TITLE 40.SOCIAL SERVICES AND ASSISTANCE

Part 1. TEXAS DEPARTMENT OF HUMAN SERVICES

Chapter 44. COMMUNITY CARE FOR AGED AND DISABLED PROJECT CHOICE

The Texas Department of Human Services (DHS) proposes to repeal all the rules in Chapter 44, concerning Community Care for Aged and Disabled Project CHOICE, §§44.1, 44.101-44.104, and 44.201-44.207. The purpose of the repeals is to delete the administrative rules for two client services programs that DHS operated as part of Project CHOICE (Consumers Have Options for Independence in Community Environments). Project CHOICE ended when grant funding ceased in 2000; the rules in Chapter 44 are, therefore, obsolete.

Bobby Halfmann, Chief Financial Officer, has determined that, for the first five-year period the proposed repeals will be in effect, there will be no fiscal implications for state or local government as a result of enforcing or administering the repeals.

Bettye M. Mitchell, Deputy Commissioner for Long Term Care, has determined that, for each year of the first five years the repeals are in effect, the public benefit anticipated as a result of repealing the chapter will be to have obsolete rule language eliminated from the rule base. There will be no adverse economic effect on small or micro businesses, or businesses of any size, as a result of repealing the chapter, because the rules being deleted are no longer in use. There is no anticipated economic cost to persons who are required to comply with the proposed repeals. There is no anticipated effect on local employment in geographic areas affected by these repeals.

Questions about the content of this proposal may be directed to Randy Wyatt at (512) 438- 4807 in DHS's Long Term Care/Client Eligibility section. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-064, Texas Department of Human Services E-205, P.O. Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

Pursuant to §2007.003(b) of the Government Code, DHS has determined that Chapter 2007 of the Government Code does not apply to these rules. Accordingly, DHS is not required to complete a takings impact assessment regarding these rules.

Subchapter A. DEFINITIONS

40 TAC §44.1

(Editor's note: The text of the following section proposed for repeal will not be published. The section may be examined in the offices of the Texas Department of Human Services or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

The repeal is proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under the Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The repeal implements the Human Resources Code, §§22.0001-22.038 and §§32.001-32.053.

§44.1.Definitions.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on January 27, 2003.

TRD-200300655

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: March 9, 2003

For further information, please call: (512) 438-3734


Subchapter B. TRANSITION TO LIFE IN THE COMMUNITY PROGRAM

40 TAC §§44.101 - 44.104

(Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Texas Department of Human Services or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

The repeals are proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under the Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The repeals implement the Human Resources Code, §§22.0001-22.038 and §§32.001-32.053.

§44.101.Transition to Life in the Community Client Eligibility Criteria.

§44.102.Application for Transition to Life in the Community Benefits.

§44.103.Transition to Life in the Community Program Benefits.

§44.104.Transition to Life in the Community Client Rights.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on January 27, 2003.

TRD-200300656

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: March 9, 2003

For further information, please call: (512) 438-3734


Subchapter C. PRESUMPTIVE ELIGIBILITY THROUGH THE PROJECT CHOICE PROGRAM

40 TAC §§44.201 - 44.207

(Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Texas Department of Human Services or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

The repeals are proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under the Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The repeals implement the Human Resources Code, §§22.0001-22.038 and §§32.001-32.053.

§44.201.Client Eligibility Criteria for Project CHOICE Presumptive Eligibility Services.

§44.202.Period of Presumptive Eligibility.

§44.203.Presumptive Eligibility Program Benefits.

§44.204.Authorization of Presumptive Eligibility Services.

§44.205.Initiation of Presumptive Eligibility Services.

§44.206.Provider Billing for Presumptive Eligibility Services.

§44.207.Provider Refusal to Deliver Presumptive Eligibility Services.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on January 27, 2003.

TRD-200300657

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: March 9, 2003

For further information, please call: (512) 438-3734


Chapter 47. PRIMARY HOME CARE

Subchapter E. SUPPORT DOCUMENTS

40 TAC §47.5902

The Texas Department of Human Services (DHS) proposes to amend §47.5902, concerning reimbursement methodology for primary home care and family care services, in its Primary Home Care chapter. The purpose of the amendment is to modify the reimbursement methodology for Primary Home Care and Family Care (PHC/FC) Services to combine two cost areas into a single cost area for reimbursement payment determination.

The Texas Health and Human Services Commission (HHSC) is proposing related policy in its Chapter 355 in this issue of the Texas Register .

Bobby Halfmann, Chief Financial Officer, has determined that, for the first five-year period the proposed section will be in effect, there will be fiscal implications for state government as a result of enforcing or administering the section. There will be no fiscal implications for local government as a result of enforcing or administering the section.

The estimated fiscal impact for the first five-year period the section is in effect is subject to the availability of funds in state fiscal years (SFY) 2004-2008. The total fiscal impact based on state and federal funding is estimated at $9,226,414 in SFY 2004; $10,003,049 in SFY 2005; $10,003,049 in SFY 2006; $10,003,049 in SFY 2007; and $10,003,049 in SFY 2008. Of the total, the impact on state funding is an estimated $4,088,168 in SFY 2004; $4,404,857 in SFY 2005; $4,404,857 in SFY 2006; $4,404,857 in SFY 2007; and $4,404,857 in SFY 2008. Of the total, the estimated federal cost is $5,138,246 in SFY 2004; $5,598,192 in SFY 2005; $5,598,192 in SFY 2006; $5,598,192 in SFY 2007; and $5,598,192 in SFY 2008.

Bettye M. Mitchell, Deputy Commissioner for Long Term Care, has determined that, for each year of the first five years the section is in effect, the public benefit anticipated as a result of enforcing the section will be that more providers will have their allowable costs covered by the unit rates for this program. There will be no adverse economic effect on small or micro businesses as a result of enforcing or administering the section, because the amendment ensures that more providers will have their allowable costs covered by the unit rates for this program. There is no anticipated economic cost to persons who are required to comply with the proposed section. There is no anticipated effect on local employment in geographic areas affected by this section.

Questions about the content of this proposal may be directed to Carolyn Pratt at (512) 685- 3127 in HHSC's Rate Analysis Department. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-072, Texas Department of Human Services E-205, P.O. Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

Under §2007.003(b) of the Government Code, DHS has determined that Chapter 2007 of the Government Code does not apply to this rule. Accordingly, DHS is not required to complete a takings impact assessment regarding this rule.

The amendment is proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides HHSC with the authority to administer federal medical assistance funds.

The amendment implements the Human Resources Code, §§22.0001-22.038 and §§32.001-32.053.

§47.5902.Reimbursement Methodology for Primary Home Care and Family Care Services.

(a) General requirements. [ For the completion and submittal of cost reports pertaining to providers' fiscal years ending in calendar year 1997 and subsequent years, providers must apply the information in this section. ] The Texas Department of Human Services (DHS) or its designee applies the general principles of cost determination as specified in §20.101 of this title (relating to Introduction).

