TITLE 40.SOCIAL SERVICES AND ASSISTANCE

Part 1. DEPARTMENT OF AGING AND DISABILITY SERVICES

Chapter 10. GUARDIANSHIP SERVICES

The Health and Human Services Commission (HHSC) proposes, on behalf of the Department of Aging and Disability Services (DADS), new Chapter 10, governing Guardianship Services, consisting of the following: new Subchapter A, consisting of §10.101 and §10.103, concerning general provisions of the DADS Guardianship Program; new Subchapter B, consisting of §§10.201, 10.203, and 10.205, concerning eligibility and assessment of individuals for guardianship services; new Subchapter C, consisting of §§10.301, 10.303, 10.305, 10.307, 10.309, 10.311, 10.313, 10.315, 10.317, 10.319, 10.321, 10.323, 10.325, 10.327, 10.329, and 10.331, concerning requirements for contractors that provide guardianship services to DADS wards; new Subchapter D, consisting of §§10.401, 10.403, and 10.405, concerning records management; and new Subchapter E, consisting of §§10.501, 10.503, 10.505, 10.507, and 10.509, concerning contract monitoring and compliance.

Background and Purpose

The purpose of the new sections is to govern the assessment of an individual for guardianship services and the contracting requirements for the DADS Guardianship Program. Senate Bill (SB) 6, 79th Texas Legislature, Regular Session, 2005, transferred responsibility for guardianship services and contracting for those services from the Department of Family and Protective Services (DFPS) to DADS and required that the HHSC executive commissioner adopt rules to govern the administration of DADS' assessment of the conditions and circumstances of an elderly or disabled person referred to DADS to determine whether guardianship is appropriate for that person.

SB 6 added §§161.101 - 161.113 to the Texas Human Resources Code, authorizing DADS to accept referrals for guardianship services for individuals from DFPS who have been found to be in a state of abuse, neglect or exploitation; to assess the individuals for capacity; to apply for guardianship if guardianship is determined to be appropriate; and to serve as guardians of the individual for as long as guardianship services are required. Under Texas Human Resources Code, §161.103, DADS is authorized to contract with a political subdivision of the state, a guardianship program (as defined by the Texas Probate Code, Section 601), a private agency, or another state agency, if appropriate, to provide guardianship services to its wards. The rules in new Chapter 10 implement these new provisions and provide requirements for entities that contract with DADS to provide guardianship services for DADS wards.

Section-by-Section Summary

Proposed new Subchapter A provides an overview of the DADS Guardianship Program. Proposed new §10.101 describes the purpose of the DADS Guardianship Program and outlines how referrals are made and what criteria DADS uses to determine whether guardianship is appropriate for the individual who is referred. The new section also states that the DADS Guardianship Program complies with the requirements of Texas Probate Code, Chapter XIII, in performing its duty as guardian of an individual. Proposed new §10.103 provides definitions for words and terms used in the chapter.

Proposed new Subchapter B provides the eligibility criteria for individuals to receive guardianship services through DADS, and the procedure for assessing individuals for guardianship services. Proposed new §10.201 provides the criteria for determining whether an individual referred to DADS for guardianship services by DFPS is eligible for guardianship services, as well as the factors DADS will consider in determining whether it may otherwise agree to serve as permanent guardian. Proposed new §10.203 governs the assessment of an individual, by which DADS considers the conditions and circumstances of the individual to determine whether guardianship or a less restrictive alternative to guardianship is appropriate and available. Proposed new §10.205 requires an annual review of a ward placed in guardianship to determine whether guardianship is still appropriate for the ward.

Proposed new Subchapter D contains the requirements a contractor must follow to manage its case records on DADS wards. Proposed new §10.401 governs the confidentiality provisions of a contractor's case records and the release of information from its case records. Proposed new §10.403 governs the contractor's responsibility to keep financial and contract-related records, to document each interaction with a ward, and to maintain certain information in each case record. Proposed new §10.405 requires a contractor to maintain its records according to 40 TAC Chapter 69.

Proposed new Subchapter E contains the provisions for DADS' reviews of a contractor for compliance with the contract and with program rules and requirements, for DADS' investigation of complaints against the contractor, and for sanctions DADS may impose against a contractor. Proposed new §10.501 describes the procedure for a monitoring review and the responsibilities of a contractor during the review. Proposed new §10.503 describes the procedure for a complaint investigation and the responsibilities of a contractor during the investigation. Proposed new §10.505 governs a fiscal monitoring review of documentation that supports a contractor's billings. Proposed new §10.507 governs the sanctions DADS may impose if a contractor fails to follow the terms of the contract or fails to comply with program rules, policies, and procedures. Proposed new §10.509 states that a contractor may request an administrative review of the DADS' review team's methodology and describes the steps a contractor must take to request an administrative review.

Fiscal Note

Gordon Taylor, DADS Chief Financial Officer, has determined that, for the first five years the proposed new sections are in effect, enforcing or administering the new sections does not have foreseeable implications relating to costs or revenues of state or local governments.

Small Business and Micro-business Impact Analysis

DADS has determined that there is no adverse economic effect on small businesses or micro-businesses or on businesses of any size as a result of enforcing or administering the new sections, because the proposed new sections impose no new requirements that would have an adverse economic effect on contractors. The proposed new sections reflect the provisions that a contractor is currently required to follow as part of its contract with DADS to provide guardianship services.

Public Benefit and Costs

Jacquelyn McDonald, DADS Assistant Commissioner for Access and Intake, has determined that, for each year of the first five years the new sections are in effect, the public benefit expected as a result of enforcing the new sections is that DADS will be in compliance with the provisions of SB 6 that require that rules be adopted for the assessment of individuals referred to DADS for guardianship, and that the requirements for contractors providing guardianship services will be established in rule.

Ms. McDonald anticipates that there will not be an economic cost to persons who are required to comply with the new sections. The new sections will not affect a local economy.

Takings Impact Assessment

DADS has determined that this proposal does not restrict or limit an owner's right to his or her property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking under Texas Government Code, §2007.043.

Public Comment

Questions about the content of this proposal may be directed to Dennis Bach at (512) 438-2895 in DADS Guardianship Section. Written comments on the proposal may be submitted to Texas Register Liaison, Legal Services-024, Department of Aging and Disability Services W-615, P.O. Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

Subchapter A. GENERAL PROVISIONS

40 TAC §10.101, §10.103

Statutory Authority

The new sections are proposed under Texas Government Code, §531.0055, which provides that the HHSC executive commissioner shall adopt rules for the operation and provision of services by the health and human services agencies, including DADS; Texas Human Resources Code, §161.021, which provides that the Aging and Disability Services Council shall study and make recommendations to the HHSC executive commissioner and the DADS commissioner regarding rules governing the delivery of services to persons who are served or regulated by DADS; and Texas Human Resources Code, §§161.101 - 161.113, which authorizes DADS to serve as guardian of the person or estate, or both, for an incapacitated individual and, if appropriate, to contract with another entity to provide guardianship services if appropriate.

The new sections implement Texas Government Code, §531.0055; and Texas Human Resources Code, §§161.021 and 161.101 - 161.113.

§10.101.Introduction.

(a) The purpose of the DADS Guardianship Program is to accept referrals for individuals from DFPS as defined in Texas Human Resources Code, §48.209; assess the individuals for capacity; apply for guardianship if determined appropriate; and serve as guardians of the individuals for as long as guardianship services are required. An individual referred by DFPS must have been found to be in a state of abuse, neglect, or exploitation.

(b) DFPS makes a referral directly to the DADS Guardianship Program, or, if requested by the court with probate jurisdiction for the county in which an individual being referred resides, DFPS may also make a referral to the court in addition to the referral to the DADS Guardianship Program.

(c) The DADS Guardianship Program files an application to be appointed as guardian or otherwise agrees to be appointed as guardian if the DADS Guardianship Program determines that:

(1) DFPS found the individual to be in a state of abuse, neglect, or exploitation or the individual is a minor in the conservatorship of DFPS;

(2) there is no less restrictive alternative to guardianship;

(3) there is no other willing, able, and suitable person or program to serve as guardian;

(4) the individual is eligible for the DADS Guardianship Program; and

(5) the court finds the individual is an incapacitated person as defined in Texas Probate Code, §601(14)(B) and makes all other findings required by Texas Probate Code, §684.

(d) As provided by Texas Human Resources Code, §161.101(d), a court may not appoint DADS as permanent guardian unless DADS files an application with a court with probate jurisdiction or otherwise agrees to be appointed as permanent guardian.

(e) The DADS Guardianship Program complies with the requirements of Texas Probate Code, Chapter XIII in performing its responsibilities as guardian of its wards.

§10.103.Definitions.

(a) A term used in this chapter that is defined in Texas Probate Code, §601 has the same meaning as defined in that section of the code.

(b) In addition, the following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:

(1) Agency--A state or local government or private not-for-profit organization that operates a guardianship program as defined by Texas Probate Code, §601.

(2) Assessment--The process of establishing whether DADS guardianship is appropriate for an individual referred by DFPS. The assessment includes a determination of whether the individual appears to meet the definition of an incapacitated person as defined by Texas Probate Code, §601(14)(B), whether there is a less restrictive alternative to guardianship, and whether the individual meets the eligibility criteria for the DADS Guardianship Program.

(3) Certificate of Medical Examination (CME)--A statement by a qualified physician attesting to whether, in the physician's medical opinion, an individual has capacity that complies with Texas Probate Code, §687(a).

(4) Contractor--An agency that operates a guardianship program as defined by Texas Probate Code, §601 with which DADS has a contract to provide guardianship services for a fee.

(5) DADS--The Department of Aging and Disability Services.

(6) DADS Guardianship Program--The program operated by DADS that provides guardianship and related services to persons with diminished capacity.

(7) Determination of mental retardation (DMR)--An examination or endorsement of a prior examination that complies with Chapter 5, Subchapter D of this title (relating to Diagnostic Eligibility for Services and Supports--Mental Retardation Priority Population and Related Conditions) and with Texas Probate Code, §687(c).

(8) DFPS--The Department of Family and Protective Services.

(9) Diminished capacity--Some loss of an individual's ability due to a physical or mental condition to provide food, clothing, or shelter for the individual, to care for the individual's own physical health, or to manage the individual's own financial affairs. An individual referred to the DADS Guardianship Program has diminished capacity, but may or may not meet the legal definition of an incapacitated person.

(10) Guardianship Certification Board--The board established under Texas Government Code, Chapter 111.

(11) Person-directed planning--A process that empowers an individual and the legally authorized representative (LAR) on the individual's behalf to direct the development of a service plan for a ward that meets the individual's personal outcomes. The service plan must identify existing supports and services necessary to achieve the individual's outcomes, identify natural supports available to the individual and negotiate needed service system supports, occur with the support of a group of people chosen by the individual and the guardian as LAR on the individual's behalf, and accommodate the individual's style of interaction and preferences regarding time and setting.

(12) Quality assurance plan--A written plan that describes a contractor's system of self-monitoring to ensure consistency and quality of care provided to a ward and ensure compliance with the Texas Probate Code, other requirements imposed by the courts, and other program policies, rules, and standards.

(13) Reporter--A person who makes a referral to DFPS staff about a situation of alleged abuse, neglect, or exploitation of an elderly person or adult with a disability.

(14) Service plan--A plan of care for a ward that ensures appropriate habilitation and rehabilitation services, including therapy, counseling, education, and training to the extent permitted by the ward's estate.

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 May 15, 2006.

TRD-200602687

Marianne Reat

General Counsel

Department of Aging and Disability Services

Earliest possible date of adoption: June 25, 2006

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

Subchapter B. ELIGIBILITY AND ASSESSMENT OF INDIVIDUALS FOR GUARDIANSHIP SERVICES

40 TAC §§10.201, 10.203, 10.205

Statutory Authority

The new sections implement Texas Government Code, §531.0055; and Texas Human Resources Code, §§161.021 and 161.101 - 161.113.

§10.201.Eligibility for Services.

(a) To determine eligibility for services, the DADS Guardianship Program conducts an assessment of an individual referred to it by DFPS under Texas Human Resources Code, 48.209. The assessment may include identifying and arranging for services that do not require guardianship. An individual must meet the requirements of subsections (b) - (f) of this section, or DADS must agree to serve as guardian under subsection (g) of this section, for the individual to be eligible for the DADS Guardianship Program.

(b) DADS' authority under Texas Human Resources Code, §161.071 to be appointed by the court to serve as permanent guardian of the person or permanent guardian of the estate is limited to an individual referred to the DADS Guardianship Program by DFPS under Texas Human Resources Code, §48.209 or an individual for whom DADS otherwise agrees to serve as permanent guardian under Texas Human Resources Code, §161.101(d).

(c) An individual referred for guardianship required after the individual is no longer a minor by the Child Protective Services Division (CPS) of DFPS must be a minor in a conservatorship of DFPS and be at least 16 years of age, and CPS must have reason to believe that the individual will be substantially unable to provide for the individual's own food, clothing, or shelter, to care for the individual's own physical health, or to manage the individual's own financial affairs when the individual becomes an adult. The guardianship of an individual meeting the criteria in this subsection may not take effect before the individual's 18th birthday.

(d) An individual referred by the Adult Protective Services Division (APS) of DFPS must be age 65 or older, or age 18 to 65 and disabled. APS must also have reason to believe the individual is an incapacitated person, as defined by Texas Probate Code, §601(14)(B) and must have been determined to be in a state of abuse, neglect, or exploitation.

(e) In order for DADS to serve as guardian, an individual must have private assets available to meet the expenses of day-to-day living, or be eligible for government benefits (for example, Medicaid, Social Security, or veterans benefits) that are sufficient to provide such support. The DADS Guardianship Program is not liable for, and cannot provide, financial support for services provided to wards, including the cost of long-term care or burial expenses.

(f) DADS must determine that becoming guardian of an individual referred by APS will provide an effective remedy for the abuse, neglect, or exploitation validated by APS. DADS must determine that becoming a guardian of an individual referred by CPS will enable DADS to effectively serve the needs of that ward.

(g) In its sole discretion, DADS may otherwise agree to serve as permanent guardian of an individual under Texas Human Resources Code, §161.101(d). In deciding whether to serve as permanent guardian, DADS considers the following additional factors:

(1) the risk of serious and imminent harm to the individual or the individual's estate if a guardian is not appointed;

(2) the likelihood that guardianship will provide an effective remedy for the risk of serious harm to the individual and that DADS' appointment will effectively serve the needs of the individual;

(3) the availability to the individual in the local community of less restrictive alternatives and other persons or agencies to serve as guardian;

(4) the history of investigations conducted by APS of the individual as an alleged victim of abuse, neglect, or exploitation and the likelihood of future investigations by APS; and

(5) the availability of private assets or government benefits to pay for the needs of the ward.

§10.203.Assessment.

(a) An assessment begins with the referral of an individual from either the Child Protective Services Division or the Adult Protective Services Division of DFPS.

(b) The DADS Guardianship Program considers the conditions and circumstances of the elderly or disabled individual, as documented by DFPS and through DADS' own review process, to determine whether a less restrictive alternative to guardianship is appropriate and available. If an appropriate, less restrictive alternative is identified and available, the DADS Guardianship Program either arranges for this alternative or provides a recommendation to DFPS to pursue the alternative.

(c) If a less restrictive alternative is not appropriate and available, the DADS Guardianship Program conducts an assessment to determine if the individual appears to lack capacity. If the DADS Guardianship Program's assessment is that the individual appears to lack capacity, the DADS Guardianship Program arranges for a qualified physician to examine the individual and provide a Certificate of Medical Examination (CME). If the basis of the alleged incapacity is mental retardation, the DADS Guardianship Program arranges for a determination of mental retardation (DMR).

(d) If the CME states that the individual is incapacitated and guardianship is appropriate, or the DMR states that the individual is a person with mental retardation that is the basis of incapacity and guardianship is appropriate, the DADS Guardianship Program attempts to identify a person or a guardianship program who is willing, able, and suitable to serve as guardian and requests that the person or guardianship program file an application for guardianship. If no such person or program can be identified, the DADS Guardianship Program files an application with the court that has probate jurisdiction in the county in which the individual resides. Only a court with probate jurisdiction may make the legal finding that an individual is an incapacitated person.

(e) If there is a contractor that serves the county in which the incapacitated individual resides, if the contractor is under the number of wards it is authorized to serve through the contract, and if the individual qualifies for the contractor's guardianship program, the DADS Guardianship Program directs the contractor to file an application for guardianship. If there are no openings in the contract, the contractor is offered an opportunity to apply for guardianship and provide services through other sources of funds.

(f) At the completion of the assessment, the DADS Guardianship Program notifies DFPS of the outcome of the assessment.

(g) If DFPS makes a referral to a probate court or the court appoints DADS as guardian through a court-initiated guardianship proceeding under Texas Probate Code, §683, or both, the DADS Guardianship Program conducts an abbreviated assessment to determine if the individual is eligible for the DADS Guardianship Program. If the individual is not eligible for the DADS Guardianship Program, the DADS Guardianship Program files appropriate pleadings to rescind or reverse the appointment that state the reasons that DADS may not be appointed guardian.

§10.205.Annual Review of a Ward's Status.

(a) At least annually after the DADS Guardianship Program's appointment as guardian for a ward, the DADS Guardianship Program evaluates the ward's status to determine if:

(1) the ward is still an incapacitated person and continues to need a guardian;

(2) an alternate person or guardianship program is willing, able, and suitable to serve as successor guardian; or

(3) a less restrictive alternative to guardianship is now available and the ward can be restored to capacity.

(b) If the DADS Guardianship Program determines that the ward is still an incapacitated person and an alternate guardian can be identified, the DADS Guardianship Program notifies the appropriate court with probate jurisdiction and files an application to resign and have a successor guardian appointed.

(c) If the DADS Guardianship Program determines that the ward is no longer an incapacitated person and no longer needs a guardian, the DADS Guardianship Program files an application with the court to have the ward restored to capacity. If a less restrictive alternative is appropriate and available, the DADS Guardianship Program refers the restored individual for the appropriate services.

(d) At any time, if the DADS Guardianship Program becomes aware of another guardianship program or private professional guardian who is willing, able, and suitable to serve as a ward's successor guardian, and there is no family member or friend of the ward or other interested person who is willing, able, and suitable to serve as guardian, the DADS Guardianship Program notifies the appropriate court with probate jurisdiction of the other guardianship program or private professional guardian's willingness and ability to serve. DADS then files an application to resign and have a successor guardian appointed.

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 May 15, 2006.

TRD-200602688

Marianne Reat

General Counsel

Department of Aging and Disability Services

Earliest possible date of adoption: June 25, 2006

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

Subchapter C. CONTRACTOR REQUIREMENTS

40 TAC §§10.301, 10.303, 10.305, 10.307, 10.309, 10.311, 10.313, 10.315, 10.317, 10.319, 10.321, 10.323, 10.325, 10.327, 10.329, 10.331

Statutory Authority

The new sections implement Texas Government Code, §531.0055; and Texas Human Resources Code, §§161.021 and 161.101 - 161.113.

§10.301.Introduction.

(a) Texas Human Resources Code, §161.103 gives DADS the authority to contract with a political subdivision of the state, a guardianship program as defined by Texas Probate Code, §601, a private agency, or another state agency for the provision of guardianship services.

(b) To the extent funds are appropriated by the legislature or made available by DADS, the DADS Guardianship Program contracts with one or more guardianship programs (contractors) to file an application with the probate courts and to serve as guardian of the person or guardian of the estate or both. The contractor must be able and willing to serve as guardian at a cost equal to or less than the cost of providing comparable guardianship services by the DADS Guardianship Program.

(c) To be eligible for guardianship services through a contractor, an individual must be eligible to be a ward of the DADS Guardianship Program. An individual who is not referred to DADS directly by DFPS or indirectly through a DFPS referral to the probate court may not be served through its contract with DADS.

(d) Funding from DADS guardianship contracts is intended to offset the contractor's cost of providing guardianship services. A contractor must not use DADS funds for a ward's daily living expenses.

(e) A contractor must comply with the requirements in this subchapter and in Subchapters D-E of this chapter (relating to Records Management, and Contract Monitoring and Compliance). If its contract with the DADS Guardianship Program is terminated or is not renewed, a contractor may continue providing services through an alternate source of funds or apply to the courts to resign as guardian and have a successor guardian appointed.

§10.303.Compliance with DADS Contracting Rules.

A contractor is expected to be familiar with and must comply with applicable provisions of Chapter 69 of this title (relating to Contract Administration). In the event of minor conflicts in wording or interpretation between the general contracting rules in Chapter 69 of this title and the rules in this chapter, the rules in this chapter have precedence.

§10.305.Eligibility To Be a Guardianship Contractor.

(a) To be eligible to apply for a guardianship contract with DADS, an agency must meet the definition of a guardianship program in Texas Probate Code, §601.

(b) An agency must agree to comply with the minimum standards for guardianship services established by the Guardianship Certification Board under Texas Government Code, §111.041.

(c) An agency must agree to comply with the certification requirements of the Guardianship Certification Board as authorized in Texas Government Code, §111.042 for all individuals, other than volunteers, who will provide guardianship services to a ward of the program on behalf of the program.

(d) An agency must agree to terminate an employee who commits an action that results in the agency being removed as guardian by the courts. If the agency fails to take action against an employee or has demonstrated a pattern of activity resulting in removal as guardian by the courts within the previous five years, the agency may become ineligible to contract with the DADS Guardianship Program.

(e) If an agency is held in contempt, fined, surcharged, removed as guardian, or found not suitable to serve as guardian by the courts, the DADS Guardianship Program may consider these actions in determining present and future eligibility and the agency may become ineligible to contract with the DADS Guardianship Program.

