TITLE 1.ADMINISTRATION

Part 5. GENERAL SERVICES COMMISSION

Chapter 111. EXECUTIVE ADMINISTRATION DIVISION

Subchapter B. HISTORICALLY UNDERUTILIZED BUSINESS CERTIFICATION PROGRAM

1 TAC §§111.12, 111.15, 111.16, 111.17, 111.20, 111.22, 111.23, 111.24

The General Services Commission adopts amendments to §§111.12, 111.15, 111.16, 111.17, 111.20, 111.22, 111.23, and 111.24 regarding the Historically Underutilized Business Program (HUB) complying with the legislative requirements of Senate Bill (SB) 178, 76th Legislative Session (1999). The amendments to §§111.12, 111.15, 111.17, 111.20, 111.22, 111.23 and 111.24 are adopted without changes to the proposed text; and the amendments to §111.16 are adopted with changes to the proposed text as published in the November 12, 1999, issue of the Texas Register (24 TexReg 9903).

The amendments are adopted in order to clarify terminology within current HUB rules and to implement the new requirements of SB 178 regarding the definitions under the HUB Program, agency planning responsibilities, state agency reporting requirements, HUB certification and recertification requirements, revocation, the HUB Directory, graduation procedures, and program review.

Language in §111.16(c) has been revised to read as follows: "State agencies shall maintain, and compile monthly, information relating to the agency's and each of its operating division's use of historically underutilized businesses, including information regarding subcontractors and suppliers. This information shall include but is not limited to the information required in subsections (a) and (b) of this section. On a monthly basis state agencies shall require a contractor/vendor to whom a state agency has awarded a contract to report to the agency the identity and amount paid to each historically underutilized business to whom the contractor/vendor has awarded a subcontract for the purchase of supplies, materials and equipment, provided that payment was made to a historically underutilized business in the month to be reported. Contractors/Vendors shall report to a state agency progress payments made to subcontractors, professionals, consultants and suppliers certified as historically underutilized businesses each month in which such payment is made."

The amendments will provide a streamlined method for securing more goods and services from HUB vendors that is compliant with SB 178, 76th Legislature (1999).

Three written comments were received from the Mexican American Legislative Caucus, Office of the Attorney General ("OAG"), and the Texas Natural Resources Conservation Commission ("TNRCC") regarding the adoption of amendments to HUB rules.

Comments from the Mexican American Legislative Caucus are as follows:

Comment on Mutual Certification Agreements. Include Minority Business Councils in your list of entities subject to mutual certification agreements. They represent a significant group of minority business owners who have primarily been seeking procurement opportunities from large corporations. While I encourage you to review the Texas-based minority business councils on a one-by one basis, I find them to be professionally run with high standards for eligibility. The purpose of this language was not to limit GSC to working ONLY with Government entities--but rather to work with all viable certification entities in the pursuit of the most complete representation of Texas minority businesses.

Response: The Commission responded to the Mexican American Legislative Caucus on December 9, 1999, indicating that as a standard internal operating procedure, the GSC may enter into agreements with other certification entities, such as the Minority Business Councils, assuming that they are accepted by local government entities (i.e., City of Houston) and meet the most critical elements of HUB certification (minority and/or women, ownership, control, size standards, and in-state residency requirements).

Comment on orientation packets. While the legislation delineated what should be included in the so-called "orientation packets" going to all newly certified HUB's, the agency rules should allow for the inclusion of any and all other information the commission deems valuable to this target audience. The intent of this change would be to ensure the commission has freedom to be creative in what other information could be included in the future. Our intent was not to be restrictive with this language.

Response: Staff agrees with comments, but no additional rules changes are necessary. The intent of the HUB rule was to ensure that the Commission's customers are aware of SB 178 requirements to provide useful marketing information. Staff is complying with the minimum legislative requirements and is also providing additional information (i.e., information regarding chambers of commerce and other certification entities) that would benefit customers. A copy of the GSC orientation packet was mailed with the Commission's December 9th response to the Mexican American Legislative Caucus identifying the information GSC provides.

Comments from the Office of the Attorney General:

Comment on Reporting Subcontracting on a Monthly Basis. In §111.16(c), the proposed rule states that state agencies shall require a contractor/vendor to report subcontracting on a monthly basis. Previously, the rule had required reporting on a quarterly basis. This new rule will significantly increase the amount of paperwork that will need to be tracked and maintained by all state agencies. In addition, if contractors/vendors do not pay subcontractors on a monthly basis, some agencies are faced with maintaining additional paperwork that will merely document monthly payments of "zero." State agencies only report subcontracting to GSC every six months. Therefore, requiring monthly reporting by contractors/vendors will not impact the data submitted for the HUB reports. This change will simply make the reporting less manageable for some agencies, and considerably more burdensome for the contractors/vendors.

Commenter further stated that he did recognize that some agencies may need to track subcontracting more frequently than others, depending on the type of contracts that are in place. Commenter suggested that the rule be changed to read, "On at least a quarterly basis, state agencies shall require a contractor/vendor to whom a state agency has awarded a contract to report to the agency the identity and the amount paid to each historically underutilized business to whom the contractor/vendor has awarded a subcontract for the purchase of supplies, materials, and equipment. State agencies may require more frequent reporting, if necessary." This would allow agencies the flexibility to request reports from the contractor/vendor to fit their own needs.

Response: Staff disagrees with comments, but added language to §111.16(c) which provides flexibility for agencies to report monthly when payments are made to subcontractors.

Comments from the Texas Natural Resource Conservation Commission's:

Comment on §111.12(1) definition for "Applicant". The proposed rule adds "limited liability company" to the list of business entity types that may be considered an Applicant for HUB certification. The TNRCC assumes (because of §111.12(11)(h)) that this list is not meant to be "all inclusive" (i.e. other types of business entities may be applicants). If the TNRCC is correct in this assumption, clarifying that the list of business entity types in the definition of Applicant is not "all inclusive" would be helpful. In the alternative, the TNRCC suggests that the definition be reworded to something such as: "Applicant-A business entity, formed for the purpose of making a profit, that applies to the commission as an historically underutilized business."