(b) (No change.)

(c) Reimbursement determination. Reimbursement is determined in the following manner.

(1) Cost determination by cost area. Allowable costs are combined for Primary Home Care and Family Care into three [ four ] cost areas, after allocating payroll taxes to each salary line item on the cost report on a pro rata basis based on the portion of that salary line item to the amount of total salary expense and after applying employee benefits directly to the corresponding salary line item.

(A) Service support [ Field supervisors ] cost area. This includes field supervisors' [ supervisor's ] salaries and [ , ] wages, benefits, and mileage reimbursement expenses. This also includes building, building equipment, and operation and maintenance costs; administration costs; and other service costs. Administration expenses equal to $0.18 per Priority 1 unit of service are allocated to Priority 1. The administration costs remaining after this allocation are summed with the other service support costs.

(B)-(C) (No change.)

[ (D) Building, administration, and other service cost areas. This includes building, building equipment, and operation and maintenance costs; administration costs; and other direct service costs. Administration expenses equal to $0.18 per Priority 1 unit of service are allocated to Priority 1. The administration costs remaining after this allocation are summed with the facility and the other service costs.]

(2) Recommended reimbursement by cost area. For the service support cost area [ areas ] described in paragraph (1)(A) [ and (D) ] of this subsection the following is calculated:

(A) (No change.)

(B) Projected cost per unit of service. To determine the projected cost per unit of service for each provider agency, the total projected allowable costs for the service support [ each ] cost area are divided by total units of service, including nonpriority services , [ and ] Priority 1 services , and STAR+PLUS services , in order to calculate the projected cost per unit of service [ for each cost area ].

(C) Projected cost arrays. All provider agencies' projected allowable costs per unit of service are rank ordered from low to high, along with each provider agency's corresponding total units of service [ for each cost area ].

(D) Recommended reimbursement for the service support [ each ] cost area [ component ]. The total units [ hours ] of service [ used to calculate each cost area component ] for each provider agency are summed until the median hour of service is reached. The corresponding projected expense is the weighted median cost component. The weighted median cost component [ for each cost area ] is multiplied by 1.044 to calculate the recommended reimbursement for the service support [ each ] cost area [ component ]. The service support cost area recommended reimbursement is limited, if necessary, to available appropriations.

(3)-(4) (No change.)

(d)-(g) (No change.)

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on January 27, 2003.

TRD-200300660

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: March 9, 2003

For further information, please call: (512) 438-3734


Part 2. TEXAS REHABILITATION COMMISSION

Chapter 104. DUE PROCESS HEARINGS, AND MEDIATION BY APPLICANTS/CLIENTS OF DETERMINATIONS BY AGENCY PERSONNEL THAT AFFECT THE PROVISION OF VOCATIONAL REHABILITATION SERVICES

The Texas Rehabilitation Commission (TRC) proposes to amend Chapter 104 of Title 40, Texas Administrative Code, concerning due process hearings and mediation. This proposal amends §§104.1-104.3, repeals §§104.4-104.9 and adds new §§104.4-104.8. The change is being proposed to eliminate the distinction between formal and informal appeal procedures, and to re-designate the procedures as "due process hearings" in accordance with terminology in final rules effective January 22, 2001 issued by the Office of Special Education and Rehabilitative Services, US Department of Education, published at 34 CFR §361.57.

Bill Wheeler, Deputy Commissioner for Financial Services, has determined that for the first five-year period the section is in effect, there will be no material fiscal implications for state or local government.

Mr. Wheeler also has determined that for each year of the first five years the section is in effect the public benefit anticipated as a result of enforcing the section will be the agency's compliance with Chapter 111, Human Resources Code. There will be no material effect on small businesses. There is no material anticipated economic cost to persons who are required to comply with the section as proposed. In accordance with Government Code section 2001.022, TRC has determined that the proposed rule will not affect a local economy. There will be no effect to small or micro businesses.

Comments on the proposal may be submitted to Roger Darley, Deputy General Counsel, Texas Rehabilitation Commission, 4900 North Lamar Boulevard, Suite 7300, Austin, Texas 78751.

40 TAC §§104.1 - 104.3

The amendments are proposed under the Texas Human Resources Code, Title 7, Chapter 111, §111.018 and §111.023, which provides the Texas Rehabilitation Commission with the authority to promulgate rules consistent with Title 7, Texas Human Resources Code.

No other statute, article, or code is affected by this proposal.

§104.1.Purpose and Scope.

(a) Purpose. The purpose of these rules is to provide the Texas Rehabilitation Commission with a system for the institution, conduct, and determination of "due process hearings" [ "informal" and "formal appeals" ] and "mediation" as those terms are defined herein. These rules shall be liberally construed in accordance with the purpose for which they were adopted. These rules inform all applicants and persons served by TRC of their due process right to appeal when they are dissatisfied with any determination made by a rehabilitation counselor or agency official regarding the furnishing or denial of services.

(b) Statutory Authority. These rules are created pursuant to the Rehabilitation Act of 1973, as amended, 29 United States Code Annotated (USCA) §§701 et seq. and Department of Education Regulations at 34 Code of Federal Regulations (CFR), Part 361. Federal laws and regulations prevail over state laws and regulations. The Administrative Procedure Act, Texas Government Code Annotated, §§2001.001 et seq. does not apply to client administrative due process hearings which are conducted pursuant to federal law.

(c) Scope.

(1) This chapter applies to client (applicant) appeals, mediations, and due process hearings before the Texas Rehabilitation Commission.

(2) These rules shall be construed to insure fair and expeditious determinations.

(3) These rules supplement the procedures required by law.

§104.2.Definitions.

The following words and terms, when used in this section, shall have the following meaning, unless the context clearly indicates otherwise.

(1) Act--The Rehabilitation Act of 1973 as amended, 29 United States Code §701 et seq.

(2) Appellant--An individual who has filed a petition for a due process [ administrative ] hearing.

(3) Applicant--An individual who has applied for services under the Act, but for whom an eligibility determination has not been made.

(4) Authorized representative--An attorney authorized to practice law in the State of Texas and/or a person designated by the applicant or client to represent them.

(5) Client--An individual who has been determined to be eligible for services by the commission pursuant to the Act and commission rules. As used in these rules, unless specifically denoted, the terms "client" and "applicant" are synonymous.

(6) Client Assistance Program (CAP)--The program created by the Act which provides assistance in informing and advising clients and applicants of all available benefits under the Act. CAP provides assistance and advocacy in pursuing legal, administrative, or other appropriate remedies to ensure protection of the client's rights under the Act if requested by the client or the client's authorized representative.

(7) Commission--The Texas Rehabilitation Commission (TRC), its officers and agents.

(8) Commissioner --The commissioner of the Texas Rehabilitation Commission.