§10.307.Acceptance of Referrals from DADS.

(a) An agency, in its application for a contract with DADS, must identify the population groups for whom it provides services, in terms of age, mobility, or other factors. The application must also specify the geographic areas within which it provides services.

(b) A contractor must accept all referrals from DADS and apply for guardianship, provided that the contractor is under the maximum service authorization level provided for in the contract.

(c) If a contractor believes that DADS has assigned an individual for guardianship who does not fit the guardianship program's eligibility criteria, the contractor may request that the DADS regional guardianship supervisor reconsider the referral. The DADS regional guardianship supervisor may, at the supervisor's discretion, withdraw the referral to the contractor and serve the individual directly.

§10.309.Policies and Procedures Required of Contractors.

A contractor must have written policies and procedures that:

(1) identify the management structure of the agency and clearly reveal the decision-making authority and chain of command;

(2) establish qualifications for employees and volunteers that indicate type of position, education required, and any licensure requirements;

(3) describe hiring practices and ensure compliance with applicable state and federal laws;

(4) describe what orientation will be provided to employees and volunteers, including what additional training will be provided if volunteers are used;

(5) ensure that allegations of abuse, neglect, and exploitation are reported to DFPS as mandated by state law;

(6) describe actions to be taken if a ward has a crisis and needs emergency help;

(7) describe the minimum standards for guardianship adopted by rule by the Office of Court Administration when serving as a guardian;

(8) include ethical standards for guardianship and estate matters;

(9) include procedures for compliance with court orders and other local practices based upon the court system in the geographic area;

(10) include a system for receiving complaints, recording the complaints, and taking action; and

(11) include procedures for communication with DADS to include:

(A) notification of a court hearing involving a DADS ward;

(B) notification of a ward's death;

(D) notification of an unusual occurrence, such as a pregnancy or a serious illness; and

(E) monthly reports to be sent to DADS.

§10.311.Qualifications and Training Requirements for Contractor Employees.

(a) A contractor must:

(1) provide an adequate number of qualified employees to meet the needs of wards that DADS refers to the contractor;

(2) until September 1, 2007, employ case managers who have at least one of the following qualifications:

(A) a bachelor's degree from an accredited college or university and a minimum of one year of full-time experience in direct social service work;

(B) 60 credit hours from an accredited college or university and certification by the National Guardianship Association; or

(3) on and after September 1, 2007, employ case managers who are certified by the Guardianship Board, as authorized in Texas Government Code, §111.042;

(4) provide an orientation program that explains:

(A) the responsibilities associated with each new employee's position;

(B) the responsibilities of the guardianship program to the ward;

(D) an overview of the Texas Probate Code and the program's responsibilities per the code;

(E) an overview of any rules or regulations that affect the guardianship program;

(F) an overview of aging and disability; medical issues, including medical treatment and medication; and end-of-life decisions; and

(G) the principles of person-directed planning;

(5) maintain a copy of the information presented at the orientation for each employee and have signed documentation of attendance at the orientation; and

(6) provide ongoing training based upon the needs of the ward as described in subsections (b) and (c) of this section and any changes in rules or state law.

(b) Ongoing training as required in subsection (a)(6) of this section must be documented and each participant must sign that the participant attended the training. At a minimum, training must include:

(1) recognizing and reporting abuse, neglect, and exploitation to the appropriate investigating agency;

(2) cultural sensitivity and ethics;

(3) financial management, including budgeting, record keeping, and bill paying;

(4) case management, including service planning, service delivery, and an overview of guardianship;

(5) housing and placement alternatives;

(6) community resources; and

(7) recognition of the social needs of wards, such as recognition of birthdays, holidays, and the need for contact with family and friends.

(c) In addition to the orientation and training specified in subsection (a)(4) and (b) of this section, a contractor must provide training to case managers in the following areas:

(1) aging and disability, including mental illness, mental retardation, related conditions, physical disabilities, and other diagnoses that affect the population being served;

(2) legal issues, including civil commitment of persons with mental retardation and mental illness, courtroom testimony, protocol, etiquette in the courtroom and other venues, and local court policies and procedures; and

(3) estate management, including money management alternatives, record keeping, and completion of documents that will be filed with the court.

§10.313.Qualifications and Training Requirements for Volunteers of Contractors.

A contractor that uses volunteers to perform guardianship duties must:

(1) assign an employee to supervise each volunteer;

(2) provide and document training based upon what the volunteer will be doing;

(3) ensure that the volunteer is supervised and does not take responsibility for a DADS ward until documentation and observation indicate the volunteer is qualified to work with the ward;

(4) have all work completed by a volunteer reviewed by an employee and any documentation countersigned by the volunteer's supervisor;

(5) document monthly supervision sessions with the volunteer;

(6) ensure that the volunteer protects the health and safety of the ward; and

(7) provide additional training on skills needed to perform job duties at least annually.

§10.315.Criminal Background Checks.

(a) A contractor must ensure that each employee and volunteer of the contractor who has contact with a ward or with the estate or benefits of a ward:

(1) has not been convicted of any crimes outlined in Texas Probate Code, §678, Presumption Concerning Best Interest;

(2) is not a person meeting the specifications in Texas Probate Code, §681, Persons Disqualified to Serve as Guardians;

(3) does not have charges pending from, has not admitted guilt for, or has not been found guilty of the offenses under the Texas Penal Code in subsection (b) of this section or any like offense under the law of another state or federal law, even if probation was granted, if deferred adjudication was granted on a plea of guilty, or if deferred adjudication was granted on a plea of no contest and no record exists, but the contractor has independent knowledge of these facts; and

(4) does not have an interest that is adverse to a ward of the DADS Guardianship Program or any of its contractors under Texas Probate Code, §642, including:

(A) being an actual or potential creditor or debtor of the ward;

(B) being an opposing party to a ward in a lawsuit;

(D) having a duty to account to a ward other than the normal duty to account arising from guardianships under its contract; or

(E) having any other financial or other interest adverse to a ward.

(b) To ensure compliance with subsection (a) of this section, the contractor must obtain a criminal background check of a prospective employee or volunteer who will have access to a ward or to the estate or benefits of a ward referred by the DADS Guardianship Program. A criminal background check must be conducted in conjunction with employment by the contractor and repeated annually by the anniversary date of hire.

(1) The following offenses under the Texas Penal Code permanently bar an individual from employment with a contractor:

(A) sexual offenses under Chapter 21;

(B) §22.011, Sexual Assault;

(D) §22.021, Aggravated Sexual Assault;

(E) §22.04, Injury to a Child, Elderly Individual, or Disabled Individual;

(F) §22.041, Abandoning or Endangering a Child;

(G) §22.05, Deadly Conduct;

(H) §22.07, Terroristic Threat;

(I) §22.08, Aiding Suicide;

(J) §22.09, Tampering with Consumer Product;

(K) offenses against the family under Title 6;

(L) criminal homicide under Chapter 19;

(M) kidnapping and unlawful restraint under Chapter 20, and trafficking of persons under Chapter 20A;

(N) §28.02, Arson;

(O) robbery under Chapter 29;

(P) burglary and criminal trespass under Chapter 30;

(Q) theft under Chapter 31; and

(R) fraud under Chapter 32.

(2) All other offenses under the Texas Penal Code or the Texas Health and Safety Code, Chapter 481 (Texas Controlled Substances Act) are a bar to employment with a contractor but may be waived as described in subsection (c) of this section.

(c) If an employee or volunteer has successfully fulfilled all requirements and conditions imposed by the court for an offense described in subsection (b)(2) of this section and if there are extenuating circumstances that would justify the individual's employment with the contractor, the contractor may make a written request to the director of the DADS Guardianship Program for a waiver of subsection (b)(2) of this section. The director will not waive the requirement for any offense described in subsection (b)(1) of this section.

§10.317.Quality Assurance Plan.

(a) A contractor must develop a quality assurance plan that describes the contractor's system of self-monitoring to ensure:

(1) consistency and quality of care provided to wards of the guardianship program; and

(2) compliance with:

(A) the Texas Probate Code;

(B) other requirements imposed by the courts; and

(b) A contractor must make its quality assurance plan available to DADS' contract monitoring staff.

§10.319.Fiscal Management.

(a) A contractor must establish policies and procedures that describe:

(1) an accounting system to ensure that payment is made by DADS to the contractor only if services provided have been rendered;

(2) a tracking system that includes receipts and a description of the goods or services provided for all fiscal matters for wards served by the guardianship program;

(3) a system to refund monies to DADS or to a ward if needed;

(4) compliance with state and federal laws and regulations regarding sound accounting practices for the contractor; and

(5) internal and external audits to be performed on a regular basis.

(b) A contractor must accept payment from DADS as payment in full for services rendered. The contractor must not duplicate billing or receipt of other funds.

(d) A contractor must not collect:

(1) payment from a ward;

(2) a percentage of the Social Security or Supplemental Security Income check specified in the Omnibus Reconciliation Act of 1990; or

(3) payment authorized by the court in accordance with Texas Probate Code, §665.

(e) A contractor must not use DADS funds or DADS reimbursed staff time to provide guardianship or other services to an individual who has not been referred by DADS.

(f) A contractor must provide all legal support necessary for the guardianship services contracted by DADS, including contested applications for guardianship.

(g) A contractor must provide DADS staff access to the results of audits performed on DADS wards.

§10.321.Roles and Responsibilities of Case Managers.

(a) A contractor must ensure that its case managers meet the qualifications as specified in §10.311(a)(2) - (3) of this chapter (related to Qualifications and Training Requirements for Contractor Employees).

(b) Upon receipt of a referral from DADS, a case manager monitors the filing of legal documents, accountings, reports, notifications, and taxes as required by state law.

(c) A case manager performs the following duties in accordance with the other duties and responsibilities outlined in the order granting guardianship:

(1) locates, secures, and manages a ward's estate;

(2) ensures that a ward has access to adequate care, protection, and services based upon identified needs and the service plan;

(3) makes decisions on medical issues such as major surgery, life-threatening illness, treatment options, and, if guardian of the estate, makes decisions regarding the ward's estate other than routine expenditures for maintenance and education;

(4) monitors to ensure inventory, appraisement, list of claims, and annual accountings have been completed;

(5) completes annual reports of the guardian of the person;

(6) hires professionals, including accountants, providers, repair persons, or realtors, with the funds of a ward's estate to perform services for the ward;

(7) resolves issues or problems that impact a ward;

(8) as much as possible, considers a ward's wishes and choices when decisions are being made about the ward;

(9) maintains documentation of face-to-face visits;

(10) informs the appropriate DADS and contractor staff concerning major issues involving a ward and documents all actions in the ward's record; and

(11) ensures that cases that are closed or transferred, or in which the guardianship is transferred to another case manager, have documentation that is complete and up to date.

§10.323.Reporting of Abuse, Neglect, or Exploitation.

(a) A contractor must report an allegation of abuse, neglect, or exploitation of a ward to DFPS within 24 hours of discovery of the alleged abuse, neglect, or exploitation.

(b) If the investigating authority is an entity other than DFPS, a contractor must report an allegation of abuse, neglect, or exploitation of a ward within 24 hours of discovery of the alleged abuse, neglect, or exploitation.

(c) A contractor must report an allegation of abuse, neglect, or exploitation of a ward to the DADS guardianship supervisor in the contractor's designated DADS region within 24 hours or by the next working day, whichever is later. The contractor must notify the DADS guardianship supervisor of the specific suspected abuse, neglect, or exploitation when it is reported to the investigating authority. The contractor must also report what actions have been taken to ensure the health and safety of the ward.

(d) If the alleged perpetrator is a contractor's employee, the contractor must remove the employee from working with any DADS wards until all allegations have been investigated. If an allegation of abuse, neglect, or exploitation is found to be valid, the contractor must take appropriate action. If the perpetrator has the right to appeal and if the appeal process determines the employee was not the perpetrator, the agency must document the findings and reorient the employee before working again with DADS wards.

§10.325.Compliance with Probate Court Local Rules in Service Area.

A contractor must comply with all requirements of Texas Probate Code, Chapter XIII. In addition, if a court with probate jurisdiction within a contractor's service area has specific local rules in addition to the requirements of the Texas Probate Code, the contractor must comply with those rules to the best of its ability, to the extent that the court's local rules do not conflict with provisions of the Texas Probate Code.

§10.327.Responsibilities of the Guardian of the Person.

(a) A contractor, rather than the contractor's employee or volunteer, is appointed by the court as guardian. A contractor must assign a primary case manager to each ward served under its contract with DADS. To ensure the ability to respond in a timely fashion in the event of an emergency, a contractor must assign back-up staff for when the primary case manager is unavailable.

(b) If a contractor is appointed guardian of the person, the contractor must manage the ward's person according to the order appointing guardian of the person. This responsibility may include:

(1) having physical possession of the ward;

(2) caring for, supervising, and protecting the ward;

(3) providing food, clothing, and shelter to the extent permitted by the ward's estate or government benefits;

(4) consenting to medical, surgical, and psychiatric care, except for in-patient psychiatric commitment;

(5) developing an annual service plan that ensures appropriate habilitation and rehabilitation services, including therapy, counseling, education, and training to the extent permitted by the ward's estate;

(6) encouraging the ward to participate in the development of the service plan to the extent that the ward is capable;

(7) building an adequate support system for the ward, including family, friends, and other appropriate collaterals;

(8) ensuring monthly status contacts with the ward as described;

(9) consulting with service providers periodically;

(10) documenting case actions in files maintained for each ward; and

(11) complying with all of the requirements of Texas Probate Code, Chapter XIII, regarding guardianship of the person.

(c) A contractor arranges care and services for the ward based on the identified needs of the ward and that enhance the ward's quality of life. The contractor ensures that the ward has access to basic care and services, including:

(1) a safe, clean environment;

(2) assistance in performing basic life functions;

(3) regular, nutritious meals;

(4) any needed medical, psychiatric, habilitative, or other services; and

(5) adequate supervision.

(d) The contractor must have a face-to-face contact at least once a month with each ward served through the contract with DADS. To the extent possible, the primary case manager makes the monthly contacts. If the ward's place of residence prevents face-to-face contact (for example, incarceration in a correctional facility), the contractor may substitute a phone contact with the ward or a person knowledgeable of the ward's current condition (for example a jailer, an attorney, a judge, a probation or parole officer, or a medical doctor). The case manager must document the monthly contacts in the ward's file.

§10.329.Responsibilities of Guardian of the Estate.

(a) If a contractor is appointed as permanent guardian of the estate, the contractor must manage the ward's finances and assets according to the order appointing guardian of the estate. This responsibility may include:

(1) locating and taking possession of the ward's assets;

(2) securing the ward's property;

(3) preparing the initial inventory, appraisement, and list of claims;

(4) paying the ward's bills;

(5) investing any money not needed for the care and maintenance of the ward;

(6) ensuring that the ward is receiving all the income and benefits to which the ward is entitled;

(7) selling the ward's property if it is in the ward's best interests;

(8) filing annual accountings to courts and to government agencies administering benefits;

(9) filing tax returns; and

(10) complying with all requirements of Texas Probate Code, Chapter XIII, regarding guardianship of the estate.

(b) If a contractor is appointed as temporary guardian of the estate, the contractor performs the duties specified by the court order appointing the contractor as temporary guardian of the estate.

(c) A contractor, its agents, employees or volunteers or their immediate family members or friends must not directly or indirectly purchase property of the ward. A contractor, its agents, employees or volunteers or their immediate family or friends may not purchase the ward's property through another person to circumvent the requirements of this subsection. A bona fide purchase for value from a person not associated with the buyer in any manner that originally purchased the property from the ward without the knowledge, request, or agreement of buyer is not a violation of this subsection.

§10.331.Service Plans for Wards.

(a) A contractor must develop and update at least annually a service plan for each ward for which it is appointed as guardian of the person. The service plan establishes a structured and systematic approach for delivery of services to a ward that maximizes quality of care, quality of life, and overall functioning of the ward.

(b) A contractor must develop the initial service plan within three months after taking and filing the oath of guardianship and must update the service plan annually by the due date of the annual report required by the court.

(c) A contractor may develop its own format for the service plan or may use a format provided by DADS. The service plan must include at least the following information:

(1) a brief description of the current status of the ward;

(2) a description of the needs of the ward in each of the following areas:

(A) living arrangements and basic care;

(B) medical/dental/vision/mental health/mental retardation services;

(D) financial and legal services; and

(E) diet and clothing preferences;

(3) the plan or strategy for meeting the needs of the ward in the areas listed in paragraph (2) of this subsection; and

(4) actions taken to date to accomplish the plan.

(d) A service plan must be developed using the principles of person-directed planning and be developed in a culturally competent manner, to meet the ward's needs within the ward's cultural context. Resources such as family systems, natural helping networks, formal institutions within the ward's community, churches, and social organizations are used to resolve the ward's problems whenever possible and appropriate.

(e) A contractor must ensure that services are provided by persons who can adequately communicate with the ward. The contractor may facilitate communication by using a translator or by other means if the contractor's employees do not speak the ward's language. A non-English speaking ward and the ward's family who attempt to communicate in English may require accommodation. Whenever possible, the contractor must offer the ward the option of communicating in the ward's preferred language, even if the ward can communicate adequately in English.

(f) Whenever possible the ward's diet and clothing must reflect cultural preferences.

(g) The service plan for the religious needs of the ward must reflect any lifelong pattern of religious affiliation. Funeral planning for the ward must reflect the cultural and religious values of the ward and the ward's family whenever possible.

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 May 15, 2006.

TRD-200602689

Marianne Reat

General Counsel

Department of Aging and Disability Services

Earliest possible date of adoption: June 25, 2006

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

Subchapter D. RECORDS MANAGEMENT

40 TAC §§10.401, 10.403, 10.405

Statutory Authority

The new sections implement Texas Government Code, §531.0055; and Texas Human Resources Code, §§161.021 and 161.101 - 161.113.

§10.401.Confidentiality of Records.

(a) A contractor must not disclose information from the case record on a ward served under the contract with the DADS Guardianship Program in a manner that identifies the ward unless the disclosure is necessary to carry out the duties of the contractor, as described in subsection (b) of this section. Texas Human Resources Code, §161.111 makes information about a DADS guardianship case confidential, and this extends to the case record of DADS wards served through contracts with DADS. All records, reports, or working papers related to the case are confidential and are exempt from public disclosure under the Texas Open Records Act (Chapter 552, Government Code). DFPS' Adult Protective Services Division records are also confidential under Texas Human Resources Code, §48.101.

(b) Examples of situations that might require pertinent case information to be disclosed include:

(1) arranging for the provision of services;

(2) facilitating involuntary mental health or mental retardation commitment;

(3) cooperating with law enforcement during the criminal investigation of abuse, neglect, or exploitation; and

(4) responding to a court order for disclosure.

(c) If a contractor shares information about a ward, the contractor must advise the recipient of the information that the information is confidential and must not be further shared without permission.

(d) DADS does not disclose to a contractor the name of a reporter who makes a complaint of abuse, neglect, or exploitation to DFPS. If a contractor learns the reporter's name or other identifying information, the contractor must not share this information with any other agency or entity.

(e) DADS guardianship staff may orally release the reporter's name to the courts, the district or county attorney, or law enforcement agencies if directed to do so by the judge trying the guardianship case. In the event a contractor learns a reporter's name or other identifying information, the contractor must not share this information with any other agency or entity.

(f) Upon written request to a contractor, the contractor may provide a copy of guardianship case information, except the name and other identifying information about a reporter, on a ward served under a DADS guardianship contract to the following:

(1) the ward or the ward's guardian;

(2) a court-appointed executor or administrator of a deceased ward's estate;

(3) the ward's private attorney;

(4) a guardian ad litem;

(5) the attorney representing the proposed guardian in a guardianship proceeding initiated by the contractor;

(6) a court investigator or court visitor appointed by the court in a guardianship proceeding;

(7) Advocacy, Inc., the federally mandated protection and advocacy system; and

(8) out-of-state protective agencies.

(g) Upon oral request to a contractor, the contractor may release a copy of the guardianship case information, except the name and other identifying information about a reporter, to the attorney ad litem. If the attorney ad litem requests the name of the reporter and asserts this information is necessary to the attorney's ability to adequately represent the client, the contractor must notify the DADS Guardianship Program and request approval to release the information to the attorney ad litem The contractor must not release information about the reporter to the attorney ad litem without written approval from the DADS Guardianship Program.

(h) Upon oral or written request, a contractor must release a copy of the entire case record, including the name of the reporter and information from other agencies, to a law enforcement agency or prosecuting attorney requesting a case under current criminal investigation, prosecution, or litigation against the contractor or DADS. A law enforcement agency must provide proof of identity before the contractor may release the requested information.

(i) If a contractor releases information to an individual or entity as allowed under this section, the contractor must record the following information in the ward's case record;

(1) the name of the requestor;

(2) the information that the contractor provided;

(3) the date the contractor provided the information; and

(4) a dated copy of the written request or date of the oral request.

(j) When the DADS Guardianship Program makes a referral to a contractor, DADS does not provide the entire case record unless the contractor is awarded guardianship and submits a written request for this information. Upon referral to a contractor, DADS provides only the following information:

(1) oral case record information, except the name and other identifying information about a reporter; and

(2) written information, including the Client Assessment completed by the DADS guardianship specialist, medical and psychological information, names and addresses of relatives, financial information and documents, and personal data (for example, Social Security number, Medicaid number, and date of birth) pertaining to the proposed ward.

(k) A contractor must comply with federally mandated restrictions concerning the sharing of the AIDS/HIV positive status of a ward or proposed ward with a proposed guardian.

