an issue since viruses come in through desktops. She added we will continue to monitor this issue.

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Executive Director Cook also reviewed the slides indicating the suggested 1.5% reduction by the House and Senate:

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Executive Director Cook stated that the agency was notified in December that the State Auditor’s Office would conduct an audit of TABC’s Financial Processes which will run until May 2017. Director of Business Services, Vanessa Mayo and her team have begun working with them. Presiding Officer Cuevas inquired if this audit will affect TABC’s external auditor’s normally scheduled work. She stated TABC’s external auditor plans to audit Cash Receipts this summer and he may be able to utilize the SAO’s audit work and reduce his workload. She added the SAO has been great to work with and they are understanding that this is a busy time for the agency due to the legislative session. She stated that the agency has never been audited by the SAO and we believe the agency has strong policies and controls in place. She added we are happy they are auditing us, as the agency is going under Sunset Review after this legislative session. She ended saying we look forward to hearing their findings and if we’re doing something wrong, we’ll fix it.

Executive Director Cook recalled that in November 2016 the Commission approved the request to exceed capital for a JAG grant to be submitted. She stated both the Governor’s Office and LBB approved the increase of $470,188.16 which will allow for the much needed purchase of lab equipment and firearm training simulators. She added this is wonderful news and this is money that the Governor’s Office and LBB recognized saves the State funds. She noted half a million was added into federal grants for both years to the budget. She believes they added it into those particular categories based on our spend patterns and typically receive half a million in grants each year, so they just added it into our budget. She noted the Governor’s Office and LBB recognized the need for the funds and it will hopefully make it easier to justify and request permission to exceed the capital authority. Commissioner Weinberg inquired if the new chemist has started with the agency. Executive Director Cook stated, the chemist has begun employment and would be introduced at the next committee meeting along with other new employees.

Executive Director Cook stated Paisano Season (runs from January 1st-12th) was just completed and it was a success. She noted several bridges were additionally staffed to assist with the large crowds. Laredo POE utilized 14 additional TCO’s and 2 supervisors to have 24 hour continued operations at Bridge II and the Impound Bus Lot. She added the Laredo POE had a revenue collection of $401, 964.50 in the 12 day period which was a 6.5 % increase from the same period in 2016. The SRT Team deployed 15 members to help with traffic direction and protection of TCO’s.

Executive Director Cook stated Eagle Pass/Del Rio staffed Bridge I and II with local TCO’s who also volunteered to work overtime hours on their days off to help keep the bridges open later into the night on Fridays, Saturday and Sunday. She noted Eagle Pass/Del Rio collected $72, 701.50 in the 12 day period which was a 15.68% increase from the same period in 2016. She added that John Reney, Director of Ports of Entry was at the various Ports for 6 of the 12 days of the Paisano season.

Presiding Officer Cuevas inquired if Director Reney noted any deficiencies while visiting the ports. Director Reney indicated this was his first time visiting during Paisano and was told in previous years there were serious issues with bottle-necking of traffic. He stated during his time of observation he saw a controlled, steady stream of traffic with no bottle-necking. He added mornings were slower than afternoons without bottle-necking. The feedback he heard from travelers was that sitting on the

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http:470,188.16

Mexico side of the bridge was 4 hours this year compared to up to 10 hours in previous years.

Presiding Officer Cuevas commented he likes that resources were moved around to compensate for the additional traffic where needed. Commissioner Weinberg inquired if additional resources could be added to assist in the increased traffic. Director Reney stated that due to construction at Bridge II, only a certain amount of resources can be utilized to avoid unsafe conditions for agency staff. Also, he stated Customs and Border Protection will not allow for over-flow to affect their secondary lane but it never became an issue.

Executive Director Cook reviewed the 2017 Agent Trainee Academy scheduled for April 2-June 15, 2017:

She stated the educational levels of the applicants are impressive. She noted once this academy is completed it will fill up openings in the Enforcement Division. She added the process began with over 500 applicants and the top 33 candidates were selected to begin the background process.