(9) Appeal [ Formal appeal ] --The timely filing of a Petition for Due Process [ Administrative ] Hearing due to a client's continued dissatisfaction with a decision of the Commission regarding the furnishing or denial of services.

(10) Hearing , Due Process Hearing --A formal due process hearing [ formal appeal ] conducted under these rules by an impartial hearing officer regarding allegations set forth in the client's Petition for Due Process [ Administrative ] Hearing regarding the furnishing or denial of services. This term includes prehearing conferences.

(11) Hearing completion date--The date set by the impartial hearing officer which closes the period during which the parties may submit further evidence into the record or the date the impartial hearing officer receives the hearing transcript, whichever is later.

(12) Impartial hearing officer (IHO)--Individual who is selected on a random basis and is appointed by the commissioner to hear an [ a formal ] appeal pursuant to these rules. The IHO is selected from a pool of qualified persons identified jointly by TRC and by members of the Rehabilitation Council of Texas.

(13) Informal appeal or review--A communication or series of communications between a client and a Commission official which seeks to resolve the client's dissatisfaction with any determination made by a vocational rehabilitation counselor or commission official concerning the furnishing or denial of services.

(14) Mediation--A voluntary process by which applicants and eligible individuals who have requested appeals may attempt resolution of disputes with TRC involving determinations affecting the provision of vocational rehabilitation services through the use of a trained mediator.

(15) Office for Administrative Hearings and Subrogation--An office of the Texas Rehabilitation Commission which provides, among other functions, administrative support to the impartial hearing officer during the [ formal ] appeal process and is the point of contact for client's questions about due process [ the administrative ] hearings [ process ].

(16) Party--An individual or agency named or admitted to participate in a due process hearing [ formal appeal ] before the commission.

(17) Record--The official record of a due process hearing [ formal appeal ] includes all of the following: pleadings; motions; intermediate rulings; orders; evidence received or considered; statements of matters officially noticed; questions and offers of proof; objections and rulings on objections; the IHO decision; any other decision, opinion, or report by the IHO; and all Commission memoranda or data, including client files, submitted to or considered by the IHO. The record is maintained by the Office for Administrative Hearings and Subrogation.

[ (18) Regional program director--Person who reviews applicant and client appeals at the TRC Regional Office level. The person holding this position in each region is also referred to as the operations director for programs.]

(18) [ (19) ] Respondent--The Texas Rehabilitation Commission (TRC).

(19) [ (20) ] Rule--Any written commission statement of general applicability that implements, interprets, or prescribes law or policy or describes the procedure or practice requirements of the commission. The term includes the amendment or repeal of a prior rule, but does not include statements concerning only the internal management or organization of the commission and not affecting private rights or procedures. The term does not include certain proceedings excluded by the Act.

(20) [ (21) ] Standard of review--The criteria for a court to remand or overturn a final decision of the Commission. In any such action the court will receive the records relating to the hearing, will hear additional evidence at the request of a party to the action; and basing the decision of the court on the preponderance of the evidence, will grant such relief as the court determines to be appropriate.

(21) [ (22) ] State plan--The commission is required by the Act to submit to the Department of Education a state plan covering a three-year period which describes the state's vocational rehabilitation and independent living programs and the plans and policies to be followed in carrying out those programs.

(22) [ (23) ] Rehabilitation Council of Texas--The council created in accordance with United States Code, Title 29, Section 725.

§104.3.General Provisions.

(a) General. The due process hearing [ formal appeal ] and mediation process commences with the filing of a Petition for Due Process [ Administrative ] Hearing with the Office for Administrative Hearings and Subrogation. Appeals of determinations made by personnel of the commission that affect the provision of vocational rehabilitation services to applicants or eligible individuals may be made concerning:

(1) applicants for vocational rehabilitation services; and

(2) clients.

(b) Jurisdiction.

(1) The Impartial Hearing Officer acquires jurisdiction over a case after a client files a Petition for Due Process [ Administrative ] Hearing and the IHO is appointed pursuant to these rules.

(2) A Petition for Due Process [ Administrative ] Hearing shall be considered filed on the date the Petition is received and date-stamped by the Office for Administrative Hearings and Subrogation.

(3) The IHO's authority is limited to a review of a client's dissatisfaction with the furnishing or denial of services by personnel of the Commission. The IHO does not have authority to:

(A) change or alter rules, policies, or procedures of the Commission;

(B) hear alleged violations of the Americans with Disabilities Act, §504 of the Act, or other federal laws; or

(C) hear or decide class actions.

(c) Conduct and Decorum. Appropriate conduct and decorum shall be maintained and enforced by the IHO. Every party, witness, attorney, or other representative shall participate in all proceedings with proper dignity, courtesy, and respect for the Commission, the IHO, and all other parties. Attorneys and other representatives or parties shall observe and practice a high standard of ethical behavior.

(d) Computation of Time.

(1) Unless otherwise required by law in computing any period of time prescribed or allowed by these rules, the date of the act, event, or default after which the designated period of time begins to run is not to be included. The last day of the period so computed is to be included, unless such day is a Saturday, Sunday, or legal holiday, in which event the period runs until the end of the next day which is neither a Saturday, Sunday, nor legal holiday. Unless specifically stated otherwise, "days" as used in these policies refer to calendar days.

(2) Unless otherwise provided by statute, the time for filing any pleading may be extended by order of the IHO at the request of any party upon written motion duly filed with the Office for Administrative Hearings and Subrogation prior to the expiration of the applicable period of time for the filing of same. Said motion shall include a showing that there is good cause for such extension of time and that the need therefor is not caused by neglect, indifference, or lack of diligence of the movant. A copy of any such motion shall be served upon all other parties of record to the proceeding contemporaneously with the filing thereof. Any party may file written pleadings contesting a motion to extend which shall be served upon all other parties contemporaneously with the filing thereof.

(3) The date upon which a pleading or motion is filed is the date on which it is received and date-stamped by the Office for Administrative Hearings and Subrogation.

(e) Appearances and right to representation. Any party may appear on his/her own behalf or may be represented by an attorney at law in good standing with the State Bar of Texas or by an authorized representative. The IHO may require any person appearing in a representative capacity to provide such evidence of his authority as the IHO may deem necessary.

(f) Notification.

(1) An applicant or eligible individual or, as appropriate, the individual's representative will be provided notice of the right to obtain review of TRC determinations that affect the provision of vocational rehabilitation services through an impartial due process hearing under §104.4 [ §104.5 ] of this chapter; the right to pursue mediation under §104.4(c) [ §104.5(c) ] of this chapter with respect to determinations made by TRC personnel that affect the provision of vocational rehabilitation services to an applicant or eligible individual; the names and addresses of individuals with whom requests for mediation or due process hearings may be filed; the manner in which a mediator or impartial hearing officer may be selected consistent with the requirements of §104.4 [ §104.5 ] of this chapter; and the availability of the client assistance program, established under 34 CFR part 370, to assist the applicant or eligible individual during mediation sessions or impartial due process hearings. The notice will be provided in writing at the time the individual applies for vocational rehabilitation services under this part; at the time the individual is assigned to a category in the State's order of selection, for programs within which an order of selection has been established; at the time the IPE is developed; and whenever vocational rehabilitation services for an individual are reduced, suspended, or terminated.

