TITLE 16.ECONOMIC REGULATION

Part 1. RAILROAD COMMISSION OF TEXAS

Subchapter G. EMPLOYEE TRAINING AND EDUCATION PROGRAM

The Railroad Commission of Texas (Commission) proposes new §§20.601-20.605, relating to Employee Training and Education Program, In-Service Instruction, Staff Development, Tuition Reimbursement Program, and Required Training, which will be in 16 TAC Chapter 20, new subchapter G, to be entitled Employee Training and Education Program. The Commission proposes the new rules to establish its employee training program in accordance with the requirements of Texas Government Code, Chapter 656, Subchapters C and D.

Proposed new §20.601 states the scope, purpose, and limitations and conditions of the Commission's employee training and education program. The program consists of in-service instruction, staff development training, the tuition reimbursement program, and required training. Employees are eligible to participate in the Commission's training and education program to increase their job-related knowledge and skills, without regard to race, color, religion, sex, age, national origin, disability, or veteran status.

The Commission's employee training and education program must relate to an employee's job duties following the training. The Commission's objectives for the employee training program include developing and retaining a well-trained and competent staff; acquainting employees with new technical, legal, or security developments; motivating employees and stimulating their involvement and participation in Commission work; assisting employees in achieving their maximum potential and usefulness to the Commission; and improving the efficiency and economy of state government.

The Commission's employee training and education program is contingent upon funding authorized by the legislature or through available funds in the Commission's regular budget. An employee's participation in training or education for which the Commission would expend funds is not a right, nor is it an obligation of the Commission to any of its employees. There is no guarantee that budgeted amounts will be available at all times in a fiscal year. The funds available to any one employee may not exceed $1,200 per fiscal year. An employee's participation in training under the program does not in any way affect an employee's at-will status; is not considered a guarantee or indication that approval will be granted for subsequent requests to participate; and does not constitute a guarantee or indication of either continued employment in a current position or future employment in a prospective position.

Proposed new §20.602 describes the type of training offered as in-service instruction. In-service instruction includes new employee orientation; training on policies prohibiting discrimination; and other instruction including but not limited to technical courses that provide technical knowledge and skill requirements for effective job performance in a specific classification series, such as hazardous materials training; computer-related basic and advanced courses for desktop applications, as well as advanced courses for information technology professionals and other staff who use advanced computer applications; information and data security training that offer best practices for ensuring the security and integrity of the Commission's information resources; and safety training, such as disaster preparedness, basic first aid, highway and traffic safety, and office safety and health that are offered to all employees. The Commission may require employees to attend in- service instruction.

Proposed new §20.603 describes staff development training offered to employees. The Commission may pay for an employee to attend a workshop, seminar, conference, institute, or continuing education course that is related to a current or prospective duty assignment. An employee's request to attend a staff development program must be approved in advance by the employee's supervisor and division director. An employee's participation in a continuing education course or program that is required for an employee to maintain a professional license is considered a priority in allocating a division's training budget if the professional license is a requirement of the employee's job. Attendance at an approved staff development program is considered part of the employee's normal work duties, and the employee is not required to use accrued leave to attend. The Commission may reimburse travel expenses incurred by employees attending a staff development program according to current Commission policy regarding employee travel.

Proposed new §20.604 sets for the guidelines for the tuition reimbursement program. In this section, "training" means instruction, teaching, or other education received by a Commission employee that is not normally received by other Commission employees and that is designed to enhance the ability of the employee to perform his or her job. The term includes a course of study at an institution of higher education or a private or independent institution of higher education as defined by Texas Education Code, §61.003. The tuition reimbursement program does not include training required either by state or federal law or that is determined necessary by the Commission and offered to all employees of the Commission performing similar jobs. In-service instruction and staff development are not part of the tuition reimbursement program.

A Commission employee may participate in the tuition reimbursement program without regard to the employee's race, color, religion, sex, age, national origin, disability, or veteran status, provided that the employee meets the other qualifications for the program, as set forth in proposed new §20.604(b). Even if an employee meets all the qualifications of the tuition reimbursement program, the employee has neither a right to reimbursement nor a guarantee that budgeted amounts will be available at all times in a fiscal year. The funds available to any one employee for tuition reimbursement may not exceed $1,200 per fiscal year.

The Commission will not reimburse employees for any tuition or registration costs, mandatory fees, and expenses for books and other written materials that are covered by scholarships, grants, or other awarded funds; for costs other than tuition or registration costs, mandatory fees, and expenses for books and other written materials; for auditing a course; or for any federal income taxes incurred because of the Commission's reimbursement of costs pursuant to the employee training and education program.

Proposed new §20.604(b) sets forth the minimum qualifications for participation in the tuition reimbursement program. As of the date the employee makes the request to participate, the employee must have been employed full time by the Commission for at least 12 months; must have received an overall performance rating of at least "meets requirements" on the employee's current Employee Performance Evaluation (EPE); and must have received no disciplinary action in the prior six months. "Disciplinary action" includes a formal written reprimand, suspension without pay, or salary reduction for disciplinary reasons.

Proposed new §20.604(c) requires that an employee requesting approval to participate in the tuition reimbursement program must meet the minimum requirements and provide to the supervisor the following information, in writing, prior to enrolling or registering for a course, class, or training program the employee's name, job title, and overall rating on the employee's current EPE; the name of the training course or educational institution; the name and number, if any, of the class, course, or program; the dates, hours, and duration of the training, and whether any or all of the training falls during the employee's regularly scheduled work hours; the amount of the tuition or registration fee; the amount of any mandatory fees that are assessed or charged in addition to tuition or registration fees; the approximate cost of books and other written materials; the deadline for enrolling in or registering for the training; and an explanation of the way in which the requested training relates to the employee's job duties after the training, whether related to a current or a prospective position.

The employee's supervisor must review the employee's request for tuition reimbursement to determine if the employee meets the requirements of subsection (b) of this section; the requested training is related to the employee's current or prospective employment duties; the requested training meets one or more of the objectives set forth in proposed new §20.601(b); and the requested dates and times for attending the training will not adversely affect the employee's workload or performance.

If the supervisor determines that all elements have been satisfied, then the supervisor must meet with the employee to discuss the obligations that the employee will be expected to meet and those that the employee may be required to assume should the request for tuition reimbursement be approved. The employee will be expected to continue working at Commission for at least one month for each month of the training course for which the Commission has paid. If an employee terminates before the end of this month-for-month period, the employee shall repay the Commission the full amount of the reimbursement to the employee. If an employee ceases to be employed by the Commission because of a reduction in force prior to the end of the month-for-month period, the employee's obligation to repay the Commission is terminated.

In addition, the employee's supervisor or division director may require the employee to make regular reports regarding the employee's progress in the training; discuss information obtained at the training with other employees; share materials obtained from training with other employees, to the extent such sharing does not violate copyright law; assume additional job duties for which the training prepared the employee; and conduct training for other employees concerning the information or skills taught at the training.

The supervisor must also discuss with the employee the specific attendance times that the training would require. If the employee would be required to attend the training during normal work hours, the supervisor and employee must devise a flex-time work schedule for the employee. If a flex-time work schedule is not feasible, the supervisor and employee must discuss the use of the employee's accrued vacation and compensatory leave time to accommodate attendance at the training.

In addition to the information provided in the employee's request for tuition reimbursement and the discussion with the employee, the supervisor may also consider the current or prospective job duties of the employee; the employee's current and previous two EPEs; the specific skill needs of the section or division; whether there is a lack of employees or applicants with the skills the requested training would provide the employee; whether allowing the employee to attend training during work hours, if that has been requested, would adversely affect workload or performance; the funding available; and any other factor that is relevant to the employee's request for tuition reimbursement.

The supervisor must consider the employee's application, the information gathered in discussion with the employee, and other relevant factors, and must issue a decision in writing. If the supervisor concludes that the request should be denied, the supervisor must include a statement of the reason or reasons for the denial. An employee may appeal a supervisor's denial to the division director. If the supervisor decides that the employee's request for tuition reimbursement should be approved, the supervisor then forwards the request to the division director with a written recommendation for approval.

The division director will review the employee's request and the supervisor's recommendation, and issue a decision in writing. If the division director concludes that the request should be denied, the division director must include a statement of the reason or reasons for the denial. An employee may appeal a division director's denial to the deputy executive director. If the division director decides that the employee's request for tuition reimbursement should be approved, the division director then forwards the employee's request and the supervisor's recommendation to the deputy executive director with a written recommendation for approval.

The deputy executive director is authorized to approve or deny the employee's request for tuition reimbursement, and must issue a decision in writing. A denial must include a statement of the reason or reasons for the denial. An employee may appeal the deputy executive director's denial of a request for tuition reimbursement to the executive director, whose decision is final. If the deputy executive director approves the request, the original documents will be retained in the office of the deputy executive director, and copies of the documents provided to the employee.

Proposed new §20.604(e) provides that an employee who has received final approval of his or her request for tuition reimbursement must meet all admission requirements of the educational institution offering the course for which the request for tuition reimbursement was approved; complete all paperwork and pay all costs for the training, including tuition or registration costs, mandatory fees, expenses for books or other written materials, etc.; and retain all original dated receipts indicating the amounts the employee paid for each type of expenditure.

Proposed new §20.604(f) requires an employee to complete the training within the time period for which tuition reimbursement was approved. The employee must immediately notify his or her supervisor if the employee ceases to be enrolled in a class for which tuition reimbursement was approved. The Commission will not reimburse an employee for training expenses for incomplete or dropped training.

Proposed new §20.604(g) prohibits an employee attending training approved for tuition reimbursement from using Commission equipment or resources such as personal computers, printers, copiers, fax machines, e-mail, internet connections, etc. During the employee's work hours, the employee may not do research, writing, projects, homework, or other activities related to the training.

Proposed new §20.604(h) requires an employee to use flex time, if possible, to accommodate attendance at training. If flex time is not used, then the employee must use accrued vacation and compensatory leave time for attendance at training.

Proposed new §20.604(i) sets forth the qualifications and procedure for tuition reimbursement. Failure to comply with the reimbursement requirements will result in denial of reimbursement. To qualify for tuition reimbursement, an employee must complete the training with a grade of "C" or better for training graded on an "A" through "F" scale; a 75 percent or better score for training graded on a numerical scale; or a passing grade for training graded on a "pass/fail" scale. The employee must complete any course in which a grade of "I" (Incomplete) has been awarded within three months, unless there are valid reasons, such as serious illness, to the contrary. A course dropped after registration does not qualify for reimbursement.

To receive tuition reimbursement, within 15 working days of receiving the final grade or grades, the employee must submit to the Personnel Division a reimbursement claim. A reimbursement claim consists of copies of the employee's request; all recommendation memoranda; the deputy executive director's or executive director's final approval memorandum; the itemized paid receipts for tuition, mandatory fees, and books and other written materials; and the official grade report, which the Commission will keep confidential.

The Personnel Division will verify the employee's grade and the costs for tuition or registration fees, other mandatory fees, and expenses for books and other written materials. Upon approval of the reimbursement claim, the Personnel Division will forward the claim to the Finance Division for reimbursement to the employee.

Proposed new §20.605 pertains to required training. Pursuant to Texas Government Code, §656.045, the Commission may require an employee to attend, as all or part of the employee's duties, a training or education program if the training or education is related to the employee's duties or prospective duties. The Commission may spend public funds as appropriate to pay the salary, tuition and other fees, travel and living expenses, training stipend, the expense of training materials, and other necessary expenses of an employee who is required to participant in a training or education program.

An employee who is engaged in training pursuant to this section and who does not perform his or her regular duties for three or more months as a result of the training may use Commission equipment or resources such as personal computers, printers, copiers, fax machines, e-mail, internet connections, etc.; and may be required by the supervisor or division director to use a Commission vehicle to attend the training. The employee is required to sign an agreement of understanding and assume mandatory obligations, pursuant to Texas Government Code, §§656.103 and 656.104. If the employee receives training paid for by the Commission, and during the training period the employee does not perform the employee's regular duties for three or more months as a result of the training, the employee must agree in writing that the employee will either work for the agency following the training for at least one month for each month of the training period or pay the Commission for all the costs associated with the training that were paid during the training period, including any amounts of the employee's salary that were paid and that were not accounted for as paid vacation or compensatory leave.

If the employee does no work for the Commission following its reimbursement to the employee for training costs, works for some but not all of the required amount of time, or fails to pay the Commission amounts reimbursed for training costs, and the Commission does not release the employee from the obligation to either provide the services or make the payments, the employee is liable to the Commission for all costs associated with the training that the Commission paid, including any amounts of the employee's salary that were paid during the training period and that were not accounted for as paid vacation or compensatory leave, and for the Commission's reasonable expenses incurred in obtaining payment, including reasonable attorney's fees.

The Commission may waive the statutory requirements and release an employee from the obligation to meet those requirements only if the Commission finds that such action is in the best interest of the agency or is warranted because of an extreme personal hardship suffered by the employee and enters an order to that effect in open meeting.