(l) If a contractor's case files contain confidential reports from other professional individuals or agencies (for example, physicians, psychologists, law enforcement, the Department of Assistive and Rehabilitative Services, or DFPS), the contractor must not release this information to anyone other than the ward or the ward's guardian without first contacting the issuing professional individual or agency for consent to release the information. If the professional individual or agency does not agree in writing to the request, the contractor must not release the information. If the ward or the ward's guardian requests confidential reports from a professional individual or agency, a contractor may release the information, except a police report.

(m) A contractor may orally share case information, except the name and other identifying information about a reporter and the AIDS/HIV positive status of a ward or a proposed ward, with authorized personnel of a social services or medical agency working with the ward or the proposed ward to the extent this information is necessary for the agency to provide services to the ward or the proposed ward.

(n) A contractor may release written case information, except the name and other identifying information about a reporter, to a social services or medical agency working with a ward or a proposed ward only if the proposed ward or the current guardian has authorized the release in writing. The social services or medical agency receiving the information must agree to keep the information confidential.

§10.403.Documentation Requirements.

(a) A contractor must maintain all financial and contract-related records:

(1) according to recognized fiscal and accounting practices; and

(2) in accordance with DADS contract requirements.

(b) A contractor must document interactions with a ward as soon as possible after the interaction. If the contractor cannot document at the time of an interaction, the documentation must:

(1) be dated the day that it is written;

(2) indicate the date of the interaction; and

(3) be signed by or otherwise identify the individual that had the contact.

(c) A contractor must sign all printed service delivery records in ink. White-out may not be used in any documentation. If there is a mistake, it must be crossed through, dated, and initialed.

(d) Documentation stored via electronic means must include the name of the person who delivered the services, the date performed, and the date the entry was made.

(e) Data must be readily accessible, and there must be a means to retrieve the data in case of electrical outage or equipment failure.

(f) A contractor must not preprint or pre-enter any record of time on a form used to document all required elements of the services delivered, as provided in the program specific rules.

(g) Records must include:

(1) copies of all legal documents related to the ward, preferably file-stamped copies if documents are file-stamped by the court in the local area when submitted;

(2) financial documents, including receipts of disbursements, bank account statements, and investment statements;

(3) documentation of all case actions, including monthly status updates;

(4) case actions, including the monthly status update, which must be documented within 10 working days after the activity:

(5) significant incidents regarding progress, illness, and accidents that may be used as part of the service plan for the ward;

(6) termination records and transfer summaries; and

(7) abuse, neglect, or exploitation incidents referred to the appropriate investigative authority.

(h) A contractor must maintain personnel records on every employee and volunteer, and must also maintain records on subcontractors if utilized.

§10.405.Maintenance of Records.

A contractor must maintain all records according to Chapter 69 of this title (relating to Contract Administration).

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 May 15, 2006.

TRD-200602690

Marianne Reat

General Counsel

Department of Aging and Disability Services

Earliest possible date of adoption: June 25, 2006

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

Subchapter E. CONTRACT MONITORING AND COMPLIANCE

40 TAC §§10.501, 10.503, 10.505, 10.507, 10.509

Statutory Authority

The new sections implement Texas Government Code, §531.0055; and Texas Human Resources Code, §§161.021 and 161.101 - 161.113.

§10.501.Monitoring Reviews.

(a) DADS conducts monitoring reviews of a contractor's services to determine if the contractor is in compliance with the contract and program rules and requirements. A monitoring review is conducted at the location where the contractor is providing the services unless DADS specifies a different location.

(b) At the conclusion of the review, DADS determines the level of compliance on each standard reviewed. If DADS considers the contractor out of substantial compliance with the contract and with the program rules and requirements, the contractor is subject to corrective action and may be subject to sanctions.

(1) adequate working space for reviewing the records; and

(2) all records DADS requests for review.

(d) During the monitoring review, DADS may:

(1) review a sample of wards' records to determine the contractor's compliance with contract requirements;

(2) interview wards and staff;

(3) observe wards and staff;

(4) interview individuals with whom agency staff interact on a regular basis, such as individuals associated with the probate courts; and

(5) conduct other activities as appropriate.

(e) DADS may conduct a follow-up monitoring review to determine if the agency has corrected the deficiencies identified at a preceding monitoring review. A follow-up monitoring review may:

(1) be a focused review using targeted samples; and

(2) focus only on those standards that DADS determined to be out of compliance at the immediately preceding monitoring review.

(f) DADS may expand a monitoring review period or the review sample at any time.

§10.503.Complaint Investigations.

(a) DADS conducts a complaint investigation of a contractor's services if DADS receives complaints that relate to program rules or procedures.

(b) DADS may conduct a complaint investigation at any time without notice to the contractor.

(c) DADS does not disclose the name of the individual who made the complaint unless specifically ordered to by a court of law or requested by law enforcement to disclose to law enforcement.

(d) During the complaint investigation, the contractor must provide:

(1) adequate working space for reviewing the records; and

(2) all records DADS requests for the review.

(e) DADS may conduct a follow-up to the complaint investigation to determine if the contractor has corrected the deficiencies identified during the complaint investigation. A follow-up complaint investigation may include:

(1) a review of a sample of wards' records to determine if the allegations are valid and if the complaint affects more than the ward whom the complaint concerned;

(2) interviews with wards and staff;

(3) observation of wards and staff;

(4) consultation with others, as appropriate; and

(5) other activities, as appropriate.

(f) DADS may conduct a follow-up complaint investigation to determine if the contractor has corrected the deficiencies identified during the complaint investigation. A follow-up complaint investigation may:

(1) be a focused review using targeted samples; and

(2) focus only on those standards that DADS determined to be out of compliance at the immediately preceding complaint investigation.

(g) DADS may expand the review period or the review sample for a complaint investigation or follow-up complaint investigation at any time.

§10.505.Fiscal Monitoring.

(a) Fiscal monitoring is the review of documentation that supports the contractor's billings as it exists at the time DADS staff arrive to conduct the review. DADS may recoup payment if the service delivery documentation does not support the contractor's billing.

(b) DADS may conduct a fiscal monitoring review:

(1) in conjunction with a monitoring review;

(2) independently of a monitoring review;

(3) when a contract is terminated; or

(4) as a result of conducting a complaint investigation.

§10.507.Sanctions.

(a) DADS may impose a sanction if the contractor fails to follow the terms of the contract or the contractor fails to comply with program rules, policies, and procedures. DADS may impose sanctions for reasons that include:

(1) DADS' determination that a ward's health and safety are jeopardized;

(2) the contractor's failure to comply with its corrective action plan;

(3) the contractor's failure to follow an agreed-upon audit resolution payment plan;

(4) the contractor's failure to provide services according to the contract or program requirements; and

(5) a validated report of abuse, neglect, or exploitation when the perpetrator is an owner, employee, or volunteer who has direct access to the wards.

(b) Types of sanctions include the following:

(1) Corrective action plan. DADS requires the contractor to submit a plan of action with the date the deficiency will be corrected.

(2) Protective action plan. DADS requires the contractor to take immediate action and put into place an abbreviated and immediate corrective action plan if health or safety issues are identified. The plan must address the contractor's actions to be taken to ensure the health and safety of the ward.

(3) Recoupment. DADS collects money the contractor owes as the result of overpayments or other billing irregularities or both.

(4) Ward referral hold. DADS does not refer new wards to the contractor. The ward referral hold is released when DADS determines the contractor has resolved the reason for the hold.

(5) Contractor hold. DADS withholds the contractor's payments. The contractor hold is released when DADS determines the contractor has resolved the reason for the hold.

(6) Involuntary contract termination. DADS may terminate the contractor's contract for cause by citing the contractor's failure to comply with the terms of the contract or with DADS program rules, policies, and procedures.

(7) Suspension. DADS may temporarily suspend the contractor's right to conduct business with DADS. The causes for and conditions of suspension are described in subsection (a) of this section. A suspension is in effect until an investigation, hearing, or trial is concluded and DADS can make a determination about the agency's future right to contract. DADS may impute the conduct of an individual, corporation, partnership, or other association to the contractor.

(c) A contractor may appeal an adverse action DADS takes against its contract. To appeal an action, the contractor must request the appeal in writing in accordance with 1 TAC Chapter 357, Subchapter I.

§10.509.Administrative Review.

(a) A contractor may request an administrative review of the review team's methodology if the contractor suspects a formal compliance monitoring may not have been conducted according to established rules and procedures.

(b) A contractor's request for an administrative review must:

(1) be in writing;

(2) identify the rules and procedures the contractor believes DADS failed to follow;

(3) state the basis for believing the review was not conducted according to established rules and procedures; and

(4) be received by DADS within 10 calendar days after the contractor's receipt of the written review findings.

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 May 15, 2006.

TRD-200602691

Marianne Reat

General Counsel

Department of Aging and Disability Services

Earliest possible date of adoption: June 25, 2006

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

Part 20. TEXAS WORKFORCE COMMISSION

Chapter 807. CAREER SCHOOLS AND COLLEGES

The Texas Workforce Commission (Commission) proposes the repeal of the following sections of Chapter 807 relating to Career Schools and Colleges:

Subchapter G. Courses of Instruction, §§807.91 - 807.104

Subchapter H. Application Fees and Other Charges, §§807.111 - 807.113

Subchapter I. Advertising, §§807.121 - 807.126

Subchapter J. Admission, §§807.141 - 807.147

Subchapter K. Progress Standards, §§807.161 - 807.164

Subchapter L. Attendance Standards, §§807.171 - 807.175

Subchapter M. Cancellation and Refund Policy, §§807.191 - 807.194

Subchapter N. Records, §§807.211 - 807.214

Subchapter O. Complaints, §807.221 and §807.222

Subchapter P. Truck Driver Training Programs, §§807.231 - 807.235

Subchapter Q. Closed Schools, §807.251 and §807.252

Subchapter R. Cease and Desist Orders, §§807.271 - 807.282

The Commission proposes the following new sections to Chapter 807 relating to Career Schools and Colleges:

Subchapter E. School Director and Administrative Staff, §807.66

Subchapter G. Staff Education Requirements, §§807.101 - 807.103

Subchapter H. Courses of Instruction, §§807.121 - 807.134

Subchapter I. Application Fees and Other Charges, §§807.151 - 807.153

Subchapter J. Advertising, §§807.171 - 807.176

Subchapter K. Admission, §§807.191 - 807.197

Subchapter L. Progress Standards, §§807.221 - 807.224

Subchapter M. Attendance Standards, §§807.241 - 807.245

Subchapter N. Cancellation and Refund Policy, §§807.261 - 807.264

Subchapter O. Records, §§807.281 - 807.284

Subchapter P. Complaints, §807.301 and §807.302

Subchapter Q. Truck Driver Training Programs, §§807.321 - 807.325

Subchapter R. Closed Schools, §807.341 and §807.342

Subchapter S. Cease and Desist Orders, §§807.361 - 807.366

The Commission proposes amendments to the following sections of Chapter 807 relating to Career Schools and Colleges:

Subchapter A. General Provisions, §807.2

Subchapter B. Certificates of Approval, §807.14

Subchapter E. School Director and Administrative Staff, §807.62 and §807.64

Subchapter F. Instructors, §§807.81 - 807.84

PART I. PURPOSE, BACKGROUND, AND AUTHORITY

PART II. EXPLANATION OF INDIVIDUAL PROVISIONS

PART III. IMPACT STATEMENTS

PART IV. COORDINATION ACTIVITIES

PART I. PURPOSE, BACKGROUND, AND AUTHORITY

The purpose of the rule amendment is to address statutory changes directed in House Bills (HB) 2333 and 2806, enacted by the 79th Texas Legislature, Regular Session (2005), which revise and amend Chapter 132 of the Texas Education Code.

HB 2333 directs initial and annual continuing education of six hours per year for directors of admissions, instructors, and chief administrative officers, or owners with supervisory authority, in career schools and colleges. The bill charges the Commission with establishing the minimum qualifications and training requirements in rule.

In addition to adding and amending several definitions, HB 2806 amends Texas Education Code, Chapter 132 by:

1. deleting the requirement to provide cost comparisons with exempt schools;

2. removing references to some of the currently required information on the certificate of approval, but leaving the final form to the Commission's discretion;

3. removing the reference to a bond from the section listing prohibitions; and

4. expanding the Commission's authority to arrange a teach-out (an arrangement with another school or college to provide for completion of the training of students of a closed school) to include any school or college, not only career schools or colleges as currently allowed.

More significantly, HB 2806 states that a career school or college that is eligible to participate in student financial aid programs under Title IV, Higher Education Act of 1965 (20 U.S.C. §1070 et seq.) is not required to take attendance. The bill deletes all references to "attendance" in Texas Education Code, Chapter 132, and also directs schools:

1. to provide written notice to students of all policies related to program interruption, including the student's responsibility to inform the school of his or her withdrawal; and

2. to verify the student's enrollment by documenting the student's participation in an academically related activity at the end of the first week, at the end of the first month, at the midpoint, and at the end of each semester or other academic term of the program.

Further, HB 2806 authorizes the Commission to adopt rules governing records necessary to make refunds.

Texas Education Code, Chapter 132, Subchapter J, regarding Cease and Desist Orders, allows the Commission to take action against career schools that are operating without a certificate of authority issued by the Commission. The Commission has had several hearings under Subchapter J, with two appeals to the Commission. The Commission's experiences with the hearings indicate that modifications of the process are necessary.

Through Texas Education Code, Chapter 132 and this chapter, the Agency licenses and regulates most private postsecondary career schools that offer vocational training or continuing education. The Agency also investigates complaints about schools, monitors schools to ensure regulatory compliance, arranges for the disposition of students affected by a school closure and administers the tuition trust account to pay tuition refunds to students when a school closes. In carrying out its regulatory duties, the Agency seeks to provide customer protection for Texas students as well as ensure quality training of the labor force to meet the needs of Texas employers.

PART II. EXPLANATION OF INDIVIDUAL PROVISIONS

(Note: Minor, nonsubstantive, editorial changes are made throughout Chapter 807 that do not change the meaning of the rules and, therefore, are not discussed in the Explanation of Individual Provisions.)

SUBCHAPTER A. GENERAL PROVISIONS

The Commission proposes the following amendments:

§807.2. Definitions

Section 807.2(3) adds a definition of "academic term." Neither Texas Education Code, Chapter 132 nor this chapter currently defines the term.

Section 807.2(4) adds a definition of "academically related activity." Neither Texas Education Code, Chapter 132 nor this chapter currently defines the term.

Section 807.2(7), the definition of "Board" is deleted because it is defined in Chapter 800.2 of this title; therefore, it is unnecessary to redefine the term in this chapter.

Section 807.2(8), the definition of "clock hour" is deleted because it is obsolete. Throughout the chapter, the term "clock hour" is replaced by the term "course time," which is defined in new §807.2(12).

Section 807.2(9), the definition of "Commission" is deleted because it is defined in Chapter 800.2 of this title; therefore, it is unnecessary to redefine the term in this chapter.

Section 807.2(9) adds a definition of "class or course." Adding the Texas Education Code definition of "class" or "course"; replacing the term "subject" with the terms "class" or "course" throughout the chapter, as appropriate; and deleting the §807.2(28) definition of "subject" implements the provisions of HB 2806, which amends §132.001(1-a) of the Texas Education Code. Generally, "class" refers to a single period of instruction that is part of a "course."

Section 807.2(11), the definition of "Course of Instruction" is unchanged, but renumbered from §807.2(13), in order to be listed in alphabetical order.

Section 807.2(12) adds a definition of "course time." Adding the Texas Education Code definition of "course time"; replacing the term "clock hour" with the term "course time" throughout the chapter; and deleting the §807.2(8) definition of "clock hour" implements the provisions of HB 2806, which amends §132.001(1-b) of the Texas Education Code.

Section 807.2(19) adds a definition of "program or program of instruction." Adding the Texas Education Code definition of "program or program of instruction"; replacing "program" with the term "program or program of instruction" throughout the chapter, as appropriate; and deleting the §807.2(18) definition of "program" implements the provisions of HB 2806, which amends §132.001(14) of the Texas Education Code.

Section 807.2(31) adds a definition of "Title IV school." Neither Texas Education Code, Chapter 132 nor this chapter currently defines the term.

Certain paragraphs in §807.2 have been renumbered to accommodate additions or deletions.

SUBCHAPTER B. CERTIFICATES OF APPROVAL

The Commission proposes the following amendments:

§804.14. Locations

The term "clock hour" is changed to "course time."

SUBCHAPTER E. SCHOOL DIRECTOR AND ADMINISTRATIVE STAFF

The Commission proposes the following amendments:

§807.62. School Director Qualifications and Duties

Section 807.62(a) removes the exemption for initial training for the school director of a small school. The school director is considered to be the chief administrative officer of or an owner with supervisory authority over a career school or college. The Commission proposes this revision in order to ensure that school directors meet the requirements of HB 2333. Additionally, the requirement to attend a workshop has been replaced with online training, set forth in new §807.101(a), which eliminates the cost and time associated with travel.

Section 807.62(d) is deleted and the information moved to new Subchapter G. Staff Education Requirements.

Section 807.62(i) is deleted because the provision is obsolete.

Certain subsections in §807.62 have been relettered to accommodate additions or deletions.

§807.64. Director of Education Requirements

Section 807.64(a) eliminates the grandfather clause, which is obsolete because of the passage of time.

§807.66. Director of Admissions Requirements

Section 807.66 is added to establish the minimum qualifications for the director of admissions position as directed in HB 2333.

SUBCHAPTER F. INSTRUCTORS

The Commission proposes the following amendments:

§807.81. Instructor Qualifications

The term "subject" is changed to "course" or "class" and the term "clock hour" is changed to "course time."

Section 807.81(e) is deleted because the provision is obsolete.

Certain subsections in §807.81 have been relettered to accommodate additions or deletions.

§807.82. Temporary Instructors

The term "subject" is changed to "course" or "class."

§807.83. Instructor Application

The term "subjects" is changed to "classes."

§807.84. School Responsibilities Regarding Instructors

Section 807.84(c), §807.84(f), and §807.84(g) are deleted and the information contained in each is moved to new Subchapter G, Staff Education Requirements.

Certain subsections in §807.84 have been relettered to accommodate additions or deletions.

SUBCHAPTER G. STAFF EDUCATION REQUIREMENTS

The Commission proposes new Subchapter G, Staff Education Requirements, as follows:

HB 2333 amends Texas Education Code by adding §132.0551(a) and §132.0551(b), which require each director of admissions, each full-time instructor, and the chief administrative officer or owner with supervisory authority in a career school or college to meet minimum qualifications and training requirements established by Commission rule. Currently, Chapter 807 identifies the position of "chief administrative officer or owner with supervisory authority" as the school director. Furthermore, Chapter 807 contains minimum qualifications and training requirements for these two positions. This new subchapter establishes the minimum qualifications and training requirements for the director of admissions position and consolidates the training requirements for the three positions.

§807.101. Initial Training

Section 807.101 consolidates initial training requirements previously set forth in repealed §807.62(d), §807.84(c), §807.84(f), and §807.84(g). Additionally, new §807.101(a) adds an option for online training to meet the initial training requirement for school directors.

§807.102. Continuing Education

HB 2333 amends Texas Education Code by adding §132.0551(g), which establishes that the requirements of the new subsections do not take effect until September 1, 2006. The bill directs the Commission to prescribe by rule procedures that will allow an individual to meet the requirements prior to that date.

Section 807.102(a) sets forth the requirement that providers must submit an application for approval of continuing education training to the Commission, unless they are exempt.

Section 807.102(b) provides for approval of any training conducted after January 1, 2006, but prior to September 1, 2006.

Section 807.102(c) sets forth the training requirements previously located in §807.84(c).

Section 807.102(d) requires that each school director, full-time instructor, and director of admissions must complete a minimum of six hours of course time of continuing education applicable to the position within 12 months of employment in the position and each calendar year thereafter.

Section 807.102(e) states that the school must provide and document in-service training that provides updates on skills, knowledge, and technology required by business and industry for those instructors who have taught for two years, but have not gained relevant work experience during the two-year period.

§807.103. Record Keeping

Section 807.103 establishes the requirements for record keeping to document accomplishment of training and continuing education in accordance with the direction of HB 2333.

SUBCHAPTER H. COURSES OF INSTRUCTION

The Commission proposes new Subchapter H, Courses of Instruction, as follows:

§807.121. Definitions Relating to Courses of Instruction

The term "subject" is changed to "class" and the term "clock hour" is changed to "course time."

Otherwise, §807.121 has no changes to the text of repealed §807.91; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.122. General Information for Courses of Instruction

The term "subject" is changed to "class" and the term "clock hour" is changed to "course time." Otherwise, §807.122 has no changes to the text of repealed §807.92; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.123. Applications for Additional Courses of Instruction

Section 807.123 has no changes to the text of repealed §807.93; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.124. Stated Occupation

Section 807.124 has no changes to the text of repealed §807.94; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.125. Curriculum Content

The term "subject" is changed to "class" in the section. Otherwise, §807.125 has no changes to the text of repealed §807.95; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.126. Curriculum Length

The term "subject" is changed to "class." Otherwise, §807.126 has no changes to the text of repealed 807.96; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.127. Program Title

Section 807.127 has no changes to the text of repealed §807.97; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.128. Equipment

Section 807.128 has no changes to the text of repealed §807.98; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.129. Facilities

Section 807.129 has no changes to the text of repealed §807.99; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.130. Admission Requirements Relating to Programs

Section 807.130 has no changes to the text of repealed §807.100; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.131. School Responsibilities Regarding Programs

The term "subject" is changed to "class." Otherwise, §807.131 has no changes to the text of repealed §807.101; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.132. Program Revisions

Section 807.132 has no changes to the text of repealed §807.102; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.133. Program Requirements for Degree Granting Schools

Section 807.133 has no changes to the text of repealed §807.103; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.134. Penalties Relating to Courses of Instruction

Section 807.134 has no changes to the text of repealed §807.104; however, it is renumbered to accommodate additions or deletions throughout the chapter.