(2) The IHO shall issue notice of the date, time, and location for the hearing.

(g) Evidence and representation. An applicant or an eligible individual, or, as appropriate, the applicant's representative or individual's representative, will be provided with an opportunity to submit at the mediation session or hearing evidence and information to support the position of the applicant or eligible individual, and may be represented in the mediation session or hearing by a person selected by the applicant or eligible individual.

(h) Hearings.

(1) Hearing officer. A due process hearing shall be conducted by an impartial hearing officer who shall issue a decision based on the provisions of the approved state plan, the Rehabilitation Act if 1973, as amended (including regulations implementing the Act), and state regulations and policies that are consistent with the Rehabilitation Act and its implementing regulations. The impartial hearing officer shall provide the decision in writing to the applicant or eligible individual, or, as appropriate, the applicant's representative or individual's representative, and to the commission.

(2) List. The commission will maintain a list of qualified impartial hearing officers who are knowledgeable in laws (including regulations) relating to the provision of vocational rehabilitation services under the Rehabilitation Act of 1973, as amended, from which hearing officers will be selected. For the purposes of maintaining such list, impartial hearing officers shall be identified jointly by the Commission, and by members of the Rehabilitation Council of Texas.

(3) Selection. An impartial hearing officer shall be selected to hear a particular case relating to a determination on a random basis.

(i) Confidentiality. All personal information regarding applicants or clients in the possession of the commission must be used only for purposes directly connected with the administration of the Act. Information may not be shared with advisory or other bodies which do not have official responsibility for administration of the Act.

(j) Testimony under oath or affirmation. In any hearing, the IHO shall administer an oath or affirmation before permitting testimony from any witness.

(k) Class actions. Class actions are not permitted under these rules.

(l) Reasonable accommodation. The commission shall provide reasonable accommodation to the client or other individuals with disabilities, upon request, for purposes of the appeal process as required by the Americans with Disabilities Act of 1990, 42 United States Code §12101 et seq. and the Act, §504.

(m) Stay of official acts or services. A request for [ an informal or formal appeal ] due process hearing does not of itself stay an official act of or the provision of services by the commission unless the official act or services are stayed by controlling law.

(n) Limitations on number of witnesses. The IHO has the right in any proceeding under these rules to limit the number of witnesses whose testimony will be repetitious and to set time limits in order to exclude irrelevant, immaterial, or unduly repetitious testimony, so long as all viewpoints are given a reasonable opportunity to be heard.

(o) Mileage and Witness fees.

(1) An individual who is not an employee of TRC and who is subpoenaed or otherwise compelled to attend any hearing or proceeding to give testimony or to produce documents is entitled to receive:

(A) mileage, in the same amount per mile as the mileage travel allowance for state employees, for traveling to and returning from the place of the hearing or the place where the deposition is taken, if the place is more than 25 miles from the individual's place of residence; and

(B) a fee of not less than $10 a day for each day or part of a day the individual is required to be present or a fee equal to the per diem and travel allowances of a state employee, if an overnight stay is required.

(2) Mileage and fees to which a witness is entitled under this rule shall be paid by the party at whose request the individual appears or at whose request the deposition is taken.

(p) Impact on provision of services. Unless the individual with a disability so requests, or, in an appropriate case, the individual's representative so requests, pending a decision by a mediator or impartial hearing officer under subsection (h)(1) of this section or §104.5 [ §104.6 ] of this title (relating to Motion for Reconsideration), the commission will not institute a suspension, reduction, or termination of services being provided for the individual, including evaluation and assessment services and plan development, unless such services have been obtained through misrepresentation, fraud, collusion, or criminal conduct on the part of the individual, or the individual's representative. In the case of a client who has completed a term of training or similar services prior to the appeal, and the next term has not yet begun (prior to the current appeal), it is understood that such training or services are not "being provided."

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on January 27, 2003.

TRD-200300651

Sylvia F. Hardman

Deputy Commissioner for Legal Services

Texas Rehabilitation Commission

Earliest possible date of adoption: March 9, 2003

For further information, please call: (512) 424-4050


Chapter 104. INFORMAL APPEALS, AND MEDIATION BY APPLICANTS/CLIENTS OF DETERMINATIONS BY AGENCY PERSONNEL THAT AFFECT THE PROVISION OF VOCATIONAL REHABILITATION SERVICES

40 TAC §§104.4 - 104.9

(Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Texas Rehabilitation Commission or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

The repeals are proposed under the Texas Human Resources Code, Title 7, Chapter 111, §111.018 and §111.023, which provides the Texas Rehabilitation Commission with the authority to promulgate rules consistent with Title 7, Texas Human Resources Code.

No other statute, article, or code is affected by this proposal.

§104.4.Informal Appeal.

§104.5.Formal Appeal and Mediation.

§104.6.Motion for Reconsideration.

§104.7.Finality of the Decision of the Commission.

§104.8.Civil Action/Judicial Review.

§104.9.Time for Hearing.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on January 27, 2003.

TRD-200300652

Sylvia F. Hardman

Deputy Commissioner for Legal Services

Texas Rehabilitation Commission

Earliest possible date of adoption: March 9, 2003

For further information, please call: (512) 424-4050


Chapter 104. DUE PROCESS HEARINGS, AND MEDIATION BY APPLICANTS/CLIENTS OF DETERMINATIONS BY AGENCY PERSONNEL THAT AFFECT THE PROVISION OF VOCATIONAL REHABILITATION SERVICES

40 TAC §§104.4 - 104.8

The new sections are proposed under the Texas Human Resources Code, Title 7, Chapter 111, §111.018 and §111.023, which provides the Texas Rehabilitation Commission with the authority to promulgate rules consistent with Title 7, Texas Human Resources Code.

No other statute, article, or code is affected by this proposal.

§104.4.Due Process Hearings and Mediation.

(a) The due process hearing appeal commences with the filing of a Petition for Due Process Hearing with the Office for Administrative Hearings and Subrogation.