Mark Bogan, Director of Personnel, has determined that for each year of the first five years the new sections are in effect there may be fiscal implications to state and local governments as a result of administering or enforcing some of the new sections. The Commission currently provides in-service and professional development training to its employees, as set forth in proposed new §§20.602 and 20.603, within current appropriated and budgeted amounts; therefore there will be no fiscal implication to state government as a result of these two new sections. If the Commission expends funds for employee training pursuant to new §§20.604 and 20.605, it will do so only if such funds are appropriated by the legislature or become available in the Commission's regular budget process; absent those events, the tuition reimbursement and required training programs are not funded, and therefore there will be no fiscal implications for state government as a result of these two new sections. Should the Commission fund the tuition reimbursement and required training programs, other state agencies, including state-supported colleges or universities, could be recipients of payments pursuant to contracts that the Commission would be authorized to enter into to provide training or education for one or more Commission employees. There will be no fiscal implications for local governments as a result of new §§20.602 and 20.603. There may be fiscal implications for local governments, in the form of revenue, as a result of new §§20.604 and 20.605 if funds are appropriated by the legislature or become available in the Commission's regular budget process and the Commission enters into a contract with a local government to provide training or education for one or more Commission employees.

The public benefit anticipated as a result of the new sections will be better educated and trained Commission employees. There is no anticipated economic cost of compliance for small businesses, micro-businesses, or individuals, because the proposed new sections apply only to the Commission, a state agency, and its employees; however, small businesses, micro- businesses, and individuals could be the recipients of payments for tuition, mandatory fees, and books by Commission employees who participate in training or education provided by such entities.

Comments on the proposed new sections may be submitted to Rules Coordinator, Office of General Counsel, Railroad Commission of Texas, P.O. Box 12967, Austin, Texas 78711-2967; online at www.rrc.state.tx.us/rules/commentform.html; or by electronic mail to rulescoordinator@rrc.state.tx.us. The Commission will accept comments for 30 days after publication in the Texas Register . For further information, call Mr. Bogan at (512) 463-6981. The status of Commission rulemakings in progress is available at www.rrc.state.tx.us/rules/proposed.html.

The Commission proposes the new sections under Texas Government Code, Subchapter C, the State Employee Training Act, and Subchapter D, Restrictions on Certain Training, and specifically under Texas Government Code, §656.048, which requires state agencies to adopt rules relating to the eligibility of the agency's administrators and employees for training and education supported by the agency and to the obligations assumed by the administrators and employees on receiving the training and education. The rules are also adopted under Texas Government Code, §656.102, which provides that before a state agency spends any money on training for a state employee, the state agency must adopt a policy governing the training of employees (in addition to the rules required by §656.048) that requires training to relate to an employee's duties following the training.

Texas Government Code, Chapter 656, Subchapters C and D are affected by the proposed new sections.

Issued in Austin, Texas on January 23, 2004.

§20.601.Employee Training and Education Program.

(a) Scope of program. The rules in this subchapter establish the Commission's employee training and education program. The program consists of in-service instruction, as set forth in §20.602 of this title (relating to In-Service Instruction); staff development training, as set forth in §20.603 of this title (relating to Staff Development); the tuition reimbursement program as set forth in §20.604 of this title (relating to Tuition Reimbursement Program); and required training as set forth in §20.605 of this title (relating to Required Training). Employees are eligible to participate in the Commission's training and education program to increase their job-related knowledge and skills, without regard to race, color, religion, sex, age, national origin, disability, or veteran status.

(b) Purpose. The Commission's employee training and education program shall relate to an employee's job duties following the training. The Commission's objectives for the employee training program include:

(1) developing and retaining a well-trained and competent staff;

(2) acquainting employees with new technical, legal, or security developments;

(3) motivating employees and stimulating their involvement and participation in Commission work;

(4) assisting employees in achieving their maximum potential and usefulness to the Commission; and

(5) improving the efficiency and economy of state government.

(1) The employee training and education program is contingent upon funding authorized by the legislature or through available funds in the Commission's regular budget.

(2) An employee's participation in training or education for which the Commission would expend funds pursuant to §§20.603- 20.605 of this title is not a right; is not an obligation of the Commission to any of its employees; and is not a guarantee that budgeted amounts will be available at all times in a fiscal year.

(3) The funds available to any one employee pursuant to §§20.603 and 20.604 shall not exceed $1,200 per fiscal year.

(4) An employee's participation in training pursuant to §§20.603-20.605 of this title shall not:

(A) in any way affect an employee's at-will status;

(B) be considered a guarantee or indication that approval will be granted for subsequent requests to participate;

(C) constitute a guarantee or indication of either continued employment in a current position or future employment in a prospective position.

§20.602.In-Service Instruction.

(a) New employee orientation. The Commission provides a program of instruction for agency employees, including new employee orientation.

(b) Training on policies prohibiting discrimination. Within 30 days of the date of employment, each employee shall attend an orientation session containing information on the Commission's policies and procedures, including information on discrimination and sexual harassment. Each employee shall attend supplemental training on discrimination, including sexual harassment, every two years.

(1) technical courses that provide technical knowledge and skill requirements for effective job performance in a specific classification series, such as hazardous materials training;

(2) computer-related basic and advanced courses for desktop applications, as well as advanced courses for information technology professionals and other staff who use advanced computer applications;

(3) information and data security training that offer best practices for ensuring the security and integrity of the Commission's information resources; and

(4) safety training, such as disaster preparedness, basic first aid, highway and traffic safety, and office safety and health that are offered to all employees.

(d) Attendance requirement. The Commission may require employees to attend in-service instruction.

§20.603.Staff Development.

(a) Work related. The Commission may pay for an employee to attend a workshop, seminar, conference, institute, or continuing education course that is related to a current or prospective duty assignment. An employee's request to attend a staff development program shall have been approved in advance by the employee's supervisor and division director.

(b) Licensing requirement. An employee's participation in a continuing education course or program that is required for an employee to maintain a professional license shall be considered a priority in allocating a division's training budget if the professional license is a requirement of the employee's job.

(c) Use of accrued leave. Attendance at an approved staff development program shall be considered part of the employee's normal work duties, and the employee shall not be required to use accrued leave to attend.

(d) Travel expenses. The Commission may reimburse travel expenses incurred by employees attending a staff development program. In that event, the expenses shall be reimbursed according to current Commission policy regarding employee travel.

§20.604.Tuition Reimbursement Program.

(a) General provisions.

(1) As used in this section, "training" means instruction, teaching, or other education received by a Commission employee that is not normally received by other Commission employees and that is designed to enhance the ability of the employee to perform his or her job. The term includes a course of study at an institution of higher education or a private or independent institution of higher education as defined by Texas Education Code, §61.003.

(2) The tuition reimbursement program does not include training required either by state or federal law or that is determined necessary by the Commission and offered to all employees of the Commission performing similar jobs. In-service instruction and staff development, as set forth in §§20.602 and 20.603 (relating to In-Service Instruction and Staff Development, respectively) are not part of the tuition reimbursement program.

(3) A Commission employee may participate in the tuition reimbursement program without regard to the employee's race, color, religion, sex, age, national origin, disability, or veteran status, provided that the employee meets the qualifications set forth in subsection (b) of this section.

(4) An employee has neither a right to reimbursement, even if the employee meets the qualifications of the tuition reimbursement program, nor a guarantee that budgeted amounts will be available at all times in a fiscal year. The funds available to any one employee for tuition reimbursement shall not exceed $1,200 per fiscal year.

(5) The Commission shall not reimburse employees for:

(A) any tuition or registration costs, mandatory fees, and expenses for books and other written materials that are covered by scholarships, grants, or other awarded funds;

(B) costs other than tuition or registration costs, mandatory fees, and expenses for books and other written materials;

(D) any federal income taxes incurred because of the Commission's reimbursement of costs pursuant to this subchapter.

(b) Minimum qualifications. As of the date the employee makes the request to participate in the tuition reimbursement program, the employee shall have:

(1) been employed full time by the Commission for at least 12 months;

(2) received an overall performance rating of at least "meets requirements" on the employee's current Employee Performance Evaluation (EPE); and

(3) received no disciplinary action in the prior six months. As used in this section, "disciplinary action" includes a formal written reprimand, suspension without pay, or salary reduction for disciplinary reasons.

(c) Request to participate. An employee requesting approval to participate in the tuition reimbursement program shall meet the minimum requirements set forth in subsection (b) of this section and shall provide to the supervisor the following information, in writing, prior to enrolling or registering for a course, class, or training program:

(1) the employee's name, job title, and overall rating on the employee's current EPE;

(2) the name of the training course or educational institution;

(3) the name and number, if any, of the class, course, or program;

(4) the dates, hours, and duration of the training, and whether any or all of the training falls during the employee's regularly scheduled work hours;

(5) the amount of the tuition or registration fee;

(6) the amount of any mandatory fees that are assessed or charged in addition to tuition or registration fees;

(7) the approximate cost of books and other written materials;

(8) the deadline for enrolling in or registering for the training; and

(9) an explanation of the way in which the requested training relates to the employee's job duties after the training, whether related to a current or a prospective position.

(d) Supervisor review and action; agency decision.

(1) The employee's supervisor shall review the employee's request for tuition reimbursement to determine if:

(A) the employee meets the requirements of subsection (b) of this section;

(B) the requested training is related to the employee's current or prospective employment duties;

(C) the requested training meets one or more of the objectives set forth in §20.601(b) of this title (relating to Employee Training and Education Program); and

(D) the requested dates and times for attending the training will not adversely affect the employee's workload or performance.

(2) If the supervisor determines that all four elements of paragraph (1) of this subsection have been satisfied, then the supervisor shall meet with the employee to discuss the obligations that the employee will be expected to meet and those that the employee may be required to assume should the request for tuition reimbursement be approved.

(A) The employee will be expected to continue working at the Commission for at least one month for each month of the training course for which the Commission has paid. If an employee terminates before the end of this month-for-month period, the employee shall repay the Commission the full amount of the reimbursement to the employee. If an employee ceases to be employed by the Commission because of a reduction in force prior to the end of the month-for-month period, the employee's obligation to repay the Commission is terminated.

(B) The employee's supervisor or division director may require the employee to:

(i) make regular reports regarding the employee's progress in the training;

(ii) discuss information obtained at the training with other employees;

(iii) share materials obtained from training with other employees, to the extent such sharing does not violate copyright law;

(iv) assume additional job duties for which the training prepared the employee; and

(v) conduct training for other employees concerning the information or skills taught at the training.

(3) The supervisor shall also discuss with the employee the specific attendance times that the training would require. If the employee would be required to attend the training during normal work hours, the supervisor and employee shall devise a flex-time work schedule for the employee. If a flex-time work schedule is not feasible, the supervisor and employee shall discuss the use of the employee's accrued leave time to accommodate attendance at the training.

(4) In addition to the information provided in the employee's request for tuition reimbursement and the discussion with the employee, the supervisor may also consider:

(A) the current or prospective job duties of the employee;

(B) the employee's current and previous two EPEs;

(D) whether there is a lack of employees or applicants with the skills the requested training would provide the employee;

(E) whether allowing the employee to attend training during work hours, if that has been requested, would adversely affect workload or performance;

(F) the funding available; and

(G) any other factor that is relevant to the employee's request for tuition reimbursement.

(5) The supervisor shall consider the employee's application, the information gathered in discussion with the employee, and other relevant factors, and shall issue a decision in writing. If the supervisor concludes that the request should be denied, the supervisor shall include a statement of the reason or reasons for the denial. An employee may appeal a supervisor's denial to the division director. If the supervisor decides that the employee's request for tuition reimbursement should be approved, the supervisor shall forward the request to the division director with a written recommendation for approval.

(6) The division director shall review the employee's request and the supervisor's recommendation, and shall issue a decision in writing. If the division director concludes that the request should be denied, the division director shall include a statement of the reason or reasons for the denial. An employee may appeal a division director's denial to the deputy executive director. If the division director decides that the employee's request for tuition reimbursement should be approved, the division director shall forward the employee's request and the supervisor's recommendation to the deputy executive director with a written recommendation for approval.

(7) The deputy executive director is authorized to approve or deny the employee's request for tuition reimbursement, and shall issue the decision in writing. A denial shall include a statement of the reason or reasons for the denial. An employee may appeal the deputy executive director's denial of a request for tuition reimbursement to the executive director, whose decision is final. If the deputy executive director approves the request, the original documents shall be retained in the office of the deputy executive director, and copies of the documents shall be provided to the employee.

(e) Registration and payment for the training. An employee who has received final approval of his or her request for tuition reimbursement shall:

(1) meet all admission requirements of the educational institution offering the course for which the request for tuition reimbursement was approved;

(2) complete all paperwork and pay all costs for the training, including tuition or registration costs, mandatory fees, expenses for books or other written materials, etc.;

(3) retain all original dated receipts indicating the amounts the employee paid for each type of expenditure.