Executive Director concluded her presentation and inquired if the Commissioners had questions. Presiding Officer Cuevas commented that Executive Director Cook has done a great job with the resources and appreciates that the budget isn’t fluffed up. He stated he is proud of the staff and liked what he learned in the presentation. Commissioner Weinberg commented to let them know how they could help at the legislative level. Executive Director recalled that February 8th the agency will testify in front of Senate Finance and Chairman Cuevas has indicated he will try to be present.

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CY16 RULE REVIEW PLAN UPDATE

Presiding Officer Cuevas called Deputy Executive Director Swedberg to present the CY2017 TABC Rule Review Plan. Deputy Executive Director Swedberg stated the initiative started a few years back to meet the statutory requirement stating the rules must be reviewed on a 4-year cycle. He stated the plan which started in CY15 has been executed aggressively the past few years. He commented that in CY15 and CY16 a total of 72 rules were reviewed, averaging about 6 rules per Commission meeting. Prior to the plan only 32 rules were reviewed between CY12 and CY14. He stated in CY17, 56 existing rules are scheduled to be reviewed which includes 31 that fall under the Alcoholic Beverage Seller Server Training chapter. He explained the last time that chapter was reviewed it was a serious undertaking, it implemented long overdue changes that included computer based training. He mentioned in speaking to Mindy Carroll, Director of Education and Prevention, that this review of the Seller Server Training chapter won’t be as extensive as it was last time. He added Director Carroll has innovative ideas that will be presented at stakeholder meetings.

Deputy Executive Director Swedberg stated 25 other rules will be reviewed this calendar year in addition the Seller Server rules. 16 of those rules date back from 1976 to 2010 as the “last reviewed date”. He noted that after completing this year’s rule review plan, there will be no rules remaining for review that have a review date older than 2011. This puts us near a 6-7 year review schedule which is closer to our goal of the 4-year review cycle. He added in CY17, three (3) potential new rules will be reviewed, along with any rule changes required from the 85th Legislative Session. He noted that although a rule is reviewed, it does not necessarily mean changes are made, at times non-substantive changes are made.

Deputy Executive Director Swedberg reviewed the rules scheduled to be reviewed in CY17. March and May’s rule review schedule include rules for Tax and Marketing. He stated July includes rule reviews on controversial issues related to sanctions, penalties, and offenses some dating back to 1999 which will involve assistance from Field Operations and General Counsel. Commissioner Weinberg pointed that Rule 35.1 related to Transportation of Alcoholic Beverages by Package Stores and Wine Only Package Stores would be a good time to look into Apps that allow people to transport alcoholic beverages. Deputy Executive Director Swedberg stated Field Operations has been running operations to learn the nature of those business models and it’s been enlightening to us and the agency is monitoring those businesses. It’s been found there are good players and some not so good players out there as it pertains to public safety. He recalled that one of the bills being tracked is related to Package Stores transporting across county lines. He stated that is why rule 35.1 was scheduled for July, after session, so that any changes made during legislature could be applied during that rule review. Commissioner Weinberg stated back in 1999 when this rule was last reviewed there were not any “phone apps” that allowed you to order alcohol to be delivered to your home. Deputy Executive Director Swedberg commented that those business models are so unique that it may require a new rule be created for it.

Deputy Executive Director Swedberg stated the September rules review includes new rules related to Public Entertainment Facilities and Charitable Events. He stated that over time it would be worthwhile to provide more structure, definition and clarification

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around those terms and what they mean. He added those two areas are both outlined in the statute; however, there is not guidance on who qualifies and how they work.

Presiding Officer Cuevas inquired whether rule 36.1 affected the Safari Club. Commissioner Weinberg commented he can’t image firearms being sold in liquor stores. Deputy Executive Director Swedberg stated there are licensees that have alcohol permits who do sell firearms, such as Wal-Mart.

Deputy Executive Director Swedberg stated that the November rule review revisits Tax and Marketing rules and a new proposed rule on Loyalty Programs.

Lastly, he stated by the completion of the planned rule reviews for CY18, we should catch up on the 4-year review cycle as required by statute. He noted with the Commissioner’s approval the CY17/18 plan will be executed.