SUBCHAPTER I. APPLICATION FEES AND OTHER CHARGES

The Commission proposes new Subchapter I, Application Fees and Other Charges, as follows:

§807.151. Fee Schedule

Section 807.151 has no changes to the text of repealed §807.111; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.152. Renewal Fees

Section 807.152 has no changes to the text of repealed §807.112; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.153. Installment Payments

Section 807.153 has no changes to the text of repealed §807.113; however, it is renumbered to accommodate additions or deletions throughout the chapter.

SUBCHAPTER J. ADVERTISING

The Commission proposes new Subchapter J, Advertising, as follows:

§807.171. General Information for Advertising

Section 807.171 has no changes to the text of repealed §807.121; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.172. Advertisement Method

Section 807.172 has no changes to the text of repealed §807.122; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.173. Advertisement Content

The term "subjects" is changed to "classes." Otherwise, §807.173 has no changes to the text of repealed §807.123; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.174. Financial Incentives

Section 807.174 has no changes to the text of repealed §807.124; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.175. Catalog

The term "subject" is changed to "class" and the term "clock hour" is changed to "course time." Otherwise, §807.175 has no changes to the text of repealed §807.125; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.176. Advertisement Monitoring

Section 807.176 has no changes to the text of repealed §807.126; however, it is renumbered to accommodate additions or deletions throughout the chapter.

SUBCHAPTER K. ADMISSION

The Commission proposes new Subchapter K, Admission, as follows:

§807.191. General Information for Admission

The term "subject" is changed to "class" and the term "clock hour" is changed to "course time." Otherwise, §807.191 has no changes to the text of repealed §807.141; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.192. Admission Requirements

The term "subjects" is changed to "classes." Otherwise, §807.192 has no changes to the text of repealed §807.142; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.193. Receipt of Enrollment Policies

HB 2806 amends Texas Education Code §132.055(5) by deleting the requirements to provide students with regulations pertaining to absences and with notice of the availability of the cost comparison information for exempt schools. (Although Title IV schools are no longer required to take attendance, the requirement remains for non-Title IV schools.) Therefore, new §807.193(b)(4) specifies that attendance is a requirement for non-Title IV schools.

HB 2806 amends Texas Education Code by adding §132.065(b), which requires schools participating in Title IV programs to provide written notice of all policies related to program interruption prior to completion and to notify each student in writing that if the student withdraws, it is the student's responsibility to inform the school or college. Therefore, in addition to the requiring written notice to be provided to the student prior to enrollment, §807.193(b)(12) adds a requirement to provide written notice of all policies related to program interruption prior to completion and written notice of the student's responsibility to inform the school if the student withdraws.

Additionally, the term "subjects" is changed to "classes" and the term "clock hour" is changed to "course time."

Otherwise, §807.193 has no changes to the text of repealed §807.143; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.194. Enrollment Agreement

HB 2806 requires Title IV schools to terminate the enrollment of a student if the student's participation in an academically related activity cannot be documented at certain points during a term. The statute also authorizes the Commission to adopt rules necessary to make refunds. Section 807.194(e)(5) adds that the executed enrollment agreement must include a student's e-mail address if any part of the instruction or academically related activity is Web based.

Otherwise, §807.194 has no changes to the text of repealed §807.144; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.195. Conduct Policy

Section 807.195 has no changes to the text of repealed §807.145; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.196. Tuition and Fees

The term "subjects" is changed to "classes." Otherwise, §807.196 has no changes to the text of repealed §807.146; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.197. Admission Requirements for Degree Granting Schools

Section 807.197 has no changes to the text of repealed §807.147; however, it is renumbered to accommodate additions or deletions throughout the chapter.

SUBCHAPTER L. PROGRESS STANDARDS

The Commission proposes new Subchapter L, Progress Standards, as follows:

§807.221. General Requirements for Progress Standards

The term "subject" is changed to "class." Otherwise, §807.221 has no changes to the text of repealed §807.161; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.222. Progress Requirements for Residence Schools

The term "clock hour" is changed to "course time." Otherwise, §807.222 has no changes to the text of repealed §807.162; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.223. Progress Requirements for Distance Education Schools

Section 807.223 has no changes to the text of repealed §807.163; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.224. Progress Requirements for Degree Granting Schools

The term "subjects" is changed to "classes." Otherwise, §807.224 has no changes to the text of repealed §807.164; however, it is renumbered to accommodate additions or deletions throughout the chapter.

SUBCHAPTER M. ATTENDANCE STANDARDS

The Commission proposes new Subchapter M, Attendance Standards, as follows:

§807.241. General Requirements for Attendance

Section 807.241(b) adds that Title IV schools are not required to take attendance. Otherwise, §807.241 has no changes to the text of repealed §807.171; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.242. Attendance Requirements for Degree Granting Schools

Section 807.242(a) clarifies that the requirements are for non-Title IV schools and Title IV schools that voluntarily take attendance. Additionally, the term "clock hour" is changed to "course time." Otherwise, §807.242 has no changes to the text of repealed §807.172; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.243. Termination of Enrollment

Section 807.243(b)(1) - 807.243(b)(4) adds the requirement that a Title IV school that does not voluntarily take attendance must terminate enrollment for a student whose participation in an academically related activity cannot be documented at specified points during the academic term.

Section 807.243(c) specifies that for purposes of §807.243, the definition of "month" is four weeks.

The term "subject" is changed to "class" and the term "clock hour" is changed to "course time." Otherwise, §807.243 has no changes to the text of repealed §807.173; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.244. Make-up Work

The term "clock hour" is changed to "course time." Otherwise, §807.244 has no changes to the text of repealed §807.174; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.245. Leaves of Absence

The term "subject" is changed to "class" and the term "clock hour" is changed to "course time." Otherwise, §807.245 has no changes to the text of repealed §807.175; however, it is renumbered to accommodate additions or deletions throughout the chapter.

SUBCHAPTER N. CANCELLATION AND REFUND POLICY

The Commission proposes new Subchapter N, Cancellation and Refund Policy, as follows:

§807.261. Right to Cancel after Tour

Section 807.261 has no changes to the text of repealed §807.191; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.262. Consummation of Refund

Section 807.262 has no changes to the text of repealed §807.192; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.263. Refund Requirements for Residence Schools

Section 807.263(d) adds instruction on the calculation of refunds for Title IV and non-Title IV schools. Otherwise, §807.263 has no changes to the text of repealed §807.193; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.264. Penalties Relating to Refunds

Section 807.264 has no changes to the text of repealed §807.194; however, it is renumbered to accommodate additions or deletions throughout the chapter.

SUBCHAPTER O. RECORDS

The Commission proposes new Subchapter O, Records, as follows:

§807.281. General Information for Records

Section 807.281 has no changes to the text of repealed §807.211; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.282. Student Records

Section 807.282 has no changes to the text of repealed §807.212; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.283. Attendance Record Keeping

Section 807.283(a) states that the requirements in this subsection apply only to non-Title IV schools.

Section 807.283(a)(1) provides that no separate master record of attendance is required of a school that offers seminars or other programs in which students do not change instructors during the school day.

Section 807.283(a)(2) specifies that schools must maintain a master record of attendance for each student that clearly reflects the number of scheduled hours each day and the hours of absence.

Section 807.283(a)(3) details the required manner in which each instructor must maintain a record of attendance for each student.

Section 807.283(b)(1) adds the requirement for Title IV schools to maintain a form signed and dated by the student to document participation in an academically related activity. An e-mail sent from the student's e-mail account of record will meet this requirement.

Section 807.283(b)(2) adds the requirement that Title IV schools maintain a class schedule, including the number of hours for each class day or the number of scheduled hours for each week for synchronous distance education for each student.

Section 807.283(c) adds that a Title IV school may voluntarily take attendance to meet the requirements of Texas Education Code, Chapter 132 and this chapter.

§807.284. Employment Records

Section 807.284 has no changes to the text of repealed §807.214; however, it is renumbered to accommodate additions or deletions throughout the chapter.

SUBCHAPTER P. COMPLAINTS

The Commission proposes new Subchapter P, Complaints, as follows:

§807.301. School Policy Regarding Complaints

Section 807.301 has no changes to the text of repealed §807.221; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.302. Complaints and Investigations

Section 807.302 has no changes to the text of repealed §807.222; however, it is renumbered to accommodate additions or deletions throughout the chapter.

SUBCHAPTER Q. TRUCK DRIVER TRAINING PROGRAMS

The Commission proposes new Subchapter Q, Truck Driver Training Programs, as follows:

§807.321. General Information Regarding Truck Driver Training

Section 807.321 specifies that truck driver instructors complete a "truck driver instructor development course with at least 40 hours of course time."

§807.322. Truck Driver Instructor Development Course

The term "clock hours" is changed to "course time." Otherwise, §807.322 has no changes to the text of repealed §807.232; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.323. Behind-the-Wheel Instruction

Section 807.323 has no changes to the text of repealed §807.233; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.324. Motor Vehicle Insurance

Section 807.324 has no changes to the text of repealed §807.234; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.325. Prohibited Activities Regarding Truck Driver Training.

Section 807.325 has no changes to the text of repealed §807.235; however, it is renumbered to accommodate additions or deletions throughout the chapter.

SUBCHAPTER R. CLOSED SCHOOLS

The Commission proposes new Subchapter R, Closed Schools, as follows:

§807.341. School Closures

Section 807.341 has no changes to the text of repealed §807.251; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.342. Tuition Trust Account

Section 807.342 has no changes to the text of repealed §807.252; however, it is renumbered to accommodate additions or deletions throughout the chapter.

SUBCHAPTER S. CEASE AND DESIST ORDERS

The Commission proposes new Subchapter S, Cease and Desist Orders, as follows:

§807.361. Statement of Charges and Notice of Hearing on Cease and Desist Orders

Section 807.361 provides that the Agency may issue a statement of charges and notice of hearing to consider issuance of a cease and desist order, if the Agency believes a person is operating a career school or college without a certificate of approval.

§807.362. Contents of Statement of Charges and Notice of Hearing

Section 807.362 changes the reference to "Executive Director" to "Agency."

Section 807.362(2) changes the reference to "Commission" to "Agency."

Otherwise, §807.362 has no changes to the text of repealed §807.273; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.363. Service of Statement of Charges and Hearing Notice for the Issuance of Cease and Desist Orders

Section 807.363 has no changes to the text of repealed §807.274; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.364. Ex Parte Consultations

Section 807.364 adds requirements to ensure that the Agency and all parties comply with standard prohibitions against ex parte contacts.

§807.365. Hearing Decision and Final Review by the Commission

Section 807.365(a) clarifies that the hearing officer's decision becomes final on the 15th day after receipt in order to be consistent with §807.365(b).

Section 807.365(c) specifies that the Commission must consider a written appeal and promptly issue a decision. Additionally, if oral argument is requested and approved, the Commission must schedule and hold an oral argument not later than 90 days after the receipt of the written appeal.

Otherwise, §807.365 has no changes to the text of repealed §807.281; however, it is renumbered to accommodate additions or deletions throughout the chapter.

§807.366. Cease and Desist Order

Section 807.366(a) changes the reference to "Executive Director" to "hearing officer," and specifies that a cease and desist order also must be issued against the person operating a career school or college without a certificate of approval.

Otherwise, §807.366 has no changes to the text of repealed §807.282; however, it is renumbered to accommodate additions or deletions throughout the chapter.

PART III. IMPACT STATEMENTS

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

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

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

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

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

There are anticipated economic costs to persons required to comply with the rules. In order to estimate the costs, the Agency surveyed eleven career schools. Proposed §807.91(a), adding an option for on-line training to meet the initial training requirement for school directors, resulted in survey results indicating that six respondants estimated no cost, and that four respondants estimated costs not to exceed $500. Proposed §807.92(c), adding a requirement for each school director, full-time instructor and director of admissions to complete a minimum of six hours of course time of continuing education applicable to the position within 12 months of employment and annually thereafter, resulted in survey results indicating that three respondants estimated no cost, and that seven respondants estimated costs ranging from $300 to $4,900 per school per year. However, two respondants indicated that these would not be new or additional costs. All other proposed new sections or revisions of current sections were estimated to have no new cost or only de minimis costs.

There is no anticipated adverse economic impact on small or microbusinesses as a result of enforcing or administering the rules.

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

Mark Hughes, Director of Labor Market Information, has determined that there is no significant negative impact upon employment conditions in the state as a result of the rules.

Luis M. Macias, Director, Workforce Development Division, has determined that for each year of the first five years the rules are in effect, the public benefit anticipated as a result of enforcing the rules shall be to provide rules that are easier to understand and comply with and make the process simpler for current and prospective school owners to obtain a certificate of approval and operate a school. Workforce areas may experience economic benefits from improved training of qualified workers and job seekers. Additionally, employers in the workforce areas will have the opportunity to access a more qualified workforce, which may provide businesses with increased efficiencies, lower costs, better products, and a growing customer base. The extent to which the economies of workforce areas will be affected by the changes in Chapter 807 will vary greatly across the state and will depend on such factors as population, demographics, the technical experience of the existing workforce, and the number of job seekers needing training and access to training resources.

PART IV. COORDINATION ACTIVITIES

In the development of these rules for publication and public comment, the Commission sought the involvement of each of Texas' 28 Boards, TWC Advisory Committee, and the career schools and colleges regulated by the Agency. The Commission provided the policy concept to each of these groups for consideration and review. During the rulemaking process, the Commission considered all information gathered in order to develop a rule that provides clear and concise direction to all parties involved.

Comments on the proposed rules may be submitted to TWC Policy Comments, Workforce and UI Policy, 101 East 15th Street, Room 440T, Austin, Texas 78778; faxed to (512) 475-3577; or e-mailed to TWCPolicyComments@twc.state.tx.us. The Commission must receive comments postmarked no later than 30 days from the date this proposal is published in the Texas Register .

Subchapter A. GENERAL PROVISIONS

40 TAC §807.2

The amended section is proposed under Texas Labor Code §301.0015 and §302.002(d), which provide the Texas Workforce Commission with the authority to adopt, amend, or repeal such rules as it deems necessary for the effective administration of Agency services and activities.

The proposed amendment affects Title 4, Texas Labor Code, particularly Chapters 301 and 302, as well as Texas Education Code, Chapter 132.

§807.2.Definitions.

In addition to the definitions contained in §800.2 of this title, the [ ~~The~~ ] following words and terms, when used in this chapter, shall have the following meanings unless the context clearly indicates otherwise.

(1) Academic quarter--A period of instruction that includes at least ten weeks of instruction, unless otherwise approved by the Commission.

(2) Academic semester--A period of instruction that includes at least 15 weeks of instruction, unless otherwise approved by the Commission.

(3) Academic term--An academic quarter, academic semester, or other progress evaluation period.

(4) Academically related activity--Includes, but is not limited to, an exam, a tutorial, computer-assisted instruction, academic counseling, academic advisement, turning in a class assignment, or attending a study group that is assigned by the institution, or other activity as determined by the Commission.

(5) [ ~~(3)~~ ] Accountant--An independent certified public accountant properly registered with the appropriate state board of accountancy.

(6) [ ~~(4)~~ ] Act--Texas Education Code, Chapter 132, Career Schools and Colleges.

(7) [ ~~(5)~~ ] Advertising--Any affirmative act designed to call attention to a school or program for the purpose of encouraging enrollment.

(8) [ ~~(6)~~ ] Asynchronous distance education--Distance education training that the Commission determines is not synchronous.

~~[ ~~(7)~~ Board--A local workforce development board as created under the Workforce and Economic Competitiveness Act.]~~

~~[ ~~(8)~~ Clock hour--Fifty minutes of instruction during a 60-minute period.]~~

~~[ ~~(9)~~ Commission--The Texas Workforce Commission.]~~

(9) Class or course--An identifiable unit of instruction that is part of a program of instruction.

(10) Coordinating Board--The Texas Higher Education Coordinating Board.

(11) Course of instruction--A program or seminar.

(12) Course time--A course or class period that is:

(A) a 50-minute to 60-minute lecture, recitation, or class, including a laboratory class or shop training, in a 60-minute period;

(B) a 50-minute to 60-minute internship in a 60-minute period; or

(13) [ ~~(11)~~ ] Distance education course--Either a seminar or a program that is offered to non-residence school students via correspondence or other media from a remote site on a self-paced schedule, excluding programs using interactive instruction.

(14) [ ~~(12)~~ ] Distance education school--A school that offers only distance education courses.

~~[ ~~(13)~~ Course of instruction--A program or seminar.]~~

(15) [ ~~(14)~~ ] Employment--A graduating or graduate student's employment in the same or substantially similar occupation for which the student was trained.

(16) [ ~~(15)~~ ] Good reputation--A person is considered to be of good reputation if the person:

(A) has never been convicted of a felony related to the operation of a school, and the person has been rehabilitated, including completion of parole or probation, from any other convictions that would constitute risk of harm to the school or students as determined by the Commission;

(B) has never been successfully sued for fraud or deceptive trade practices within the last 10 years;

(C) does not own a school currently in violation of legal requirements, has never owned a school with repeated violations, and has never owned a school that closed with violations including, but not limited to, unpaid refunds; and

(D) has not knowingly falsified or withheld information from the Commission.

(17) [ ~~(16)~~ ] Job placement--An affirmative effort by the school to assist the student in obtaining employment in the same or substantially similar stated occupation for which the student was trained.

(18) [ ~~(17)~~ ] Master student registration list--A comprehensive list with an entry made for any person who signs an enrollment agreement, makes a payment to attend the school, or attends a class. The entry shall be made on the date the first of these events occurs.

~~[ ~~(18)~~ Program--A sequence of approved subjects offered by a school that teaches skills and fundamental knowledge required for employment in the stated occupation.]~~

(19) Program or program of instruction--A postsecondary program of organized instruction or study that may lead to an academic, professional, or vocational degree, certificate, or other recognized educational credential.

(20) [ ~~(19)~~ ] Reimbursement contract basis--A school operating, or proposing to operate, under a contract with a state or federal entity in which the school receives payment upon completion of the training.

(21) [ ~~(20)~~ ] Residence school--A school that offers at least one program that includes classroom instruction or synchronous distance education.

(22) [ ~~(21)~~ ] School--A "career school or career college," as defined in the Act, that includes each location where courses of instruction shall be offered.

(23) [ ~~(22)~~ ] Secondary education--Successful completion of public, private, or home schooling at the high school level or obtainment of a recognized high school equivalency credential.

(24) [ ~~(23)~~ ] Seminar--A course of instruction that enhances a student's career, as opposed to a program that teaches skills and fundamental knowledge required for a stated occupation. A seminar may include a workshop, an introduction to an occupation or cluster of occupations, a short course that teaches part of the skills and knowledge for a particular occupation, language training, continuing professional education, and review for postsecondary examination.

(25) [ ~~(24)~~ ] Seminar school--A school that offers only seminars.

(26) [ ~~(25)~~ ] Small school--A "small career school or college" as defined in the Act.

(27) [ ~~(26)~~ ] Stated occupation--An occupation for which a program is offered that:

(A) is recognized by a state or federal law or by a state or federal agency as existing or emerging;

(B) is in demand; and

(28) [ ~~(27)~~ ] Student--Any individual solicited, enrolled, or trained in Texas by a school.

[ ~~(28)~~ Subject--A component of a program that includes specific content designed to advance the practical skills and knowledge necessary to prepare a student for employment in the stated occupation. A subject in a school is similar to a course at a community or technical college.]

(29) Suspension of enrollments--A Commission sanction that requires the school to suspend enrollments, re-enrollments, advertising, and solicitation, and to cease, in any way, advising prospective students, either directly or indirectly, of the available courses of instruction.

(30) Synchronous distance education--The Commission may determine distance education to be synchronous under the following conditions:

(A) The training is conducted simultaneously in real time, or the training is conducted so that the manner of delivery ensures that even if the instructor and student are separated by time, the course time [ ~~clock hours~~ ] of instruction that the student experiences can be determined; and

(B) There is consistent interaction between the student(s) and the instructor on a schedule that includes a definite time for completion of the program and periodic verifiable student completion/performance measures that allow the application of the progress standards of Subchapter L [ K ] and attendance standards of Subchapter M [ L ] of this chapter.

(31) Title IV school--A career school or college that participates in student financial aid programs under Title IV, Higher Education Act of 1965 (20 U.S.C. Section 1070 et seq.).

(32) [ ~~(31)~~ ] Tour--An inspection of the facilities and equipment pertaining to a course of instruction.

(33) [ ~~(32)~~ ] Week--Seven consecutive calendar days.

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 May 11, 2006.

TRD-200602614

Reagan Miller

Deputy Director for Workforce and UI Policy

Texas Workforce Commission

Earliest possible date of adoption: June 25, 2006

For further information, please call: (512) 475-0829

Subchapter B. CERTIFICATES OF APPROVAL

40 TAC §807.14

The proposed amendment affects Title 4, Texas Labor Code, particularly Chapters 301 and 302, as well as Texas Education Code, Chapter 132.

§807.14.Locations.

(a) A school shall obtain a certificate of approval for each location where courses of instruction will be offered, unless the school has a certificate of approval and meets one of the exceptions in this section.