(f) Attendance; notice. The employee shall complete the training within the time period for which tuition reimbursement was approved. The employee shall immediately notify his or her supervisor if the employee ceases to be enrolled in a class for which tuition reimbursement was approved. The Commission shall not reimburse an employee for training expenses for incomplete or dropped training.

(g) Use of Commission resources. An employee attending training approved for tuition reimbursement shall not use Commission equipment or resources such as personal computers, printers, copiers, fax machines, e-mail, internet connections, etc. During the employee's work hours, the employee shall not do research, writing, projects, homework, or other activities related to the training.

(h) Time used to attend training. The employee shall use flex time, if possible, to accommodate attendance at training. If flex time is not used, then the employee shall use accrued leave time for attendance at training.

(i) Tuition reimbursement qualifications and procedure. Failure to comply with the reimbursement requirements will result in denial of reimbursement.

(1) To qualify for tuition reimbursement, an employee shall complete the training with a grade of "C" or better for training graded on an "A" through "F" scale; a 75 percent or better score for training graded on a numerical scale; or a passing grade for training graded on a "pass/fail" scale. The employee shall complete any course in which a grade of "I" (Incomplete) has been awarded within three months, unless there are valid reasons, such as serious illness, to the contrary. A course dropped after registration does not qualify for reimbursement.

(2) To receive tuition reimbursement, within 15 working days of receiving the final grade or grades, the employee shall submit to the Personnel Division a reimbursement claim.

(3) A reimbursement claim consists of copies of:

(A) the employee's request;

(B) all recommendation memoranda;

(D) the itemized paid receipts for tuition, mandatory fees, and books and other written materials; and

(E) the official grade report, which the Commission will keep confidential.

(4) The Personnel Division shall verify the employee's grade and the costs for tuition or registration fees, other mandatory fees, and expenses for books and other written materials.

(5) Upon approval of the reimbursement claim, the Personnel Division shall forward the claim to the Finance Division for reimbursement to the employee.

§20.605.Required Training.

(a) Required training or education. Pursuant to Texas Government Code, §656.045, the Commission may require an employee to attend, as all or part of the employee's duties, a training or education program if the training or education is related to the employee's duties or prospective duties.

(b) Use of funds. The Commission may spend public funds as appropriate to pay the salary, tuition and other fees, travel and living expenses, training stipend, the expense of training materials, and other necessary expenses of an employee who is required to participant in a training or education program.

(c) Use of Commission resources. An employee who is engaged in training pursuant to this section and who does not perform his or her regular duties for three or more months as a result of the training:

(1) may use Commission equipment or resources such as personal computers, printers, copiers, fax machines, e-mail, internet connections, etc.; and

(2) may be required by the supervisor or division director to use a Commission vehicle to attend the training.

(d) Agreement of understanding. The employee shall sign an agreement of understanding and assume the following mandatory obligations, pursuant to Texas Government Code, §§656.103 and 656.104:

(1) If the employee receives training paid for by the Commission, and during the training period the employee does not perform the employee's regular duties for three or more months as a result of the training, the employee shall agree in writing that the employee will either work for the agency following the training for at least one month for each month of the training period or pay the Commission for all the costs associated with the training that were paid during the training period, including any amounts of the employee's salary that were paid and that were not accounted for as paid vacation or compensatory leave.

(2) If the employee does no work for the Commission following its reimbursement to the employee for training costs, works for some but not all of the required amount of time, or fails to pay the Commission amounts reimbursed for training costs, and the Commission does not release the employee from the obligation to either provide the services or make the payments, the employee is liable to the Commission for all costs associated with the training that the Commission paid, including any amounts of the employee's salary that were paid during the training period and that were not accounted for as paid vacation or compensatory leave, and for the Commission's reasonable expenses incurred in obtaining payment, including reasonable attorney's fees.

(3) The Commission may waive the requirements prescribed under paragraph (1) of this subsection and release an employee from the obligation to meet those requirements only if the Commission finds that such action is in the best interest of the agency or is warranted because of an extreme personal hardship suffered by the employee and enters an order to that effect in open meeting.

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 23, 2004.

TRD-200400479

Mary Ross McDonald

Managing Director

Railroad Commission of Texas

Earliest possible date of adoption: March 7, 2004

For further information, please call: (512) 475-1295

Part 4. TEXAS DEPARTMENT OF LICENSING AND REGULATION

Chapter 60. TEXAS COMMISSION OF LICENSING AND REGULATION

The Texas Department of Licensing and Regulation ("Department") proposes the repeal of existing rules at 16 Texas Administrative Code ("TAC"), §60.10 and §§60.100-60.108, 60.120-60.124, 60.150-60.160, 60.170-60.174, and 60.190-60.192 and proposes new rules at 16 TAC §60.10; §60.66, and §§60.100-60.101, 60.150-60.160, and 60.170-60.173, concerning authority and responsibilities, organization, and practice and procedure before the Texas Commission of Licensing and Regulation and the Department.

The proposed repeal removes the sections concerning definitions and hearings procedures that must be rewritten to comply with Senate Bills 279 and 1147 passed during the 78th Legislative Session that amend Chapter 51, Texas Occupations Code, providing for the addition of new requirements that hearings before the Department be heard by the State Office of Administrative Hearings and that the Department develop and implement a negotiated rulemaking and an alternative dispute resolution procedure. The new rules are necessary to comply with new legislation, provide the public access to new avenues for settling cases, and increase regulatory efficiency.

William H. Kuntz, Jr., Executive Director, has determined that for the first five-year period the proposed repeal is in effect the public benefits expected as a result of adoption of the proposed repeal are that new rules will simplify and harmonize procedures as well as encourage settlements of complaints. For each year of the first five-year period the new rules are in effect, the public benefits will be a simplification of procedural rules for hearings and development and implementation of a new avenue to resolve disputed matters.

Mr. Kuntz also has determined that for each year of the first five-year period the proposed repeal is in effect, there will be no cost to state or local government as a result of enforcing or administering the repeal because the repeal requires no action by anyone. There will be no cost to state or local government as a result of enforcing or administering the new rules.

There will be no effect on large, small, or micro-businesses as a result of the proposed repeal and new rules. There are no anticipated economic costs to persons who are required to comply with the repeal because there is no requirement to take any action or with the new rules other than the minimal attendant costs for those who choose to avail themselves of the hearings process.

Comments on the proposed repeal and new rules may be submitted to William H. Kuntz, Jr., Executive Director, Texas Department of Licensing and Regulation, P.O. Box 12157, Austin, Texas 78711, or facsimile 512/475-2872, or electronically: whkuntz@license.state.tx.us. The deadline for comments is 30 days after publication in the Texas Register .

Subchapter A. AUTHORITY AND RESPONSIBILITIES

16 TAC §60.10

(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 Licensing and Regulation or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

The repeal is proposed under Chapter 51, §51.201 and §51.203, Texas Occupations Code, which authorize the Commission to adopt rules as necessary for its own procedures and to implement each law establishing a program regulated by the Department.

The statutory provisions affected by the repeal are those set forth in the Chapter 51, Texas Occupations Code. No other statutes, articles, or codes are affected by the repeal.

§60.10.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 26, 2004.

TRD-200400497

William H. Kuntz, Jr.

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: March 7, 2004

For further information, please call: (512) 463-7348

16 TAC §60.10

The new rule is proposed under Chapter 51, §51.201 and §51.203, Texas Occupations Code, which authorize the Commission to adopt rules as necessary for its own procedures and to implement each law establishing a program regulated by the Department.

The statutory provisions affected by the proposed new rule are those set forth in the Chapter 51, Texas Occupations Code. No other statutes, articles, or codes are affected by the proposal.

§60.10.Definitions.

The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise.

(1) ADR--alternative dispute resolution

(2) ADR Administrator--The trained coordinator in the Departmental office designated by the Commission to coordinate and oversee the ADR procedures which may include conducting mediations. The ADR Administrator shall serve as a resource for ADR training and shall collect data concerning the effectiveness of the ADR procedures.

(3) ALJ--administrative law judge employed by the State Office of Administrative Hearings.

(4) Alternative Dispute Resolution (ADR) Procedures--Alternatives to judicial forums or administrative agency contested case proceedings for the voluntary settlement of contested matters through the facilitation of an impartial third- party.

(5) APA--The Administrative Procedure Act (TEX. GOV'T. CODE, Chapter 2001).

(6) Applicant--Any person seeking a license, certificate, registration, commission, title or permit from the Department.

(7) Commission--Texas Commission of Licensing and Regulation

(8) Complainant--Any person who has filed a complaint with the Department against any person whose activities are subject to the jurisdiction of the Department.

(9) Contested case or proceeding--A proceeding in which the legal rights, duties, or privileges of a party are to be determined by the Commission and/or Executive Director after an opportunity for adjudicative hearing.

(10) Department--Texas Department of Licensing and Regulation

(11) Executive Director--the executive director of the Texas Department of Licensing and Regulation.

(12) Final decision maker--The Commission and/or the Executive Director, both of whom are authorized by law to render the final decision in a contested case.

(13) Judge--Administrative law judge employed by the State Office of Administrative Hearings

(14) License--The whole or part of any Departmental registration, license, commission, certificate of authority, approval, permit, endorsement, title or similar form of permission required or permitted by law.

(15) Mediator--The Departmental employee or other State employee who presides over ADR proceedings regardless of which ADR method is utilized.

(16) Party--A person admitted to participate in a case before the final decision maker.

(17) Person--Any individual, partnership, corporation, or other legal entity, including a state agency or governmental subdivision.

(18) Pleading--A written document submitted by a party, or a person seeking to participate in a case as a party, which requests procedural or substantive relief, makes claims, alleges facts, makes legal argument, or otherwise addresses matters involved in the case.

(19) Private Mediator--A person in the mediation profession who is not a Texas State employee and who has met all the qualifications prescribed by Texas law for mediators.

(20) Respondent--Any person, licensed or unlicensed, who has been charged with violating a law establishing a regulatory program administered by the Department or a rule or order issued by the Commission or the Executive Director.

(21) Rule--Any Commission statement of general applicability that implements, interprets, or prescribes law or policy, or describes the procedure or practice requirements of the Department or Commission and is filed with the Texas Register.

(22) SOAH--State Office of Administrative Hearings.

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 26, 2004.

TRD-200400498

William H. Kuntz, Jr.

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: March 7, 2004

For further information, please call: (512) 463-7348

Subchapter B. ORGANIZATION

16 TAC §60.66

The statutory provisions affected by the proposal are those set forth in the Chapter 51, Texas Occupations Code. No other statutes, articles, or codes are affected by the proposal.

§60.66.Negotiated Rulemaking.

(a) It is the Commission’s policy to employ negotiated rulemaking procedures when appropriate. When the Commission is of the opinion that proposed rules are likely to be complex, or controversial, or to affect disparate groups, negotiated rulemaking will be considered.

(b) When negotiated rulemaking is to be considered, the Commission will appoint a convener to assist it in determining whether it is advisable to proceed. The convener shall have the duties described in Chapter 2008, Government Code, and shall make a recommendation to the Executive Director to proceed or to defer negotiated rulemaking. The recommendation shall be made after the convener, at a minimum, has considered all of the items enumerated in Government Code, §2008.052(c).

(c) Upon the convener’s recommendation to proceed, the department shall initiate negotiated rulemaking according to the provisions of Chapter 2008, Government Code.

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 26, 2004.

TRD-200400499

William H. Kuntz, Jr.

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: March 7, 2004

For further information, please call: (512) 463-7348

Subchapter D. PRACTICE AND PROCEDURE

16 TAC §§60.100 - 60.108, 60.120 - 60.124, 60.150 - 60.160, 60.170 - 60.174, 60.190 - 60.192

(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 Licensing and Regulation or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

The repeals are proposed under Chapter 51, §51.201 and §51.203, Texas Occupations Code, which authorize the Commission to adopt rules as necessary for its own procedures and to implement each law establishing a program regulated by the Department.

The statutory provisions affected by the repeals are those set forth in the Chapter 51, Texas Occupations Code. No other statutes, articles, or codes are affected by the repeals.

§60.100.Purpose and Scope.

§60.101.Filing, Computation of Time, and Notice.

§60.102.Agreements To Be in Writing.

§60.103.Hearings Examiner.

§60.104.Conduct and Decorum.

§60.105.Ex Parte Consultations.

§60.106.Parties.

§60.107.Representative Appearances.

§60.108.Form and Content of Pleadings.

§60.120.Motions.

§60.121.Service of Documents on Parties.

§60.122.Examination and Correction of Pleadings.

§60.123.Amended Pleadings.

§60.124.Prepared Testimony and Exhibits.

§60.150.Dismissal Without Hearing.

§60.151.Disposition by Agreement.

§60.152.Prehearing Conference.