(b) Role of Office for Administrative Hearings and Subrogation. Upon receipt of the Petition for Due Process Hearing, the Office for Administrative Hearings and Subrogation shall:

(1) acknowledge receipt of the petition for due process hearing (via certified mail, return receipt requested) and advise the appellant of the availability of the Client Assistance Program, including the address and telephone number;

(2) date-stamp the Petition and record a docket control number for the appeal;

(3) select the impartial hearings officer (IHO), who is appointed by the commissioner, on a random basis from a pool of qualified persons identified jointly by TRC and the Rehabilitation Council of Texas in accordance with the Rehabilitation Act and forward a copy of the Petition for Due Process Hearing to the IHO;

(4) forward a copy of the Petition for Due Process Hearing to the Office of the General Counsel, Deputy Commissioner for Rehabilitation Services and Commission Representative immediately upon receipt;

(5) provide administrative support to the IHO:

(A) serve as the custodian of records for all documents, motions, and pleadings directed to the IHO;

(B) coordinate and schedule all dates, meetings, hearings;

(C) make all necessary arrangements for the due process hearing:

(i) schedule and set up the hearing location;

(ii) if required, retain the services of a certified shorthand reporter to prepare a transcript of the proceedings;

(iii) provide any requested reasonable accommodations;

(6) compile and maintain the official record of the appeal;

(7) accompany IHO to prehearing conference, administrative hearing and provide necessary assistance during the proceedings;

(c) Mediation.

(1) An applicant or eligible individual and the State may elect to resolve disputes involving TRC determinations that affect the provision of vocational rehabilitation services through a mediation process whenever an applicant or eligible individual or, as appropriate, the individual's representative requests an impartial due process hearing under this section.

(2) The following apply to mediation.

(A) Participation in the mediation process is voluntary on the part of the applicant or eligible individual, as appropriate, and on the part of TRC;

(B) Use of the mediation process will not be used to deny or delay the applicant's or eligible individual's right to pursue resolution of the dispute through an impartial hearing held within the time period specified in section 104.8 of this chapter, or any other rights provided under this chapter. At any point during the mediation process, either party or the mediator may elect to terminate the mediation. In the event mediation is terminated, either party may pursue resolution through an impartial hearing;

(C) The mediation process will be conducted by a qualified and impartial mediator who is not an employee of a public agency (other than an administrative law judge, hearing examiner, employee of a State office of mediators, or employee of an institution of higher education); is not a member of the Rehabilitation Council of Texas; has not been involved previously in the vocational rehabilitation of the applicant or eligible individual; is knowledgeable of the vocational rehabilitation program and the applicable Federal and State laws, regulations, and policies governing the provision of vocational rehabilitation services; has been trained in effective mediation techniques consistent with any State-approved or -recognized certification, licensing, registration, or other requirements; and has no personal, professional, or financial interest that would be in conflict with the objectivity of the individual during the mediation proceedings. An individual serving as a mediator is not considered to be an employee of the designated State agency or designated State unit for the purposes of this definition solely because the individual is paid by the designated State agency or designated State unit to serve as a mediator. The mediator will be selected from a list of qualified and impartial mediators maintained by the TRC on a random basis; or by agreement between TRC and the applicant or eligible individual or, as appropriate, the individual's representative; or in accordance with a procedure established by TRC for assigning mediators which ensures the neutrality of the mediator assigned.

(D) Mediation sessions will be scheduled and conducted in a timely manner and will be held in a location and manner that is convenient to the parties to the dispute.

(3) Discussions that occur during the mediation process will be kept confidential and may not be used as evidence in any subsequent due process hearings or civil proceedings, and the parties to the mediation process may be required to sign a confidentiality pledge prior to the commencement of the process.

(4) An agreement reached by the parties to the dispute in the mediation process will be described in a written mediation agreement that is developed by the parties with the assistance of the qualified and impartial mediator and signed by both parties. Copies of the agreement will be sent to both parties.

(5) The costs of the mediation process will be paid by TRC. However, TRC will not pay for any costs related to the representation of an applicant or eligible individual by counsel or other advocate selected by the applicant or eligible individual.

(d) Impartial Hearing Officer.

(1) Qualifications. The IHO:

(A) cannot be an employee of a public agency;

(B) cannot be a member of the Rehabilitation Council of Texas (the Act, §105, as amended in 1992); and

(C) must have knowledge of the delivery of vocational rehabilitation services, the state plan under the Act, §101, the federal regulations, and commission rules governing the provision of such services and training with respect to the performance of official duties;

(D) must not have been involved in previous decisions regarding the vocational rehabilitation of the applicant or client;

(E) must have no personal or financial interest that would conflict with his/her objectivity;

(F) must have successfully completed impartial hearings training presented by the commission; and

(G) must not be a client of TRC.

(2) Powers and Duties.

(A) The IHO shall have the authority and duty to:

(i) conduct a full, fair, and impartial hearing;

(ii) take action to avoid unnecessary delay in the disposition of the proceeding;

(iii) maintain order; and

(iv) permit deviations from the rules and procedures prescribed in subsections (f)-(j) of this section, except subsection (j)(4)(F), in the interest of justice or to expedite the proceedings. If prior to adjournment of a hearing either party disagrees with a ruling or otherwise so requests, the IHO shall include in the written record a justification, and an explanation of how the decision is in the interest of justice and/or reasonably necessary to expedite the proceedings. Actions taken under this subsection shall be limited to procedural matters, and no party shall lose any substantive rights.

(B) The IHO shall have the power to regulate the course of the hearing and the conduct of the parties and authorized representative(s), including the power to:

(i) administer oaths;

(ii) take testimony;

(iii) rule on questions of evidence;

(iv) rule on discovery issues;

(v) issue orders relating to hearing and prehearing matters, including orders granting permission to subpoena witnesses and imposing sanctions regarding discovery;

(vi) limit irrelevant, immaterial, and unduly repetitious testimony and reasonably limit the time for presentations;

(vii) admit or deny party status;

(viii) grant continuance(s);

(ix) require parties to submit legal memoranda, proposed findings of fact, and conclusions of law;

(x) make findings of fact and conclusions of law; and

(xi) issue decisions.

(C) An IHO shall disqualify him/herself if the IHO has directly or indirectly had prior involvement with any issues that are the basis for the hearing, or if the IHO has a personal relationship or familial relationship with any party or witness.

(D) Substitution of impartial hearing officers.

(i) If for any reason an IHO is unable to continue presiding over a pending hearing or issue a decision after the conclusion of the hearing, another IHO may be designated as a substitute in accordance with applicable law and these rules.

(ii) The substitute IHO may use the existing record and need not repeat previous proceedings, but may conduct further proceedings as necessary and proper to conclude the hearing and render a decision.

(e) Ex Parte Communications. Unless required for the disposition of ex parte matters authorized by law, the IHO may not communicate, directly or indirectly, in connection with any issue of fact or law with the commissioner or any party or a party's representative, except upon notice to all parties.

(f) Prehearing Procedures.

(1) Prehearing Conference(s).

(A) When appropriate, the IHO may hold a prehearing conference to resolve matters preliminary to the hearing.

(B) A prehearing conference may be convened to address preliminary matters including the following listed in clauses (i)-(xv) of this subparagraph:

(i) issuance of subpoenas;

(ii) factual and legal issues;

(iii) stipulations;

(iv) clarification of the issues at the discretion of the IHO;

(v) requests for official notice;

(vi) identification and exchange of documentary evidence;

(vii) admissibility of evidence;

(viii) identification and qualification of witnesses;

(ix) motions;

(x) discovery disputes;

(xi) order of presentation;

(xii) scheduling;

(xiii) settlement conferences;

(xiv) mediation; and

(xv) such other matters as will promote the orderly and prompt resolution of the issues and conduct of the hearing.

