The Texas Workforce Commission (Commission) proposes repeal of Chapter 800, Subchapter E, §§800.151, 800.152, 800.161, 800.171 - 800.178, 800.181, 800.182, and 800.191; and new Chapter 800, Subchapter E, §§800.151, 800.152, 800.161, 800.171, 800.172, 800.174 - 800.176, 800.181, and 800.191.

Purpose. The purpose of the rule changes is to set forth the Commission's sanction plan, which includes a description of responsibilities of Boards and subrecipients of the Agency and the Commission's role in preventing sanctionable acts that could trigger penalties. The purpose of the sanctions rules is to cure and correct deficiencies of a Board and subrecipient of the Agency at the earliest possible time to ensure services are delivered to the employers and residents in the area. The sanctions rules serve to notify a Board of what constitutes a sanctionable act. The new sanctions rules complement the new subchapter on Performance Review and Assistance, which focuses on assisting Boards and subrecipients of the Agency in avoiding potential sanctions.

Sanctions encompass the assignment of sanction status and assessment of penalties. Penalties may be assessed on a case-by-case review of the circumstances surrounding the sanctionable acts. The Agency will consider the steps necessary to ensure successful service delivery outcomes, customer needs, and accountability for contract management services and activities provided by a Board.

Background. The Commission is charged with ensuring accountability of Boards and subrecipients of the Agency. Boards are charged with the oversight and management of the services and activities of the One-Stop Service Delivery Network. Specifically, Board and Commission goals reflect WIA goals: streamlining services; empowering individuals; universal access; increased accountability; strong role for Boards and the private sector; and state and local flexibility. The four principles of Texas' vision are: limited and efficient state government; local control ; personal responsibility; and support for strong families.

Texas Government Code Chapter 2308, Texas Labor Code Title 4 and WIA have imposed on Boards a number of duties and responsibilities for the administration of Commission-funded activities, including maintaining adequate fiscal systems, complying with the uniform rules for administration of grants and agreements, meeting the contract performance measures, and complying with all applicable state and federal statutes and regulations. The Commission is responsible for oversight of Boards' and Agency subrecipients' activities and for identifying difficulties in or failures to meet contract performance levels or noncompliance with applicable statutes and regulations.

The proposed rules emphasize the partnership between the Commission and Boards or other subrecipients of the Agency in assuring compliance with federal and state requirements through performance reviews; technical assistance; contract oversight and management; and monitoring. Where preventive measures have not succeeded, the rules lay out a detailed sanctions plan. If performance review and assistance, including a performance improvement plan, do not produce anticipated results, the Commission will consider sanction actions described in this subchapter to ensure that there is no interruption of services.

The general changes to the rules are as follows:

* requiring that a Board or subrecipient of the Agency cooperate with performance review and assistance, including technical assistance, and contract management activities;

* adding subrecipients of the Agency (not a Board's contractor) to the entities that are subject to corrective and sanction actions; and

* replacing the term "program" with "services" and "activities" to focus on the full range of services and activities available through the Texas Workforce Centers.

More specifically, the changes to the rules include the following:

(1) reducing repetition in definitions and rules for Level One Sanctions, Level Two Sanctions, and Level Three Sanctions as well as clarifying the related definitions to show the increasing severity;

(2) adding an Intent to Sanctions provision;

(3) making all penalties available as options for the different "sanctionable acts" so that the new criteria may be applied to each situation based on the totality of the circumstances, such as the severity of the act or acts, previous occurrences of the acts, and efforts by the Board or subrecipient of the Agency to prevent the occurrence of the sanctionable acts;

(4) adding acts that may result in penalties;

(5) renaming types of sanctions as "corrective actions" and "penalties";

(6) clarifying that corrective actions and penalties may be assessed during the year and identifying sanction levels that may occur either during the year or after the end of a year; and

(7) reorganizing the appeal section, including a new Informal Conferences and Informal Dispositions subsection.