§60.153.Postponement, Continuance, Withdrawal, or Dismissal.

§60.154.Consolidation.

§60.155.Discovery.

§60.156.Place and Nature of Hearings.

§60.157.Order of Procedure.

§60.158.Briefs.

§60.159.Participation by Telephone.

§60.160.Failure To Attend Hearing and Default.

§60.170.Reporters and Transcripts.

§60.171.The Record.

§60.172.Evidence.

§60.173.Offer of Proof.

§60.174.Formal Exceptions Not Required.

§60.190.Proposals for Decision.

§60.191.Filing of Exceptions and Replies.

§60.192.Final Orders, Motions for Rehearing, and Emergency Orders.

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 26, 2004.

TRD-200400500

William H. Kuntz, Jr.

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: March 7, 2004

For further information, please call: (512) 463-7348

16 TAC §§60.100, 60.101, 60.150 - 60.160, 60.170 - 60.173

The new rules are proposed under Chapter 51, §51.201 and §51.203, Texas Occupations Code, which authorize the Commission to adopt rules as necessary for its own procedures and to implement each law establishing a program regulated by the Department.

The statutory provisions affected by the proposed new rules are those set forth in the Chapter 51, Texas Occupations Code. No other statutes, articles, or codes are affected by the proposal.

§60.100.Purpose and Scope.

(a) Purpose. Unless otherwise provided by statute or by the provisions of this subchapter, this subchapter will govern the institution and final conclusion of proceedings followed in handling all adjudicative matters under the Administrative Procedure Act (APA), TEX. GOV'T CODE ANN. Chapter 2001. Once the Department files the Request to Docket Case form with SOAH, SOAH acquires jurisdiction over a contested case, and a hearing conducted by SOAH on a contested case proceeding pending before the Department is governed by SOAH's rules of procedure. In the case of a conflict with rules in this subchapter, SOAH's rules, 1 TAC Chapter 155, control after the filing of the Request to Docket Case form and until after final amendments or corrections to the proposal for decision.

(b) Scope. These rules govern the institution, conduct, and determination of adjudicative proceedings required or permitted by law, whether instituted by the Department or by the filing of an application, claim, complaint, or any other pleading. These rules shall not be construed so as to enlarge, diminish, modify, or otherwise alter the jurisdiction, powers, or authority of the Commission, the Executive Director, or the substantive rights of any person or agency.

§60.101.Filing, Computation of Time, and Notice.

(a) The Department shall provide notice to all parties in accordance with APA §2001.052, Chapter 51, Texas Occupations Code, and the following:

(1) If, after investigation of a possible violation and the facts surrounding that possible violation, the Department determines that a violation has occurred, the Department shall issue a notice of the alleged violation, stating the facts on which the conclusion that a violation occurred is based, recommending that an administrative penalty or administrative sanction, or both, be imposed on the person charged, and recommending the amount of that proposed penalty and/or type of sanction. The Department shall base the recommendation on the factors set forth in §60.62(e).

(2) The written Notice of Alleged Violation shall include:

(A) a brief summary of the alleged violation(s);

(B) a statement of the amount of the penalty and/or sanction recommended; and

(b) Not later than the 20th day after the date on which the notice is received, the Respondent may accept the determination of the Department, including the recommended penalty and/or sanction, or make a written request for a hearing on that determination. Upon receipt of a written request for hearing, the Department shall submit a Request for Docket Case form to SOAH accompanied by legible copies of all pertinent documents, including but not limited to the Notice of Hearing or other document describing the agency action giving rise to a contested case. In accordance with 1 TAC §155.9, the Department shall request one or more of the following actions on the Request to Docket Case form:

(1) Setting of hearing;

(2) Assignment of an administrative law judge; and/or

(3) Setting of alternative dispute resolution proceeding, including but not limited to mediated settlement conference, mediation, or arbitration.

(c) The original of all pleadings and other documents requesting action or relief in a contested case, shall be filed with SOAH once it acquires jurisdiction. Pleadings, other documents, and service to SOAH shall be directed to: Docketing Division, State Office of Administrative Hearings, 300 West 15th Street, Room 504, P.O. Box 13025, Austin, Texas 78711-3025. The time and date of filing shall be determined by the file stamp affixed by SOAH. Unless otherwise ordered by the judge, only the original and no additional copies of any pleading or document shall be filed. Unless otherwise provided by law, after a proposal for decision has been issued, originals of documents requesting relief, such as exceptions to the proposal for decision or requests to reopen the hearing, shall be filed with the Department's Executive Director and/or Commission as well as the Department's Enforcement Division, P.O. Box 12157, Austin, Texas 78711; 920 Colorado Street, Austin Texas; or by facsimile mail at 512-475-2891 if the documents contain 20 or fewer pages including exhibits. Filings may be made until 5:00 p.m. on business days. Copies shall be filed with SOAH.

§60.150.Disposition by Agreement.

(a) Disposition by agreement of any contested case may be made by stipulation, agreed settlement, or consent order, unless precluded by law.

(b) Parties agreeing to such informal disposition shall prepare a settlement agreement, containing proposed findings of fact and conclusions of law, which shall be signed by all the parties and their designated representatives.

(1) adopt the settlement agreement and issue a final order;

(2) reject the settlement agreement and remand the contested case for a hearing before SOAH;

(3) reject the settlement agreement and order further investigation by the Department; or

(4) take such other action as the Executive Director and/or the Commission find just.

(d) The Commission may designate its Chair and/or the Executive Director to adopt or reject agreed orders.

§60.151.Alternative Dispute Resolution Policy.

It is the Department's policy to encourage the fair and expeditious resolution of all contested matters through voluntary settlement procedures. The Department is committed to working with all parties to achieve early settlement of contested matters.

§60.152.Referral of Contested Matter for Alternative Dispute Resolution Procedures

The Department's Director of Enforcement or Human Resources Office, on behalf of the Department, may seek to resolve a contested matter through negotiation or mediation involving all parties and if so, shall refer the matter for mediation in accordance with §60.155.

§60.153.Appointment of Mediator.

(a) For each matter referred for ADR procedures, the ADR Administrator shall mediate or assign another Departmental mediator unless the parties agree upon the use of another agency's mediator or private mediator. The ADR Administrator may assign a substitute or additional mediator to a proceeding as the ADR Administrator deems necessary.

(b) A private mediator may be hired for Departmental ADR procedures provided that:

(1) the parties unanimously agree to use a private mediator;

(2) the parties unanimously agree to the selection of the person to serve as the mediator; and

(3) the mediator agrees to be subject to the direction of the Department's ADR Administrator and to all time limits imposed by the Administrator, statute or regulation.

(c) If a private mediator is used, the costs for the services of the mediator shall be apportioned equally among the parties, unless otherwise agreed upon by the parties, and shall be paid directly to the mediator.

(d) All mediators in Departmental mediation proceedings shall subscribe to the ethical guidelines for mediators adopted by the ADR Section of the State Bar of Texas.

§60.154.Qualifications of Mediators.

(a) A Departmental mediator will receive at a minimum 40 hours of formal training in ADR procedures through a program approved by the Department's Executive Director.

(b) SOAH mediators, employees of other agencies who are mediators, and private pro bono mediators, may be assigned to contested matters as needed.

(1) Each mediator shall first have received 40 hours of Texas mediation training as prescribed by Texas law.

(2) Each mediator shall have some expertise in the area of the contested matter.

(3) If the mediator is a SOAH judge, that person will not also sit as the judge for the case if the contested matter goes to public hearing. If the mediator is an employee of the Department and dispute does not settle, that mediator will not have any further contact or involvement concerning the disputed matter.

§60.155.Commencement of ADR.

(a) The Department encourages resolution of disputes at any time; however, ADR procedures may begin, at the discretion of the Director of Enforcement or the Human Resources Office, anytime after the Department anticipates initiation of an adverse action against an applicant, respondent, or employee. The Department may issue a Notice of Mediation along with a Notice of Alleged Violation or along with a notice of a proposed denial of licensure or opportunity to take an examination. Prior to the submission of a Request for Docket Case form to SOAH, and with agreement of all parties, the ADR Administrator may schedule mediation upon any party's request.

(b) A Departmental employee, subsequent to appealing a personnel action to the appropriate Departmental Division Director in accordance with the Department's Personnel Manual and without having obtained satisfaction, may request approval of mediation from the Human Resources Office.

(c) Upon unanimous motion of the parties and at the discretion of the administrative law judge, the provisions of this section may apply to contested case hearings. In such cases, it is within the discretion of the judge to continue the hearing to allow the use of ADR procedures.

§60.156.Stipulations.

When the ADR procedures do not result in the full settlement of a matter, the parties in conjunction with the mediator, may limit the contested issues through the entry of written stipulations. Such stipulations shall be forwarded or formally presented to the administrative law judge assigned to conduct the contested case hearing on the merits and shall be made part of the hearing record.

§60.157.Agreements.

All agreements between or among parties that are reached as a result of ADR must be committed to writing and will have the same force and effect as a written contract.

§60.158.Confidentiality.

(a) Except as provided in subsections (c) and (d) of this section, a communication relating to the subject matter made by a participant in an ADR procedure, whether before or after the institution of formal ADR proceedings, is confidential, is not subject to disclosure, and may not be used as evidence in any further proceeding.

(b) Any notes or record made of an ADR procedure are confidential, and participants, including the mediator, may not be required to testify in any proceedings relating to or arising out of the matter in dispute or be subject to process requiring disclosure of confidential information or data relating to or arising out of the matter in dispute.

(c) An oral communication or written material used in or made a part of an ADR procedure is admissible or discoverable only if it is admissible or discoverable independent of the procedure.

(d) If this section conflicts with other legal requirements for disclosure of communications or materials, the issue of confidentiality may be presented to the judge to determine, in camera, whether the facts, circumstances, and context of the communications or materials sought to be disclosed warrant a protective order or whether the communications or materials are subject to disclosure.

(e) All communications in the mediation between parties and between each party and the mediator are confidential. No shared information will be given to the other party unless the party sharing the information explicitly gives the mediator permission to do so. Material provided to the mediator will not be provided to other parties and will not be filed or become part of the contested case record. All notes taken during the mediation conference will be destroyed at the end of the process.

§60.159.Place and Nature of Hearings.

Every effort should be made to conduct administrative hearings in Austin, Texas, to achieve the Department's mission to ensure effective and economical use of public resources while adhering to the provisions of 1 TAC §155.13.

§60.160.Failure to Attend Hearing and Default.

(a) If, within twenty days after receiving a Notice of Alleged Violation, the Respondent fails to accept the Department's determination and recommended administrative penalty and/or sanction, or fails to make a written request for a hearing on the determination, the Department may propose entry of a default order against the Respondent unless otherwise provided by applicable law.

(b) Where a Respondent fails to answer to the Notice of Alleged Violation, the Department may present to the Commission and/or the Executive Director a motion for default order along with a proposed default order containing findings of fact and conclusions of law. Respondents will be notified as to the time and place the motion for default order will be considered. If a Respondent attends at the time and place prescribed in the notice, an administrative hearing may be set in accordance with §60.101(b).

(c) If, after receiving a notice proposing denial of an application or a notice proposing denial of an opportunity to take an examination, an Applicant may request a hearing in writing within twenty days of receipt of the notice or forfeit the right to a hearing unless otherwise provided by applicable law.

(d) 1 TAC §155.55 (SOAH rules) applies where a Respondent fails to appear on the day and time set for administrative hearing. In that case, the Department's staff may move either for dismissal of the case from SOAH's docket or for the issuance of a default proposal for decision by the judge.

(e) Any document served upon a party is prima facie evidence of receipt if it is directed to the party's last known complete, correct address as shown by the Department's records. This presumption is rebuttable. Failure to claim properly addressed certified or registered mail will not support a finding of nondelivery.

§60.170.The Adjudicative Hearing Record.

(a) On the written request by a party to a case or on request of the judge, a written transcript of all or part of the proceedings shall be prepared. The cost of the transcript is borne by the requesting party. This section does not preclude the parties from agreeing to share the costs associated with the preparation of a transcript. If only the judge requests a transcript, costs will be assessed to the Respondent(s) or Applicant(s), as appropriate.

(b) Any party who needs a certified language interpreter for presentation of its case shall be responsible for requesting the services of an interpreter. The requesting party shall be responsible for making arrangements with a certified language interpreter once a request is made. The cost of the certified language interpreter shall be borne by the party requiring the interpreter's services.

§60.171.Proposals for Decision.

Proposed decisions shall be brought before the Executive Director and/or the Commission for decision under their respective authorities.

§60.172.Filing of Exceptions and Replies.

(a) Any party of record may, within 14 days after the date of service of a proposal for decision, file exceptions to the proposal for decision with the Executive Director of the Department and/or the Commission, as appropriate. Replies to such exceptions may be filed within 10 days after the deadline for filing such exceptions. Copies of exceptions and replies shall be served on the Enforcement Division of the Department and SOAH at the addresses referenced in §60.101(c) of these rules.