(b) The Commission may approve the following as exempt from applying for approval for a new or additional location, if requested at least 30 days in advance:

(1) seminars, including preparation for licensing examinations, educational institution entrance examinations, and reading improvement;

(2) classes in no more than one location at a time as an itinerant school;

(3) classes at facilities used for additional classrooms for instructional services only, which are within a one-mile radius of the main campus and are dependent on the main campus for administration, supervision, fiscal control, and student services; or

(4) short-term programs. Short term programs:

(A) include course time of 200 [ ~~clock~~ ] hours or less of instruction; and

(B) are conducted with at least a 90-day interval between cessation of one program and the beginning of the next.

(c) The school shall file an application for a certificate of approval to reflect a new or additional location, including all documents deemed necessary by the Commission, and the appropriate fee. The Commission may issue the certificate of approval after inspection of the new facilities.

(d) If the Commission determines that a move of the school presents an unreasonable transportation hardship which would prevent a student from completing the training at the new location, the school shall provide a full refund of all monies paid and a release from all obligations to the student.

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 May 11, 2006.

TRD-200602615

Reagan Miller

Deputy Director for Workforce and UI Policy

Texas Workforce Commission

Earliest possible date of adoption: June 25, 2006

For further information, please call: (512) 475-0829

Subchapter E. SCHOOL DIRECTOR AND ADMINISTRATIVE STAFF

40 TAC §§807.62, 807.64, 807.66

The amended and new sections are proposed under Texas Labor Code §301.0015 and §302.002(d), which provide the Texas Workforce Commission with the authority to adopt, amend, or repeal such rules as it deems necessary for the effective administration of Agency services and activities.

The amended and new rules affect Title 4, Texas Labor Code, particularly Chapters 301 and 302, as well as Texas Education Code, Chapter 132.

§807.62.School Director Qualifications and Duties.

(a) A school director of a small school shall have administrative or management experience and [ ~~. A school director of a small school~~ ] shall be of good reputation . [ ~~and is not required to attend a Commission-sponsored workshop prior to initial approval by the Commission.~~ ]

(b) A school director of other than a small school shall be of good reputation and have a total of five years of administrative or management experience. An equivalent duration of higher education, college or university, may be substituted for each year of experience.

[ ~~(d)~~ A school director shall attend a Commission-sponsored workshop and demonstrate a proficiency of the knowledge required to operate a school before final Commission approval may be granted. The Commission may require a school director to attend additional workshops scheduled by the Commission in order to maintain skills and continue as an approved school director.]

(d) [ ~~(e)~~ ] The school director is responsible for the courses of instruction, organization of classes, designation of a liaison for Commission compliance visits, maintenance of the school facilities and proper administrative records, and all other matters related to the administration of the school, as determined by the Commission.

(e) [ ~~(f)~~ ] The school director shall sign and agree to the terms of the Director's Statement.

(f) [ ~~(g)~~ ] The Commission may require the school director to attend additional training to continue approved director status if a school has more than one substantiated complaint from students during a one-year period. If the school has repeat violations from a previous year under the same director, the Commission may revoke the approval of the school director.

(g) [ ~~(h)~~ ] The school director shall:

(1) ensure that all facilities, including housing endorsed by the school, comply with local, city, county, municipal, state, and federal regulations such as, but not limited to, fire, building, and sanitation codes; and

(2) inspect facilities, including housing, before endorsement.

[ ~~(i)~~ The Commission shall grandfather the director of a school from meeting the requirements contained in this section, providing that the school has submitted the application for that school director to the Commission prior to the effective date of this section, and the application results in approval by the Commission.]

§807.64.Director of Education Requirements.

(a) A school may have a director of education. [ The Commission shall grandfather schools from meeting the director of education requirements contained in this section for a particular director of education provided that the school has submitted the application for approval of the director of education to the Commission prior to the effective date of this section and the application results in approval by the Commission. ]

(b) If the school employs a director of education, the director shall meet the same qualifications as an instructor and, in addition, shall have:

(1) one year of employment as a postsecondary instructor;

(2) one year of employment as a supervisor; and

(3) a bachelor's degree, appropriate for the skills required, as determined by the Commission.

§807.66.Director of Admissions Requirements.

(a) A school may have a director of admissions. An individual employed by a school as a director of admissions prior to the effective date of this section is not subject to §807.66(b)(1) and §807.66(b)(2).

(b) If the school employs a director of admissions, the director shall be of good reputation and, in addition, shall have:

(1) one year of management or administrative experience; and

(2) one year of admissions experience.

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 May 11, 2006.

TRD-200602616

Reagan Miller

Deputy Director for Workforce and UI Policy

Texas Workforce Commission

Earliest possible date of adoption: June 25, 2006

For further information, please call: (512) 475-0829

Subchapter F. INSTRUCTORS

40 TAC §§807.81 - 807.84

The amended sections are proposed under Texas Labor Code §301.0015 and §302.002(d), which provide the Texas Workforce Commission with the authority to adopt, amend, or repeal such rules as it deems necessary for the effective administration of Agency services and activities.

The amended rules affect Title 4, Texas Labor Code, particularly Chapters 301 and 302, as well as Texas Education Code, Chapter 132.

§807.81.Instructor Qualifications.

(a) The instructor shall be of good reputation and shall not be a current student in the same or similar program, as determined by the Commission, in which the instructor teaches.

(b) Instructors shall possess and affirm on forms provided by the Commission that the instructor has one of the following qualifications that applies to the course [ ~~subject~~ ] area to be taught. In such cases where the practical experience is gained on a seasonal basis as an industry standard, the season of at least three months of experience shall be considered as one year of experience.

(1) The instructor has a master's degree or higher that:

(A) includes satisfactory completion of six semester credit hours or eight quarter credit hours in the class [ ~~subject~~ ] to be taught;

(B) includes satisfactory completion of three semester credit hours or four quarter credit hours in the course [ ~~subject~~ ] area and one year of related practical experience within the ten years immediately preceding employment by the school, if the class [ ~~subject~~ ] to be taught is in a technical field;

(C) includes satisfactory completion of three semester credit hours, or four quarter credit hours in the course [ ~~subject~~ ] area to be taught, if the class [ ~~subject~~ ] to be taught is in a non-technical field; or

(D) includes one year of related practical experience in the class [ ~~subject~~ ] to be taught within the ten years immediately preceding employment by the school, if the class [ ~~subject~~ ] to be taught is in a non-technical field.

(2) The instructor has a bachelor's degree that:

(A) includes nine semester hours or 12 quarter hours related to the course [ ~~subject~~ ] area to be taught;

(B) includes satisfactory completion of six semester credit hours or eight quarter credit hours in the course [ ~~subject~~ ] area to be taught and one year of related practical experience within the ten years immediately preceding employment by the school, if the class [ ~~subject~~ ] to be taught is in a technical field;

(C) includes satisfactory completion of three semester credit hours or four quarter credit hours in the course [ ~~subject~~ ] area and one year of related practical experience within the ten years immediately preceding employment by the school, if the class [ ~~subject~~ ] to be taught is in a non-technical field; or

(D) includes two years of related practical experience within the ten years immediately preceding employment by the school.

(3) The instructor has an associate's degree that:

(A) includes satisfactory completion of nine semester credit hours or 12 quarter hours in the course [ ~~subject~~ ] area to be taught and two years of related practical experience within the ten years immediately preceding employment by the school; or

(B) includes three years of related practical experience within the ten years immediately preceding employment by the school.

(4) The instructor has a secondary education if it includes a certificate of completion from a recognized postsecondary school for a program with course time of at least [ a ] 900 hours [ ~~clock-hour program~~ ] in a relevant course [ ~~subject~~ ] area and four years of related practical experience within the ten years immediately preceding employment by the school; or

(5) The instructor has proof of satisfactory completion of secondary education if accompanied by five years of related practical experience within the ten years immediately preceding employment by the school.

(c) In addition to the other applicable requirements for instructors, including the good reputation requirement, the following qualifications apply to the specific instructors listed in this subsection.

(1) The Commission requires that a court reporting instructor of only machine shorthand theory and speedbuilding shall have:

(A) an associate's degree or higher and certificate of completion of machine shorthand theory requirements in an accredited court reporting program;

(B) an associate's degree in court reporting from any state-recognized school;

(D) a certificate of completion of a court reporting program from a state-certified school.

(2) The Commission requires that a court procedures and technology instructor shall have:

(A) a Registered Professional Reporter or Certified Shorthand Reporter certification; and

(B) one year of court reporting experience.

(3) The Commission requires that a modeling instructor shall have, at a minimum:

(A) a secondary education and certificate of completion from a modeling program of at least 45 [ ~~clock~~ ] hours of course time from a state recognized school and at least five verifiable paid modeling jobs completed within the past five years; or

(B) a secondary education and at least ten verifiable paid modeling jobs completed within the past five years.

(4) The Commission requires that a truck driving instructor shall have, at a minimum:

(A) a secondary education;

(B) certified proof of successful completion of course time of 40 [ ~~clock~~ ] hours in safety education and driver training as required by this chapter; and

(C) three years of full-time tractor trailer driving experience within the ten years immediately preceding employment by the school.

(5) The Commission requires that a bartending instructor shall be certified by the Texas Alcoholic Beverage Commission as having completed the required awareness course.

(d) The director shall ensure that an instructor applicant demonstrates sufficient language to teach the class [ ~~subject~~ ] for which the instructor is applying to teach.

[ ~~(e)~~ The Commission shall grandfather schools from meeting the instructor requirements contained in this section for a particular instructor provided that the school has submitted the application for approval of the instructor to the Commission prior to the effective date of this section and the application results in approval by the Commission.]

(e) [ ~~(f)~~ ] For those instructors who return to the school prior to one full year of absence, and who will be teaching the same classes [ ~~subjects~~ ] as previously approved, the school shall document the leave and reinstatement dates in the instructor's personnel file. When an instructor begins teaching new classes [ ~~subjects~~ ] or the absence was more than one year, the school shall submit a new application to the Commission.

§807.82.Temporary Instructors.

(a) The Commission may allow a school to use a previously unapproved instructor to teach temporarily for a reasonable amount of time in the case of an emergency, as determined by the Commission.

(b) In such circumstances, the school shall provide written notice to the Commission delivered no later than the first day the temporary instructor begins teaching. The notice shall include:

(1) the class [ ~~subject~~ ] to be taught;

(2) the name of the approved instructor;

(3) the name of the temporary instructor; and

(4) the reason for the temporary instructor.

(d) The temporary instructor shall have practical experience or education in the course [ ~~subject~~ ] area to be taught, and shall not have been previously disapproved to teach the class [ ~~subject~~ ].

(e) There shall be no more than one temporary instructor per grading period in an individual class [ ~~subject~~ ], unless specifically approved in advance by the Commission.

(f) Failure to comply with this section shall result in penalties, up to and including, a full refund to all students attending such classes.

§807.83.Instructor Application.

(a) A school that has been licensed for at least one year and is accredited by an agency recognized by the U. S. Secretary of Education is not required to submit instructor applications to the Commission for approval. Documentation that the instructor meets the requirements of this chapter must be kept on file at the school and available for review immediately upon request.

(b) The school shall file an application for approval of an instructor on forms provided by the Commission in accordance with the following criteria and ensure that the instructor is of good reputation.

(1) The application shall be postmarked within five calendar days of employment as an instructor subject to the conditions outlined in this subchapter. A school may employ an instructor pending approval by the Commission.

(2) Depending upon the qualifications indicated on the application, the application shall include one or more of the following:

(A) a legible copy of the postsecondary certificate or degree, or a transcript indicating appropriate coursework completed, as applicable;

(B) proof of a current occupational license; and

(c) A school with degree programs shall ensure that instructors are of good reputation and meet all the qualifications required by the Coordinating Board.

(d) The Commission may approve a variance from the specific qualifications contained in §807.81 of this subchapter with sufficient justification and an assurance that the program quality will not be lessened.

(e) The Commission may consider current approvals of instructors by other Texas state agencies responsible for approval and regulation of the program, or any professional certifications held by the instructor when submitted with the Commission's instructor application. The Commission will accept notification, in lieu of a new instructor application, for any instructor that has a current approval by the Commission to teach the same classes [ ~~subjects~~ ] at other schools that have the same owners.

(f) The Commission may require the school director of an accredited school to file applications for instructors if there have been two substantiated complaints regarding instructors in the previous year, or if the school is unable to produce, when requested, documentation that all instructors meet the requirements of this subchapter.

(g) The Commission may require a school director to submit and receive approvals for instructor applications in advance of employing the instructors for a period of one year if the school has had three instructor applications finally disapproved within the previous two years.

§807.84.School Responsibilities Regarding Instructors.

(a) The school shall ensure that an appropriate number of instructors, as determined by the Commission, have proper licensure or certificates required for the stated occupation's objective. The holder of the license or certificate shall actively participate in program development and revisions.

(b) The school shall ensure continuity of instruction through reasonable retention of instructors to provide students with a quality education.

[ ~~(c)~~ The school shall implement, maintain, and update annually a written plan for staff development, which includes, at a minimum, continuing education, staff meetings, attendance at trade and professional conferences, and observation of, or participation in, on-the-job activities.]

(c) [ ~~(d)~~ ] The school director or director of education shall formally evaluate each instructor in writing at least annually, subject to review by the Commission.

(d) [ ~~(e)~~ ] The school director or director of education shall ensure that students are allowed the opportunity to formally evaluate each instructor in writing at least annually and incorporate said evaluation in the instructor's overall evaluation. These student evaluations are subject to review by the Commission.

[ ~~(f)~~ The school shall provide in-service training within the first three months of teaching to those instructors hired lacking teaching experience. In-service training includes planned professional development opportunities that enable inexperienced instructors to learn and develop effective teaching strategies and skills. Topics shall include competency-based training, instructional methods, adult learning styles, and student learning and skills assessment. Competency-based training specifies the skills and skill levels required to complete a training program, develops and organizes teaching and learning methods to enable students to achieve the identified skills and levels of proficiency, and uses criterion-referenced evaluation to measure achievement.]

[ ~~(g)~~ The school shall provide and document in-service training that provides updates on skills, knowledge, and technology required by business and industry for those instructors who have taught for two years, but have not gained relevant work experience during the two-year period.]

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 May 11, 2006.

TRD-200602617

Reagan Miller

Deputy Director for Workforce and UI Policy

Texas Workforce Commission

Earliest possible date of adoption: June 25, 2006

For further information, please call: (512) 475-0829

Subchapter G. COURSES OF INSTRUCTION

40 TAC §§807.91 - 807.104

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

The repeal is proposed under Texas Labor Code §301.0015 and §302.002(d), which provide the Texas Workforce Commission with the authority to adopt, amend, or repeal such rules as it deems necessary for the effective administration of Agency services and activities.

The repeal affects Title 4, Texas Labor Code, particularly Chapters 301 and 302, as well as Texas Education Code, Chapter 132.

§807.91.Definitions Relating to Courses of Instruction.

§807.92.General Information for Courses of Instruction.

§807.93.Applications for Additional Courses of Instruction.

§807.94.Stated Occupation.

§807.95.Curriculum Content.

§807.96.Curriculum Length.

§807.97.Program Title.

§807.98.Equipment.

§807.99.Facilities.

§807.100.Admission Requirements Relating to Programs.

§807.101.School Responsibilities Regarding Programs.

§807.102.Program Revisions.

§807.103.Program Requirements for Degree Granting Schools.

§807.104.Penalties Relating to Courses of Instruction.

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 May 11, 2006.

TRD-200602632

Reagan Miller

Deputy Director for Workforce and UI Policy

Texas Workforce Commission

Earliest possible date of adoption: June 25, 2006

For further information, please call: (512) 475-0829

Subchapter H. APPLICATION FEES AND OTHER CHARGES

40 TAC §§807.111 - 807.113

The repeal affects Title 4, Texas Labor Code, particularly Chapters 301 and 302, as well as Texas Education Code, Chapter 132.

§807.111.Fee Schedule.

§807.112.Renewal Fees.

§807.113.Installment Payments.

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 May 11, 2006.

TRD-200602633

Reagan Miller

Deputy Director for Workforce and UI Policy

Texas Workforce Commission

Earliest possible date of adoption: June 25, 2006

For further information, please call: (512) 475-0829

Subchapter I. ADVERTISING

40 TAC §§807.121 - 807.126

The repeal affects Title 4, Texas Labor Code, particularly Chapters 301 and 302, as well as Texas Education Code, Chapter 132.

§807.121.General Information for Advertising.

§807.122.Advertisement Method.

§807.123.Advertisement Content.

§807.124.Financial Incentives.

§807.125.Catalog.

§807.126.Advertisement Monitoring.

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 May 11, 2006.

TRD-200602634

Reagan Miller

Deputy Director for Workforce and UI Policy

Texas Workforce Commission

Earliest possible date of adoption: June 25, 2006

For further information, please call: (512) 475-0829

Subchapter J. ADMISSION

40 TAC §§807.141 - 807.147

The repeal affects Title 4, Texas Labor Code, particularly Chapters 301 and 302, as well as Texas Education Code, Chapter 132.

§807.141. General Information for Admission.

§807.142. Admission Requirements.

§807.143. Receipt of Enrollment Policies.

§807.144. Enrollment Agreement.

§807.145. Conduct Policy.

§807.146. Tuition and Fees.

§807.147. Admission Requirements for Degree Granting Schools.

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 May 11, 2006.

TRD-200602635

Reagan Miller

Deputy Director for Workforce and UI Policy

Texas Workforce Commission

Earliest possible date of adoption: June 25, 2006

For further information, please call: (512) 475-0829

Subchapter K. PROGRESS STANDARDS

40 TAC §§807.161 - 807.164

The repeal affects Title 4, Texas Labor Code, particularly Chapters 301 and 302, as well as Texas Education Code, Chapter 132.

§807.161. General Requirements for Progress Standards.

§807.162.Progress Requirements for Residence Schools.

§807.163.Progress Requirements for Distance Education Schools.

§807.164.Progress Requirements for Degree Granting Schools.

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 May 11, 2006.

TRD-200602636

Reagan Miller

Deputy Director for Workforce and UI Policy

Texas Workforce Commission

Earliest possible date of adoption: June 25, 2006

For further information, please call: (512) 475-0829

Subchapter L. ATTENDANCE STANDARDS

40 TAC §§807.171 - 807.175

The repeal affects Title 4, Texas Labor Code, particularly Chapters 301 and 302, as well as Texas Education Code, Chapter 132.

§807.171.General Requirements for Attendance.

§807.172.Attendance Requirements for Degree Granting Schools.

§807.173.Termination of Enrollment.

§807.174.Make-up Work.

§807.175.Leaves of Absence.

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 May 11, 2006.

TRD-200602637

Reagan Miller

Deputy Director for Workforce and UI Policy

Texas Workforce Commission

Earliest possible date of adoption: June 25, 2006

For further information, please call: (512) 475-0829

Subchapter M. CANCELLATION AND REFUND POLICY

40 TAC §§807.191 - 807.194

The repeal affects Title 4, Texas Labor Code, particularly Chapters 301 and 302, as well as Texas Education Code, Chapter 132.

§807.191.Right to Cancel after Tour.

§807.192.Consummation of Refund.

§807.193.Refund Requirements for Residence Schools.

§807.194.Penalties Relating to Refunds.

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 May 11, 2006.

TRD-200602638

Reagan Miller

Deputy Director for Workforce and UI Policy

Texas Workforce Commission

Earliest possible date of adoption: June 25, 2006

For further information, please call: (512) 475-0829

Subchapter N. RECORDS

40 TAC §§807.211 - 807.214

The repeal affects Title 4, Texas Labor Code, particularly Chapters 301 and 302, as well as Texas Education Code, Chapter 132.

§807.211.General Information for Records.

§807.212.Student Records.

§807.213.Attendance Record Keeping.

§807.214.Employment Records.

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 May 11, 2006.

TRD-200602639

Reagan Miller

Deputy Director for Workforce and UI Policy

Texas Workforce Commission

Earliest possible date of adoption: June 25, 2006

For further information, please call: (512) 475-0829

Subchapter O. COMPLAINTS

40 TAC §807.221, §807.222

The repeal affects Title 4, Texas Labor Code, particularly Chapters 301 and 302, as well as Texas Education Code, Chapter 132.

§807.221.School Policy Regarding Complaints.

§807.222.Complaints and Investigations.

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 May 11, 2006.

TRD-200602640

Reagan Miller

Deputy Director for Workforce and UI Policy

Texas Workforce Commission

Earliest possible date of adoption: June 25, 2006

For further information, please call: (512) 475-0829

Subchapter P. TRUCK DRIVER TRAINING PROGRAMS

40 TAC §§807.231 - 807.235

The repeal affects Title 4, Texas Labor Code, particularly Chapters 301 and 302, as well as Texas Education Code, Chapter 132.

§807.231.General Information Relating to Truck Driver Training.

§807.232.Truck Driver Instructor Development Course.

§807.233.Behind-the-Wheel Instruction.

§807.234.Motor Vehicle Insurance.

§807.235.Prohibited Activities Regarding Truck Driver Training.

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 May 11, 2006.

TRD-200602641

Reagan Miller

Deputy Director for Workforce and UI Policy

Texas Workforce Commission

Earliest possible date of adoption: June 25, 2006

For further information, please call: (512) 475-0829

Subchapter Q. CLOSED SCHOOLS

40 TAC §807.251, §807.252

The repeal affects Title 4, Texas Labor Code, particularly Chapters 301 and 302, as well as Texas Education Code, Chapter 132.

§807.251.School Closures.

§807.252.Tuition Trust Account.

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 May 11, 2006.

TRD-200602642

Reagan Miller

Deputy Director for Workforce and UI Policy

Texas Workforce Commission

Earliest possible date of adoption: June 25, 2006

For further information, please call: (512) 475-0829

Subchapter R. CEASE AND DESIST ORDERS

40 TAC §§807.271 - 807.282

The repeal affects Title 4, Texas Labor Code, particularly Chapters 301 and 302, as well as Texas Education Code, Chapter 132.