Randy Townsend, Chief Financial Officer, has determined that for the first five years the rules are in effect, the following statements will apply:

there are no additional estimated costs to the state and to local governments expected as a result of enforcing or administering the rules;

there are no estimated reductions in costs to the state or to local governments expected as a result of enforcing or administering the rules;

there are no estimated losses or increases in revenue to the state or to local governments as a result of enforcing or administering the rules;

there are no foreseeable implications relating to costs or revenues to the state or to local governments as a result of enforcing or administering the rules; and

there are no anticipated costs to persons who are required to comply with the rules as proposed.

Mr. Townsend also has determined that there is no anticipated adverse impact on small businesses as a result of enforcing or administering these rules because any regulatory burdens or impact on small businesses (including micro-businesses) as well as foreseeable adverse economic effects or costs, if any, would be a result of federal statute and regulations, which are the basis for these proposed rules, and second, as far as can be determined, small businesses (including micro-businesses) are not required to do anything as a result of these rules. In the event that a Board, Board's contractor, or a subrecipient of the Agency is required to expend funds as a result of corrective measures or penalties, the expense may be covered by the grant through administrative funds. If the sanctionable act results in a corrective measure or penalty that cannot be absorbed by the entity that performed the sanctionable act through administrative costs then the expenses would be the responsibility of the entity committing the sanctionable act. The amount of those expenses is proportionate to the degree of the sanctionable act and the amount of funds necessary to take appropriate corrective measures or respond to penalties. For that reason, the expenses may be larger for larger entities and smaller for smaller entities but proportionate to the sanctionable acts and related corrective measures and penalties.

Barbara Cigainero, Director of Workforce Development, has determined that for each year of the first five years that the rules will be in effect the public benefit anticipated as a result of the adoption of the proposed rules will be to improve customer service and ensure continued federal funding by strengthening the partnership between the Commission and a Board through performance review and assistance and corrective action to assure compliance with appropriate oversight and management.

James Barnes, Director of Labor Market Information, has determined that there is no foreseeable negative impact upon employment conditions in this state as a result of these proposed rules.

Comments on the proposed sections may be submitted to John Moore, Texas Workforce Commission, 101 East 15th Street, Room 608, Austin, Texas 78778; fax number (512) 463-1426; or e-mail to john.moore@twc.state.tx.us. Comments must be received by the Commission no later than 30 days from the date this proposal is published in the Texas Register .

For information about the Commission please visit our web page at www.texasworkforce.org.

Subchapter E. SANCTIONS RULES

The Texas Workforce Commission (Commission) proposes amendments to Subchapter A. General Provisions, §§809.1-809.2; the repeal of Subchapter A. General Provisions, §809.5; amendments to Subchapter B. General Management Requirements, §§809.11, 809.14, 809.15 and 809.20; Subchapter C. Requirements to Provide Child Care, §§809.43, 809.46-809.48; Subchapter D. Self-Arranged Care, §809.61; Subchapter G. Child Care for People Transitioning off Public Assistance, §§809.101-809.105; the repeal of Subchapter I. Child Care Training Center Pilot Programs, §§809.171-809.174; and amendments to Subchapter K. Funds Management, §§809.221, 809.225, 809.231, and 809.233 relating to child care services.

The purpose of amending the rules is to offer clarification of priorities for service, adjust the parents' share of cost provision, incorporate the new Texas Rising Star provider identity for Designated Vendors, which includes higher reimbursement rates, and remove unnecessary provisions.

The rule amendments continue to require placing eligible Choices, Transitional or Texas Workforce Applicants' children into care. However, the rule amendments make clear that if necessary, due to the limitation of funds, a child's care may be discontinued to ensure that the statutory and regulatory priorities receive child care services. Therefore, a Board must ensure that policies are in place for discontinuing child care services for families that are other than Choices, Transitional, or Texas Workforce Applicants if funding is limited. The amendments ensure that funds are used for low-income families who are working or are in training or educational activities and who must receive child care services to assist them in becoming self-sufficient.

The exemption to the parent's share of cost provision relating to TANF is changed to an exemption for Choices participants. The purpose for the rule change is to provide for the exemption from paying a parent's share of cost for persons participating in the Choices services or activities who are working, in training or in an education activity. The intent of the rule change is to encourage parents to voluntarily participate in Choices if they are still receiving TANF, thus making them eligible for a broader range of services and further assisting them in becoming self-sufficient. TANF recipients who are not mandatory or voluntary participants in a Choices service or activity will be responsible for paying the parent's share of cost as determined by the Board.