Response: Staff disagrees with comment. The goal of this change was to identify all the business structures that are eligible for certification as a HUB. Section 111.12(h) provides a definition for inclusion of all other businesses that are not already identified by the Commission.

Comment on §111.12(9) and §111.12(14) definitions for "Forum" and "Mentor Protege Program." In the proposed rule changes, the term "Forum" and "Mentor Protégé Program" are defined but no other rules relating to "Forum" or "Mentor Protégé Program" are proposed. The TNRCC assumes that rules will be proposed by GSC at another time to address the "Forum" and "Mentor Protégé Program" requirements as set forth in SB 178. If this assumption is correct, the TNRCC suggests that the proposed definitions of "Forum" and "Mentor Protégé Program" be withdrawn from this proposed rule change and resubmitted simultaneously with the related rule proposals in order that the definitions may be evaluated in light of the proposed applicable rules.

Response: Staff disagrees with comment. HUB rules regarding Forums and the Mentor Protégé Program will be considered during the January and February 2000 Commission meetings, respectively. The proposed definitions will not change at the date the rules are considered by the GSC Commissioners.

Comment on §111.12(19) definition of "Principal Place of Business". The proposed rule is restrictive. The proposed definition of "Principal Place of Business" is a more restrictive definition than is given in 1 TAC §111.2. Why has the commission proposed this more restrictive definition? Such a restrictive definition may drastically reduce the number of eligible HUBs. Given the lack of legislative guidance on what is meant by "Principal Place of Business," the TNRCC suggests that "Principal Place of Business" for the purpose of these proposed rules, either not be defined (As in most other Texas rules, probably because the determination of "Principal Place of Business" is usually considered a question of fact.) or, be defined in a less restrictive manner, such as "Principal Place of Business-- The place in which the HUB or Applicant maintains an office and from which a substantial part of its operations are conducted." This definition is derived from the definition of "Principal Place of Business" as it has been defined by the Office of the Attorney General for similar statutes (See OAG Opinion Nos. JM-616 & JM-696).

Response: Staff disagrees with comment. SB 178 amended the definition of HUB to include the principal place of business must be in the State of Texas. In addition to this, applicants must also demonstrate their active participation, control and management of the business. The proposed definition of Principal Place of Business is to ensure that all applicants are aware that business headquarters must be in Texas, but the applicants must be actively participating, controlling, and managing the daily operations of the business during regular business hours.

Comment on §111.12(19) definition of "Principal Place of Business" and clarification of proposed rule. The proposed rule defines "Principal Place of Business" as "a permanent business office located in Texas where the majority of HUB owner(s) makes the decisions, controls the daily operations of the organization, and participates in the business. The qualifying owners must be residents of the State of Texas."

The proposed rule's phrasing, "majority of HUB owner(s)" is ambiguous. Does this mean the majority of the HUB business entity's owners (which in the case of a corporation with 100 owners of which 51 are economically disadvantaged person owners, could be 2 economically disadvantaged person owners and 49 non-economically disadvantaged person owners)? Or, does it mean the majority of the economically disadvantaged person owners (which in the case of a corporation with 100 owners of which 51 are economically disadvantaged persons, would mean 26 of the economically disadvantaged persons)? Or, does it mean a subset of the business entity's owners which must be a majority of owners and consist entirely of economically disadvantaged persons (which in the case of a corporation with 100 owners of which 51 are economically disadvantaged persons, would mean all 51 of the economically disadvantaged persons)?

By stating "... where the majority of HUB owner(s) makes the decisions, controls the daily operations of the organization, and participates in the business..." this proposed rule seems to require that for a HUB to be considered as having its "Principal Place of Business" in Texas, the qualifying owners (the economically disadvantaged persons) must be actively participating in the business' decisions and daily operations from the business "Principal Place of Business" office. A qualifying owner who actively participates in the business' decisions and daily operations from a location or office (even if in Texas) other than the business' "Principal Place of Business" office would therefore not meet the definition of "Principal Place of Business" and would therefore no longer be eligible for HUB certification. Is this the commission's intent?

The proposed rule requires that for a potential HUB to be considered as having its "Principal Place of Business" in Texas, the qualifying owners must be residents of the State of Texas. The TNRCC requests clarification on what is meant by "residents of the State of Texas" (Will a driver's licenses or voter's registration suffice? Is there a time of residency requirement? And/or, must the qualifying owners be legally domiciled in Texas with an intent to remain for the indefinite future?) In addition, this proposed rule seems to eliminate from the definition of "Principal Place of Business" a business entity whose articles of incorporation, business assets, office, operations, and activity are in Texas, but whose "qualifying owners" are not residents of the state of Texas. (i.e. A Texarkana, Texas based Texas incorporated corporation owned entirely by an economically disadvantaged person, that conducts all of its business in Texas, and which has all of its assets in Texas, but whose owner resides in Texarkana, Arkansas would not have its "Principal Place of Business" in Texas according to the proposed rule and would therefore not meet the definition of a HUB.) Is this the commission's intent?

Response: Staff disagrees with comment that the term "the majority HUB owner(s)" is ambiguous. It clearly identifies the economically disadvantaged owners must own at least 51% of the business.

Staff disagrees with the comment regarding the definition for "Principal Place of Business". It is the intent of SB 178 and GSC rules for all HUB owners to actively participate in their office locations within Texas.

Staff disagrees with TNRCC comment requesting clarification on what is meant by "residents of the State of Texas" in the definition for "Principal Place of Business" . All qualifying applicants must provide documentation to determine their legal residency (i.e., voter registration). The definition of "Principal Place of Business" includes not only the business location, but also defines that the majority HUB owners of that business must reside within Texas. This is to ensure compliance with HUB eligibility requirements of active participation, control, proportionate interest, and management.