(b) A request for extension of time within which to file exceptions or replies shall be filed with the Department and SOAH, a copy thereof shall be served on all other parties of record by the party making such a request. An extension of time may be granted by agreement of parties or by order of the administrative law judge assigned to the case upon a showing of good cause.

§60.173.Final Orders, Motions for Rehearing, and Emergency Orders.

(a) A final order in a contested case shall be in writing and shall be signed by the Commission, the Executive Director or both, as applicable. Final orders shall include findings of fact and conclusions of law separately stated. A party notified by mail of a final decision or order shall be presumed to have been notified on the third day after the date on which the notice is mailed.

(b) The timely filing of a motion for rehearing is a prerequisite to appeal.

(c) In the absence of a timely filed motion for rehearing, a decision is final on the expiration of the period for filing a motion for rehearing. If a motion for rehearing is filed, a decision is final and appealable on the date an order is signed overruling a motion for rehearing or on the date the motion is overruled by operation of law.

(d) If the Commission and/or the Executive Director find that an imminent peril to the public health, safety, or welfare requires immediate effect of a final decision or order, that finding shall be recited in the decision or order as well as the fact that the decision or order is final and effective on the date signed, in which event the decision or order is final and appealable on the date signed and no motion for rehearing is required as a prerequisite for appeal.

(e) A petition for judicial review must be filed in a District Court of Travis County Texas within 30 days after the order is final and appealable, as provided by Government Code, Title 10, Subtitle A, Chapter 2001. A party filing a petition for judicial review must also comply with the requirements of Occupations Code, §51.307.

(f) A party who appeals a final decision in a contested case must pay all costs for the preparation of the original or a certified copy of the record of the agency proceeding that is required to be transmitted to the reviewing court.

(g) If, after judicial review, the penalty is reduced or not assessed, the Executive Director shall remit to the person charged the appropriate amount, plus accrued interest if the penalty has been paid, or shall execute a release of the bond if a supersedeas bond has been posted. The accrued interest on amounts remitted by the Executive Director under this subsection shall be paid at a rate equal to the rate charged on loans to depository institutions by the New York Federal Reserve Bank, and shall be paid for the period beginning on the date that the assessed penalty is paid to the Department and ending on the date the penalty is remitted.

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 26, 2004.

TRD-200400501

William H. Kuntz, Jr.

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: March 7, 2004

For further information, please call: (512) 463-7348

Chapter 70. INDUSTRIALIZED HOUSING AND BUILDINGS

16 TAC §§70.10, 70.20, 70.30, 70.50, 70.71, 70.73 - 70.75, 70.80, 70.102

The Texas Department of Licensing and Regulation ("Department") proposes amendments to existing rules at 16 Texas Administrative Code, §§70.10, 70.20, 70.30, 70.50, 70.71, 70.73 - 70.75, 70.80, and 70.102 regarding the industrialized housing and buildings program.

There are a number of changes throughout the rules to address statutory changes made by Senate Bill ("SB") 279, 78th Legislature, and to address the codification of the Industrialized Housing and Buildings ("IHB") statute made by House Bill ("HB") 3507, 78th Legislature.

Section 70.10 is amended by adding subsection (c) to clarify that other terms not defined in this chapter may be defined in the mandatory building codes adopted under the industrialized housing and building program.

Section 70.20 is amended in paragraph (1) to correct the reference to the fee schedule from "70.70 to 70.80".

Section 70.30 was amended to replace the exemption for temporary buildings with an exemption for buildings specifically exempt from permit in the mandatory building codes to clarify the types of temporary buildings that are exempt. Section 70.30 was also amended to delete the exemption for buildings not designed to be placed on a permanent foundation and to add an exemption for construction site office buildings and to add new subsection (b) to reflect statutory changes made by SB 279.

Section 70.50 was amended to require an industrialized builder to report where a building is stored if it has not been installed, to keep a copy of the site inspection reports for all units installed outside the jurisdiction of a municipality, and to require industrialized builders to report on if a unit was transferred to the ownership of another industrialized builder or installation permit holder. The changes are made to clarify the type of records that a builder must be able to supply in response to a department audit. Section 70.50(4) was also amended to delete the requirement that the builder identify the type of foundation system. The change was made to reflect statutory changes made by SB 279. Section 70.71 was amended to delete subsection (e) concerning buildings not designed to be placed on a permanent foundation to reflect statutory changes made by SB 279.

Section 70.73(b) was amended to clarify that site inspections are performed in accordance with the rules and procedures established by the Council and to clarify that certain types of unoccupied buildings do not require site inspections. Section 70.73 was also amended to add the word "building" just before codes or code to reflect a change in SB 279 that refers "mandatory building codes" rather than construction codes or state codes.

Section 70.74 was completely rewritten to add requirements and procedures for altering industrialized housing or buildings. These changes were made to reflect statutory changes made by SB 279 that requires industrialized buildings that are altered to comply with the mandatory building codes.

Section 70.75(a) was amended to clarify that manufacturers must provide the industrialized builder or installation permit holder a set of approved buildings for the house or building in accordance with §70.70 and provide the builder or permit holder the name, mailing address, and telephone number of the department for filing complaints.

Section 70.75(b) was amended to clarify that industrialized builders must provide their customers a complete set of approved plans and specifications in accordance with §70.70 and in accordance with §70.74 and also provide the customer with the name, mailing address, and telephone number of the department for filing complaints.

Section 70.80(h) was revised to clarify that the fee for decals insignia is based on the gross floor area of the module or gross surface area or floor area of the modular component. Section 70.80(l) was added to set the fee for alteration decals used to certify that altered industrialized buildings comply with the mandatory state codes.

Section 70.102(a) was revised to clarify industrialized housing and buildings must comply with the mandatory building codes in effect at the time of construction, that installations must comply with the mandatory buildings codes, and that alterations must comply with the mandatory building codes and §70.74. Section 70.102(b) was deleted because there are no longer 2 code groups since ICBO and SBCCI have merged to form the ICC. Section 70.102(c) was revised to replace "the Act" with "Chapter 1202" to reflect the codification of the Industrialized Housing and Buildings Statute by HB 3507.

William H. Kuntz, Jr., Executive Director, has determined that for the first five-year period the proposed amendments are in effect there will be no cost to state or local government as a result of enforcing or administering the amended rules.

Mr. Kuntz also has determined that for each year of the first five-year period the proposed amendments are in effect, the public benefit will be that the rules will be more accurate in references to rules and statutes, will include new statutory requirements, and will be concise and clear.

There will be a cost to large, small, or microbusinesses. There will be an economic cost to industrialized builders who are required to comply with the new regulations on alterations. However this cost should be offset by the benefit to the builders of being able to use altered buildings instead of new buildings.

Comments on the proposal may be submitted to William H. Kuntz, Jr., Executive Director, Texas Department of Licensing and Regulation, P.O. Box 12157, Austin, Texas 78711, or facsimile 512/475-2872, or electronically: whkuntz@license.state.tx.us. The deadline for comments is 30 days after publication in the Texas Register .

The amendments are proposed under Texas Occupations Code, Chapter 1202 and Texas Occupations Code, Chapter 51, which authorizes the Department to adopt rules as necessary to implement this chapter and any other law establishing a program regulated by the Department.

The statutory provisions affected by the proposal are those set forth in Texas Occupations Code, Chapter 1202 and Texas Occupations Code, Chapter 51. No other statutes, articles, or codes are affected by the proposal.

§70.10.Definitions.

(a) The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Alteration--Any construction, other than repair of the house or building, to an existing industrialized house or building after affixing of the decal by the manufacturer. Industrialized housing or buildings that have not been maintained shall be considered altered.

(2) Alteration decal--The approved form of certification issued by the department to an industrialized builder to be permanently affixed to a module indicating that alterations to the industrialized building module have been constructed to meet or exceed the code requirements and in compliance with this chapter.

~~[ ~~(1)~~ Act--Texas Civil Statutes, Article 5221f-1.]~~

(3) [ ~~(2)~~ ] Building site--A lot, the entire tract, subdivision, or parcel of land on which industrialized housing or buildings are sited.

(4) [ ~~(3)~~ ] Building system--The design and/or method of assembly of modules or modular components represented in the plans, specifications, and other documentation which may include structural, electrical, mechanical, plumbing, fire protection, and other systems affecting health and safety.

(5) Chapter 1202--Texas Occupations Code, Chapter 1202, Industrialized Housing and Buildings.

(6) [ ~~(4)~~ ] Closed construction--That condition where any industrialized housing or building, modular component, or portion thereof is manufactured in such a manner that all portions cannot be readily inspected at the site without disassembly or destruction thereof.

(7) [ ~~(5)~~ ] Commercial structure--An industrialized building classified by the mandatory building codes [ ~~applicable model code~~ ] for occupancy and use groups other than residential for one or more families. The term shall not include a structure that is not installed on a permanent foundation and either is not open to the public or is less than 1,500 square feet in total area and not used as a school or place of religious worship.

~~[ ~~(6)~~ Commissioner's designee--A person appointed by the commissioner to act in a capacity of authority.]~~

(8) [ ~~(7)~~ ] Compliance Control Program--The manufacturer's system, documentation, and methods of assuring that industrialized housing, buildings, and modular components, including their manufacture, storage, handling, and transportation conform with Chapter 1202 [ ~~the Act~~ ] and this chapter.

(9) [ ~~(8)~~ ] Component--A sub-assembly, subsystem, or combination of elements for use as a part of a building system or part of a modular component that is not structurally independent, but may be part of structural, plumbing, mechanical, electrical, fire protection, or other systems affecting life safety.

(10) [ ~~(9)~~ ] Decal--The approved form of certification issued by the department to the manufacturer to be permanently affixed to the module indicating that it has been constructed to meet or exceed the code requirements and in compliance with this chapter [ ~~these sections~~ ].

(11) [ ~~(10)~~ ] Design package--The aggregate of all plans, designs, specifications, and documentation required by these sections to be submitted by the manufacturer to the design review agency, or required by the design review agency for compliance review, including the compliance control manual and the on-site construction documentation. Unique or site specific foundation drawings and special on-site construction details prepared for specific projects are not a part of the design package except as expressly set forth in §70.74 [ ~~of this title (relating to Alterations and Deviations)~~ ].

(12) [ ~~(11)~~ ] Design review agency--An approved organization, private or public, determined by the council to be qualified by reason of facilities, personnel, experience, demonstrated reliability to review designs, plans, specifications, and building systems documentation, and to certify compliance to these sections evidenced by affixing the council's stamp. Chapter 1202 [ ~~The Act~~ ] designates the department as a design review agency.

(13) [ ~~(12)~~ ] ICC--International Code Council, Inc., 5203 Leesburg Pike, Suite 708, Falls Church, Virginia 22041-3401.

~~[ ~~(13)~~ ICBO--International Conference of Building Officials, 5360 Workman Mill Road, Whittier, California 90601.]~~

(14) Industrialized builder--A person who is engaged in the assembly, connection, and on-site construction and erection of modules or modular components at the building site or who is engaged in the purchase of industrialized housing or buildings or of modules or modular components from a manufacturer for sale or lease to the public; a subcontractor of an industrialized builder is not a builder for purposes of this chapter [ ~~these sections~~ ].

(15) Insignia--The approved form of certification issued by the department to the manufacturer to be permanently affixed to the modular component indicating that it has been constructed to meet or exceed the code requirements and in compliance with the sections in this chapter.

(16) Installation--On-site construction (see paragraph (26) [ ~~(32)~~ ] of this section).

(17) Installation permit--A registration [ ~~license~~ ] issued by the department to a person who purchases an industrialized house or building for his/her own use and who assumes responsibility for the installation of the industrialized house or building. A person who applies for an installation permit may not be engaged in the purchase of industrialized housing or buildings or of modules or modular components for sale or lease to the public. A subcontractor of an installation permit holder is not an industrialized builder for the purposes of this chapter. [ is not registered as an industrialized builder, but who is responsible for the installation of industrialized housing or buildings or of modules or modular components and who is not engaged in the purchase of industrialized housing or buildings or of modules or modular components for sale or lease to the public. ]

(18) Lease, or offer to lease--A contract or other instrument by which a person grants to another the right to possess and use industrialized housing or buildings for a specified period of time in exchange for payment of a stipulated price.

(19) Local building official--The agency or department of a municipality or other local political subdivision with authority to make inspections and to enforce the laws, ordinances, and regulations applicable to the construction, alteration, or repair of residential and commercial structures.

(20) Manufacturer--A person who constructs or assembles modules or modular components at a manufacturing facility which are offered for sale or lease, sold or leased, or otherwise used.

(21) Manufacturing facility--The place other than the building site, at which machinery, equipment, and other capital goods are assembled and operated for the purpose of making, fabricating, constructing, forming, or assembly of industrialized housing, buildings, modules, or modular components.