Presiding Officer Cuevas stated the CY17/18 looked good and to move forward with the plan.

ENFORCEMENT DIVISION UPDATE

Presiding Officer Cuevas called Executive Chief Robert Saenz for the Enforcement Division Update. Executive Chief Saenz reviewed the staffing for all regions, noting that with Lt. Marvin Montero’s retirement in January, John Altum’s position (former Staff Sergeant in the Training Division) is being reclassified as the Staff Lieutenant position. Staff Lt. Altum will take the necessary training (such as COOP) to assume the role in addition to other responsibilities. He mentioned that Lt. Montero’s vacant position will be used to create a position in the Houston office that will be over the Special Response Team (SRT) as a Captain when SRT deploys, along with regular Lieutenant duties. He noted last year SRT was deployed to assist during the floods in Fort Bend and Brazoria Counties and also during last year’s Paisano season.

Executive Chief Saenz reviewed achievements received by agents:

Region 4, Agent Joe Franco was selected for the Jose Cuevas Gold Star Employee of the Year Award and was recognized at the March 2016 Commission Meeting.

During Agent Alejandra Nieto’s assignment as an agent in the Austin Region her supervisors nominated her for a MADD award for her outstanding commitment to make the community safer. In September 2016, Agent Nieto was honored with an award along with other recipients from various law enforcement agencies.

The Bryan Area Office was recognized in November 2016 at a MADD luncheon. The office was awarded the Heroes of the Highway Award for 2016 from Mothers Against Drunk Drivers. The award was for the job done in the enforcement of underage drinking, DWI’s, Sale to Intoxicated Person investigations and other alcohol related undercover operations. This is the second year in a row the Bryan office has received this award.

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He stated he is very proud of their achievement and undercover efforts in the Bryan area. He added they learned that the compliance rate for on-premise locations in college towns can be improved.

Executive Chief Saenz stated in January 2017 a sergeant assessment was held where several agents took the sergeant’s exam. There will be a few upcoming sergeant positions available to fill. He noted policy states the sergeant exam score is good for two years, some agents opted to use last year’s score and others took the exam this year. He again mentioned that the next New Agent Academy is scheduled for April 2017.

Executive Chief Saenz reviewed the Undercover Operations and Associated Violation slide:

He pointed out there was a decrease in 2016 as related to Undercover Operations and Administrative cases and he stated that is due to the agency conducting several more hundred Minor Sting Operations which took away time allowed to conduct Undercover Operations. He stated this year the agency was more vigilant in visiting with local law enforcement and opening complaints for breaches of peace and things of that nature.

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Executive Chief reviewed the Percent of Violations Found During Undercover Operations slide:

He noted a steady 11% of violations were found in 2016. He stated as permittees get accustomed to how we do our UC Operations, we have had to adjust how we conduct UC Operations to be successful in detecting violations.

Executive Chief Saenz reviewed the Admin & Criminal Cases slide:

He commented the great thing about the increase in the Administrative cases is that 80% are primarily Public Safety cases, as opposed to 20% in prior years. He noted in previous years most Administrative cases were industry and marketing related; however, those types of cases were shifted to be handled by the Auditing and Investigations Division.

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Executive Chief Saenz reviewed the Minor Stings slide:

He stated Minor Stings were increased by about 2000 undercover operations from 2015 to 2016. He noted this increase didn’t result in any additional Sale To Minor Violations; however, the compliance rate increased. He mentioned as indicated in Exceptional Item 1 - additional agents were requested to run additional operations. He stated if Minor Stings are increased, it affects how many Undercover Operations are conducted, if we do more Undercover Operations, we can’t do as many inspections. The drop-off in shifts is based on where the limited resources are utilized to perform the different functions. Presiding Officer Cuevas inquired how many people it takes to perform a Minor Sting. Executive Chief Saenz stated for Minor Stings and Undercover Operations the team consists of a Sergeant and at least three agents. He stated for smaller towns during Minor Stings sometimes more than one minor is used. In the past it was found that in small towns stores will call other stores to tip them off that TABC is conducting Minor Stings in the area.