Comment on §111.12(19) definition of "Principal Place of Business" and effect on federally funded contracts. The requirements of SB 178 that a HUB be an entity with its principal place of business in Texas, along with the commission's proposed rule's definition of " Principal Place of Business" brings uncertainty as to whether, in a contract using Federal Funds, the current assumption of many agencies, that by complying with the Good Faith Effort requirements, an agency also complies with the Federal MWBE requirements, still holds true? How then, if this rule is issued as proposed, does the commission recommend an agency simultaneously meet its Federal MWBE and state Good Faith Effort requirements? Also, how can an agency comply with this rule, in a partly or entirely Federally funded purchase, while simultaneously avoiding Texas-specific preferences which may not be exercised while using Federal funds?

Response: Staff disagrees with comment. The SB 178 requirements are not applicable to the federal Minority and Women's Business Enterprises (MWBE) requirements. The GSC HUB Directory is utilized to assist state agencies in meeting or exceeding their good faith effort goals in accordance with the Texas Disparity Study and HUB rules, §111.13.

The amendments are adopted under the Texas Government Code, Title 10, Subtitle D, Chapter 2161, §2161.002, which provides the General Services Commission with the authority to promulgate rules under this Code.

§111.16.State Agency Reporting Requirements.

(a)

The comptroller will report to the commission not later than March 15 of each year regarding the previous six-month period, and on September 15 of each year regarding the preceding fiscal year, the payments made for the purchase of goods, services and public works awarded and actually paid from treasury funds by each state agency. Subject to the capabilities of the comptroller's USAS system, the comptroller shall identify state agencies' purchases from state term contracts which are paid from treasury funds so that those purchases awarded and actually paid under term contracts may be included in the commission's report of its own purchases.

(b)

State agencies will report to the commission, not later than March 15 of each year regarding the previous six-month period and on September 15 of each year regarding the preceding fiscal year, the payments made for the purchase of goods and services awarded and actually paid from non-treasury funds by the state agency. The report shall include information requested by the commission and shall be in a form prescribed by the commission. State agencies' purchases from state term contracts which are paid from non-treasury funds must be identified on the report as such so that they may be reflected on the commission's report of its own purchases.

(c)

State agencies shall maintain, and compile monthly, information relating to the agency's and each of its operating division's use of historically underutilized businesses, including information regarding subcontractors and suppliers. This information shall include but is not limited to the information required in subsections (a) and (b) of this section. On a monthly basis state agencies shall require a contractor/vendor to whom a state agency has awarded a contract to report to the agency the identity and amount paid to each historically underutilized business to whom the contractor/vendor has awarded a subcontract for the purchase of supplies, materials and equipment, provided that payment was made to a historically underutilized business in the month to be reported. Contractors/Vendors shall report to a state agency progress payments made to subcontractors, professionals, consultants and suppliers certified as historically underutilized businesses each month in which such payment is made.

(d)

State agencies will report to the commission, not later than March 15 of each year regarding the previous six-month period and on September 15 of each year regarding the preceding fiscal year, the total dollar amount of historically underutilized business subcontracting participation in all of the agencies' contracts for the purchase of goods, services and public works payments. State agencies must include subcontracting participation paid from Treasury and Non-Treasury funds.

(e)

State agencies that participate in a group purchasing program under Texas Government Code §2155.134 shall include a separate report to the commission, not later than March 15 of each year regarding the previous six-month period and September 15 of each year regarding the preceding fiscal year, of purchases that are made through the group purchasing program and shall report the dollar amount of each purchase that is allocated to the reporting agency.

(f)

The commission shall prepare a consolidated report based on a compilation and analysis of the reports submitted by each state agency and information provided by the comptroller in the format specified by the commission. These reports of historically underutilized business purchasing and contracts shall form a record of each agency's purchases in which the agency selected the contractor/vendor. If the contractor/vendor was selected by the commission as part of its state term contract program, the purchase will be reflected on the commission's report of its own purchases. The commission report will contain the following information:

(1)

the total dollar amount of payments made by each state agency;

(2)

the total number of HUBs actually paid by each state agency;

(3)

the total number of contracts awarded to HUBs by each state agency;

(4)

the number of bids received from HUBs by each state agency; and

(5)

the graduation rates of HUBs as defined in §111.23 of this title (relating to Graduation Procedures) for the following groups as defined in §111.12 of this title (relating to Definitions) and certified by the commission:

(A)

Black Americans;

(B)

Hispanic Americans;

(C)

American Women;

(D)

Asian Pacific Americans; and

(E)

Native Americans.

(g)

On April 15 of each year, the commission shall submit the consolidated report regarding the previous six-month period and on October 15 of each year regarding the preceding fiscal year to the presiding officer of each house of the legislature, the members of the legislature and the joint select committee.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on January 27, 2000.

TRD-200000556

Ann Dillon

General Counsel

General Services Commission

Effective date: February 16, 2000

Proposal publication date: November 12, 1999

For further information, please call: (512) 463-3960


Subchapter C. COST OF COPIES OF PUBLIC INFORMATION

1 TAC §111.71

The General Services Commission (the "GSC") adopts new §111.71, regarding informing the public of basic rights and responsibilities under the public information law. Section 111.71 is adopted with changes to the proposed text as published in the November 12, 1999, issue of the Texas Register (24 TexReg 9906).

The General Services Commission adopts §111.71 in order to implement new §552.205, of the Texas Government Code, Chapter 552, Public Information Act enacted by Senate Bill (SB) 1851, 76th Legislature (1999).

In §111.71(b), the words "the rights and responsibilities of requestors and governmental bodies that are subject to Chapter 552" were changed to read "the rights of requestors and responsibilities of governmental bodies that are subject to Chapter 552, as well as the procedures for inspecting or obtaining a copy of public information under said chapter."

In §111.71(c)(1) the words "and laminated to prevent alterations" were deleted. In §111.71(c)(2) the words "15 inches by 22 inches in size" were changed to "8 1/2 inches by 14 inches in total size, exclusive of framing." New language has been inserted as §111.71(c)(3) to read: "The sign may be laminated to prevent alterations."

Language in §111.71(d) has been reorganized and modified to improve readability and to clarify procedures.