(C) Among other matters, as stated in subsection (b) of this section, an IHO may order:

(i) that the parties jointly discuss the prospects of settlement or stipulations or other dispute resolution methods approved herein and be prepared to report thereon at the prehearing conference;

(ii) that the parties file and be prepared to argue preliminary motions at the prehearing conference;

(iii) that the parties be prepared to specify the controlling factual and legal issues in the case at the prehearing conference; and

(iv) that the parties make a concise statement of undisputed facts and issues at the prehearing conference.

(D) All or part of the prehearing conference may be recorded or transcribed.

(E) The IHO may, after acquiring jurisdiction, issue an order requiring a prehearing "statement of the case." The parties shall file a statement specifying the party's present position on any or all of the following listed in clauses (i)-(v) of this subparagraph as required by the IHO. Parties shall supplement this statement on a timely basis. The statement may include:

(i) the disputed issues or matters to be resolved;

(ii) a brief statement of the facts or arguments supporting the party's position in each disputed issue or matter;

(iii) a list of facts or exhibits to which a party will stipulate; and

(iv) a list of the witnesses which each party intends to call at the hearing, including a designation of each as either a fact or expert witness, and a brief statement summarizing the testimony and/or opinions (experts) of each witness.

(2) Prehearing Orders.

(A) The IHO may issue a prehearing order reciting the actions taken or to be taken with regard to any matter addressed at the prehearing conference.

(B) The prehearing order shall be a part of the hearing record.

(C) If a prehearing conference is not held, the IHO may issue a prehearing order to regulate the conduct of the proceedings of the formal hearing.

(3) Stipulations.

(A) The parties, by stipulation, may agree to any substantive or procedural matter.

(B) A stipulation shall be filed in writing or entered on the record at the prehearing (or hearing).

(C) The IHO may require additional development of stipulated matters.

(g) Pleadings.

(1) In a due process hearing all pleadings, including the Petition for Due Process Hearing, shall contain:

(A) the name of the party making the pleading;

(B) the names of all other known parties;

(C) a concise statement of the facts alleged and relied upon;

(D) a statement of the type of relief, action, or order desired;

(E) any other matter required by law;

(F) a certificate of service, as required by these rules; and

(G) the signature of the party making the pleading or the party's authorized representative.

(2) Any pleading filed for a due process hearing may be amended up to 14 days prior to the hearing. Amendments filed after that time will be accepted at the discretion of the IHO.

(3) Any pleading may adopt and incorporate, by specific reference thereto, any part of any document or entry in the official files and records of the Commission. All pleadings relating to any matter pending before the Commission shall be filed with the IHO through the Office for Administrative Hearings and Subrogation.

(4) All pleadings shall be typed or printed on 8 1/2 by 11 inch paper with a one-inch margin. Reproductions are acceptable, provided all copies are clear and permanently legible.

(5) Pleadings shall contain the name, address, and telephone number of the party filing the document or the name, telephone number, and business address of the authorized representative.

(6) The party or the party's designated representative filing the pleading shall include a signed certification that a true and correct copy of the pleading has been served on every other party.

(h) Dismissal. After giving notice and hearing, the IHO may upon the motion of any party or the IHO's own motion, dismiss the appeal upon showing of any one of the following:

(1) failure to prosecute;

(2) unnecessary duplication of proceedings or res judicata;

(3) withdrawal;

(4) moot questions;

(5) lack of jurisdiction;

(6) failure to raise a material issue in the pleading;

(7) failure of a party to appear at a scheduled hearing.

(i) Motions.

(1) Unless otherwise provided by these rules, the following shall apply.

(A) A party may move for appropriate relief before or during a hearing.

(B) A party shall submit all motions in writing or orally at a hearing.

(C) Written motions shall:

(i) be filed no later than 15 days before the date of the hearing, except where good cause is stated in the motion, the IHO may permit a written motion subsequent to that time;

(ii) state concisely the question to be determined;

(iii) be accompanied by any necessary supporting documentation; and

(iv) be served on each party.

(D) An answer to a written motion shall be filed on the earlier of:

(i) seven days after receipt of the motion; or

(ii) on the date of the hearing.

(E) On written notice to all parties or with telephone consent of all parties, the IHO may schedule a conference to consider a written motion.

(F) The IHO may reserve ruling on a motion until after the hearing.

(G) The IHO may issue a written decision or state the decision on the record.

(H) If a ruling on a motion is reserved, the ruling shall be in writing and may be included in the IHO's decision.

(I) The filing or pendency of a motion does not alter or extend any time limit otherwise established by these rules.

(2) Continuance(s) may be granted by the IHO in accordance with applicable law. Motions for continuances shall be in writing or stated in the record and shall set forth the specific grounds upon which the party seeks the continuance.

(3) Unless made during a prehearing or hearing, a party seeking a continuance, cancellation of a scheduled proceeding, or extension of an established deadline must file such motion no later than 10 days before the date or deadline in question. A motion filed less than 10 days before the date or deadline in question must contain a certification that the movant contacted the other party(ies) and whether or not it is opposed by any party(ies). Further, if a continuance to a certain date is sought, the motion must include a proposed date or dates and must indicate whether the party(ies) contacted agree on the proposed new date(s).

(j) Hearing.

(1) The IHO shall set the date and time for the hearing. The location shall be the Commission's regional or area office nearest the Appellant's residence or as agreed to by the parties.

(2) Order of procedure at the hearing.

(A) The appellant may state briefly the nature of the claim or defense, what the appellant expects to prove, and the relief sought. Immediately thereafter, the respondent may make a similar statement, and any other parties will be afforded similar rights as determined by the IHO. Each party is allowed 10 minutes for such statement.

(B) Evidence shall then be introduced by the appellant. The respondent and any other parties shall have the opportunity to cross-examine each of the appellant's witnesses.

(C) Cross-examination is not limited solely to matters raised on direct examination. Parties are entitled to redirect and recross-examination.

(D) Unless the statement has already been made, the respondent may briefly state the nature of the claim or defense, what the respondent expects to prove, and the relief sought.

(E) Evidence, if any, shall be introduced by the respondent. The appellant and any other parties shall have the opportunity to cross-examine each of the respondent's witnesses.

(F) Any other parties may make statements and introduce evidence. The appellant and respondent shall have opportunity to cross-examine the other parties' witnesses.

(G) The parties may present rebuttal evidence.

(H) The parties may be allowed closing statements at the discretion of the IHO.

(I) The IHO may permit deviations from this order of procedure in the interest of justice or to expedite the proceedings.

(J) Parties shall provide four copies of each exhibit offered.

(3) No evidence shall be admitted which is irrelevant, immaterial, or unduly repetitious.