Executive Chief Saenz reviewed the Breach Investigations slide:

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He stated it was noticed that the numbers of Undercover Operations (both UC and Minor Stings) completed didn’t add up to the amount of the Administrative cases. He had Analyst Elizabeth Zamora run the numbers and it found that Breach Investigations made up the gap in the discrepancy. He added that Breach Investigations are initiated with a complaint card. He explained that agents will visit local law enforcement and find out about fights at bars, this information initiates the breach investigation.

Executive Chief Saenz reviewed the Inspections and Priority Inspections slide and stated in the 1st Quarter 2016 the levels of priority locations were redefined. He stated the undercover detection rate was going down due to what he believes was because we were running operations at locations already on the priority list. He said the locations were no longer violating the law because they knew we’d be back. It was decided to have Business Services Division, Planner-Roy Hale analyze the priority locations lists. He stated based on his analysis it was determined that certain permit types have a tendency to violate the law more than others within the first couple of years. Based on this information locations were removed from the priority list after six months and replaced those inspections and undercover operations with new priority retailers. He noted certain MBs, BGs and even some BQs tend to violate the public safety law higher than others. He added for those priority locations dropped at six months, they are being revisited at 13 months to ensure they are still being good actors.

Executive Chief Saenz reviewed the Performance Measures slide:

He noted Performance Measures 1 changed from “Percentage of Licensed Establishments Inspected Annually” to “Percentage of Priority Licensed Locations Inspected by Enforcement Agents”. He stated the prior performance measure forced us to inspect locations regardless if they have done anything wrong. It was changed to

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“priority locations” to focus efforts on priority locations. Performance Measure 2 was amended to measure average number of days to close out a complaint card instead of the pressure of closing the complaint in 60 days. Performance Measure 3 and 4 are related to agents conducting education. He stated agents will still educate, especially in the rural areas or when requested; however, their resources are better utilized conducting operations. Executive Chief asked if the Commissioners had any questions and they did not.

Presiding Officer Cuevas thanked Executive Chief Saenz for his presentation.

HUMAN RESOURCE DIVISION UPDATE

Presiding Officer Cuevas called Human Resources Director Donn Rupp for the Human Resources Division Update. Director Rupp introduced himself to the Commissioners and started by thanking the HR team with special recognition to Keon Flowers, Recruiter and Melinda Ho, HR Generalist for their assistance with the HR Division presentation.

He reviewed the Recruitment slide and shared the following information:

Posted and advertised 124 Positions 17 Internal positions 11 Temporary positions 96 External positions

Received 7317 online applications

He stated for application resources, most were obtained by Recruiter Activity, followed by TABC Website/Work-in-Texas/GlassDoor/Monster, and lastly by State Employee Referrals. He commented from his past experience in Human Resources at other companies, the TABC Service Awards for 15, 20 and 25 years of service is astronomical compared to outside corporations. He gave kudos to the agency for retaining employees for such a long time.

He reviewed the applicant diversity information and commented there wasn’t much of a change with the exception of an increase of over 400 for Hispanic population. He noted overall for more diversity the agency can do a better job recruiting more female, African American and Asian/Pacific Islanders. He stated last year, there was a significant number of females that applied; however, the conversation rate to hire females is low. He noted his team is working to try to determine why that is.

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Director Rupp reviewed the Workforce by Ethnicity/Gender Slide:

He compared the agencies average of hiring to other agencies and stated for veterans the goal for State agencies is 20%, overall State agencies average 7.2%, and TABC averages at 13.1%.

Commissioner Weinberg asked if the percentages are overlaid with the general population of Texas. Director Rupp stated that hasn’t been done yet; however, populations for African-Americans from Houston, Dallas and San Antonio were used, and Hispanic populations from San Antonio, Houston, Dallas and Austin were used. Commissioner Weinberg stated he thinks we’re pretty close to representing Texas in our diversity.

Presiding Officer Cuevas commented that we also need to look at the management level. Are Hispanics working in the lower positions or are they moving up? Director Rupp stated that factor is being included in the HR matrix along with how we manage our people. Commissioner Weinberg stated this is very important information to learn.