§807.271.Definitions Relating to Cease and Desist Orders.

§807.272.Statement of Charges and Notice of Hearing on Cease and Desist Orders.

§807.273.Contents of Statement of Charges and Notice of Hearing.

§807.274.Service of Statement and Charges and Hearing Notice for the Issuance of Cease and Desist Orders.

§807.275.Agreements to Hold the Hearing at a Later Date.

§807.276.Hearing.

§807.277.Evidence.

§807.278.Hearing Officer Disqualification and Withdrawal.

§807.279.Hearing Procedure.

§807.280.Continuance of Hearing.

§807.281.Hearing Decision and Final Review by the Commissioners.

§807.282.Effect of the Cease and Desist Order.

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 May 11, 2006.

TRD-200602643

Reagan Miller

Deputy Director for Workforce and UI Policy

Texas Workforce Commission

Earliest possible date of adoption: June 25, 2006

For further information, please call: (512) 475-0829

Subchapter G. STAFF EDUCATION REQUIREMENTS

40 TAC §§807.101 - 807.103

The new sections are proposed under Texas Labor Code §301.0015 and §302.002(d), which provide the Texas Workforce Commission with the authority to adopt, amend, or repeal such rules as it deems necessary for the effective administration of Agency services and activities.

The proposed new rules affect Title 4, Texas Labor Code, particularly Chapters 301 and 302, as well as Texas Education Code, Chapter 132.

§807.101.Initial Training.

(a) A school director shall complete the online training contained in the Director's Resource Guide or attend a Commission-sponsored workshop and demonstrate a proficiency of the knowledge required to operate a school before final Commission approval may be granted. The Commission may require a school director to retrain in order to maintain skills and continue as an approved school director.

(b) The school shall provide in-service training within the first three months of teaching to those instructors hired lacking teaching experience. In-service training includes planned professional development opportunities that enable inexperienced instructors to learn and develop effective teaching strategies and skills. Topics shall include competency-based training, instructional methods, adult learning styles, and student learning and skills assessment. Competency-based training specifies the skills and skill levels required to complete a training program, develops and organizes teaching and learning methods to enable students to achieve the identified skills and levels of proficiency, and uses criterion-referenced evaluation to measure achievement.

§807.102.Continuing Education.

(a) Except for exempt providers as defined in the Act, providers shall submit an application for approval of continuing education training. In approving continuing education training, the Commission shall consider the factors set out in §132.0551 of the Act.

(b) If a continuing education training provider submits an application for approval prior to September 1, 2006, and the application and courses are approved, all training conducted on or after January 1, 2006, will be considered as approved continuing education if the training is determined by the Commission to be substantially similar to the application.

(c) The school shall implement, maintain, and update annually a written plan for staff development, which includes at a minimum, continuing education, staff meetings, attendance at trade and professional conferences, and observation of, or participation in, on-the-job activities.

(d) Each school director, full-time instructor, and director of admissions shall complete a minimum of six hours of course time of continuing education applicable to the position within 12 months of employment in the position and each calendar year thereafter.

(e) The school shall provide and document in-service training that provides updates on skills, knowledge, and technology required by business and industry for those instructors who have taught for two years, but have not gained relevant work experience during the two-year period.

§807.103.Record Keeping.

The school shall:

(1) maintain records of any continuing education or training received by its officials or personnel indicating for which position the training was received;

(2) maintain records of any continuing education or training for officials or personnel for five years; and

(3) retain the records on the premises of the school or college so the records are immediately available for review.

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 May 11, 2006.

TRD-200602618

Reagan Miller

Deputy Director for Workforce and UI Policy

Texas Workforce Commission

Earliest possible date of adoption: June 25, 2006

For further information, please call: (512) 475-0829

Subchapter H. COURSES OF INSTRUCTION

40 TAC §§807.121 - 807.134

The proposed new rules affect Title 4, Texas Labor Code, particularly Chapters 301 and 302, as well as Texas Education Code, Chapter 132.

§807.121.Definitions Relating to Courses of Instruction.

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

(1) Externship--Practical, program-related, off-campus training under direct or indirect instructor supervision, with a preplanned outline of experiences and competencies.

(2) Laboratory experience--A specific experience of observation, experimentation, practice, study, technical investigation, analysis, and practical application of theory or verbal instruction involving hands-on supervised study in a selected vocation or class.

(3) Lecture--A presentation of theories, concepts, procedures, or information about a particular class.

(4) New program--A program:

(A) not previously offered;

(B) previously offered and then discontinued;

(C) with a revised objective such that the program provides preparation for different jobs than those for which the program was originally approved (examples: legal secretary to paralegal; dental technician to medical technician; computer operator to computer programmer); or

(D) with a 25 percent or more change within a 12-month period to the total number of hours, content, or lessons (examples: course time from 1,000 hours to 750, 600 hours to 900, 20 lessons to 30, 60 semester credit hours to 80).

(5) New seminar--A seminar:

(A) not previously offered;

(B) previously offered and then discontinued;

(D) with a 25 percent or more change in a 12-month period to the total number of hours of the approved seminar.

(6) Revised program or seminar--Revisions include changes in admission requirements, title, class title, objective description (but not the detailed objective), class course time or credit hours, or class hours of lecture, laboratory, or externship. Scheduling and price changes are catalog changes, not revisions.

§807.122.General Information for Courses of Instruction.

(a) A school submitting applications for approval of seminars shall use abbreviated forms provided by the Commission.

(b) No class or program shall be approved by the Commission unless the school demonstrates that the program's quality, content, and length reasonably and adequately imparts the job skills and knowledge necessary for the student to obtain employment in the stated occupation.

(c) A school may not solicit students, otherwise advertise, or conduct classes for a course of instruction prior to the Commission's approval of the course of instruction. Any such activity by the school, prior to the Commission's approval of the course of instruction, shall constitute a misrepresentation by the school and shall entitle each student in the course of instruction to a full refund of all tuition and fees paid by the student and release from all obligations.

(d) The school shall establish and maintain a formal advisory committee of at least five members, unless the Commission approves a lesser number of persons in advance, for each type of program with course time in excess of 200 hours in length. At least annually, the committee shall evaluate the curriculum, instructional materials and media, equipment, and facilities to ensure they meet the needs of the job market. The school shall have written documentation of the evaluation available for review by the Commission. If the school does not follow an advisory committee recommendation, the school shall maintain written documentation of the justification for not following the recommendation.

(e) If the applicant requests approval to measure programs in credit hours, the following conversion table shall be used.

(1) One academic quarter credit hour equals a minimum course time of:

(A) 10 hours of classroom lecture;

(B) 20 hours of laboratory experience; or

(2) One academic semester credit hour is equal to a minimum course time of:

(A) 15 hours of classroom lecture;

(B) 30 hours of laboratory experience; or

(3) The school shall calculate lecture, laboratory, and externship credit hour conversions individually for each class, rounding down to the nearest half credit hour. The school shall add the total for the credit hours for lecture, laboratory, and externship to determine the total credit hours for a class.

§807.123.Applications for Additional Courses of Instruction.

(a) A school applying for approval of an additional course of instruction, after receiving an original certificate of approval, shall submit a complete application that includes:

(1) the appropriate fee;

(2) a completed application for approval on forms provided by the Commission; and

(3) any other revisions or evidence as requested by the Commission.

(b) The Commission may require an abbreviated program application if:

(1) the school has the exact program approved at another location;

(2) the program objective changes;

(3) the program length changes 25% or more; or

(4) the school's completion and employment rates are exemplary, as determined by the Commission.

(c) The Commission may deny an application for approval of an additional course of instruction if the school is not in full compliance with the Act or this chapter.

§807.124.Stated Occupation.

(a) The school shall ensure that each program prepares the student for the stated occupation.

(b) The school shall demonstrate that a student who successfully completes the program is more likely to be employed in the stated occupation than an individual who does not complete the program, all other things being equal.

(c) The school shall identify a demonstrable occupational demand for the stated occupation. The Commission may consider the following in evaluating the school's statement of occupational demand:

(1) publications of established relevant occupational associations;

(2) targeted occupation lists of Boards, if approved by the Commission, or other local or state entities;

(3) references to advertisements in media for employment;

(4) occupation employment rate of students;

(5) percentage of graduating students who have previously completed the same or substantially similar program and who have obtained employment in the same or substantially similar stated occupation for which they have been trained;

(6) relative supply and demand for the stated occupation, including letters from potential employers that describe their need for trained employees; and

(7) reports or publications relating to the specific occupational demand.

§807.125.Curriculum Content.

(a) The school shall:

(1) provide competency-based programs;

(2) assess skills using primarily performance-based methods;

(3) use instructional media, methods, and materials appropriate for the program content and students' knowledge and abilities;

(4) offer programs in a logical sequence of knowledge and skills; and

(5) if deemed appropriate by the Commission, provide an externship or a simulation of the workplace for the program.

(b) Each class in the program shall teach the practical skills and knowledge required for employment in the stated occupation. The proportion of lecture, laboratory, and externship hours for each class and for the program shall be reasonable for the skills and knowledge to be learned for the stated occupation.

(c) The Commission may use or validate existing skill standards or competencies, or develop statewide skill standards with the assistance of industry, schools, and other relevant entities as determined by the Commission.

§807.126.Curriculum Length.

(a) Each class submitted for approval shall identify the course time or credit hours allocated to that class. A class or program that exceeds a length reasonable to prepare the student for the stated occupation shall not be approved.

(b) The Commission may establish minimum and maximum program lengths for stated occupations consistent with the intent of the Act.

§807.127.Program Title.

(a) Each program submitted for approval shall be identified by a title.

(b) The title shall clearly identify the stated occupation and shall be a title commonly used by business or industry.

§807.128.Equipment.

(a) Equipment required for instruction shall be comparable to that commonly found in the stated occupation.

(b) The school shall remove equipment not in working order from the instructional area, mark it as out-of-order, or properly identify it as awaiting repair.

(c) The school shall provide equipment of sufficient quality and quantity to meet the maximum use requirements of the current students, as demanded by the activity patterns of the training program.

§807.129.Facilities.

(a) In determining adequate space for lecture and laboratory experiences, the Commission shall consider that the amount of lecture and laboratory space meets the use requirements of the maximum number of current students in class with appropriate seating facilities and/or workstations, as needed by the activity patterns of the program.

(b) Enrollment shall not exceed the design characteristics of the available workstations.

§807.130.Admission Requirements Relating to Programs.

(a) The school shall submit, for approval by the Commission, its admission requirements for each program with justification for the requirements.

(b) The school shall ensure that the student demonstrates to the school sufficient proficiency in the language of instruction to successfully complete the training program.

§807.131.School Responsibilities Regarding Programs.

(a) As a condition of program approval or renewal, the school shall identify any portion of instruction that is self-paced or not conducted in English.

(b) To maintain program approval, the school shall demonstrate the following:

(1) a reasonable student completion rate for each program; and

(2) a minimum employment rate for program graduates in jobs related to the stated occupation.

(c) When a school is approved to offer a program, the school shall maintain sufficient instructors to teach all subjects for completing the program during the length of time stipulated in the school catalog, regardless of the size of the class.

(d) The school shall schedule classes so that students will be able to complete the program during the length of time stipulated in the school catalog.

(e) The school shall ensure that students receive the lecture and laboratory experience hours with sufficient instructors and scheduling. An instructor may not be simultaneously supervising a laboratory experience and a lecture even if they are in the same room.

(f) A school shall provide course outlines to students at the beginning of each subject which lists students' performance objectives, references and resources, and a general content outline for the subject.

(g) A school shall have and use lesson plans for all subjects.

(h) A school may not use classes from one or more approved programs to create a new program and award a certificate of completion without prior approval.

(i) The student-to-instructor ratio shall be sufficient for students to learn, practice, and demonstrate the necessary knowledge and skills. These ratios may be varied at the discretion of the Commission to conform to conditions in an individual school. The following student-instructor ratios may be acceptable for single classes:

(1) business lecture or laboratory--30 to one;

(2) technical, vocational, or allied health lecture--30 to one;

(3) technical lab (examples: computer programming, data processing, electronics)--20 to one;

(4) vocational lab (examples: auto mechanics, air conditioning and refrigeration, drafting)--20 to one; and

(5) intensive language instruction (beginning)--15 to one; (intermediate to advanced)--20 to one.

§807.132.Program Revisions.

(a) The school shall submit a revised program application for any proposed changes in the program that shall be reflected in the school catalog's program information.

(b) The school shall receive approval of proposed program revisions in writing from the Commission before implementing the revisions.

§807.133.Program Requirements for Degree Granting Schools.

A school shall provide evidence to the Commission that they are authorized by the Coordinating Board to offer degree programs.

§807.134.Penalties Relating to Courses of Instruction.

(a) If an approved course of instruction is discontinued for any reason, the Commission shall be notified within 72 hours of discontinuance and furnished with the names and addresses of any students who were prevented from completion of the course of instruction due to discontinuance. Should the school fail to make arrangements satisfactory to the students and the Commission for the completion of the course of instruction, the full amount of all tuition and fees paid by the students are then due and refundable. Any course of instruction discontinued will be removed from the list of approved courses of instruction.

(b) The Commission may suspend enrollments in a particular course of instruction at any time the Commission finds cause. For purposes of this subsection, cause includes, but is not limited to:

(1) inadequate instruction;

(2) unapproved or inadequate curriculum;

(3) inadequate equipment; or

(4) inadequate facilities.

(c) If a school begins teaching a course of instruction or revised course of instruction that has not been approved by the Commission, the Commission may require the school to refund to the enrolled students all or a portion of the tuition fees.

(d) If upon review and consideration of an original, renewal, or revised application for course of instruction approval, the Commission determines that the applicant fails to meet the requirements in the Act or this chapter, the Commission shall notify the school, setting forth in writing the reasons for the denial. This may include summaries of peer evaluations from both educators and employers offering similar courses of instruction.

(e) The Commission may revoke approval of a school's course of instruction at any time the Commission finds cause. For purposes of this subsection, cause includes, but is not limited to:

(1) any statement contained in the application for the course of instruction approval which is untrue;

(2) the school's failure to maintain the instructors, facilities, equipment, or courses of instruction, or course of instruction outcomes on the basis of which approval was issued;

(3) advertising made on behalf of the school which is false, misleading, or deceptive, including those that use the word "associate" to describe a degree other than those approved by the Coordinating Board;

(4) courses of instruction without clearly stated limited transferability if there are no articulation agreements with other postsecondary institutions in the same geographic area;

(5) courses of instruction for which financial aid is advertised but is not available;

(6) repeated violations by the school that negatively impact the quality of a particular course of instruction; or

(7) violations by the school of any applicable provision of the Act or this chapter.

(f) A school whose course of instruction approval is denied or revoked shall have the right to appeal. The Commission will conduct hearings in accordance with Commission policies and procedures applicable to the appeal.

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 May 11, 2006.

TRD-200602619

Reagan Miller

Deputy Director for Workforce and UI Policy

Texas Workforce Commission

Earliest possible date of adoption: June 25, 2006

For further information, please call: (512) 475-0829

Subchapter I. APPLICATION FEES AND OTHER CHARGES

40 TAC §§807.151 - 807.153

The proposed new rules affect Title 4, Texas Labor Code, particularly Chapters 301 and 302, as well as Texas Education Code, Chapter 132.

§807.151.Fee Schedule.

The Commission shall collect fees according to the following schedule.

(1) The initial fee for a certificate of approval for a small school is $1,001.

(2) The initial fee for any other school is $3,000.

(3) In the event of a change in ownership of the school, the new owner shall pay the same fee as that charged for an initial fee for a school.

(4) The initial registration fee for a representative is $90.

(5) The annual renewal fee for a representative is $45.

(6) The fee for a change of name of the school or owner is $150.

(7) The fee for a change of address of a school is $270.

(8) The fee for a change in the name or address of a representative or a change of the name or address of a school that causes the reissuance of the notice of permitted representative is $15.

(9) The application fee for a course of instruction that is an additional program is $225.

(10) The application fee for a course of instruction that is a seminar program is $35.

(11) The application fee for a school director, administrative staff member, or instructor is $20.

(12) The fee for an inspection of classroom facilities that are separate from the main campus is $375.

(13) The fee for an investigation of a complaint against a school is $400, if assessed.

§807.152.Renewal Fees.

(a) For small schools, if a certificate of approval is issued for more than one year, the renewal fee is $1,001, which may be paid with $501 the first year and $250 on the anniversary date of the certificate for each subsequent year.

(b) For all other schools, the renewal fee is based on the gross amount minus refunds of annual student tuition and fees. The renewal fee is the greater of:

(1) 0.31% of the school's gross tuition and fees, excluding refunds as provided by the Act; or

(2) $500.

(c) For all schools, the Commission shall assess a penalty of 10% of the renewal fee, not less than $200 or more than $1,000, if the school fails to file a complete application for renewal at least 30 days before the expiration date of the certificate of approval.

§807.153.Installment Payments.

(a) With the exception of the renewal installment schedule for small schools, a school may elect to pay any single fee in excess of $1,000 by quarterly installment. A service charge of 10% of the fee shall be added, and the total divided into equal quarterly installment payments. The first payment shall be due on the date the fee is due. The successive payments shall be due in 90-day increments.

(b) Failure to pay any installment by the due date may result in one or more of the following:

(1) a penalty being assessed in the amount of 50% of the total amount of the fee;

(2) full payment of the penalty and outstanding balance due within 30 days; or

(3) suspension of participation in the installment payment plan for the next renewal period.

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 May 11, 2006.

TRD-200602620

Reagan Miller

Deputy Director for Workforce and UI Policy

Texas Workforce Commission

Earliest possible date of adoption: June 25, 2006

For further information, please call: (512) 475-0829

Subchapter J. ADVERTISING

40 TAC §§807.171 - 807.176

The proposed new rules affect Title 4, Texas Labor Code, particularly Chapters 301 and 302, as well as Texas Education Code, Chapter 132.

§807.171.General Information for Advertising.

(a) A school shall not make deceptive statements in attempting to enroll students.

(b) The Commission may require a school to furnish proof to the Commission of any of its advertising claims, when requested.

§807.172.Advertisement Method.

(a) A school may advertise for prospective students under "instruction," "education," "training," or a similarly titled classification.

(b) A school shall not be advertised under any "help wanted," "employment," or similar classification.

(c) No school advertisements shall use the word "wanted," "help wanted," or "trainee," either in the headline or the body of the advertisement, nor shall any advertisement indicate, in any manner, that the school has or knows of employment of any nature available to prospective students; only "placement assistance," if offered, may be advertised.

(d) A school shall not use terms to describe the significance of the approval that specify or connote greater approval. Terms that schools may not use to connote greater approval by the Commission include, but are not limited to, "accredited," "supervised," "endorsed," and "recommended." A school shall not use the words "guarantee," "guaranteed," or "free" unless approved in writing by the Commission.

(e) Any advertisement that includes a reference to awarding of credit hours shall include the statement, "limited transferability." Where a school has an arrangement with a college or university to accept transfer hours, such information may be advertised, but any limitations shall be included in the advertisement.

§807.173.Advertisement Content.

(a) Advertisement content shall include, and clearly indicate, the full and correct name of the school and its address, including city, as they appear on the certificate of approval.

(b) Advertisements shall not include:

(1) statements that the school or its programs are accredited unless the accreditation is that of an agency recognized by the United States Department of Education;

(2) statements that the school or its courses of instruction have been approved unless the approval can be substantiated by an appropriate certificate of approval issued by an agency of the state or federal government; or

(3) representation of the school as an employment agency under the same name, or a confusingly similar name, or at the same location of the school.

(c) A school holding a franchise to offer specialized programs or classes not available to other schools shall not advertise such programs in such a manner as to diminish the value and scope of programs offered by other schools not holding such a franchise. Advertising of special classes or programs offered under a franchise shall be limited to the classes or programs offered.

(d) A school shall not use endorsements, commendations, or recommendations by students in favor of a school except with the consent of the student and without any offer of financial or other material compensation. Endorsements shall bear the legal or professional name of the student.

(e) A school shall not use a photograph, cut, engraving, illustration or graphic in advertising in such a manner as to:

(1) convey a false impression of size, importance, or location of the school, equipment, or facilities associated with the school, or

(2) circumvent any of the requirements of this chapter regarding written or oral statements.

(f) Every advertisement must clearly indicate that training is being offered, and shall not, either by actual statement, omission, or intimation, imply that prospective employees are being sought.

§807.174.Financial Incentives.

(a) Advertisements shall not:

(1) state that students shall be guaranteed employment while enrolled in the school;

(2) state that employment shall be guaranteed for students after graduation; or

(3) misrepresent opportunities for employment upon completion of any program.

(b) Advertisements shall not contain dollar amounts as representative or indicative of the earning potential of graduates unless those dollar amounts have been published by the United States Department of Labor. This provision shall not be construed as prohibiting the school from providing earning potential to the student individually on the student's receipt of enrollment policies or other such Commission-approved document.

(1) contain the language "financial aid available, if qualified"; and

(2) appear in type no larger than the font used for the name of the school and in similar color and style.

(d) Advertising of student tuition loans as described in this section does not preclude disclosure of the school's eligibility under the various state and federal loan programs.

§807.175.Catalog.