The rule amendments also remove the parents' share of cost exemption for Supplemental Security Income (SSI) recipients to provide for the exemption from the parent's share of cost to apply only to Choices participants.

The rule amendments replace the Designated Vendor title with the new Texas Rising Star provider identity. This title has been established in coordination with local Boards and contractors and more accurately describes the higher quality of care that is found in these facilities. In addition, the rule amendments put into place a minimum five percent increase in the reimbursement rate for Texas Rising Star providers as long as the rate does not exceed the published rate.

The rule amendments remove certain portions of the rules that are obsolete or have expired, such as the child care training center pilot programs.

For purposes of this preamble, the term "Agency" refers to the daily operations of the Texas Workforce Commission under the direction of the executive director, and the term "Commission" refers to the three-member body of governance composed of Governor-appointed members.

In §809.1, section (b), the word "or" replaces the word "and". Also, in section (b), the phrase "continues to" is deleted, and the word "administer" is changed to plural form.

In §809.2, sections (1) and (2), the definitions regarding the Board and Child Care are redefined which are consistent with §800.2.

Section 809.5. Child Care State Advisory Committee is repealed in its entirety.

In §809.14, subsection (3) of section (a), the phrase "Designed Vendor standards of" is replaced by the phrase "Texas Rising Star criteria as established by." In addition, the phrase "(formerly known as the Designated Vendor criteria)" is appended to the end of section (b). In section (d), the phrase "Designated Vendor" is replaced by the phrase "Texas Rising Star Provider."

In §809.15, section (b), the phrase "Designated Vendor criteria" is replaced by the phrase "Texas Rising Star Provider criteria." In addition, the phrase "(formerly known as the Designated Vendor criteria)" is appended to the end of section (b). In section (d), the phrase "Designated Vendor" is replaced by the phrase "Texas Rising Star Provider."

In §809.46, subsection (B) of subsection (2) of section (a), the sentence was removed, and the subsequent subsections were renamed appropriately.

In §809.61, a new section (c) was inserted between section (b) and section (c). All sections following the new section (c) were renamed appropriately.

In §809.103, section (c), the phrase "one year" was replaced by the phrase "12 months or until the family reaches the Board's income limit for eligibility, whichever occurs first. Subject to the availability of funds, children who are otherwise eligible for at-risk child care and whose time limit for Applicant child care has expired, may be continued in care subject to the Board's policies for at-risk child care. At-risk care includes eligibility under any provision contained in Subchapter H of this title relating to Children of Parents at Risk of Becoming Dependent on Public Assistance."

Subchapter I. Child Care Training Center Pilot Programs is repealed in its entirety.

In §809.221, sections (a) and (b) were replaced with new sections (a) and (b).

In §809.225, section (c), the phrase "if eligible to receive care based on other eligibility criteria or if the Texas Department of Protective and Regulatory Services or its caseworker indicates that the child is in need of protective services." was replaced by the phrase "if the children are otherwise eligible under the Board's child care policies and meet the minimum requirements for eligibility set forth in the federal regulations, and if it does not result in removing another child from care. Children Needing to Receive Protective Services referred by a Texas Department of Protective Services (CPS) worker that are no longer funded through PRS shall remain in care for the period of time determined appropriate by the CPS. The provision of care shall not exceed six months and shall not result in another child being removed from care. In addition, the entire section (d) was deleted.

In §809.231, a new section (b) was added, subsequent subsections were renamed appropriately, and a new section (e) was added.

In§809.233, section (1), each phrase stating "parent fees" was replaced by the phrase "parents' share of costs."

The Commission made non-substantive grammatical changes to improve readability and to incorporate state statutory requirements to §§809.11, 809.20, 809.43, 809.47, 809.48, 809.101, 809.102, 809.104, 809.105, 809.231 and 809.233.