Director Rupp reviewed the Hires/Terminations by Ethnicity slide and stated the State average of terminations was 17.6% which to him, is high. He noted TABC is at 9.5%. He stated the “Good Attrition” rate is 8.7%, which reflects TABC is almost right on.

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He stated for the recruiting perspective HR needs to become more in touch with Division heads utilizing “drive alongs” to understand what is good and what is bad. He commented this new endeavor drives the new HR strategy.

Commissioner Weinberg commented that the HR team is rarely “seen” at the meetings and asked if they were present. Director Rupp stated most of the HR team was present and asked them to stand for introduction.

Commissioner Weinberg stated that the HR team is a small group to manage an agency of TABC’s size.

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Director Rupp discussed the pillars and phases in detail and reviewed the Five HR Pillars which consist of:

Recruiting People Operations Training Support Benefits & Leave Administration Safety

Director Rupp inquired if the Commissioners had any questions.

Commissioner Weinberg commented that during his time with TABC, he has learned the importance of HR. He’s come to realize you can’t run a business without a good HR team. He added one of the reasons the agency has low turnover is because we hire right, train right, and benefit right, although we aren’t the highest paying agency. He stated the family environment and the HR group is a huge part of the agency’s success.

Presiding Officer Cuevas stated he enjoyed the presentation and appreciated how Director Rupp honored his team. He stated since his time at the agency he has never seen a “Safety” report like that and it’s good that we’re thinking that way. He added automation is key to hiring efficiently. He believes the “Drive Along” concept is important to know the team/staff.

Presiding Officer Cuevas commented he appreciates Director Rupp’s energy and he looks forward to ongoing engagement so that we’re all on the same page. Director Rupp ended by saying HR won’t be successful in the journey if the Division heads aren’t with them. He stated thus far his interactions with Division heads have been positive.

PUBLIC COMMENTS

Presiding Officer Cuevas opened the floor for additional comments before the Commission. Hope Ransom with Anew Briter Smile stepped forward to inquire if training is provided for law enforcement concerning TABC rules and regulations. Executive Chief Saenz responded that training was provided to law enforcement agencies upon request by the agency.

EXECUTIVE SESSION TO CONSULT WITH LEGAL COUNSEL REGARDING PENDING AND ANTICIPATED LITIGATION AGAINST THE AGENCY AND TO DELIBERATE ON THE APPOINTMENT, EMPLOYMENT, EVALUATION, AND DUTIES OF THE POSITIONS OF EXECUTIVE DIRECTOR AND GENERAL COUNSEL (GOVT. CODE §551.071, §551.074, AND TEXAS ALCOHOLIC BEVERAGE CODE §5.11)

Presiding Officer Cuevas announced that the regular open session of the Texas Alcoholic Beverage Commission will be recessed at this time 1:43 p.m., January26, 2017 and an Executive session will be held to consult with legal counsel regarding pending and anticipated litigation against the agency and to deliberate on the appointment, employment, evaluation, and duties of the

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Positions of Executive Director and General Counsel (Govt. Code §551.071, §551.074, and Texas Alcoholic Beverage Code §5.11)

The Texas Alcoholic Beverage Commission has concluded its Executive session and is now in open regular session. The date is January 27, 2016 and the time is 2:46 p.m. No final action, decision or vote was made in Executive session.

NEXT MEETING DATE: Tuesday, March 28, 2017

ADJOURN

Presiding Officer José Cuevas called for a motion to adjourn. Commissioner Weinberg made a motion to adjourn. Commissioner Steen seconded the motion. The motion was made and seconded. The motion passes. Presiding Officer José Cuevas announced that the meeting was adjourned at 2:47 p.m.

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Attachment 1

Administrative Rules, Agenda Items 10-13

January 24, 2017 Commission Meeting Agenda Item 10: Adopt Amendments to Rule §45.85, Approval of Labels

The Texas Alcoholic Beverage Commission proposes amendments to §45.85, relating to Approval of Labels, without changes to the proposed text as published in the December 2, 2016, issue of the Texas Register (41 TexReg 9401). No comments were received.