(a) The catalog shall include the following:

(1) table of contents or index;

(2) name and complete street address of the school;

(3) volume number, date of publication, and effective dates;

(4) history of any accreditations or approvals, including statement of approval and regulation by the Commission;

(5) description of space, facilities, and equipment;

(6) list of all trustees, directors, officers of the corporation, and owners;

(7) list of management staff and faculty, including education relating to the areas of instruction;

(8) tuition, fees, other charges, and applicable scholarship terms;

(9) school calendar;

(10) school hours of operation and class schedule, including the amount of time allocated for breaks and mealtimes;

(11) policies regarding enrollment, including entrance requirements, previous education credit, cancellation and refund, progress, attendance, leave of absence, and conduct;

(12) veterans administration refund policy, if applicable;

(13) description of courses of instruction, including the number of hours of course time of a seminar, seminar topic, lecture, lab, and externship, as well as credit hours in each class, if applicable;

(14) description of each class;

(15) description of the grading policy, including requirements for graduation;

(16) description of placement assistance, if available;

(17) statement of polices regarding grievances; and

(18) a statement signed by the owner or director indicating that all of the information contained in the catalog is true and correct.

(b) Any classes defined as self-paced shall be noted as such in the catalog.

§807.176.Advertisement Monitoring.

(a) The Commission may order corrective action to counteract the effect of advertising in violation of the Act or rules, including:

(1) retraction by the school of such advertising claims published in the same manner as the claims themselves; and

(2) cancellation of telephone numbers without an automatic forwarding message.

(b) As corrective action for violations of the Act or rules, the Commission may require schools to submit all advertisements to the Commission for pre-approval at least 30 days before proposed submission of the advertisements to the advertising medium.

(c) Nothing in these guidelines shall prohibit release of information to students as required by a state or federal agency.

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 May 11, 2006.

TRD-200602621

Reagan Miller

Deputy Director for Workforce and UI Policy

Texas Workforce Commission

Earliest possible date of adoption: June 25, 2006

For further information, please call: (512) 475-0829

Subchapter K. ADMISSION

40 TAC §§807.191 - 807.197

The proposed new rules affect Title 4, Texas Labor Code, particularly Chapters 301 and 302, as well as Texas Education Code, Chapter 132.

§807.191.General Information for Admission.

(a) The Commission may approve specific admission requirements for seminars and small schools.

(b) Small schools with programs with course time of 40 hours or less, individual class offerings, and seminars are not required to grant credit for previous education and training.

(c) The school shall make appropriate adjustments to the program length and price based upon credit granted for previous education and training, where warranted.

(d) For a school having specific term-beginning dates, a school may not start students after the third day of classes during any given term, except in those cases where appropriate credit for previous education and training has been given according to the Act and this chapter.

(e) A continuously enrolled student has the right to graduate under the academic requirements stated in the catalog in effect at the time of the student's enrollment.

§807.192.Admission Requirements.

(a) The school shall require for admission into its programs proof of one of the following:

(1) secondary education;

(2) successful completion or the equivalent of one full-time academic semester (12 academic semester hours) or academic quarter (18 academic quarter hours) at an accredited college, university, or other postsecondary school; or

(3) for certificate programs only, proven ability-to-benefit by obtaining a satisfactory score on the approved entrance test.

(b) Entrance test requirements shall be in accordance with the following provisions.

(1) Any entrance test shall be a nationally recognized standardized test or a nonstandardized test developed by the appropriate industry and approved by the Commission. A nonstandardized test shall be validated by a qualified third party, such as an expert in tests and measurements, for both appropriateness and the specific score level required for admission into the program. The name of the test and its publisher, any time limitations, a minimum acceptable score, and an explanation of score meanings, as referenced in the test material, shall be provided to the student with a copy of the test, if the test is not already on file with the Commission.

(2) If multiple opportunities are allowed for retaking the same entrance test, such students shall wait a minimum of five calendar days prior to retaking the test. A student may take a second entrance test on the same day provided a substantially different test is administered. This shall be stated in the admissions policy published in the school catalog.

(3) A representative is not allowed to administer the test, nor is anyone allowed to assist the student in answering the questions.

(4) If the entrance test reveals the student to be ineligible as an ability-to-benefit student, the student may be enrolled as a remedial student. The school shall have an evaluation procedure approved by the Commission to determine remedial needs and to determine when the required level of remediation has been reached. The school shall also have a remediation plan for such students consisting of classes approved by the Commission as a part of the program. The students may be charged for the remedial portion of the program on an hourly pro rata basis, but the student is not obligated for the tuition and fees of the program until the entrance requirements are met.

(c) Evidence shall be maintained in each student's file to show the admissions requirements have been met. A full refund of all monies paid and a full release from all obligations shall be due, as determined by the Commission, to any student for whom the school cannot establish that the admission requirements were met.

§807.193.Receipt of Enrollment Policies.

(a) For all enrollments other than for seminars, individual classes, and small schools with programs of course time of 40 hours or less, each school shall use a form provided by the Commission to verify the prospective student's receipt of the information required in this section.

(b) Unless otherwise required in this chapter, prior to enrollment the school shall furnish the following to each prospective student:

(1) a school catalog and program outline, unless the prospective student enrolls in a seminar;

(2) a schedule of tuition, fees, and other charges;

(3) the cancellation and refund policy;

(4) the progress and grievance policies and, for non-Title IV schools, attendance policies;

(5) the rules of operation and conduct;

(6) if available, the average starting salary per pay period and annually for the prospective student's stated occupation, and information regarding the number of job openings in the program objective field in a specified area within the last 12 months, including the name of the information source;

(7) the regulations pertaining to incomplete grades;

(8) written and verbal information regarding loans and grants and their differences, if the school participates in a loan or grant program;

(9) the requirements, if any, for any state or national licensing, certifications, or registrations;

(10) the exam passage rates for programs that prepare students for state licensing, certification, or registration exams;

(11) the job placement and employment data for the stated occupation as required in this chapter; and

(12) notice of all policies related to program interruption prior to completion and written information informing the student that if the student withdraws, it is the student's responsibility to inform the school or college.

(c) Any school that refers to the awarding of credit hours shall explain to each student during the enrollment process that transferability of such hours may be limited. Each student shall sign a statement indicating such an explanation has been provided.

(d) Should a school have an articulation agreement with an accredited college or university, or other postsecondary school, such information shall be provided to the student, including any known agreement limitations. Such schools shall also provide a list of known Texas postsecondary schools that accept any or all of the credit hours so earned.

(e) Students shall acknowledge receipt of each piece of information or documentation as set forth in this section by initialing each page and providing a complete signature at the end of the receipt of the enrollment policy form.

(f) A copy of the receipt of the enrollment policies form shall be given to the student and a copy maintained as a part of the student's files.

§807.194.Enrollment Agreement.

(a) A school does not need an enrollment agreement to enroll a student in a seminar that will be completed within three consecutive calendar days.

(b) For distance education schools, the enrollment agreement shall specify the amount of time allotted to the student to complete the program.

(d) A school shall use only an approved enrollment agreement to enroll students.

(e) The executed enrollment agreement shall include, but is not limited to, the following:

(1) full and correct name and location of the school;

(2) program title, tuition, fees, reasonable estimate cost of books and supplies, any other expenses, total cost of the program, items subject to cost change, method of payment and payment schedule, disclosure statement if interest is charged on more than three payments, and detachable buyer's right to cancel if enrollment is procured off campus;

(3) date training is to begin and program length;

(4) name, address, and signature of the student;

(5) student's e-mail address if any part of the instruction or academically related activity is Web based;

(6) statement by the school that the student will receive a copy of the school enrollment agreement and catalog at the time of signing by the student;

(7) cancellation and refund policy; and

(8) a Federal Trade Commission statement for holder in due course, unless no loans, grants, or installment payments are involved.

(f) The school shall provide a notice of cancellation, attached to the enrollment agreement, for any student enrolled off the school premises. The notice shall:

(1) be in duplicate;

(2) be easily detachable;

(3) be printed in boldface type, with a minimum font of 10 point;

(4) contain the date of the enrollment agreement, name and address of school, the date on which the statutory 72-hour cancellation privilege will expire, and any other provisions as determined by the Commission;

(5) be printed in the same language as used in the enrollment agreement; and

(6) be in such a form that can be used by the student to notify the school of the student's desire to cancel by dating, signing, and mailing or otherwise delivering the form to the school's address shown.

(g) A copy of the enrollment agreement form shall be given to the student and a copy maintained as a part of the student's file.

(h) The Commission may permit a school to submit an abbreviated enrollment agreement for students enrolled on a reimbursement contract basis.

§807.195.Conduct Policy.

The school shall submit for approval a copy of the rules and regulations pertaining to conduct, which shall include statements regarding:

(1) conditions for dismissal; and

(2) conditions for reenrollment of those students dismissed for violating the conduct policy.

§807.196.Tuition and Fees.

(a) A school shall disclose to potential students all tuition, fees, and other charges, and state such information in the school's application for a certificate of approval. The school may not use an estimated tuition amount, nor may the school increase the student's tuition if the student remains continuously enrolled and completes the training as approved at the time of admission. If the school charges to repeat classes, the amount of the charges must be disclosed to the student.

(b) A school shall make available for review by the Commission upon request:

(1) a description of the methods of payment that are available to enrolling students;

(2) the names and addresses of lending institutions used by the school for student tuition loans; and

(3) the true annual percentage rate and any other fees or charges associated with student tuition loans.

(d) A school may offer scholarships providing the terms of scholarships are disclosed to the Commission.

(e) The school shall maintain, in a permanent format that is acceptable and readily accessible to the Commission, a record of any funds received from, or on behalf of, the student. A school shall clearly identify the payor, the type of funding, and the reason for the charges. These records shall be posted and kept current.

(f) A school shall issue written receipts of any charges or payments to the student and maintain such records for review upon request by the Commission. Each separately charged item shall be clearly itemized on a student-signed receipt.

§807.197.Admission Requirements for Degree Granting Schools.

(a) Students who transfer from other postsecondary schools shall complete at least 20 academic semester hours or 30 academic quarter hours in residency at the school that will grant the degree. This does not apply to transfers within the same school system.

(b) A school shall allow students attending at the time a school becomes a degree granting school to earn a degree, providing the student:

(1) meets all the prerequisites for acceptance into the degree program; and

(2) satisfactorily completes all courses or equivalent courses of the degree program.

(c) Former students shall meet all the prerequisites for acceptance into the degree program and shall satisfactorily complete all courses or equivalent courses in the approved degree program to qualify for a degree.

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 May 11, 2006.

TRD-200602622

Reagan Miller

Deputy Director for Workforce and UI Policy

Texas Workforce Commission

Earliest possible date of adoption: June 25, 2006

For further information, please call: (512) 475-0829

Subchapter L. PROGRESS STANDARDS

40 TAC §§807.221 - 807.224

The proposed new rules affect Title 4, Texas Labor Code, particularly Chapters 301 and 302, as well as Texas Education Code, Chapter 132.

§807.221.General Requirements for Progress Standards.

(a) The Commission may approve specific progress standards for self-paced, competency-based programs.

(b) Seminars, because of their nature and duration, are not required to have progress standards.

(c) The progress evaluation records shall be of the type and nature to reflect whether the student is making satisfactory progress to the point of being able to complete all subject matter within the allotted time provided in the course curriculum.

(d) The school shall submit its policies pertaining to incomplete grades to the Commission for approval and publish those policies in the school's catalog. The policies shall address the possibility of the classes being discontinued when the student returns and clarify options available to that student pursuant to the Act.

(e) Approved court reporting program students may receive one grade of "IP" (in progress) in any speedbuilding class if they have not achieved the required speed at the end of the grading period.

§807.222.Progress Requirements for Residence Schools.

(a) For programs with course time of 40 hours or less, the school is only required to give a final exam at the end of the program to determine whether the student has sufficient knowledge to warrant a certificate of completion, in lieu of a progress evaluation.

(b) For programs with course time of 41 to 200 hours, the school shall record a student's grades at the midpoint and end of each progress evaluation period. A student not making satisfactory progress at the midpoint shall be placed on academic probation for the remainder of the progress evaluation period. If the student does not achieve satisfactory progress by the end of the probationary period, the student's enrollment shall be terminated.

(c) For schools approved on a course time basis and offering programs in excess of 200 hours, the school shall evaluate progress at least every eight weeks. A school approved on a credit hour basis shall evaluate progress at the midpoint and end-of-term for academic semester or academic quarter or at least every eight weeks. For programs with course time in excess of 200 hours, the following shall apply.

(1) The school shall place a student making unsatisfactory progress for the program at the end of a progress evaluation period on academic probation for the next progress evaluation period. If the student on academic probation achieves satisfactory progress for the subsequent progress evaluation period, but does not achieve the required grades to meet overall satisfactory progress for the program, the student may be continued on academic probation for one more progress evaluation period.

(2) If a student on academic probation fails to achieve satisfactory progress for the first probationary progress evaluation period, the student's enrollment shall be terminated.

(3) The enrollment of a student who fails to achieve overall satisfactory progress for the program at the end of two successive probationary progress evaluation periods shall be terminated.

(d) When a student is placed on academic probation, the school shall counsel the student prior to the student returning to class. The date, action taken, and terms of probation shall be clearly indicated in the student's permanent file.

(e) The school may allow a student whose enrollment was terminated for unsatisfactory progress to reenroll after a minimum of one progress evaluation period. Such reenrollment does not circumvent the approved refund policy.

(f) The school shall place a student who returns after their enrollment was terminated for unsatisfactory progress on academic probation for the next grading period. The school shall advise the student of this action and document the student's file accordingly. If the student does not demonstrate satisfactory progress at the end of this probationary period, that student's enrollment shall be terminated.

§807.223.Progress Requirements for Distance Education Schools.

(a) Distance education schools shall evaluate progress as the school receives each lesson assignment. The school shall maintain the record of progress on forms approved by the Commission. Forms shall include:

(1) the date course materials are mailed to the student;

(2) the date the lesson assignment is received from the student;

(3) the grade on a per-lesson basis;

(4) the instructor's name;

(5) the date graded assignments are returned to the student; and

(6) the final grade for the program with completion date indicated.

(b) If at the end of the time period specified in the enrollment agreement, the student has not completed the program, the student's enrollment shall be terminated.

§807.224.Progress Requirements for Degree Granting Schools.

For a school offering degree programs, the progress standards shall include the following:

(1) a student progress evaluation every academic semester, academic quarter, or at least every eight weeks in block-time programs;

(2) a minimum grade point average for graduation from all degree programs of 2.0 based on a 4.0 scale, and that a student achieve a passing grade in all required classes;

(3) a probationary period of one academic semester, academic quarter, or approved grading period following the end of the academic semester, academic quarter, or approved grading period in which the student's grades become unsatisfactory; and

(4) provisions for termination at the end of not more than two consecutive probationary periods if the student's cumulative grade point average does not improve to the level required for graduation.

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 May 11, 2006.

TRD-200602623

Reagan Miller

Deputy Director for Workforce and UI Policy

Texas Workforce Commission

Earliest possible date of adoption: June 25, 2006

For further information, please call: (512) 475-0829

Subchapter M. ATTENDANCE STANDARDS

40 TAC §§807.241 - 807.245

The proposed new rules affect Title 4, Texas Labor Code, particularly Chapters 301 and 302, as well as Texas Education Code, Chapter 132.

§807.241.General Requirements for Attendance.

(a) Seminar programs that begin and end during one day are not required to maintain an attendance policy.

(b) Title IV schools are not required to take attendance.

(d) No provision in this subchapter shall require a school to terminate the enrollment of a student for lack of attendance at a point at which a refund would not be due.

(e) A school shall charge for a full day of absence when the student fails to attend all of the scheduled classes on that day. The school shall charge for a partial day of absence for any period of absence during the day.

(f) A school shall not consider school holidays, such as summer vacation and Christmas holidays, etc., as days of absence.

§807.242.Attendance Requirements for Degree Granting Schools.

(a) The following requirements are for non-Title IV schools and Title IV schools that voluntarily take attendance.

(b) For a school offering degree programs, the attendance standards shall include the following:

(1) provisions for termination or probation during the next academic quarter, academic semester, or approved term when a student is absent for more than 20% of the scheduled course time hours during an academic quarter, academic semester, or approved term;

(2) provisions for termination when a student is absent for more than 20% of the scheduled course time hours during the probationary academic quarter, academic semester, or approved term; and

(3) provisions for termination prior to the last quarter, when a student is absent in excess of 10 consecutive school days or 20% of the total course time hours in the course, whichever occurs first.

§807.243.Termination of Enrollment.

(a) A school shall terminate the enrollment of a student who accumulates the lesser of the following amounts of absences:

(1) more than 10 consecutive school days;

(2) more than 20% of the total course time hours in a program with course time of more than 200 hours;

(3) more than 25% of the total course time hours in a program or individual class with course time of 41 to 200 hours;

(4) more than 25% of the total course time hours for seminars, individual classes, or programs with course time of 40 hours or less; or

(5) any number of days if the student fails to return as scheduled from an approved leave of absence.

(b) A Title IV school that does not voluntarily take attendance shall terminate the enrollment of a student if the student's participation in an academically related activity cannot be documented:

(1) at the end of the first week of the academic term;

(2) at the end of the first month of the academic term;

(3) at the midpoint of each academic term; and

(4) at the end of each academic term.

(d) Students whose enrollments are terminated for violation of the attendance policy may not reenroll before the start of the next progress evaluation period. This provision does not circumvent the approved refund policy.

§807.244.Make-up Work.

(a) No more than 5% of the total course time hours for a program may be made up.

(b) The school shall submit make-up work policies to the Commission for approval.

(1) be supervised by an instructor approved for the class being made up;

(2) require the student to demonstrate substantially the same level of knowledge or competence expected of a student who attended the scheduled class session;

(3) be completed within two weeks of the end of the grading period during which the absence occurred;

(4) be documented by the school as being completed, recording the date, time, duration of the make-up session, and the name of the supervising instructor; and

(5) be signed and dated by the student to acknowledge the make-up session.

§807.245.Leaves of Absence.

(a) Seminars and small schools with programs with course time of 40 hours or less shall not grant leaves of absence.

(b) A school director may grant a leave of absence after determining that good cause is shown.

(c) In a 12-month calendar period, a student may have no more than two leaves of absence. For a program with course time of 200 hours or less, a student may be on leave of absence for a total of 30 calendar days. For programs with course time of more than 200 hours, a student may be on leave of absence for a total of 60 calendar days.

(d) School attendance records shall clearly define the dates of the leave of absence. A written statement as to why the leave of absence was granted, signed by both the student and the school director indicating approval, shall be placed in the student's permanent file.

(e) In addition to the requirements concerning leaves of absence in this subchapter, a school offering degree programs that schedules their courses on an academic quarter or academic semester basis may include in their attendance policies provisions for summer leaves of absence. These leaves of absence shall not exceed the lesser of 120 days or the interval between the end of the spring academic quarter or academic semester and the start of the fall academic quarter or academic semester.

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 May 11, 2006.

TRD-200602624

Reagan Miller

Deputy Director for Workforce and UI Policy

Texas Workforce Commission

Earliest possible date of adoption: June 25, 2006

For further information, please call: (512) 475-0829

Subchapter N. CANCELLATION AND REFUND POLICY

40 TAC §§807.261 - 807.264

The proposed new rules affect Title 4, Texas Labor Code, particularly Chapters 301 and 302, as well as Texas Education Code, Chapter 132.

§807.261.Right to Cancel after Tour.

(a) Distance education, combination distance education-residence, and seminars are not required to provide the student a tour.

(b) Any potential student who has not been provided the opportunity to tour the school facilities and inspect the equipment before signing an enrollment contract has an additional three days, excluding Saturdays, Sundays, and legal holidays, following a tour and inspection to cancel enrollment and request a full refund of any money paid to the school and release from all obligations. The student shall sign and date an acknowledgement form certifying the completion of the tour.

§807.262.Consummation of Refund.

(a) A school shall document refunds by written record indicating the date of the refund transaction, the name of the student receiving the refund, the total amount refunded, and the specific reason for the refund. Proof of consummation shall be on file within 120 days of the effective date of termination and shall include:

(1) copies of both sides of the cancelled check;

(2) printed proof of completed transaction of electronic funds transfer or other similar electronic means; or

(3) documentation of an awarded credit to a credit card or other similar account.

(b) To ensure a school's good faith effort to timely consummate a refund owed directly to a student, the student's file shall contain evidence of the following proof of a certified mailing of the refund to the:

(1) student's last known address;

(2) student's permanent address, if different from the student's last known address; or

(3) address of the student's parent or legal guardian, if different from the student's last known and permanent addresses.

(c) If after making a good faith effort to timely consummate a refund, the school is unable to consummate the refund, the school shall forward to the Commission the appropriate refund amount and any pertinent student information to assist the Commission in locating the student.

§807.263.Refund Requirements for Residence Schools.

(a) Students are entitled to a full refund for classes attended if the school does not provide a class with:

(1) an approved instructor;

(2) an instructor for whom an application has been properly submitted to the Commission; or

(3) a temporary instructor for whom the school submitted notice to the Commission.

(b) If a class has no instructor for more than one class period, students are entitled to a full refund for each such class attended.

(c) The length of a program, for purposes of calculating refunds owed, is the shortest scheduled time period in which the program may be completed by continuous attendance of a full-time student.

(d) A non-Title IV school shall calculate refunds for students based upon scheduled hours of classes through the last date of attendance. A Title IV school shall calculate refunds for students based upon scheduled hours of classes through the last documented day of an academically related activity. Neither type of school shall count leaves of absence, suspensions, school holidays, days when classes are not offered, and summer vacations for purposes of calculating a student's refund.

(e) For all schools other than distance education, combination distance education-residence, and seminars, a student may cancel enrollment, request a full refund, and request a release from any obligations to the school within three days, excluding Saturdays, Sundays, and legal holidays following:

(1) the first day of the student's scheduled classes if the student is not provided an opportunity to tour the school facilities, which includes inspection of equipment, before signing an enrollment contract; or

(2) the day the tour of the school facilities, including inspection of the equipment, is completed, when provided before the first day of the student's scheduled classes.