The section provides the content, size, and other physical characteristics or the sign mandated by new §552.205 of the Texas Government Code, Chapter 552 (the "Texas Public Information Act"), as enacted by SB 1851, 76th Legislature (1999).

Comments were received from four respondents. The comments addressed the following: (1) lamination and size of the poster; (2) rights and responsibilities of requestors and governmental bodies; and (3) procedures for obtaining public information.

The commission agrees with the comment that it could become expensive to laminate the signs. Additionally, the minimum size of the sign has been changed to make it easier to print the sign posted by GSC on its website. The language in adopted §111.71(c) was changed to reflect the comment.

The commission agrees with the comment that certain government information may be confidential by other statutes, constitutional law, or by judicial decision. The language in adopted §111.71(d)(1) has been changed to reflect the comment.

The commission agrees with the comment that a governmental body may start work before a requestor accepts charges that exceed $40. However, the commission believes that a requestor has a right to reject copies for which the requestor did not agree to pay. Additionally, a governmental body that starts work on a request before the requestor has accepted the estimated charges, assumes the risk of wasting time and effort. Any costs incurred that were not accepted by the requestor may not be used to calculate unpaid balances pursuant to Government Code, Chapter 552, §552.263. Furthermore, §552.2615(d) states in part, "the charges may not exceed: (1) the amount estimated in the updated itemized statement, or (2) if an updated itemized statement is not sent to the requestor, an amount that exceeds by 20 percent or more the amount estimated in the itemized statement." Therefore, a governmental body that continues work after realizing that the original itemized statement will be exceeded by 20 percent or more, would have to provide all copies made to the requestor, but only be permitted to charge the original estimated amount plus 20 percent. Neither Government Code, Chapter 552, nor rule §111.67 require an itemized statement if the charges do not exceed $40; therefore, a governmental body may make copies in advance if the charge is under $40. The language in proposed §111.71(d)(2)(B) has been moved to (D), and changed to clarify that the itemized statement applies only to charges over $40.

The commission disagrees with the comment that the language in proposed §111.71(d)(2)(C) is confusing, or that it may lead a requestor to believe that the requestor has the right to receive free copies. The language in proposed §111.71(d)(2)(C) has been clarified and reorganized under adopted §111.71(d)(2)(E). The language tracks §552.221(a) of the Act from the requestor's point of view. The language clarifies that in most instances inspection can be made without charges being imposed.

The commission agrees with the comment that a requestor has a right to a copy of the governmental body's written communication to the Office of the Attorney General ("OAG") requesting a decision, or if the written communication discloses the requested information, a redacted copy may be provided. The proposed language in §111.71(d)(2)(D) has been reorganized under adopted §111.71(d)(3)(F) and changed to reflect the comment.

The commission agrees with the comment that the law does not mention "improper" charges. The language in proposed §111.71(d)(2)(E) has been modified and reorganized under adopted §111.71(d)(2)(H) to reflect that a requestor may make a complaint to GSC relating to charges, and that other possible violation complaints may be filed with the county or district attorney.

The commission agrees that a complaint against a governmental body other than a state agency must be filed first with the district or county attorney of the county where the governmental body is located. If the governmental body is the district or county attorney, the complaint must be filed with the OAG. The language in adopted §111.71(d)(2)(H) has been changed to reflect the comment.

The commission agrees with the comment that a requestor may not realize that failing to respond to an itemized statement within ten days as provided by law may render the request "automatically withdrawn". Language has been added to adopted §111.71(d)(5)(C)(i) to clarify that a response must be made within ten days or the request will be deemed withdrawn.

The commission agrees with the comment that Government Code, Chapter 552 does not specify that a governmental body has rights. The proposed language concerning "Rights of Governmental Bodies" has been deleted and part of the language has been added to adopted §111.71(d)(5) and (6) concerning cost of records, information to be released and information that may be withheld due to an exception (Government Code §§552.225, 552.2615 and 552.303).

The commission disagrees with the comment that language relating to the responsibilities of a governmental body found in adopted §111.71(d)(3)(C), which reads "be informed about open records laws and educate employees on the requirements of those laws", serves no purpose. Government Code, §552.205 requires that the public information sign contain basic information "about the rights of a requestor, the responsibilities of a governmental body, and the procedures for inspecting or obtaining a copy of public information...." This is a basic responsibility of a governmental body. Therefore, the language has not been changed.

The commission agrees with the comment that an itemized statement and subsequent updates, are required only in cases where the estimated charges will exceed $40, and in any changes in estimates above 20 percent of the original estimate. The language in adopted §111.71(d)(3)(D) reflects the comment.

The commission disagrees with the comment that the law states the requestor will pay the charges. Government Code, §552.2615(b)(1) states that "the requestor will accept the estimated charges." However, language in adopted §111.71(d)(3)(D) has been changed to clarify "acceptance" of the charges, rather than "agreement" with the charges.

The commission agrees with the comment that a governmental body may assert any of the exceptions listed in the law, and whether or not the information may be ultimately withheld has no relevance to the request for an OAG opinion. The language in adopted 111.71(d)(3)(F) reflects the comment.

The commission agrees with the comment that states that a governmental body "shall make a good faith effort to notify" third parties when their proprietary information is requested. The language in adopted §111.71(d)(3)(H) reflects the comment.

The commission agrees with the comment that it is not clear how Government Code §552.353(c) affects the 30-day deadline that a governmental body has to file suit in response to an OAG opinion. Therefore, proposed §111.71(d)(5)(H) has been deleted, and this issue will be referred to OAG for further clarification.

The commission disagrees with the comment that a governmental body has no duty to respond in writing to all communications from the GSC or OAG. Although the commission is not certain whether or not the OAG requires that a governmental body respond in writing to the OAG's communications regarding violations of the Act, GSC rule §111.68(d), relating to processing complaints of overcharges, states that "the governmental body shall respond in writing to the questions within 10 days from receipt of the questions." The language has been changed and reorganized under adopted §111.71(d)(3)(I) to reflect the need for a written response to communications from GSC. The words "in writing" have been deleted as it refers to responses to the OAG.