(22) Model--A specific design of an industrialized house, building, or modular component which is based on size, room arrangement, method of construction, location, arrangement, or size of plumbing, mechanical, or electrical equipment and systems therein in accordance with an approved design package.

(23) Module--A three dimensional section of industrialized housing or buildings, designed and approved to be transported as a single section independent of other sections, to a site for on-site construction with or without other modules or modular components.

(24) NFPA--National Fire Protection Association, Batterymarch Park, Quincy, Massachusetts 02269.

(25) Nonsite specific building--An industrialized house or building for which the permanent site location is unknown at the time of construction.

(26) On-site construction--Preparation of the site, foundation construction, assembly and connection of the modules or modular components, affixing the structure to the permanent foundation, connecting the structures together, completing all site-related construction in accordance with designs, plans, specifications, and on-site construction documentation.

(27) Open construction--That condition where any house, building, or portion thereof is constructed in such a manner that all parts or processes of manufacture can be readily inspected at the building site without disassembly, damage to, or destruction thereof.

(28) Permanent foundation system--A foundation system for industrialized housing or buildings designed to meet the applicable building code as set forth in § §70.100 , 70.101, [ ~~of this title (relating to Mandatory State Codes)~~ ] and [ § ] 70.102 [ ~~of this title (relating to Use and Construction of Codes)~~ ].

(29) Permanent industrialized building--An industrialized building that is not designed to be transported from one commercial site to another commercial site.

(30) [ ~~(29)~~ ] Person--An individual, partnership, company, corporation, association, or any other legal entity, however organized.

(31) [ ~~(30)~~ ] Price--The quantity of an item that is exchanged or demanded in the sale or lease for another.

(32) [ ~~(31)~~ ] Public--The people of the state as a whole to include individuals, companies, corporations, associations or other groups, however organized, and governmental agencies.

(33) [ ~~(32)~~ ] Registrant--A person who, or which, is registered with the department pursuant to the rules of this chapter as a manufacturer, builder, design review agency, third party inspection agency, or third party inspector.

(34) [ ~~(33)~~ ] Residential structure--Industrialized housing designed for occupancy and use as a residence by one or more families.

(35) [ ~~(34)~~ ] Sale, sell, offer to sell, or offer for sale--Includes any contract of sale or other instrument of transfer of ownership of property, or solicitation to offer to sell or otherwise transfer ownership of property [ ~~for an established price~~ ].

~~[ ~~(35)~~ SBCCI--Southern Building Code Congress International, Inc., 900 Montclair Road, Birmingham, Alabama 35213.]~~

(36) Site or building site--A lot, the entire tract, subdivision, or parcel of land on which industrialized housing or buildings are sited.

(37) Special conditions and/or limitations--On-site construction documentation which alerts the local building official of items, such as handicapped accessibility or placement of the building on the property, which may need to be verified by the local building official for conformance to the mandatory building [ ~~state~~ ] codes.

(38) Structure--An industrialized house or building that [ ~~which~~ ] results from the complete assemblage of the modules or modular components [ ~~, modular components, or components~~ ] designed to be used together to form a completed unit.

(39) Third party inspector--An approved person or agency, private or public, determined by the council to be qualified by reason of facilities, personnel, experience, demonstrated reliability, and independence of judgment to inspect industrialized housing, buildings, and portions thereof for compliance with the approved plans, documentation, compliance control program, and applicable code.

(b) Other definitions may be set forth in the text of the sections in this chapter. For purposes of these sections, the singular means the plural [ , ] and the plural means the singular.

(c) Where terms are not defined in this section or in other sections in this chapter and are defined in the mandatory building codes as referenced in §70.100, such terms shall have the meanings ascribed to them in these codes unless the context as the term is used clearly indicates otherwise. Where terms are not defined in this section or other sections in this title or in the mandatory building codes, such terms shall have ordinarily accepted meanings such as the context implies.

§70.20.Registration of Manufacturers and Industrialized Builders.

Manufacturers and industrialized builders shall not engage in any business activity relating to the construction or location of industrialized housing or buildings without being registered with the department.

(1) An application for registration shall be submitted on a form supplied by the department, and shall contain such information as may be required by the department. The application must be verified under oath by the owner of a sole proprietorship, the managing partner of a partnership, or the officer of a corporation. The application must be accompanied by the fee set forth in § 70.80 [ ~~70.70~~ ].

(2) The industrialized builder shall verify under oath at the time of registration that the alteration, foundation and installation of all units installed under this registration shall be constructed in accordance with the mandatory building codes, the engineered plans, and department rules, and shall be inspected in accordance with the inspection procedures established by the Texas Industrialized Building Code Council.

(3) A person who purchases an industrialized house or building, or modular component, for his/her own use and who assumes responsibility for the installation of the industrialized house or building may file for an installation permit in lieu of registering as an industrialized builder. A person who purchases an industrialized housing or buildings, or modular components, for sale or lease to the public may not file for an installation permit. The application shall be submitted on a form supplied by the department and shall contain such information as may be required by the department. A separate application must be submitted for each building containing industrialized housing and buildings modules or modular components. The application must be accompanied by the fee set forth in §70.80.

(4) The registration of a manufacturer or industrialized builder shall be valid for 12 months and must be renewed annually. Every corporate entity must be separately registered. Each separate manufacturing facility must be registered; a manufacturing facility is separate if it is not on property that is contiguous to a registered manufacturing facility. An industrialized builder must register each separate sales office but is not required to register each job location.

(5) A registered manufacturer or industrialized builder shall notify the department in writing within 10 days if:

(A) the corporate or firm name is changed;

(B) the main address of the registrant is changed;

(D) the location of any manufacturing facility is changed;

(E) a new manufacturing facility is established;

(F) there are changes in principal officers of the firm; or

(G) an industrialized builder transfers a module or modular component to another industrialized builder.

(6) An application for original registration or renewal may be rejected if any information contained on, or submitted with, the application is incorrect. The certificate of registration may be revoked or suspended or a penalty or fine may be imposed for any violation of Chapter 1202, the rules and regulations in this chapter or administrative orders of the department, or the instructions and determinations of the council in accordance with §70.90 and §70.91.

§70.30.Exemptions.

(a) The scope of [ ~~the sections in~~ ] this chapter is limited by Chapter 1202 [ ~~the Industrialized Housing and Buildings Act~~ ]; accordingly, it does [ ~~they do~~ ] not apply to:

(1) mobile homes or HUD-code manufactured homes as defined in Texas Occupations Code, Chapter 1201 [ ~~Texas Civil Statutes, Article 5221f~~ ];

(2) housing constructed of sectional or panelized systems not utilizing modular components;

(3) ready-built homes which are constructed so that the entire living area is contained in a single unit or section at a temporary location for the purpose of selling it and moving it to another location, provided that modular components are not used in the construction of the ready-built home;

(4) any residential or commercial structure which is in excess of three stories or 49 feet in height as measured from the finished grade elevation at the entrance of the structure to the peak of the roof;

(5) buildings that are specifically referenced in the mandatory building codes as exempt from permits;

~~[ ~~(5)~~ temporary structures which are specifically referenced in the mandatory codes;]~~

(6) construction site office buildings; or

[ ~~(6)~~ a structure designated by a manufacturer as not being designed to be placed on a permanent foundation. Structures so designated by the manufacturer shall have a seal attached by the manufacturer stating that the structure is not designed for placement on a permanent foundation. A municipality with the authority to regulate structures may require a Texas decal on any structure which is placed within its jurisdiction; or]

(7) any open construction.

(b) The installation of an industrialized house or a permanent industrialized building that is moved from the first installation site to a new installation site is subject to the permitting and approval requirements of the local authorities.

§70.50.Manufacturer's and Builder's Monthly Reports.

(a) The manufacturer shall submit a monthly report to the department, of all industrialized housing, buildings, modules, and modular components that were constructed and to which decals and insignia were applied during the month. The manufacturer shall keep a copy of the monthly report on file for a minimum of five years. Any corrections to reports previously filed shall clearly indicate the corrections to be made and the month and date of the report that is being corrected. The report shall contain:

(1) the serial or identification number of the units;

(2) the decal or insignia number assigned to each identified unit;

(3) the name and registration number of the industrialized builder (as assigned by the department), or the installation permit number (as assigned by the department) of the person, to whom the units were sold, consigned, and shipped. The requirements contained in §70.20(2) [ ~~(relating to Registration of Manufacturers and Industrialized Builders)~~ ] shall apply when an installation permit is reported in lieu of the registration number of an industrialized builder;

(4) the date the decal or insignia was affixed (physically attached or applied) to the unit;

(5) an identification of the type of structure for which the units are to be used, e.g., single family residence, duplex, restaurant, equipment shelter, bank building, hazardous storage building, etc.;

(6) any other information the department may require; and

(7) an indication of zero units if there was not activity for the reporting month.

(b) Each industrialized builder shall keep records of all industrialized housing, buildings, modules, and modular components that were sold, leased, or installed. These records shall be kept for a minimum of five years from the date of sale, lease, or installation and shall be made available to the department for review upon request. An annual audit of units sold, leased, or installed by the builders shall be conducted by the Department. The audit will identify the modules or modular components by the name and Texas registration number of the manufacturer of each unit and the assigned Texas decal or insignia numbers and the corresponding identification, or serial numbers as assigned by the manufacturer. The builders shall report or provide the following information to the Department for each unit identified in the audit within the timeframe set by the audit:

(1) evidence of compliance with §70.75 [ ~~of this title (relating to Responsibilities of Registrants- Permit/Owner Information)~~ ];

(2) the address where each unit was installed. If the builder is not responsible for the installation, then the address to where each unit was delivered . If the unit has not been installed, then the address where the unit is stored ;

(3) the occupancy use of each building containing modules or modular components, i.e., classroom, restaurant, bank, equipment shelter, etc; and

~~[ ~~(4)~~ identification of the type of foundation system, either permanent or temporary, on which each unit was installed, in accordance with the following.]~~

(4) [ ~~(A)~~ ] if [ If ] the builder is responsible for the installation and site work, then the builder:

(A) [ ~~(i)~~ ] shall, for units installed outside the jurisdiction of a municipality, keep a copy of the foundation plans and [ ~~, for units installed on a permanent foundation,~~ ] keep a copy of the site inspection report in accordance with §70.73 [ ~~of this title (relating to Responsibilities of the Registrants--Building Site Inspections)~~ ]. A copy of these documents shall be made available to the department upon request; or

(B) [ ~~(ii)~~ ] shall, if installed within the jurisdiction of a municipality, provide the name of the city responsible for the site inspection ; or [ . ]

(5) [ ~~(B)~~ ] if [ If ] the builder is not responsible for the installation and site work, or if the builder has transferred the ownership of the unit to another person, then the builder shall provide identification of the installation permit number, assigned by the Department, or builder registration number, assigned by the Department, of the person responsible.

(c) The manufacturer's monthly reports must be filed with the department no later than the 10th day of the following month.

§70.71.Responsibilities of the Registrants--Manufacturer’s Data Plate.

(a) The manufacturer will attach a data plate to each dwelling unit of a residential structure containing industrialized housing and buildings modules and to each appropriate unit of a commercial structure containing industrialized housing and buildings modules. The data plate must be made of a material that will not deteriorate over time and be permanently placed so that it cannot be removed without destruction. The data plate shall be placed in an easily accessible location as designated on the floor plan or on the cover or title sheet for each model or project. The data plate shall not be located on any readily removable item such as a cabinet door or similar component. Location of the data plate on the cover of the electrical distribution panel is acceptable.

(b) The data plate must contain, as a minimum, the following information:

(1) the manufacturer's name, registration number, and address;

(2) the serial or identification number of the unit;

(3) the State decal numbers;

(4) the name and date of applicable codes;

(5) an identification of permissible type of gas for appliances;

(6) the maximum snow load (roof) (psf);

(7) the maximum wind speed (mph) and exposure;

(8) the seismic design criteria;

(9) the occupancy/use group type;

(10) the construction type; and

(11) special conditions and/or limitations.

(c) All modular components shall be marked with, or otherwise have permanently affixed, a data plate containing the following information:

(1) the manufacturer's name, registration number, and address;

(2) the serial or identification number of the component or components;

(3) the State insignia number or numbers;

(4) the name and date of applicable codes;

(5) the design loads for the component; and

(6) any special conditions of use for the component.

(d) The information required in subsection (c) of this section may be placed in the crate in which the component or components are shipped or on a tag attached to the crate or to the component if the component is such that the information may not be marked or permanently affixed to the component.

[ ~~(e)~~ Structures designated by the manufacturer as not being designed for placement on a permanent foundation shall have a manufacturer's seal permanently attached inside the door of the electrical panel or near the entrance door if the unit does not have an electrical panel. The seal shall not be smaller than 2 by 1 - 1/2 inches and shall be constructed of a metallic alloy. The seal must contain the following capitalized statement: THIS STRUCTURE IS NOT DESIGNED FOR PLACEMENT ON A PERMANENT FOUNDATION AND DOES NOT MEET THE REQUIREMENTS OF TEXAS CIVIL STATUTES, ARTICLE 5221f-1, INDUSTRIALIZED HOUSING AND BUILDINGS.]