Section 45.85 addresses applications for approval of malt beverage labels.

Subsection (b) is amended to include holders of brewpub licenses among those permit and license holders who can apply for approval of malt beverage labels.

Former subsection (e), which established a $25 application fee for each size requested on the application, is deleted and subsection (c) is amended to incorporate those provisions relating to the application fee.

Subsection (d) is amended to specify that a sample of the beverage or a product analysis conducted by an independent laboratory must be submitted with an application for a label revision if the analysis on file with the commission is older than five years.

New subsection (e) is added to address permissible label revisions. Creation of this new category of label approval applications will permit the agency to implement new internal procedures for these types of revisions. By removing them from the queue of general label approval applications, they may subject to faster review. In turn, this should allow the reduced queue of general label approval applications to also be processed more quickly.

Paragraphs (1) – (9) of new subsection (e) describe the types of label approvals that are classified as permissible. By indicating on the application form that the application is for a one of these types of permissible revisions (or by using a separate application form), the application will be identified as eligible for the expedited review process.

Subsection (f) is amended to state additional statutory references.

The commission reviewed the section pursuant to Government Code §2001.039 and has determined that the need for a rule addressing malt beverage label approval continues to exist but that these changes to the prior rule are appropriate.

The amendments are adopted pursuant to Alcoholic Beverage Code §5.31, which grants authority to prescribe rules necessary to carry out the provisions of the Code.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Page 1 of 4

Text of rule as amended:

§45.85 Approval of Labels

(a) No beer, ale or malt liquor may be shipped into the state, imported into the state, manufactured and offered for sale in the state, or distributed, sold or stored in the state until a sample of the beverage has been analyzed and the label approved by the commission.

(b) An applicant for label approval under this section must hold a brewer's or non-resident brewer's permit, a manufacturer's or non-resident manufacturer's license, or a brewpub license issued by the commission.

(c) An applicant must submit to the commission an application on the form prescribed by the commission and a $25 application fee for each size requested on the application. The application must be accompanied by:

(1) a legible copy of the certificate of label approval issued by the United States Department of the Treasury; and

(2) an actual label that is affixed to the product as shipped, sold, or marketed, or an exact color copy of the label.

(d) A sample of the beverage must be submitted to the commission for analysis to verify alcohol content. A product analysis provided by an independent laboratory may be submitted in lieu of the actual sample. If an application is for a label revision, a sample of the beverage must be submitted to the commission for analysis to verify alcohol content if the analysis on file is older than 5 years. A product analysis provided by an independent laboratory may be submitted in lieu of the actual sample if the analysis on file is older than 5 years.

(e) Permissible Label Revisions An application for label approval is a permissible revision or amendment if it includes only the changes described in paragraphs (1)-(9). All mandatory label information must be legible and appear on a contrasting background. Any changes made under this section must not violate this subchapter or the Alcoholic Beverage Code, and must conform to the general requirements specified by this subchapter. Any changes in spelling must not change the meaning of the previously approved label.

(1) Add or delete any non-mandatory label information, including text, illustrations, graphics, and ingredients.

(2) Reposition any label information, including text, illustrations, and graphics. (3) Change the color of the background or text, the shape, or the proportionate size of

labels. (4) Change the type size or font or make appropriate changes to the spelling

(including punctuation marks and abbreviations) of words. (5) Change to the type of container or net contents statement.

Page 2 of 4

(6) Add, delete, or change optional information referencing awards, medals or a rating or recognition provided by an organization as long as the rating or recognition reflects simply the opinion of the organization and does not make a specific substantive claim about the product or its competitors.

(7) Add, delete, or change holiday or seasonal-themed graphics, artwork, or salutations.

(8) Add, delete, or change promotional sponsorship-themed graphics, logos, artwork, dates, event locations or other sponsorship-related information.

(9) Add, delete or change references to a year or date.

(f) This section implements Alcoholic Beverage Code §101.41 and §101.67 (e), pursuant to the requirements of Alcoholic Beverage Code §5.38 and the authority of Alcoholic Beverage Code §5.31.