The commission disagrees with the comment that the requirement for the sign to contain an email address where the requestor may send a request for information may result in a governmental body having to implement an electronic process to receive requests. In order to avoid misunderstanding, the words "if any" will be added to the proposed language which has been reorganized under adopted §111.71(d)(7)(A). Additionally, the words "name or names and address" will be changed to "contact information".

The commission agrees with the comment that the name of the district or county attorney may change every four years, if not more often. The language in proposed §111.71(d)(6)(B) has been reorganized under adopted §111.71(d)(7)(B) and changed to read " the sign must contain contact information of the local county or district attorney...." The commission disagrees more detail is needed in this section, since the minimum information required has already been included. Additionally, the commission disagrees that the GSC's Office of General Counsel contact information needs to be included since said office does not handle overcharge complaints.

The commission agrees with the comment that the Act emphasizes "information" rather than "records." The language in proposed §111.71(d)(3)(B) has been reorganized under adopted §111.71(d)(4)(B) and the words "items requested" has been changed to "information requested."

The commission disagrees with the comment that the following language found in proposed §111.71(d)(5)(C) and (D) is not necessary: "Inform requestors of estimates", and "Confirm that the requestor agrees to pay the costs before incurring the costs". The language has been reorganized under adopted §111.71(d)(3)(D). Government Code, Chapter 552, requires updated itemized statements when the original estimates will be exceeded by 20 percent. The lack of the updated itemized statement limits the governmental body's recovery to the original estimate plus 20 percent. Additionally, by "confirmation" the commission means that a governmental body has received the requestor's written acceptance of the charges or an amended request.

The commission agrees with the comment that duties can be summarized. Proposed §111.71(d)(5)(E) and (F) have been reorganized in adopted §111.71(d)(3)(E). The word "establish" has been changed to "set" to parallel the wording in the Government Code, Chapter 552.

The commission disagrees with the comment that would specify, or give the appearance of specifying, that compliance is achieved only by using the sign provided by GSC. The law states that the GSC "by rule shall prescribe the content of the sign and the size, shape, and other physical characteristics of the sign." The sign provided by GSC on its website, by mail, or in person, is simply an example and extended as a courtesy. It is not the intention of the commission that the sign posted by the commission should be the only sign that can be used. A governmental body that may use the promulgated rules to produce its own sign.

The commission agrees with the comment that the law provides for the rights of requestors, responsibilities of governmental bodies, and procedures for obtaining public information. Proposed §111.71.(d)(3), relating to Responsibilities of Requestors, has been deleted and part of the language reorganized under adopted §111.71(d)(4) and (5) as procedures to obtain information and information to be released.

The commission agrees with the comment that the law does not specify that a "written" request is needed to obtain information. The word "written" has been deleted from §111.71(d)(3)(A), now located in §111.71(d)(4)(A).

City Public Service Board, San Antonio--Against; Texas Association of School Boards--Against; Texas Department of Human Services--Against

The new section is adopted under the Government Code, Chapter 552, Subchapter D, §552.205, (the "Public Information Act"), which provides the General Services Commission with the authority to promulgate rules necessary to implement the sections.

§111.71.Informing the Public of Basic Rights and Responsibilities under the Public Information Act.

(a)

Pursuant to Government Code, Chapter 552, Subchapter D, §552.205, an officer for public information shall prominently display a sign in the form prescribed by the General Services Commission.

(b)

The sign shall contain basic information about the rights of requestors and responsibilities of governmental bodies that are subject to Chapter 552, as well as the procedures for inspecting or obtaining a copy of public information under said chapter.

(c)

The sign shall have the minimum following characteristics:

(1)

Be printed on plain paper.

(2)

Be no less than 8 1/2 inches by 14 inches in total size, exclusive of framing.

(3)

The sign may be laminated to prevent alterations.

(d)

The sign will contain the following wording:

(1)

The Public Information Act. Texas Government Code, Chapter 552, gives you the right to access government records; and an officer for public information and the officer's agent may not ask why you want them. All government information is presumed to be available to the public. Certain exceptions may apply to the disclosure of the information. Governmental bodies shall promptly release requested information that is not confidential by law, either constitutional, statutory, or by judicial decision, or information for which an exception to disclosure has not been sought.

(2)

Rights of Requestors. You have the right to:

(A)

Prompt access to information that is not confidential or otherwise protected;

(B)

Receive treatment equal to all other requestors, including accommodation in accordance with the Americans with Disabilities Act (ADA) requirements;

(C)

Receive certain kinds of information without exceptions, like the voting record of public officials, and other information;

(D)

Receive a written itemized statement of estimated charges, when charges will exceed $40, in advance of work being started and opportunity to modify the request in response to the itemized statement;

(E)

Choose whether to inspect the requested information (most often at no charge), receive copies of the information, or both;

(F)

A waiver or reduction of charges if the governmental body determines that access to the information primarily benefits the general public;

(G)

Receive a copy of the communication from the governmental body asking the Office of the Attorney General for a ruling on whether the information can be withheld under one of the accepted exceptions, or if the communication discloses the requested information, a redacted copy;

(H)

Lodge a written complaint about overcharges for public information with the General Services Commission. Complaints of other possible violations may be filed with the county or district attorney of the county where the governmental body, other than a state agency, is located. If the complaint is against the county or district attorney, the complaint must be filed with the Office of the Attorney General.

(3)

Responsibilities of Governmental Bodies. All governmental bodies responding to information requests have the responsibility to:

(A)

Establish reasonable procedures for inspecting or copying public information and inform requestors of these procedures;

(B)

Treat all requestors uniformly and shall give to the requestor all reasonable comfort and facility, including accommodation in accordance with ADA requirements;

(C)

Be informed about open records laws and educate employees on the requirements of those laws;

(D)

Inform requestors of estimated charges greater than $40 and any changes in the estimates above 20 percent of the original estimate, and confirm that the requestor accepts the charges, or has amended the request, in writing before finalizing the request;

(E)

Inform requestor if the information cannot be provided promptly and set a date and time to provide it within a reasonable time;

(F)

Request a ruling from the Office of the Attorney General regarding any information the governmental body wishes to withhold, and send a copy of the request for ruling, or a redacted copy, to the requestor;

(G)

Segregate public information from information that may be withheld and provide that public information promptly;

(H)

Make a good faith attempt to inform third parties when their proprietary information is being requested from the governmental body;

(I)

Respond in writing to all written communications from the General Services Commission regarding charges for the information. Respond to the Office of the Attorney General regarding complaints about violations of the Act.