§70.73.Responsibilities of the Registrants--Building Site Inspections.

(a) When the building site is within a municipality that has a building inspection agency or department, the local building official will inspect all on-site construction done at the site and the attachment of the structure to the permanent foundation to assure completion and attachment in accordance with the design package, the on-site construction documentation, and any unique foundation system or on-site detailed drawings.

(b) When the building site is outside a municipality, or within a municipality that has no building department or agency, a third party inspector will perform the required inspections in accordance with this section and the inspection procedures established by the Texas Industrialized Building Code Council . The on-site inspection is normally accomplished in three phases: foundation inspection [ ~~site preparation~~ ], set inspection, and final inspection. Site inspections are not required for the installation, on permanent foundations, of unoccupied industrialized buildings not open to the public with a gross area of less than or equal to 400 square feet, such as communication equipment shelters, that are not also classified as a hazardous occupancy by the mandatory building code. The builder, or installation permit holder, is responsible for scheduling each phase of the inspection with the third party inspector. Additional inspections will be scheduled as required for larger structures and to correct discrepancies. The industrialized builder, or installation permit holder, may utilize a different third party inspector for different projects, but may not change the inspector for a project once started without the written approval of the department. The inspector shall provide the builder or permit holder a copy of the site inspection report and shall keep a copy for a minimum of five years. The report may be in whatever format the inspector desires as long as the following information is included on the inspection report:

(1) dates of all inspections;

(2) the name, Texas registration number or license number, and signature of the inspector who performed the inspection;

(3) the name and Texas industrialized builder registration number, or the installation permit number, of the person responsible for the foundation and installation. Installation permit numbers are assigned by the Department in accordance with §70.20 [ ~~of this title (relating to Registration of Manufacturers and Industrialized Builders)~~ ];

(4) the name and Texas registration number of the manufacturer of the modules or modular components inspected;

(5) the name and address of the owner of the building or buildings inspected;

(6) the complete site address of the modules or modular components inspected;

(7) the Texas decal or insignia numbers and manufacturer's identification or serial numbers of the modules or modular components inspected;

(8) the building codes the modules or modular components were designed to meet in accordance with the data plate on the building;

(9) the occupancy group and the building construction type of the building in accordance with the data plate on the building;

(10) a record of all system testing observed; and

(11) the date and description of any deviations to the approved plans, unique site completion documentation, or mandatory building codes and the corrective action, including the date of the corrective action, taken by the industrialized builder, or installation permit holder. If no deviations were observed, then this shall be noted on the report. The inspector shall notify the department of any deviations that cannot be corrected or that the builder, or installation permit holder, refuses to correct.

(c) Destructive disassembly shall not be performed at the site in order to conduct tests or inspections, nor shall there be imposed standards or test criteria different from those required by the approved installation instructions, on-site construction documentation, and the applicable mandatory building code. Nondestructive disassembly may be performed only to the extent of opening access panels and cover plates.

(d) If an inspector finds a structure, or any part thereof, at the building site to be in violation of the approved design package and/or the unique on-site plans and specifications, the inspector shall immediately post a deviation notice and notify the industrialized builder or installation permit holder. The industrialized builder, or installation permit holder, is responsible for assuring that all deviations are corrected and inspected prior to occupation of the building.

(e) The industrialized builder, or installation permit holder, shall not permit occupancy of a structure until a successful final inspection has been completed and a certificate of occupancy issued by the local authorities. The industrialized builder, or installation permit holder, shall keep a copy of the inspection report for the site inspection in the files for a minimum of five years.

§70.74.Responsibilities of the Registrations--Alterations [ ~~or Deviations~~ ].

(a) The manufacturer [ ~~or industrialized builder~~ ] shall not alter construction of the industrialized house or building [ ~~or deviate~~ ] from the approved design package [ ~~and on-site construction documentation~~ ]. Industrialized builders or installation permit holders shall not alter construction performed at the installation site from the approved on-site construction documentation except in accordance with this section or [ ~~Unique foundation drawings and on-site details are subject to~~ ] §70.70(e) . Alterations of industrialized housing or buildings shall be as specified in this section [ ~~of this title (relating to Unique On-Site Details)~~ ].

(b) An alteration of an industrialized house or building prior to, or during installation, that [ ~~which~~ ] results in a structure that does not comply with the mandatory building codes [ ~~state code~~ ] is prohibited. An alteration after installation of an industrialized building that is designed to be moved from one commercial site to another commercial site that does not comply with the mandatory building codes is prohibited. Alterations after installation of industrialized housing or permanent industrialized buildings shall be in accordance with the requirements of the local building code authorities.

(c) Repairs and work exempt from permit requirements as specified in the mandatory building codes referenced in §70.100 shall not be considered alterations.

[ ~~(c)~~ A complete set of plans and specifications describing a proposed alteration of an industrialized house or building shall be submitted to a design review agency for approval prior to construction. All work must be performed in accordance with the approved plans and specifications. The person performing the alteration shall notify the department in writing at least 10 days in advance of the work. The department may inspect the work performed to ensure conformance to the approved plans by utilizing department or third party inspectors. An alteration to an industrialized house or building resulting in a change in the principal use of the structure shall require a reclassification of the structure to the appropriate occupancy group defined in the mandatory state code.]

(d) Alteration decals are used to certify alterations of industrialized buildings. Each decal is assigned to a specific module or modular component. The control of the decals shall remain with the department. The department will issue alteration decals to the third party inspection agency responsible for the inspections of the alterations upon application and payment of the fee for the decal by the industrialized builder. By affixing the decal the industrialized builder and third party inspection agency certify that the module has been altered and inspected in accordance with the mandatory building codes and this section. The third party inspector shall not affix the decal to any module where inspection reveals that the alteration does not comply with the approved alteration plans and specifications or the mandatory building codes.

(e) Alterations of industrialized housing and permanent industrialized buildings.

(1) Prior to, or during, installation outside the jurisdiction of a municipality. The industrialized builder, or installation permit holder, shall submit the original approved plans and specifications for the house or building, as reference, along with a complete set of plans and specifications describing a proposed alteration to a design review agency for approval prior to construction in accordance with the procedures established by the Texas Industrialized Building Code Council. Alterations on the house or building shall not begin prior to approval of the plans and specifications and shall be performed only by persons licensed to perform this work. Inspections of alterations shall be performed by a third party inspector in accordance with procedures established by the Texas Industrialized Building Code Council. The third party inspection agency responsible for inspections for a project may not be changed without the written approval of the department. An alteration data plate shall be affixed to any house or building where the alteration results in a reclassification of the occupancy group or construction type, a change in the permissible type of gas required for appliances, or a change in the wind speed and exposure, maximum snow (roof) load, seismic design criteria, or special conditions or limitations. The data plate shall contain such information as specified in subsection (g). All records pertinent to the alteration, including a copy of the alteration data plate, shall be retained by the industrialized builder or installation permit holder for a minimum of 5 years and be made available to the department upon request;

(2) Prior to installation within the jurisdiction of a municipality. Alterations prior to installation within a jurisdiction shall be in accordance with paragraph (1) of this subsection;

(3) During, or after, installation within the jurisdiction of a municipality. Approval of plans and inspection of alterations shall be in accordance with the permitting and inspection procedures of the municipality.

(f) Alterations of industrialized buildings designed to be moved from one commercial site to another commercial site. An industrialized building designed to be moved from one commercial site to another commercial site, that is altered, may be recertified.

(1) To recertify the building the industrialized builder shall:

(A) provide the design review agency the current value of the building and a cost estimate for the alteration. With knowledge of the penalties for false statements the industrialized builder shall certify that the current value of the building and the cost estimate are true and accurate;

(B) submit a copy of the original approved construction documents for the building to the design review agency for reference purposes;

(C) submit a copy of the plans and specifications for alteration of the building to the design review agency for review and approval in accordance with the requirements established by the Texas Industrialized Building Code Council. The plans and specifications shall include the serial number assigned by the manufacturer and the Texas decal number or insignia number of each module or modular component;

(D) not begin the alteration of the building prior to the approval of the alteration plans and specifications by the design review agency. The alteration shall be performed only by persons licensed to perform this work;

(E) have the alteration inspected by a third-party inspector in accordance with the procedures established by the Texas Industrialized Building Code Council. The industrialized builder may not change the third party inspector for a project once started without the written approval of the department. A minimum of one rough in inspection and a final inspection of the alteration construction shall be required;

(F) maintain all records pertinent to the alteration and make these records available to the Department upon request; and

(G) purchase a decal from the Department to affix to each module. The alteration decal shall be released only to the third party inspection agency responsible for the alteration inspections.

(2) The third party inspector shall affix the alteration decal to the each industrialized building module or modular component upon completion of the construction and successful completion of all required inspections. The decal shall be affixed in the vicinity of the original decal or insignia on the module or modular component.

(3) An alteration data plate shall be affixed to any building, in the vicinity of the original data plate on the building, where the alteration results in a reclassification of the occupancy group or construction type, a change in the type of gas required for appliances, or a change in the wind speed and exposure, maximum snow (roof) load, seismic design criteria, or special conditions or limitations. The data plate shall contain such information as specified in subsection (g) of this section. A copy of the data plate shall be retained by the industrialized builder and be made available to the Department upon request.

(g) An alteration data plate shall be placed by the third party inspector on each altered house or building as required by this section. The data plate shall be supplied by the industrialized builder or installation permit holder. An alteration data plate shall be made of a material that will not deteriorate over time and shall be permanently placed so that it cannot be removed without destruction. The data plate shall be placed adjacent to the original data plate in an easily accessible location as designated in the alteration plans, but shall not be located on any readily removable item such as a cabinet door or similar component. Location of the data plate on the cover of the electrical distribution panel is acceptable. An alteration data plate shall contain, as a minimum, the information required on a manufacturer’s data plate as required by §70.71(b)(2-11) plus the following information:

(1) the name, address, and registration number assigned by the department of the industrialized builder, or the name, address, and installation permit number assigned by the department of the owner of the house or building; and

(2) the Texas alteration decal numbers.

§70.75.Responsibilities of the Registrants--Permit/Owner Information.

(a) The manufacturer shall provide the industrialized builder, or a person who has obtained an installation permit in accordance with §70.20 [ ~~of this title (relating to Registration of Manufacturers and Industrialized Builders)~~ ], with the following information:

(1) the name, Texas registration number, and address of the manufacturer of the building;

(2) the location of the decal(s) or insignia on the modules or modular components;

(3) a description of the location of the data plate and explanation of the information thereon;

(4) a set of approved plans , in accordance with §70.70, as necessary to obtain a building permit;

(5) the floor plan of the building and schematic drawings of the plumbing, electrical, and heating/ventilation systems for the owner of the building; [ ~~and~~ ]

(6) a completed signed copy of the energy compliance checklist (reference subsection [ ~~subparagraph~~ ](c)(8) (C) of §70.70 ; and [ ~~of this title (relating to Responsibilities of the Registrants-Manufacturer’s Design Package).~~ ]

(7) the information required by §70.78(b).

(b) The industrialized builder shall provide the purchaser (owner) of any industrialized house or building the following information:

(1) the name, Texas registration number, and address of the manufacturer and industrialized builder;

(2) a description of the location of the data plate and explanation of the information thereon;

(3) the floor plan of the building and schematic drawings of the plumbing, electrical, and heating/ventilation systems;

(4) a complete set of approved plans and specifications in accordance with §70.70, including all records pertinent to alterations of the house or building in accordance with §70.74;

(5) [ ~~(4)~~ ] the location of the decal(s) or insignia on the module or modular components;

(6) [ ~~(5)~~ ] a site plan showing the on-site location of all utilities and utility taps;

(7) [ ~~(6)~~ ] a completed signed copy of the energy compliance checklist (reference subsection [ ~~paragraph~~ ] (a)(6) of this section) ; and [ . ]

(8) the information required by §70.78(b).

(c) The manufacturer must have written proof that the information in subsection (a) of this section was delivered to the industrialized builder or installation permit holder and keep this proof in the manufacturer's files for a minimum of five [ ~~two~~ ] years.

(d) The builder must have written proof that the information in subsection (b) of this section was delivered to the purchaser (owner) and keep this proof in the industrialized builder's files for a minimum of five [ ~~two~~ ] years.

§70.80.Commission Fees.

(a) The manufacturer's registration fee is $750 annually .

(b) The industrialized builder's registration fee is $375 annually .

(d) The third party inspection agency's registration fee is $150 per firm and $100 per inspector annually.

(e) The registration fee shall be paid before the certificate of registration is issued and annually thereafter.