§807.264.Penalties Relating to Refunds.

(a) A penalty shall be paid on any refund not consummated in a timely manner as required by the Act. The penalty assessment shall begin on the first day following the expiration of the statutorily defined refund period and end on the day preceding the date the refund is consummated.

(b) Penalties assessed on late refunds for grants shall be paid to the tuition trust account if the amount is $15 or less. Any other penalty assessed on a school's late payment of student refunds shall be disbursed in the following order of priority:

(1) to the student's account at a lending institution for the balance of principal and interest on the student loan;

(2) to the student for tuition and fees paid directly by the student; and

(3) to the tuition trust account for any remaining balance of assessed penalty.

(c) If the Commission determines that the method used by the school to calculate refunds is in error or the school does not routinely pay refunds within the time required by the Act, the school shall submit an audited report conducted by an accountant of the refunds due former students that includes any penalty due as specified in the Act. An audit opinion letter shall accompany a schedule of student refunds due, which discloses the following information for the four years prior to the date of the Commission's request:

(1) student information, including name, address, and social security number;

(2) pertinent dates, including last date of attendance and date of termination; and

(3) refund information, including amount of refund with principal, penalty, and any balance due separately stated, payee, and date and check number of payment if payment has been made.

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 May 11, 2006.

TRD-200602625

Reagan Miller

Deputy Director for Workforce and UI Policy

Texas Workforce Commission

Earliest possible date of adoption: June 25, 2006

For further information, please call: (512) 475-0829

Subchapter O. RECORDS

40 TAC §§807.281 - 807.284

The proposed new rules affect Title 4, Texas Labor Code, particularly Chapters 301 and 302, as well as Texas Education Code, Chapter 132.

§807.281.General Information for Records.

(a) A school shall permanently maintain a master student registration list (MSRL). If the school maintains the MSRL in electronic form, the school must be able to produce a printed copy immediately upon request. The MSRL must contain at least the following information:

(1) date of applicable entry;

(2) name of student;

(3) address of student including city, state, and zip code;

(4) telephone number;

(5) social security number;

(6) date of birth; and

(7) name of program.

(b) A school shall maintain current records and necessary data for each student required to be on the master student registration list to show compliance with the Act and this chapter. These records shall be:

(1) maintained on-site; and

(2) made available to the Commission for inspection.

(c) If applicable, the school shall maintain and ensure that copies of the accreditation authorization and letter of eligibility from the United States Department of Education are available for Commission review.

(d) Degree granting schools shall maintain a copy of the certificate of authorization from the Coordinating Board for each authorized degree program.

(e) The Commission may conduct unannounced compliance inspections.

(f) A school shall maintain complete records of all advertising, sales, and enrollment materials used by or on behalf of the school for a five-year period. Materials maintained shall include, but not be limited to, direct mail pieces, brochures, printed literature, films, leaflets, handbills, fliers, video and audiotapes disseminated through the broadcast media, materials disseminated through the print media or Internet, and sales and recruitment manuals used to instruct sales personnel.

§807.282.Student Records.

(a) A school shall permanently maintain student transcripts of academic records. A school shall provide such transcripts to students and prospective employers at a reasonable charge if the student has fulfilled the financial obligation to the school and is neither in default nor owes a refund to any federal or state student financial aid program.

(b) A school shall retain financial records in accordance with federal retention requirements.

(1) a written record of previous education and training on a form provided by the Commission; and

(2) official transcripts from all previous postsecondary schools attended by the student.

§807.283.Attendance Record Keeping.

(a) The following requirements are for non-Title IV schools:

(1) A school offering seminars or other programs where students do not change instructors during the school day is not required to maintain a separate master record of attendance.

(2) A school shall maintain a master record of attendance on each student that clearly indicates the number of scheduled hours each day and the hours of absence.

(3) Each instructor shall maintain a record of attendance, which shall indicate a positive record of each student's attendance. Entries in the record of attendance shall be made in ink or other permanent medium, including other permanent computer records, and shall not be changed in a manner that precludes reading the original entry.

(b) The following requirements are for Title IV schools:

(1) The school shall maintain a form signed and dated by the student to document the student's participation in an academically related activity. An e-mail sent from the student's e-mail account listed on the enrollment agreement fulfills this requirement.

(2) The school shall maintain a master record for each student that clearly indicates the student's class schedule as well as the number of scheduled hours for each class day. For synchronous distance education students, the record shall indicate the number of scheduled hours for each week.

(c) Nothing in this chapter prevents a Title IV school from voluntarily using attendance as a manner of fulfilling the requirements of this chapter.

§807.284.Employment Records.

(a) A school offering programs approved for an occupational objective shall complete the labor market information survey on forms provided by the Commission and submit them on or before the date provided in the survey packet as requested by the Commission.

(b) A school shall report program completion, job placement, and employment data on an annual basis in each program approved for an occupational objective.

(1) The school shall provide the data in a form acceptable to the Commission.

(2) Verifiable documentation shall be made available for review to support data reported. The documentation shall include the names of graduates and the names, addresses, and telephone numbers of their employers.

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 May 11, 2006.

TRD-200602626

Reagan Miller

Deputy Director for Workforce and UI Policy

Texas Workforce Commission

Earliest possible date of adoption: June 25, 2006

For further information, please call: (512) 475-0829

Subchapter P. COMPLAINTS

40 TAC §807.301, §807.302

The proposed new rules affect Title 4, Texas Labor Code, particularly Chapters 301 and 302, as well as Texas Education Code, Chapter 132.

§807.301.School Policy Regarding Complaints.

The school shall:

(1) submit a written grievance procedure designed to resolve disputes between current and former students and the school for Commission approval;

(2) provide a copy of the grievance procedure to each student and maintain proof of such delivery;

(3) maintain records regarding grievance filings and resolutions; and

(4) diligently work to resolve all complaints at the local school level.

§807.302.Complaints and Investigations.

(a) The Commission may investigate a complaint about a school and may determine the extent of investigation needed by considering various factors, such as:

(1) the seriousness of the alleged violation;

(2) the source of the complaint;

(3) the school's history of compliance and complaints;

(4) the timeliness of the complaint; and

(5) any other reasonable matter deemed appropriate.

(b) The Commission may require documentation or other evidence of the violation before initiating a complaint investigation.

(c) The investigation fee authorized by the Act is based on a per site visit. The school director shall be notified that an on-site visit was conducted when the investigation results in assessment of a fee.

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 May 11, 2006.

TRD-200602627

Reagan Miller

Deputy Director for Workforce and UI Policy

Texas Workforce Commission

Earliest possible date of adoption: June 25, 2006

For further information, please call: (512) 475-0829

Subchapter Q. TRUCK DRIVER TRAINING PROGRAMS

40 TAC §§807.321 - 807.325

The proposed new rules affect Title 4, Texas Labor Code, particularly Chapters 301 and 302, as well as Texas Education Code, Chapter 132.

§807.321.General Information Regarding Truck Driver Training.

A school providing truck driver training shall ensure that the truck driver instructors complete a truck driver instructor development course with at least 40 hours of course time.

§807.322.Truck Driver Instructor Development Course.

(a) A school shall apply to the Commission for approval to provide a truck driver instructor development course.

(b) The instructor development course shall consist of 40 hours of course time, which includes at least the following topics.

(1) Five hours shall cover techniques of instruction including: qualities of a competent instructor, the learning process, methods of teaching, development of efficient teaching habits, demonstration teaching, the use of instruction material and training aids, course preparation, lesson plans, testing and evaluation, and the duration and frequency of lessons.

(2) Two hours shall cover personality factors affecting the driver and pedestrian including: natural abilities; senses; mind and nerves; bones and muscles; knowledge of vehicle, road, traffic, and self; attitudes and emotions; reaction time; and reactions to alcohol, carbon monoxide, over-the-counter drugs, prescription drugs, illegal drugs, heart ailments, epilepsy, diabetes, insanity, exhaustion, tension, and monotony.

(3) Six hours shall cover state laws as located in the Texas Motor Vehicle Law book relating to the operation of motor vehicles including: driver's license, vehicle registration, certificate of title, operation of vehicles, uniform act, miscellaneous offenses, and safety responsibility.

(4) Eight hours shall cover driving procedures including: handling--city, rural, night, mountain, and freeway driving; fog, rain, sandstorms, and other hazardous weather conditions; road hazards and recovery procedures for slick roads; blowout hazards and running off the road; traffic signs, markings, and signals; use of rearview mirrors; vehicle braking and stopping distances; following distances; right-of-way, when and how to yield it; vehicle acceleration and deceleration; yielding right-of-way to emergency vehicles; driver signals; proper passing procedures; procedures and problems for passing on two and three-lane roadways; and super-size motorized equipment.

(5) Three hours shall cover physical forces affecting the motor vehicle in motion including: forces of gravity; friction; acceleration, mass, and force; inertia and centrifugal force; kinetic energy and momentum; kinetic energy and braking; and horsepower and acceleration.

(6) Two hours shall cover highway characteristics including: primary, secondary, expressway, freeway, farm or ranch road, two-way two-lane, two-way three-lane, two-way multilane, two-way multilane divided, one-way multilane, parking, and traffic controls. Traffic control topics consist of the following:

(A) sign topics including shape, color, location and importance;

(B) traffic marking topics including center and lane lines, no passing zone, transition markings, turn lane marking, stop lines, crosswalk lines, etc.; and

(7) Two hours shall cover automobile systems and maintenance including: electrical system--generator, alternator, battery, lighting, and electric-powered equipment; cooling system--lubrication and fuel systems; power train--engine, transmission, and differential; brake system--wheels and tires, caster, camber, toe-in, balance, inflation, tire condition, and care; exhaust system; instruments and gauges; compartment adjustments--seat, ventilation, mirrors, headrests, seat belts, and shoulder harness; starting the engine and warm-up procedures; safety devices--door locks, headrests; and miscellaneous features--windshield wipers, heater, and defroster.

(8) Two hours shall cover behind-the-wheel elementary lessons with demonstration in an appropriate vehicle and practice to be performed in the presence of the instructor including: starting; steering; stopping; shifting gears; backing; turning--right and left; and parking and starting on grade.

(9) Six hours shall cover behind-the-wheel driving safety lessons with demonstration in an appropriate vehicle and practice to be performed in the presence of the instructor including: developing good seeing habits; speed control; safe following; lane driving and lane changing; intersections and right-of-way; proper signaling; correct turn procedures; detecting of and handling problems--vehicle, cycle, pedestrian; freeway driving--ramp use, entering, exiting, lane use, emergency stopping; parking procedures; entering traffic from parked position; and night driving.

(10) Two hours shall cover school and instructor approval requirements including the following: school approval requirements, instructor approval requirements, classroom and automotive equipment requirements, required student records, contract requirements, and deportment of instructors.

(11) Two hours shall cover specialized training regarding the following: students with physical, mental, or emotional handicaps; illiterate students; non-English-speaking students; and habitual violators and problem drivers.

§807.323.Behind-the-Wheel Instruction.

A school providing behind-the-wheel instruction shall ensure that the instruction includes:

(1) actual driving practice while the motor vehicle is in motion;

(2) no more than four persons, excluding the instructor, occupying any motor vehicle during the behind-the-wheel instruction;

(3) notice in all contracts and advertisements of behind-the-wheel instruction being conducted with groups of students, if applicable; and

(4) credit toward satisfying minimum standards for behind-the-wheel instruction for only actual time spent behind the wheel in vehicle operation.

§807.324.Motor Vehicle Insurance.

A school providing truck driver training shall ensure that:

(1) a current list of vehicles used in truck driver training is filed with the Commission on a form provided by the Commission;

(2) an insurance certificate accompanies each motor vehicle used in training and is filed with the Commission on or before the date the school files an original or renewal application for approval of the program with the Commission;

(3) an insuring company or carrier issues an insurance certificate on a form furnished by the Commission directly to the Commission, which states the insurance company or carrier has issued a policy or policies of insurance, and the amounts of insurance for each vehicle listed on the list of vehicles used in truck driver training;

(4) a written notice is provided to the Commission by registered or certified mail at least 10 days prior to the expiration date of insurance coverage of a listed vehicle; and

(5) a copy of the written notice of cancellation of insurance on any listed vehicle is provided to the Commission by registered or certified mail immediately upon receipt of notice by the school.

§807.325.Prohibited Activities Regarding Truck Driver Training.

(a) A school, a trainer of truck driver instructors, or a truck driver instructor shall not:

(1) allow an instructor to give instruction or allow a student to secure instruction in the classroom or in a motor vehicle if that instructor or student is using or exhibits any evidence or effect of an alcoholic beverage, controlled substance, or other such impairment;

(2) permit a student to operate a motor vehicle without a valid driver's license or instruction permit in the student's possession during behind-the-wheel instruction;

(3) permit more than a ratio of four students per vehicle and three vehicles per instructor on truck driving ranges;

(4) permit more than four students per vehicle per instructor during street instruction for truck driver training; or

(5) advertise or otherwise state or imply that a driver's license or permit is guaranteed or assured to any student or individual who may take or complete any instruction or course of instruction, enroll, or otherwise receive instruction in any truck driver training school.

(b) The Commission may suspend, revoke, or refuse to renew approval of a truck driver instructor or a trainer of truck driver instructors, upon determining that the applicant or instructor has been:

(1) convicted under the laws of this state, another state, or the United States of any felony; of an offense of criminally negligent homicide committed as a result of the person's operation of a motor vehicle; of an offense involving driving while intoxicated or under the influence; or of an offense involving tampering with a governmental record; or

(2) found incompetent or is incompetent to:

(A) safely operate a motor vehicle; or

(B) properly conduct classroom or behind-the-wheel instruction.

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 May 11, 2006.

TRD-200602628

Reagan Miller

Deputy Director for Workforce and UI Policy

Texas Workforce Commission

Earliest possible date of adoption: June 25, 2006

For further information, please call: (512) 475-0829

Subchapter R. CLOSED SCHOOLS

40 TAC §807.341, §807.342

The proposed new rules affect Title 4, Texas Labor Code, particularly Chapters 301 and 302, as well as Texas Education Code, Chapter 132.

§807.341.School Closures.

(a) The Commission may declare a school to be closed when:

(1) written notification is received by the Commission from the school owner stating the school will close;

(2) Commission determines that the school facility has been vacated without prior notification of a change of address given to the Commission;

(3) an owner with multiple school locations transfers all students from one school location to another school location;

(4) the school dismisses all students, contrary to the school's class schedule as printed in the school catalog; or

(5) the school fails to maintain the faculty, facilities, equipment, or courses of instruction on the basis for which approval was issued.

(b) After the Commission determines that a school will close or is closed, the Commission will attempt to notify students concerning their options to accept a teach-out or to receive a proportional tuition refund based on available funds. Notification to students may include constructive notice in news media, student meetings, or mailings to students.

(c) Each teach-out requires approval of the Commission to determine whether the course of instruction is available, reasonable, and comparable with the course of instruction of the closed school. The teach-out is subject to the following conditions:

(1) Transfers of students from a closed school to another school under the same ownership shall not constitute a teach-out.

(2) In order to be eligible for a teach-out, students shall submit a signed statement of acceptance to the teach-out school by the deadline as established by the Commission.

(3) The school offering the teach-out shall give credit for all comparable training received at the closed school, as determined by the Commission.

§807.342.Tuition Trust Account.

(a) In a year in which the Commission determines it is necessary to charge a fee under §132.2415(b) of the Act, each school shall make a payment to the tuition trust account at the time the school renewal fee is paid.

(b) The amount in the tuition trust account, as provided in the Act, is an accrued balance. The accrued balance is the cash balance of the tuition trust account less the sum of the accrued liabilities from unpaid student refunds and teach-out claims.

(c) Disbursements shall be made from the tuition trust account for student refunds and reimbursable teach-out expenses incurred during each 12-month period ending August 31, and shall be:

(1) made first for student refunds in accordance with §132.2415(d) of the Act;

(2) disbursed for reimbursable teach-out expenses based upon remaining funds; and

(3) calculated after other funding sources have been determined.

(d) Following the graduation or termination of the students from the teach-out school, the teach-out school shall determine actual expenses and submit a claim for reimbursement to the Commission on or before the date provided in the application packet. The teach-out school shall:

(1) not claim expenses for facilities, equipment, utilities, or other items which were owned, rented, used, or otherwise obligated by the school prior to the Commission's approval of the teach-out program, even though such items may be used for the teach-out program;

(2) be limited to expenses for tuition and fees that are non-recoverable from all financial resources, including grants and loans; and

(3) ensure that the sum of the tuition and fees paid to the student's account at the closed school and the teach-out school is the lesser amount the student would have been charged for the complete program at the closed school or the teach-out school.

(e) For schools in their first two years of operation that have not been required to furnish financial statements to comply with §807.35(b), the payment to the tuition trust account shall be calculated at the rate determined by the Commission using the projected gross amount of tuition and fees, as required in §807.33(c), to be charged by the school for the year in which the payment is collected. Once the school has submitted the actual amount of tuition and fees collected by the school in compliance with §807.35(b), the Commission shall reconcile the projected and actual amounts of tuition and fees collected. Upon reconciliation, the Commission shall determine if the school is entitled to a refund or must pay an additional amount to the tuition trust account.

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 May 11, 2006.

TRD-200602629

Reagan Miller

Deputy Director for Workforce and UI Policy

Texas Workforce Commission

Earliest possible date of adoption: June 25, 2006

For further information, please call: (512) 475-0829

Subchapter S. CEASE AND DESIST ORDERS

40 TAC §§807.361 - 807.366

The proposed new rules affect Title 4, Texas Labor Code, particularly Chapters 301 and 302, as well as Texas Education Code, Chapter 132.

§807.361.Statement of Charges and Notice of Hearing on Cease and Desist Orders.

If the Agency believes a person is operating a career school or college without a certificate of approval in violation of §132.151 of the Act, the Agency may issue a statement of charges and notice of hearing to consider the issuance of a cease and desist order.

§807.362.Contents of Statement of Charges and Notice of Hearing.

The statement of charges and notice of hearing issued by the Agency shall contain the following information:

(1) The name and last known address of the person against whom the order may be entered;

(2) A short and plain statement of the reasons the Agency believes the person is operating a career school or college without a certificate of approval;

(3) A copy of the Commission's Career Schools and Colleges rules, Title 40, Chapter 807 of the Texas Administrative Code; and

(4) The date, time, and location of the hearing.

§807.363.Service of Statement and Charges and Hearing Notice for the Issuance of Cease and Desist Orders.

The statement of charges and notice of hearing to consider a cease and desist order shall be served by certified mail, return receipt requested, on the person against whom the order is entered. Notice is presumed received five days from the date it is mailed by the Agency.

§807.364.Ex Parte Consultations.

(a) A Commissioner or employee of the Agency assigned to render a decision or to make findings of fact and conclusions of law in a cease and desist proceeding shall not directly or indirectly communicate in connection with an issue of fact or law with the Commission, a person, a party, or a representative of those entities, except on notice and opportunity for each party to participate.

(b) A Commissioner or employee of the Agency assigned to render a decision or to make findings of fact and conclusions of law in a cease and desist hearing may communicate ex parte with an Agency employee who has not participated in a hearing in the case for the purpose of using the special skills or knowledge of the agency and its staff in evaluating the evidence.

(c) This section shall be construed liberally to promote the effectiveness and efficiency of issuance of cease and desist orders.

§807.365.Hearing Decision and Final Review by the Commission.

(a) Within 10 days after the hearing is held, the hearing officer shall issue a written decision granting or denying the request for the issuance of a cease and desist order that includes findings of fact and conclusions of law. The hearing decision shall be mailed by certified mail, return receipt requested, and is presumed received five days from the date it is mailed. The hearing officer's decision becomes final the 15th day after receipt of the hearing decision unless an appeal is filed under subsection (b) of this section.

(b) A party that is not satisfied with the decision of the hearing officer may file a written appeal of the decision to the Commission for a final review no later than the 15th day after receipt of the hearing decision. The written appeal shall contain the party's arguments as to why the decision of the hearing officer should be reversed. A party may request oral argument on the written appeal before the Commission. If oral argument is approved, each party or its hearing representative may present argument in support of its position.

(c) Upon receipt of the written appeal of the hearing officer's decision, the Commission shall consider the appeal and issue a decision promptly. If in the written appeal, oral argument is requested by a party and approved, the Commission shall schedule and hold oral argument not later than 90 days of receipt of the written appeal. The Commission shall consider the appeal on the basis of the record made before the hearing officer. The decision of the Commission shall be mailed by certified mail, return receipt requested, and is presumed received 5 days from the date it is mailed.

§807.366.Cease and Desist Order.

(a) If the request for the issuance of a cease and desist order becomes final under the provisions of §807.365(a) or, if after an appeal the decision under §807.365(c) upholds the issuance of a cease and desist order by the Commission, the hearing officer shall issue a cease and desist order against the person that is found operating a career school or college without a certificate of approval in violation of §132.151 of the Act.

(b) The cease and desist order shall be delivered by certified mail, return receipt requested, and is presumed received five days from the date it is mailed.

(c) From the date of receipt of the issuance of the cease and desist order, the person must completely cease and desist operating the career school or college.

(d) The cease and desist order shall remain in effect until the person comes into complete compliance with the Act as determined by the Commission, or unless otherwise provided by the order of the Commission.

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 May 11, 2006.

TRD-200602630

Reagan Miller

Deputy Director for Workforce and UI Policy

Texas Workforce Commission

Earliest possible date of adoption: June 25, 2006

For further information, please call: (512) 475-0829