(4)

Procedures to Obtain Information.

(A)

Submit a request by mail, fax, email or in person, according to a governmental body's reasonable procedures.

(B)

Include enough description and detail about the information requested to enable the governmental body to accurately identify and locate the information requested.

(C)

Cooperate with the governmental body's reasonable efforts to clarify the type or amount of information requested.

(5)

Information to be released.

(A)

You may review it promptly, and if it cannot be produced within 10 working days the public information office will notify you in writing of the reasonable date and time when it will be available;

(B)

Keep all appointments to inspect records and to pick up copies. Failure to keep appointments may result in losing the opportunity to inspect the information at the time requested;

(C)

Cost of Records.

(i)

You must respond to any written estimate of charges within 10 days of the date the governmental body sent it or the request is considered to be automatically withdrawn;

(ii)

If estimated costs exceed $100.00 (or $50.00 if a governmental body has fewer than 16 full time employees) the governmental body may require a bond, prepayment or deposit;

(iii)

You may ask the governmental body to determine whether providing the information primarily benefits the general public, resulting in a waiver or reduction of charges;

(iv)

Make timely payment for all mutually agreed charges. A governmental body can demand payment of overdue balances exceeding $100.00, or obtain a security deposit, before processing additional requests from you.

(6)

Information that may be withheld due to an exception.

(A)

By the 10th business day after a governmental body receives your written request, a governmental body must:

(i)

Request an Attorney General Opinion and state which exceptions apply;

(ii)

Notify the requestor of the referral to the Attorney General; and

(iii)

Notify third parties if the request involves their proprietary information;

(B)

Failure to request an Attorney General opinion and to notify the requestor within 10 business days will result in a presumption that the information is open unless there is a compelling reason to withhold it.

(C)

Requestors may send a letter to the Attorney General arguing for release, and may review arguments made by the governmental body. If the arguments disclose the requested information, the requestor may obtain a redacted copy.

(D)

The Attorney General must render a decision no later than the 45th working day after the attorney general received the request for a decision. The attorney general may request an additional 10 working days extension.

(E)

Governmental bodies may not ask the Attorney General to "reconsider" an opinion.

(7)

Additional Information on Sign.

(A)

The sign must contain contact information of the governmental body's officer for public information, or the officer's agent, as well as the mailing address, phone and fax numbers, and email address, if any, where requestors may send a request for information to the officer or the officer's agent. The sign must also contain the physical address at which requestors may request information in person.

(B)

The sign must contact information of the local county attorney or district attorney where requestors may submit a complaint of alleged violations of the Act, as well as the contact information for the Office of the Attorney General and the General Services Commission.

(C)

The sign must also contain contact information of the person or persons with whom a requestor may make special arrangements for accommodation pursuant to the American with Disabilities Act.

(e)

A governmental body may comply with Section 552.205 and this rule by posting the sign provided by the General Services Commission.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on January 27, 2000.

TRD-200000584

Ann Dillon

General Counsel

General Services Commission

Effective date: February 16, 2000

Proposal publication date: November 12, 1999

For further information, please call: (512) 463-3960


Chapter 112. HUMAN RESOURCES PROGRAM

Subchapter A. EMPLOYEE TRAINING AND DEVELOPMENT PROGRAM

1 TAC §§112.1, 112.3, 112.5, 112.7

The General Services Commission adopts new Chapter 112, §§112.1, 112.3, 112.5 and 112.7, concerning the Employee Training and Development Program. Chapter 112 is adopted without changes to the proposed text as published in the December 17, 1999, issue of the Texas Register (24 TexReg 11203). The text will not be republished.

The General Services Commission adopts new Chapter 112 in order to provide policy guidelines to employees of the General Services Commission who pursue personal and professional improvement through training and education.

The new Chapter 112 clearly defines procedures and guidelines in accordance with the Government Code, Chapter 656, Subchapter C - The State Employee Training Act and S.B. 223, 76th Leg. (1999).

No comments were received regarding the adoption of new Chapter 112 - Employee Training and Development Program.

New Chapter 112 is adopted under the authority of the Texas Government Code, Title 10, Subtitle D, Section 2152.105 and Government Code, §656.048 which provides the General Services Commission with the authority to promulgate rules necessary to implement the sections.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on January 26, 2000.

TRD-200000514

Ann Dillon

General Counsel

General Services Commission

Effective date: February 15, 2000

Proposal publication date: December 17, 1999

For further information, please call: (512) 463-3960


Chapter 113. CENTRAL PURCHASING DIVISION

General Services Commission adopts amendments to Chapter 113, Subchapter A, §§113.8, 113.19 and new §113.15; and adopts amendments to Subchapter C, §113.34 relating to recycled, remanufactured or environmentally sensitive commodities or services pursuant to S.B. 1127, 76th Leg. (1999). The rules are adopted without changes to the proposed text as noticed in the December 17, 1999, publication of the Texas Register (24 TexReg 11205). The text will not be republished.

Amendments and new rules to Chapter 113, Subchapter A and Subchapter C, are adopted to update terminology and clarify language to be in accordance with S.B. 1127, 76th Leg. (1999) which amended Texas Government Code §§2155.445 and 2155.448 relating to purchasing preferences.

The amendments and new rule to Chapter 113, Subchapter A and Subchapter C will provide for the commission, in coordination with the Recycling Market Development Board (RMDB), to annually consider recommendations of the RMDB when updating the list of identified commodities or services and purchasing goals for procurements by state agencies.