(4) Documentary evidence and official notice.

(A) Documentary evidence may be received in the form of copies or excerpts if the original is not readily available. On request, parties shall be given an opportunity to compare the original and the copy or excerpts.

(B) When numerous similar documents which are otherwise admissible are offered into evidence, the IHO may limit the documents received to those which are typical and representative. The IHO may also require that an abstract of relevant data from the documents be presented in the form of an exhibit, provided that all parties of record or their representatives be given the right to examine the documents from which such abstracts were made.

(C) The following laws, rules, regulations, and policies are officially noticed:

(i) the Rehabilitation Act of 1973, as amended, 29 United States Code, §701 et seq.;

(ii) Department of Education regulations, 34 Code of Federal Regulations, Part 361;

(iii) Texas Human Resources Code, Title 7, §111 et seq.;

(iv) TRC State Plan for Vocational Rehabilitation Services;

(v) TRC Rehabilitation Services Manual; and

(vi) TRC Administrative Policies and Procedures Manual.

(D) Exhibits.

(i) Exhibits shall not exceed 8 1/2 by 11 inches (unless they are folded to that size). Maps, drawings, and other exhibits which are not the required size shall be rolled or folded so as not to unduly encumber the record. Exhibits not conforming to this rule may be excluded.

(ii) Exhibits shall be limited to facts material and relevant to the issues involved in a particular proceeding.

(iii) The original of each exhibit offered shall be tendered to the court reporter for identification.

(iv) In the event an exhibit has been identified, objected to, and excluded, the IHO shall determine whether or not the party offering the exhibit withdraws the offer, and, if so, permit the return of the exhibit. If the excluded exhibit is not withdrawn it shall be given an exhibit number for identification, shall be endorsed by the IHO with a ruling, and shall be included in the record for the only purpose of preserving the exception.

(E) Offer of proof. When testimony on direct examination is excluded by ruling of the IHO, the party offering such evidence shall be permitted to make an offer of proof by dictating or submitting in writing the substance of the proposed testimony prior to the conclusion of the hearing. The IHO may ask such questions of the witness as deemed necessary to satisfy that the witness would testify as represented in the offer of proof.

(5) Failure to attend hearing and default. If, after receiving notice of a hearing, a party fails to attend a hearing, the IHO may proceed in that party's absence and, where appropriate, may issue a decision against the defaulting party.

(k) Impartial Hearing Officer Decision.

(1) Within 30 days of the hearing completion date, the IHO shall issue a decision based on the provisions of the approved State plan, the applicable regulations, and the Act which shall contain separately stated:

(A) findings of fact;

(B) conclusions of law; and

(C) decision.

(2) The Office for Administrative Hearings and Subrogation shall submit the IHO opinion to the Commissioner with a copy to each party.

§104.5.Motion for Reconsideration.

Either party to a hearing may file a motion for reconsideration with the Office for Administrative Hearings and Subrogation within 20 days after issuance of the decision of the impartial hearing officer. The motion for reconsideration must specify the matters in the decision of the impartial hearing officer which the party considers to be erroneous. Any response to the motion for reconsideration must be filed no later than seven days after service of the motion. The impartial hearing officer shall rule on the motion for reconsideration no later than 15 days after receipt of the motion. If the motion is granted, the IHO shall issue a decision upon reconsideration within an additional 15 days. If the impartial hearing officer fails to rule on the motion for reconsideration within 15 days, the motion is denied as a matter of law.

§104.6.Finality of the Decision of the Commission.

The decision of the impartial hearing officer under §104.5 of this title (relating to Motion for Reconsideration) is the final decision of the Commission. A decision dismissing the case under §104.3(h)(1) of this title (relating to General Provisions) or §104.4(j)(5) of this title (relating to Due Process Hearings and Mediation) becomes the final decision of the Commission if a timely motion for reconsideration is not filed.

§104.7.Civil Action/Judicial Review.

(a) General. Any party aggrieved by a final decision of an impartial hearing officer may bring a civil action for review of such decision. The action may be brought in any State court of competent jurisdiction or in a district court of the United States of competent jurisdiction without regard to the amount in controversy. In any such action the court will receive the records relating to the hearing, will hear additional evidence at the request of a party to the action; and basing the decision of the court on the preponderance of the evidence, will grant such relief as the court determines to be appropriate.

(b) Exhaustion of administrative remedies, including a Motion for Reconsideration, is a prerequisite to judicial review.

(c) A party seeking judicial review of the final Commission decision shall commence his civil action no later than 30 days after the date of the final decision.

(d) Implementation. If a party brings a civil action to challenge a final decision of a hearing officer under §104.3(h)(1) of this title (relating to General Provisions) or §104.5 of this title (relating to Motion for Reconsideration), the final decision involved shall be implemented pending review by the court.

§104.8.Time for Hearing.

A hearing conducted by an impartial hearing officer, selected in accordance with §104.4 of this chapter, will be held within 60 days of an applicant's or eligible individual's request for review of a determination made by personnel of TRC that affects the provision of vocational rehabilitation services to the individual, unless informal resolution or a mediation agreement is achieved prior to the 60th day or the parties agree to a specific extension of time.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on January 27, 2003.

TRD-200300653

Sylvia F. Hardman

Deputy Commissioner for Legal Services

Texas Rehabilitation Commission

Earliest possible date of adoption: March 9, 2003

For further information, please call: (512) 424-4050


Part 5. TEXAS VETERANS LAND BOARD

Chapter 175. GENERAL RULES OF THE VETERANS LAND BOARD

Subchapter B. MORTGAGE FINANCING

40 TAC §175.52

The Veterans Land Board of the State of Texas (board) proposes an amendment to, Texas Administrative Code, Title 40, Part 5, Chapter 175, §175.52 related to Borrower's Eligibility and Number of Loans. This amendment proposes a new subsection, §175.52(d), for the land mortgage program. The purpose of the proposed amendment is to provide for the conversion of existing Land Contracts for Sale and Purchase to Land Mortgage Loans. The proposed amendment is required by Texas Natural Resources Code §§161.501 through 161.513 relating to Purchase of Land Secured by Mortgage, Deed of Trust, or Other Lien on Land.

The present method of financing the purchase by a Texas veteran is by a contract of sale and purchase and has been used since the inception of the Veterans Land Board. Chapter 175, Subchapter B related to Mortgage Financing contains rules governing the new method of financing the purchase of land by eligible Texas veterans using a mortgage. The proposed amendment, related to the conversion of contracts to mortgages, will allow purchasers to convert their contracts for sale and purchase to a mortgage loan. The conversion will replace one set of security documents with another. Financing with a mortgage gives the purchasers advantages over financing with a contract for sale and purchase.

The proposed new 175.52(d) authorizes the chairman to establish the procedures and requirements for conversion of contracts to mortgages under the new veterans land mortgage program.