Text of rule showing amendments:

§45.85 Approval of Labels

(a) No beer, ale or malt liquor may be shipped into the state, imported into the state, manufactured and offered for sale in the state, or distributed, sold or stored in the state until a sample of the beverage has been analyzed and the label approved by the commission.

(b) An applicant for label approval under this section must hold a brewer's or non-resident brewer's permit, [or] a manufacturer's or non-resident manufacturer's license, or a brewpub license issued by the commission.

(c) An applicant must submit to the commission an application on the form prescribed by the commission and a $25 [the] application fee for each size requested on the application. The application must be accompanied by:

(1) a legible copy of the certificate of label approval issued by the United States Department of the Treasury; and

(2) an actual label that is affixed to the product as shipped, sold, or marketed, or an exact color copy of the label.

(d) A sample of the beverage must be submitted to the commission for analysis to verify alcohol content. A product analysis provided by an independent laboratory may be submitted in lieu of the actual sample. If an application is for a label revision, a sample of the beverage must be submitted to the commission for analysis to verify alcohol content if the analysis on file is older than 5 years. A product analysis provided by an independent laboratory may be submitted in lieu of the actual sample if the analysis on file is older than 5 years.

Page 3 of 4

[(e) The application fee for label approval of beer, ale, or malt liquor is $25 for each size requested on the application.]

(e) Permissible Label Revisions An application for label approval is a permissible revision or amendment if it includes only the changes described in paragraphs (1)-(9). All mandatory label information must be legible and appear on a contrasting background. Any changes made under this section must not violate this subchapter or the Alcoholic Beverage Code, and must conform to the general requirements specified by this subchapter. Any changes in spelling must not change the meaning of the previously approved label.

(1) Add or delete any non-mandatory label information, including text, illustrations, graphics, and ingredients.

(2) Reposition any label information, including text, illustrations, and graphics. (3) Change the color of the background or text, the shape, or the proportionate size of

labels. (4) Change the type size or font or make appropriate changes to the spelling

(including punctuation marks and abbreviations) of words. (5) Change to the type of container or net contents statement. (6) Add, delete, or change optional information referencing awards, medals or a

rating or recognition provided by an organization as long as the rating or recognition reflects simply the opinion of the organization and does not make a specific substantive claim about the product or its competitors.

(7) Add, delete, or change holiday or seasonal-themed graphics, artwork, or salutations.

(8) Add, delete, or change promotional sponsorship-themed graphics, logos, artwork, dates, event locations or other sponsorship-related information.

(9) Add, delete or change references to a year or date.

(f) This section implements Alcoholic Beverage Code §101.41 and §101.67 [(e)], pursuant to the requirements of Alcoholic Beverage Code §5.38 and the authority of Alcoholic Beverage Code §5.31.

Page 4 of 4

January 24, 2017 Commission Meeting Agenda Item 11: Approve Publication of Proposed Amendments to Rule §35.21, Assist Defined

The Texas Alcoholic Beverage Commission proposes amendments to §35.21, relating to Assist Defined.

Section 35.21 is an interpretive rule clarifying the use of the word "assist" in Alcoholic Beverage Code §61.71(a)(12) and §106.09(a). Those subsections provide that a person may not employ a person under 18 years old to sell, serve, prepare, handle or dispense alcoholic beverages, or to assist in doing so. The rule provides that merely being employed to work where alcoholic beverages are sold does not by itself mean that the minor is assisting in the prohibited activities, if the minor does not have a direct and immediate connection with any particular sale of alcoholic beverages.

The proposed amendments are mostly grammatical and stylistic. The list of prohibited activities is modified to track the language of the relevant Alcoholic Beverage Code ("Code") subsections.

The commission has reviewed the section pursuant to Government Code §2001.039 and has determined that the need for the rule continues to exist but that changes to the current rule are appropriate.

Martin Wilson, Assistant General Counsel, has determined that for each year of the first five years that the proposed amendments will be in effect, there will be no fiscal impact on local government attributable to the amendments.