No comments were received concerning the proposed amendments to Chapter 113, Subchapter A, §§113.8, 113.19 and new §113.15; and proposed amendments to Subchapter C, §113.34.

Subchapter A. PURCHASING

1 TAC §§113.8, 113.15, 113.19

The amendments and new rule are adopted under the authority of the Texas Government Code, Title 10, Subtitle D., Chapter 2152, Subchapter A, §2152.003 and Chapter 2155, §2155.068, 2155.445 and 2155.448 which provides the General Services Commission with the authority to promulgate rules necessary to implement the sections.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on January 26, 2000.

TRD-200000515

Ann Dillon

General Counsel

General Services Commission

Effective date: February 15, 2000

Proposal publication date: December 17, 1999

For further information, please call: (512) 463-3960


Subchapter C. SPECIFICATION

1 TAC §113.34

The amendments are adopted under the authority of the Texas Government Code, Title 10, Subtitle D., Chapter 2152, Subchapter A, §2152.003 and Chapter 2155, §2155.068, 2155.445 and 2155.448 which provides the General Services Commission with the authority to promulgate rules necessary to implement the sections.

Filed with the Office of the Secretary of State on January 26, 2000.

TRD-200000516

Ann Dillon

General Counsel

General Services Commission

Effective date: February 15, 2000

Proposal publication date: December 17, 1999

For further information, please call: (512) 463-3960


Part 15. TEXAS HEALTH AND HUMAN SERVICES COMMISSION

Chapter 361. CHILDREN'S HEALTH INSURANCE PROGRAM

1 TAC §361.1

The Health and Human Services Commission adopts new §361.1 concerning the definition of significant traditional providers in the Children's Health Insurance Program (CHIP) in new chapter 361, Children's Health Insurance Program. Section 361.1 is adopted with changes to the proposed text as published in the August 27, 1999, issue of the Texas Register (24 TexReg 6602).

Section 62.155(b) of the Health and Safety Code, added by Senate Bill 445, 76th Legislature, directs the Health and Human Services Commission to define significant traditional providers in CHIP by rule. New §361.1 contains the new proposed definition.

The justification for this rule is that the definition, as revised in response to comments received, best captures providers whom the commission perceives as having traditionally provided care to the population to be served in CHIP.

The following comments were received on the new rule as proposed. Following each comment is the commission's response and any resulting change(s) to the rule.

Comment: One commenter suggested that the definition include mental health centers that have provided mental health counseling services to large numbers of working poor families.

Response: The commission has added "or by specialty code" to subsection (a) of the proposed rule. The providers will be listed by provider type and by specialty code by county. If a provider's billing falls within the top 80% of billings either by provider type or specialty code within a particular county, the provider will be a significant traditional provider (STP). If the mental health centers are not listed as STPs on the list generated as a result of this definition, the commission has added subsection (b) to the rule, setting out an appeals process by which these centers can seek to become an STP.

Comment: One commenter stated that the wording of the definition is unclear concerning whether community MHMR centers will qualify as significant traditional providers. The commenter suggests that the phrase "by type of provider" should be further clarified and categories of major significant traditional providers, like community MHMR centers, should be listed in the definition.

Response: The commission believes that community MHMR centers will be encompassed by the proposed definition. The commission has added "or by specialty code" to subsection (a) of the proposed rule. The providers are being listed by provider type and by specialty code by county and if a provider's billing falls within the top 80% of billings either by provider type or specialty code within a particular county, the provider will be an STP. If the community MHMR centers believe that they are STPs and are not included in the listing resulting from implementing this rule, the centers may appeal under new subsection (b).

Comment: One commenter stated that the current definition of STP is based on a volume calculation and is not related to the acuity and/or complexity of care needed. The commenter thus concludes that the net result of this definition is that specialty services that are not "volume driven" but are medically necessary may not be available to "at risk" populations. The commenter suggested that the definition of STP should be amended to include not only the top 80% of encounters but also specific medical specialty services, such as catastrophic medical rehabilitation, oncology services, ophthalmology and audiology services, and respiratory services, including ventilator-dependent children.

Response: The methodology used to derive the STP list based on the definition addresses this concern because the volume was determined by provider type and specialty code by county. The commission has added "or by specialty code" to subsection (a) to clarify this methodology.

Comment: One commenter suggested that, in this scenario, 20% of the providers are eliminated, which may cause a negative impact on children with disabilities. The commenter suggests that language be included to allow small, innovative providers to be included if they can meet the HMO's contract terms.

Response: The 80% referenced in the rule applies to billings and not to the number of providers. Those providers who, when listed by provider type or specialty code by county, have provided 80% of the billings in the Medicaid program or the Texas Healthy Kids Corporation will be included as STPs. The rule, as amended in response to public comment, captures those providers who have traditionally provided care to the CHIP or similar populations. Nothing in CHIP will discourage health plans from contracting with small, innovative providers.

Comment: Two commenters believe that the proposed definition of significant traditional providers should include specialized pediatric laboratories to track House Bill 2896, which includes language requiring Medicaid managed care HMOs to offer contracts to "each specialized laboratory in a region, including those laboratories located in a children's hospital." The commenters recommend inclusion of similar language to ensure that children have access to specialized pediatric laboratory services.

Response: The commission believes that specialized pediatric laboratories will be encompassed by the proposed definition. The providers are being listed by provider type and by specialty code by county. If a provider's billing falls within the top 80% of billings either by provider type or specialty code within a particular county, the provider will be an STP. If a specialized pediatric laboratory believes that it is an STP and is not included in the listing resulting from implementing this rule, the lab may appeal under new subsection (b).

Comment: One commenter suggested that the proposed definition of significant traditional provider is problematic in terms of the substance abuse benefit. CHIP is providing a broader range of chemical dependency services than Medicaid currently covers. These services have historically and traditionally been provided with TCADA funds, not public insurance. The commenter suggests adding "or providers that were funded and in good standing with TDMHMR or TCADA in SFY 99."

Response: The commission agrees with the comment and has incorporated the suggested language.