Douglas Oldmixon, Executive Secretary of the Veterans Land Board, has determined that for each year of the first five years that the section as proposed will be in effect, there will be no significant fiscal implication to state or local government as a result of administering this section as amended.

Douglas Oldmixon, Executive Secretary of the Veterans Land Board, has determined that for each year of the first five years that the section as proposed will be in effect, the public will benefit because mortgages give purchasers greater flexibility in the use of their property than do contracts.

Mr. Oldmixon has determined that the proposed amendment will have no significant effect on small businesses during each year of the first five years the section is in effect and the anticipated impact on local employment will be insignificant. Mr. Oldmixon has also determined that during each year of the first five years the proposed amendment is in effect, the anticipated economic cost to persons who request a conversion will be insignificant.

Comments may be submitted to Melinda Tracy, Texas Register Liaison, Texas General Land Office, P.O. Box 12873, Austin Texas, 78711-2873, or by fascimile at (512) 463-6311 by no later than 30 days after publication.

The amendments to this section are proposed under the Natural Resources Code, Title 7, Chapter 161, §§161.063, 161.503, 161.504, 161.506, 161.508, 161.511 and 161.513 which authorizes the Board to adopt rules that it considers necessary and advisable for the Veterans Land Program and the Veterans Land Mortgage Program.

Texas Natural Resources Code §§161.221 to 161.230 and 161.501 to 161.513 are affected by this proposed action.

§175.52.Borrower's Eligibility and Number of Loans.

(a) The Board shall be the final authority in defining and interpreting all eligibility requirements, and whether a prospective borrower has actually satisfied those requirements. The Board may by resolution prescribe the procedures and forms to be used in mortgage loan transactions.

(b) A person is eligible to apply for a loan under the provisions of this subchapter if he or she satisfies the requirements of §175.2(c), relating to Loan Eligibility Requirements.

(c) A person may only have one loan at a time as a veteran. However, once that loan is paid in full he or she may apply for an additional loan as a veteran. The foregoing notwithstanding, an individual who is currently participating in the program as a veteran may assume a loan, or take an assignment of a contract of sale as a non-veteran and may bid on a tract or tracts at a forfeited land sale as a non-veteran.

(d) Notwithstanding anything to the contrary in this chapter, a purchaser under an executory Veterans Land Board Contract of Sale and Purchase may refinance the obligation represented by the Contract of Sale and Purchase by substituting a purchase money Veterans Land Board mortgage loan. No additional funds may be advanced except for expenses incident to the transaction, as provided in Tex. Nat. Res. Code §161.508(b). The chairman may establish procedures, documents, and policies to accomplish transactions authorized by this section. To the maximum extent possible, the substitute loans must retain the terms of the original Contracts of Sale and Purchase and must comply with the requirements for new Veterans Land Board mortgage loans. All liens securing the substitute loans relate back to the date of the original Contracts of Sale and Purchase.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on January 27, 2003.

TRD-200300671

Larry L. Laine

Chief Clerk, Deputy Commissioner

Texas Veterans Land Board

Earliest possible date of adoption: March 9, 2003

For further information, please call: (512) 305-9129


40 TAC §175.61, §175.62

The Veterans Land Board of the State of Texas (board) proposes new Texas Administrative Code, Title 40, Part 5, Subchapter B, §175.61, relating to Delinquencies, Acceleration and Foreclosures and §175.62, relating to Trustee's Sale. The purpose of the proposed new rules is to provide fair notice to all parties of the board's procedures for delinquency, acceleration, foreclosure and post foreclosure measures. The proposed new rules are required by Texas Natural Resources Code §§161.501 - 161.513, relating to Purchase of Land Secured by Mortgage, Deed of Trust, or Other Lien on Land.

The land mortgage program is subject to the Texas Property Code regarding procedures for foreclosure and to the Texas Business and Commerce Code regarding filing and priority of security instruments. Other state and federal laws also apply to mortgages issued under the board's land mortgage program. The legal procedures for foreclosure are specified in other laws and these proposed rules do not purport to affect any legally required procedure for mortgages, notes, deeds of trust or foreclosures.

Proposed new §175.61, states that the board, under the new veterans land mortgage program, will follow the foreclosure procedures according to the terms of the note and deed of trust for each loan or any other lien document associated with each loan, and according to state and federal law, as applicable.

Proposed new §175.62, provides for the board's procedures at any trustee's sale of a foreclosed mortgage loan, and for disposition of land by the board after foreclosure and purchase by the board.

Douglas Oldmixon, Executive Secretary of the Veterans Land Board, has determined that for each year of the first five years that the sections as proposed will be in effect, there will be no significant fiscal implication to state or local government as a result of administering the new sections.

Mr. Oldmixon, has determined that for each year of the first five years that the new sections will be in effect, the public will benefit because the proposed sections will allow the Board to proceed to change its program to allow mortgages.

Mr. Oldmixon has determined that the proposed new rules will have no significant effect on small businesses during each year of the first five years the new sections are in effect and the anticipated impact on local employment will be insignificant.

Mr. Oldmixon has also determined that during each year of the first five years the proposed sections are in effect, the anticipated economic cost to persons who are required to comply with the sections will be insignificant.

Comments may be submitted to Melinda Tracy, Texas Register Liaison, Texas General Land Office, P.O. Box 12873, Austin Texas, 78711-2873 or by fascimile at (512) 463-6311 by no later than 30 days after publication.

The new sections are proposed under the Natural Resources Code, Title 7, Chapter 161, §§161.063, 161.319, 161.503, 161.504, 161.506, 161.508, 161.511 and 161.513 which authorizes the Board to adopt rules that it considers necessary and advisable for the Veterans Land Program and to provide for Land Mortgage Program foreclosure and for resale of land.

Texas Natural Resources Code §161.319 and §§161.501 - 161.513 are affected by this proposed action.

§175.61.Delinquencies, Acceleration and Foreclosures.

(a) The chairman is authorized to enter into any modification of the debtor's obligation if it is in the best interest of the program.

(b) The terms of each note and deed for trust or any other lien document shall determine acceleration and foreclosure requirements and procedures, unless modified under subsection (a) of this section.

(c) The chairman must approve the initiation of all foreclosure proceedings. All foreclosures shall be conducted in strict compliance with applicable federal and state laws and the note and the deed of trust or other lien document, or any modification thereof.

§175.62.Trustee's Sale.

(a) The chairman may bid for the land at any trustee's sale for any amount that the chairman deems to be in the best interest of the program. All land purchased by the Board at a foreclosure sale shall be resold in the same manner as forfeited land under §175.18 of this title.

(b) The chairman may collect any deficiencies as allowed by law.

(c) "Trustee's sale" means any foreclosure sale under this subchapter.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on January 27, 2003.

TRD-200300670

Larry L. Laine

Chief Clerk, Deputy Commissioner

Texas Veterans Land Board

Earliest possible date of adoption: March 9, 2003

For further information, please call: (512) 936-4179