(f) The fee for department personnel for certification inspections at a manufacturing facility shall be $40 per hour. Travel and per diem costs shall be reimbursed by the manufacturer in accordance with the current rate as established in the current Appropriations Act. The department shall present a billing statement to the manufacturer at the completion of the inspection that is payable upon receipt.

(g) When the department acts as a design review agency, the fee for such services is $40 per hour. The manufacturer for whom the services are performed shall pay the fee before approval of the designs, plans, specifications, compliance control documents, and installation manuals and before the release of the documents to the manufacturer. Travel and per diem costs shall be reimbursed by the manufacturer in accordance with the current rate as established in the current Appropriations Act.

(h) The fees for issuing decals and insignia are:

(1) modules (decals): $.07 per square foot of gross floor area, with a minimum of $25 for each decal; and

(2) modular component (insignia): $.02 per square foot of gross surface area with a minimum of $.60 for each insignia or $.07 per square foot of gross floor area with a minimum of $15 for each insignia.

(i) The fee for department personnel for special inspections shall be $40 per hour. A special inspection is any inspection for industrialized housing and buildings that is not covered by other fees. The Department will present a billing statement at the conclusion of the inspection that is payable upon receipt. Travel and per diem costs shall be reimbursed in accordance with the current rate as established in the current Appropriation Act.

(j) The fee for department monitoring of design review agencies and third party inspection agencies outside headquarters shall be $40 per monitor hour. Travel and per diem costs shall be reimbursed in accordance with the current rate as established in the current Appropriations Act. The department will present the agency or manufacturer a statement at the conclusion of the monitoring trip, and it is payable upon receipt.

(k) The fee for an installation permit shall be $75 for each building containing industrialized housing and buildings modules or modular components. A separate application must be submitted for each building containing industrialized housing and buildings modules or modular components.

(l) The fee for issuing an alteration decal is $50 for each decal.

§70.102.Use and Construction of Codes.

(a) Industrialized [ ~~The local building official shall advise the department in writing as to whether the municipality bases its code on the ICBO codes or the SBCCI codes. Any industrialized~~ ] housing or buildings shall [ ~~building, module, or modular component to be located within the jurisdiction of the municipality must~~ ] be constructed to meet or exceed the mandatory building [ ~~model~~ ] code standards and requirements in effect at the time of construction. Industrialized housing and buildings shall be installed in accordance with the mandatory building code standards and requirements referenced in §70.100 [ ~~of this title (relating to Mandatory State Codes)~~ ] and §70.101. Alterations of industrialized housing and buildings shall be in accordance with the mandatory building code standards and requirements referenced in §§70.100 and 70.101 and in accordance with §70.74 [ ~~for the codes used by the municipality~~ ].

[ ~~(b)~~ If the industrialized house or building, module, or modular component, is located either outside a municipality or in a municipality that does not base its code on the SBCCI or ICBO codes, then the manufacturer may choose which of the two code groups with which the construction must comply. The manufacturer shall specify which of the two model code groups is applicable to the design package.]

(b) [ ~~(c)~~ ] The codes adopted in §70.100 [ ~~of this title (relating to Mandatory State Codes)~~ ] shall be construed to conform to the intent of Chapter 1202 [ ~~the Industrialized Housing and Buildings Act (the Act)~~ ] and these rules and regulations. For example, where reference is made in any of the codes to the building official, the plumbing or mechanical official, or the administrative authority or enforcement official, such reference shall be construed pursuant to Chapter 1202 [ ~~the Act~~ ] and the sections in this chapter to mean, where applicable, the council, the local building official, or the department.

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 23, 2004.

TRD-200400483

William H. Kuntz, Jr.

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: March 7, 2004

For further information, please call: (512) 463-7348

Part 6. TEXAS MOTOR VEHICLE BOARD

Chapter 103. GENERAL RULES

16 TAC §103.2

The Texas Motor Vehicle Board of the Texas Department of Transportation proposes new §103.2. This new rule will govern the licensure of separately located and franchised warranty repair facilities. The previously published version of §103.2, published in the November 14, 2003, issue of the Texas Register (28 TexReg 10010) is withdrawn and simultaneously republished for consideration with changes as the result of comments submitted to the Board in response to the prior version of §103.2.

Proposed new §103.2 requires that franchised dealers obtain licenses for separate locations operating as service-only repair facilities pursuant to §2301.251 and §2301.264(a)(2)(G) of the Texas Occupations Code. The proposed new rule defines "service-only facility" and provides clarification that franchised dealers may contract with other independent repair facilities to perform warranty service on vehicles the dealer would ordinarily perform. The revised version of §103.2 adds language in subsection (d) that clarifies that a manufacturer or distributor may require its prior written approval before a franchised dealer can contract with a third-party provider for warranty work the dealer would ordinarily perform. However, the rule also states that the manufacturer or distributor may not unreasonably withhold approval. Furthermore, the rule establishes that persons who are not authorized to sell the line of new motor vehicles to be serviced are not eligible to be licensed as service-only repair facilities. The Board intends that this rule should not preclude independent repair facilities from providing consumers with non-warranty repair service, nor should it prevent such individuals or companies from entering into contracts with franchised dealers to perform warranty service on behalf of the dealer as authorized by this rule.

Some written comments received by the Board regarding the previous publication of §103.2 offered non-substantive grammatical changes. Other comments expressed concern that the earlier published version would allow dealers to contract with third parties to perform warranty work without manufacturer or distributor approval, in contravention of franchise agreements and industry custom. The new version of §103.2 addresses these comments, adding language to clarify that a manufacturer or distributor may require a dealer to seek prior written approval before it engages a third party to perform warranty work on its behalf. The Board does not intend the rule to absolutely require prior written approval in each instance where a franchised dealer contracts with a particular third-party provider. Instead, the rule is intended to allow the manufacturer or distributor to indicate when prior written approval is necessary, or to allow the course of conduct between the dealer and the manufacturer/distributor to indicate when it is required. The rule also states that a manufacturer or distributor may not unreasonably withhold approval from a franchised dealer who seeks to contract with a third party to perform warranty work.

Brett Bray, Director, Motor Vehicle Division, has determined that for the first five-year period the proposed new section is in effect, there will be no fiscal implications for state or local government as a result of enforcing or administering the section.

Mr. Bray has also determined that for each year of the first five years the new section is in effect the anticipated public benefit will be increased availability of warranty work, and increased clarity amongst dealer licensees regarding the parameters for establishing a service-only facility location. There will be an indeterminate positive impact on small businesses, and an anticipated small economic cost to franchised dealers required to comply with the new rule as proposed. Mr. Bray has also certified that there will be no impact on local economies or overall employment as a result of enforcing or administering the section.

Comments may be submitted to Brett Bray, Director, Motor Vehicle Division, Texas Department of Transportation, P.O. Box 2293, Austin, Texas 78768-2293, (512) 416-4899. The Motor Vehicle Board will consider adoption of this proposed new rule at its meeting on March 25, 2004. The deadline for receipt of comments on the proposed new rule is 5:00 p.m. on Monday, March 8, 2004.

The new rule is proposed under the Texas Occupations Code §2301.155, which provides the Board with authority to adopt rules as necessary and convenient to effectuate the provisions of the Act and to govern practice and procedure before the agency.

Texas Occupations Code §§2301.002(8), 2301.251, 2301.264(a)(2)(G), and 2301.652 are affected by the proposed new rule.

§103.2.Service-Only Facility.

(a) A service-only facility is a location occupied and operated by a franchised dealer that is a completely separate, non-contiguous site, from the dealer's new vehicle sales and service or sales only location, where the dealer will only perform warranty and non-warranty repair services.

(b) A franchised dealer must obtain a license to operate a service-only facility. The dealer may not obtain a service-only facility license to service a particular line of new motor vehicles, unless the dealer is franchised and licensed to sell that line.

(c) A service-only facility is considered a dealership under Texas Occupations Code §2301.002(8), and is therefore subject to protest under Texas Occupations Code §2301.652.

(d) Upon the manufacturer's or distributor's prior written approval, which cannot be unreasonably withheld, a franchised dealer may contract with another person to perform warranty repair services the dealer is authorized to perform under a franchise agreement with a manufacturer or distributor.

(e) A person with whom a franchised dealer contracts, as described in subsection (d) of this section, to perform warranty repair services is not eligible to obtain a service-only facility license and may not advertise to the public the performance of warranty repair services in any manner.

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 22, 2004.

TRD-200400442

Brett Bray

Director

Texas Motor Vehicle Board

Proposed date of adoption: March 25, 2004

For further information, please call: (512) 416-4899

Chapter 107. WARRANTY PERFORMANCE OBLIGATIONS

16 TAC §107.6

The Texas Motor Vehicle Board proposes an amendment to 16 TAC §107.6, Hearings.

The proposed amendment adds a new paragraph authorizing hearings to be held by written submission only or by telephone when agreed to by the parties and approved by the hearing officer. The proposed amendment also provides that renumbered paragraphs 107.6(8), pertaining to each party being questioned by the other party, and 107.6(11), pertaining to all hearings being recorded on tape by the hearing officer, will not apply when hearings are conducted by written submissions only. In addition, the amendment makes non-substantive changes by correcting outdated references due to the codification of the former Texas Motor Vehicle Commission Code, Article 4413(36), Texas Revised Civil Statutes as Chapter 2301 of the Texas Occupations Code.

Brett Bray, Director, Motor Vehicle Division, has determined that for the first five-year period the amendment is in effect there will be no fiscal implications for state or local governments as a result of enforcing or administering the section.

Mr. Bray has also determined that for each year of the first five-year period the amendment is in effect the anticipated public benefit will be a streamlining of the hearing process by eliminating the mandatory requirement for the parties to attend hearings in-person, which will result in a travel and resource cost savings.

There will be no effect on small or large businesses. There will be no impact on local economies or overall employment as a result of the amendment.

Comments, in 16 copies, may be submitted to Brett Bray, Director, Motor Vehicle Division, Texas Department of Transportation, P. O. Box 2293, Austin, TX 78768, 512-416-4899. The Motor Vehicle Board will consider adoption of the proposed amendment at its meeting on March 25, 2004. The deadline for receipt of comments on the proposed amendment is 5:00 p.m. on March 8, 2004.

The amendment is proposed under the Texas Occupations Code §2301.155 which provides the Motor Vehicle Board with the authority to adopt rules as necessary and convenient to administer Chapter 2301 and to govern practice and procedure before the Board.

Texas Occupations Code §2301.204 and §§2301.601 - 2301.613 are affected by the proposed amendment.

§107.6.Hearings.

Complaints which satisfy the jurisdictional requirements of the Texas Occupations Code §2301.204 and §§2301.601 - 2301.613 [ ~~Texas Motor Vehicle Commission Code, §3.08(i) or §6.07~~ ], will be set for hearing and notification of the date, time, and place of the hearing will be given to all parties by certified mail.

(1) - (6) (No change.)

(7) By agreement of the parties and with the approval of the hearing officer, the hearing may be conducted by written submissions only or by telephone.

(8) [ ~~(7)~~ ] Except for hearings conducted by written submission only, each [ ~~Each~~ ] party will be subject to being questioned by the other party, within limits to be governed by the hearing officer.

(9) [ ~~(8)~~ ] Except for hearings conducted by written submissions only or by telephone, the [ ~~The~~ ] complainant will be required to bring the vehicle in question to the hearing for the purpose of having the vehicle inspected and test driven, unless otherwise ordered by the hearing officer upon a showing of good cause as to why the complainant should not be required to bring the vehicle to the hearing.

(10) [ ~~(9)~~ ] The Board may have the vehicle in question inspected prior to the hearing by an expert, where the opinion of such expert will be of assistance to the hearing officer and the Board in arriving at a decision. Any such inspection shall be made upon prior notice to all parties who shall have the right to be present at such inspection, and copies of any findings or report resulting from such inspection will be provided to all parties prior to, or at, the hearing.

(11) [ ~~(10)~~ ] Except for hearings conducted by written submissions only, all [ ~~All~~ ] hearings will be recorded on tape by the hearing officer. Copies of the tape recordings of a hearing will be provided to any party upon request and upon payment as provided by law.

(12) [ ~~(11)~~ ] All hearings will be conducted expeditiously. However, if a Board hearing officer has not issued a decision within 150 days after the Texas Occupations Code §§2301.601 - 2301.613 [ ~~Texas Motor Vehicle Commission Code §6.07~~ ] complaint and filing-fee were received, Board staff shall notify the parties by certified mail that complainant has a right to file a civil action in state district court to pursue rights under §§2301.601 - 2301.613 [ ~~§6.07~~ ]. The 150-day period shall be extended upon request of the complainant or if a delay in the proceeding is caused by the complainant. The notice will inform the complainant of the right to elect to continue the lemon law complaint through the Board.

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 23, 2004.

TRD-200400470

Brett Bray

Director

Texas Motor Vehicle Board

Proposed date of adoption: March 25, 2004

For further information, please call: (512) 416-4899