Randy Townsend, Director of Finance, has determined that for each year of the first five years the rules will be in effect, the following statements will apply:

There are no additional estimated costs to the state and to local governments expected as a result of enforcing or administering the rules;

There are no estimated reductions in costs to the state and to local governments as a result of enforcing or administering the rules;

There are no estimated losses or increases in revenue to the state or to local governments as a result of enforcing or administering the rules;

There are no foreseeable implications relating to costs or revenue of the state or local governments as a result of enforcing or administering the rules; and

There are no anticipated economic costs to persons required to comply with the rules; however, some persons that are receiving a child care subsidy may no longer be able to utilize the cost savings resulting from having the Child Care and Development Fund subsidize the child care of the family.

Mr. Townsend has also determined that there is no anticipated adverse impact on small businesses as a result of enforcing or administering the rules because small businesses are not regulated or required to do anything by the rules.

James Barnes, Director of Labor Market Information, has determined that there is no significant negative impact upon employment conditions in this state as a result of the proposed amendments and reapeals.

Barbara Cigainero, Director of Workforce and Development, has determined that for each year of the first five years the rules will be in effect, the public benefit anticipated as a result of enforcing the rules will be to help ensure a more effective use of child care funds to assist Boards in supporting employment, training, and education.

Comments on the proposal may be submitted to John Moore, Texas Workforce Commission Building, 101 East 15th Street, Room , Austin, Texas 78778, (512) 463-3041. Comments may also be submitted via fax to (512) 463-1426 or e-mailed to: John.Moore@twc.state.tx.us.. Comments must be received by the Agency within thirty days from the date of the publication in the Texas Register .

For information about the Commission please visit our web page at www.texasworkforce.org.

Subchapter A. GENERAL PROVISIONS

The Texas Workforce Commission (Commission) proposes the repeal of Chapter 813, Subchapter A. General Provisions, §813.1 and §813.2; Subchapter B. Expenditure of Funds, §§813.11-813.14; Subchapter C. Allowable Activities for Participants, §§813.21-813.23; Subchapter D. Support Services for Participants, §§813.31-813.33; Subchapter E. Complaints and Appeals, §§813.41-813.43; and new Chapter 813, Subchapter A. General Provisions, §§813.1-813.3; Subchapter B. Access to Employment and Training Activities and Support Services, §813.11 and §813.12; Subchapter C. Expenditure of Funds, §813.22; Subchapter D. Allowable Activities, §813.31 and §813.32; Subchapter E. Support Services for Participants, §813.41; and Subchapter F. Complaints and Appeals, §§813.51-813.53.

The purpose of the repeal and new rules is to support the expansion of E&T activities and support services statewide by aligning Food Stamp E&T, Choices, work search and complementary requirements associated with Unemployment Insurance, and other work-related services through the Texas Workforce Network, and to provide more flexibility to assist Boards in the integration of Food Stamp E&T activities and support services into the Texas Workforce Centers as set forth in 40 TAC Chapter 801 Subchapter B relating to the Texas Workforce Center Network. The purpose of the new rules is also to more clearly state the role of the Boards in the oversight and management of the delivery of Food Stamp E&T activities and support services.

Subchapter A sets out the General Provisions. Section 813.1 states the purpose, §813.2 sets out the definitions and terms used in this chapter, and §813.3 sets out the general Board responsibilities.

Subchapter B sets out the provisions for access to employment and training activities and support services. Section 813.11 sets out board responsibilities regarding access to E&T Activities and Support Services, and §813.12 sets out participant responsibilities.

Subchapter C sets out Expenditure of Funds. Section 813.22 states what funds are designated for able-bodied adults without dependents (ABAWDs).

Subchapter D sets out the Allowable Activities. Section 813.31 sets out the allowable activities for ABAWDs, and §813.32 sets out the activities for all E&T mandatory work registrants.

Subchapter E sets out the Support Services for Participants. Section 813.41 is the general provision on support services.

Subchapter F sets out Complaints and Appeals. Section 813.51 addresses appeals of decisions made on food stamp applications and benefits, §813.52 addresses appeals of E&T activities and services decisions, and §813.53 addresses discrimination complaints.