Comment: Two commenters asked whether CHIP contracts will contain a provision, similar to the one in the Medicaid managed care contracts, in which the state prohibits HMOs from using the lack of board certification as a reason to deny rural physicians from participating in the plans' networks. The commenter also asks whether the Medicaid standard that rural hospitals do not have to have JCAHO certification in order to participate in a Medicaid HMO plan will be used for CHIP.

Response: Although CHIP contracts are not addressed in this rule, the commission intends to have a provision similar to the referenced Medicaid contract provision in the CHIP HMO contracts. Likewise, CHIP intends to mirror the referenced Medicaid standard about rural hospitals.

Comment: One commenter stated that it believes that the proposed definition of "significant traditional provider" meets the spirit and intent of Senate Bill 445. However, the commenter suggested the inclusion of an appeals process through either the Texas Health and Human Services Commission or the Texas Department of Health for STPs who have difficulty obtaining "good faith" negotiations with contracted CHIP health plans. The commenter states that, in the Medicaid program, health plans failed to negotiate terms in accordance with section 533.006(a)(2)(A) of House Bill 2913 of the 75th Regular Legislative session.

Response: Section 62.155(b) of the Health and Safety Code is not identical to the STP language in section 533.006(a)(2)(A) of the Government Code, which applies to the Medicaid program. Section 62.155(b) requires only that health plans seek participation of STPs in the health plans' networks. If a provider is determined to be an STP under this rule and believes that the health plans are not seeking the provider's participation, the provider can bring that issue to the commission's attention. However, the commission does not believe that this type of formal appeal process is necessary. The commission intends to mirror the Medicaid STP requirements in CHIP and believe that the HMO contracts will address this issue.

Comment: A commenter suggested that there be an appeal process established under this rule for providers who are not initially determined to be STPs to challenge that determination as was done in the Medicaid program related to the CHIP program to provide for the same consideration.

Response: The commission agrees and has added subsection (b) to provide for such a process.

Comment: One commenter suggested that many of the very valuable (especially to special needs kids) providers who are pediatric sub-specialists will be excluded from this definition. For instance, a heart surgeon who is very skilled in children's care may not see enough volume to get into the "80%" category.

Response: The providers are being listed by provider type and by specialty code by county. If a provider's billing falls within the top 80% of billings either by provider type or specialty code within a particular county, the provider will be an STP. If a particular provider believes that he or she is an STP and is not included in the listing resulting from implementing this rule, the provider may appeal under new subsection (b).

Comment: One commenter suggested adding state-operated community services of the Texas Department of Mental Health and Mental Retardation and non-profit behavioral health providers who have traditionally provided a majority of their services to low-income children and families as specific types of STPs.

Response: The commission believes that these providers will be encompassed by the rule as amended in response to public comment. If these providers are not included in the list of STPs that results from use of this definition, they may appeal under new subsection (b).

Comment: One commenter suggested that non-profit behavioral healthcare providers who have traditionally provided care to low-income, uninsured families and children on a sliding scale basis but who have not served the Medicaid population should be included within this definition.

Response: The commission agrees and has added language to the rule to encompass these providers.

Comment: One commenter suggested adding those providers who over fiscal years 1999 and 2000 have delivered TCADA-funded services.

Response: The commission has added language to subsection (a) to include those providers who were funded by and in good standing with TCADA in state fiscal year 1999. As the STP list needs to be fixed in a point of time for the health plans to contract with them, the commission declines to add fiscal year 2000 to the definition.

Comments were received from the Texas Medical Association, Austin Child Guidance Center, The Texas Council of Community Mental Health and Mental Retardation Centers, Inc., The Institute for Rehabilitation and Research, Advocacy, Incorporated, Children's Hospital Association of Texas, The Association of Substance Abuse Programs, The University of Texas Medical Branch at Galveston, Tenet Healthcare Corporation, the Texas Department of Mental Health and Mental Retardation, the Texas Commission on Alcohol and Drug Abuse, and CHRISTUS Santa Rosa Children's Hospital in San Antonio. None of the commenters were against the rule in its entirety; however, they expressed concerns, asked questions, and suggested recommendations for change as discussed in the summary of comments.

The new rule is adopted under the Texas Government Code, §531.033, which provides the commissioner of HHSC with broad rulemaking authority and under Texas Health and Safety Code, chapter 62, §62.051(d), which authorizes the commissioner to adopt rules necessary to implement the child health plan for certain low-income children.

The new rule implements Health and Safety Code, §62.155(b).

§361.1.Definition of Significant Traditional Provider.

(a)

In the Children's Health Insurance Program, significant traditional provider (STP) means:

(1)

all hospitals receiving disproportionate share hospital funds in State Fiscal Year 1999;

(2)

all other providers in a county that, when listed by provider type or by specialty code in descending order by the amount of recipient or enrollee billings, provided the top 80 percent of recipient or enrollee billings for either the Texas Medicaid Program in State Fiscal Year 1998 as determined by the Texas Department of Health or the Texas Healthy Kids Corporation in State Fiscal Year 1999 as determined by the Texas Healthy Kids Corporation for each provider type or specialty code;

(3)

providers that were funded and in good standing with the Department of Mental Health and Mental Retardation or the Council on Alcohol and Drug Abuse in State Fiscal Year 1999; and

(4)

non-profit behavioral health providers who have provided at least 50% of their behavioral health services for state fiscal year 1999 on a sliding scale basis to low-income, uninsured families and children under 200% of the federal poverty level.

(b)

If a provider is not initially determined to be an STP, the provider may appeal that determination by sending a written notice to the Health and Human Services Commission, Children's Health Insurance Program, P.O. Box 13247, Austin, Texas 78711-3247, stating that it wants to appeal the STP determination. The commission will then notify the provider of the appeal procedure to follow.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on January 31, 2000.

TRD-200000680

Marina S. Henderson

Executive Deputy Commissioner

Texas Health and Human Services Commission

Effective date: February 20, 2000

Proposal publication date: August 27, 1999

For further information, please call: (512) 424-6576