Statutory Background: The Food Stamp Act of 1977 requires non-exempt adults at least 16 but less than 60 years of age, referred by the Texas Department of Human Services, to register for work and take part in E&T activities and support services. Failure to comply with these requirements may result in disqualification from the receipt of Food Stamp benefits. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 requires able-bodied food stamp recipients at least 18 but less than 50 years of age with no dependent children (ABAWDs) to work or participate in specific activities in order to receive Food Stamp benefits. Failure of ABAWDs to comply with these federal requirements will limit their assistance to three out of thirty-six (36) months.

E&T activities and support services are funded with 100% federal grant funds (100% funds) as well as 50% federal and 50% state funds (50/50 funds). Regarding the 100% funds, the Balanced Budget Act of 1997 authorized additional funds for ABAWDs and mandated that states utilize at least eighty percent (80%) of the 100% funds for qualifying work activities for ABAWDs. The remaining twenty percent (20%) of the 100% funds may be used to provide work activities specified in the Texas State Plan, approved by the U.S. Department of Agriculture, for all mandatory work registrants. The remaining twenty percent (20%) of funds are not subject to the restrictions placed upon the eighty percent (80%) of the federal funds. The 50/50 funds may be used for E&T activities in addition to support services such as child care, transportation, and other expenses to assist participants in E&T activities with becoming self sufficient.

Purpose: The purpose of the rule changes related to Food Stamp E&T activities and support services is to facilitate the maintenance and continuous improvement of the One-Stop Service Delivery Network as established in Texas Government Code, Chapter 2308, and Texas Labor Code, Chapters 301 and 302. The proposed rules provide the Boards with more flexibility to more fully integrate Food Stamp E&T into the One-Stop Service Delivery Network. As part of the network, the goals of Food Stamp E&T activities and support services are consistent with and reflective of the Workforce Investment Act (WIA) one-stop principles and the principles of Texas' vision. The WIA principles are: streamlining services, empowering individuals, universal access, increased accountability, a strong role for Boards and the private sector, and state and local flexibility. The four principles of Texas' vision are: limited and efficient state government, local control, personal responsibility, and support for strong families.

The oversight and management by Boards of the delivery of Food Stamp E&T activities and support services outlined in the rules is intended to emphasize the role of the Boards in providing a seamless network of information and services that is responsive to the individual needs of customers, including persons engaged in the Food Stamp E&T activities and support services. The Commission intends that the Food Stamp E&T activities and support services be fully integrated through the available one-stop centers with the added flexibility identified in the rules.

Randy Townsend, Chief Financial Officer, has determined that for the first five-year period the rules are in effect, the following statements will apply:

there are no additional estimated costs to the state and to local governments expected as a result of enforcing or administering the rules;

there are no estimated reductions in costs to the state and to local governments as a result of enforcing or administering the rules;

there are no estimated losses or increases in revenue to the state and to local governments as a result of enforcing or administering the rules;

there are no foreseeable implications relating to costs or revenue of the state or local governments as a result of enforcing or administering the rules; and

there are no anticipated economic costs to persons required to comply with the rules.

Mr. Townsend, Chief Financial Officer, has determined that there is no anticipated adverse impact on small businesses as a result of enforcing or administering the rules because small businesses are not required to do anything as a result of the rules.

James Barnes, Director of Labor Market Information, has determined that the proposed rules would not affect private employment but that it would impact public employment by creating more flexibility in the use of Food Stamp E&T funds and more integration of Food Stamp E&T activities and support services into the Texas Workforce Network. Nevertheless, the Director of Labor Market Information does not expect any significant impact upon overall employment conditions in the state as a result of the proposed rules.

Barbara Cigainero, Director of Workforce Division, has determined that for each year of the first five years the rules are in effect, the public benefit anticipated as a result of enforcing the rules will be to provide activities and support services in a more flexible manner to meet the needs of persons receiving Food Stamp E&T

Comments on the proposal may be submitted to John Moore, Office of General Counsel, Texas Workforce Commission, 101 East 15th Street, Room 608, Austin, Texas 78778-0001; fax (512) 463-1426. Comments may also be submitted via e-mail to Mr. Moore at john.moore@twc.state.tx.us. Comments must be received by the Commission within thirty (30) days from the date this proposal is published in the Texas Register .

For information about the Commission please visit our web page at www.texasworkforce.org.

Subchapter A. GENERAL PROVISIONS