Proposed Rules Title 16

TITLE 16. ECONOMIC REGULATION

PART 4. TEXAS DEPARTMENT OF LICENSING AND REGULATION

CHAPTER 55. RULES FOR ADMINISTRATIVE SERVICES

The Texas Department of Licensing and Regulation ("Department") proposes new 16 Texas Administrative Code ("TAC"), Chapter 55, §§55.1, 55.10, 55.20, 55.30, 55.40, 55.50 - 55.61, and 55.70 - 55.82, regarding administrative services rules related to the Texas Commission of Licensing and Regulation ("Commission") and the Department.

JUSTIFICATION

The current rules at 16 TAC Chapter 60 implement the statutory requirements under Texas Occupations Code, Chapter 51, the enabling statute for the Commission and the Department. As the result of a rule review conducted in accordance with Texas Government Code §2001.039 (see 33 TexReg 8562, October 10, 2008), the Department is proposing that the current rules be repealed and replaced with two new rule chapters. The Department has determined that these changes are necessary to ensure that the rules: (1) include and accurately reflect all of the requirements of Texas Occupations Code, Chapter 51 and other statutes affecting state agencies; (2) reflect the Commission's and the Department's current policies, procedures and practices; and (3) do not contain provisions that are more appropriately located elsewhere, such as an employee handbook.

EXPLANATION OF NEW RULES

In conjunction with the repeal of the current rules at 16 TAC Chapter 60 and the proposal of new rules in Chapter 60, which are published in the Proposed Rules section of this issue of the Texas Register, the Department is proposing new rules at Chapter 55. Proposed new Chapter 55 addresses administrative services issues involving the Department including procurements, contracts, and contract disputes with vendors. The proposed new rules include many of the provisions found in the current Chapter 60 rules, which are being repealed.

Proposed new Chapter 55 has five subchapters addressing various administrative services issues. Subchapter A states the statutory authority for adopting rules and provides definitions used in the chapter. Subchapter B sets out the Department's processes for procuring goods and services. Subchapter C sets out the procedures for potential vendors to protest the procurement processes and/or awards. Subchapter D sets out the Department's rules for handling contract disputes with current vendors and resolving those disputes through negotiation. Subchapter E sets out the Department's rules for handling contract disputes with current vendors and resolving those disputes through mediation. Subchapters D and E reflect the model rules developed by the Texas Attorney General and the State Office of Administrative Hearings for use by state agencies.

FISCAL IMPACT ON STATE AND LOCAL GOVERNMENT.

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

PUBLIC BENEFITS

Mr. Kuntz also has determined that for each year of the first five-year period the proposed rules are in effect, the public benefit will be rules that provide more information to the public and that reflect the current policies, practices and procedures of the Commission and the Department. In addition, because of the structure and organization of the rules, it should be easier for vendors and the general public to find the specific information they are searching for in the rules.

PROBABLE ECONOMIC COSTS

Mr. Kuntz has determined that there are no anticipated economic costs to small or micro-businesses or to persons who are required to comply with the rules as proposed.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS

Since the agency has determined that the rules will have no adverse economic effect on small or micro-businesses, preparation of an Economic Impact Statement and a Regulatory Flexibility Analysis, as detailed under Texas Government Code §2006.002, are not required.

PUBLIC COMMENTS

Comments on the proposal may be submitted by mail to Caroline Jackson, Legal Assistant, Texas Department of Licensing and Regulation, P.O. Box 12157, Austin, Texas 78711, or by facsimile to (512) 475-3032, or electronically to erule.comments@license.state.tx.us. The deadline for comments is 30 days after publication in the Texas Register.

SUBCHAPTER A. GENERAL PROVISIONS

16 TAC §55.1, §55.10

STATUTORY AUTHORITY

The new rules are proposed as the result of a rule review conducted in accordance with Texas Government Code §2001.039. The new rules are proposed under Texas Occupations Code, §51.201(b) and §51.203, which authorize the Commission, the Department's governing body, to adopt rules as necessary to implement Chapter 51 and any other law establishing a program regulated by the Department. In addition, the new rules are proposed under Texas Government Code, Chapter 2156, which requires state agencies making purchases to adopt the Texas Comptroller of Public Accounts' rules related to bid opening and tabulation; Texas Government Code, Chapter 2161, which requires a state agency to adopt the Texas Comptroller of Public Accounts' rules as the agency's own rules for construction projects and purchases of goods and services; and Texas Government Code, Chapter 2260, which requires each state agency to develop rules to address contract disputes with vendors and to resolve those disputes through negotiation and/or mediation. Finally, the new rules are proposed in accordance with Texas Government Code, Chapters 552 and 2009; and Texas Civil Practice and Remedies Code, Chapters 107 and 154.

STATUTORY PROVISIONS AFFECTED

The statutory provisions affected by the proposal are those set forth in Texas Occupations Code, Chapter 51, the Commission's and Department's enabling statute. In addition, the following statutes establishing specific programs regulated by the Department are affected: Texas Agriculture Code, Chapters 301 and 302 (Weather Modification and Control); Texas Business and Commerce Code, Chapter 92 (Rental Purchase Agreements-Loss Damage Waivers); Texas Government Code, Chapters 57 (Licensed Court Interpreters) and 469 (Architectural Barriers); Texas Health and Safety Code, Chapters 76 (Discount Health Care Programs), 754 (Elevators and Escalators), and 755 (Boilers); Texas Labor Code, Chapters 91 (Staff Leasing Services) and 92 (Temporary Common Worker Employers); and Texas Occupations Code, Chapters 953 (For Profit Legal Service Contract Companies), 1152 (Property Tax Consultants), 1202 (Industrialized Housing and Buildings), 1302 (Air Conditioning and Refrigeration Contractors and Technicians), 1304 (Service Contract Providers and Administrators), 1305 (Electricians), 1601 (Barbers), 1602 (Cosmetology), 1802 (Auctioneers), 1901 (Water Well Drillers), 1902 (Water Well Pump Installers), 2052 (Combative Sports), 2105 (Talent Agencies), 2303 (Vehicle Storage Facilities), 2306 (Vehicle Protection Product Warrantors), 2308 (Tow Trucks and Operators), and 2501 (Personnel Employment Services). No other statutes, articles, or codes are affected by the proposal.

§55.1.Authority.

This chapter is promulgated under the authority of Texas Occupations Code, Chapter 51. This chapter applies except in the event of a conflict with other statutory provisions related to specific programs regulated by the Commission and the Department.

§55.10.Definitions.

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

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

(2) Alternative Dispute Resolution (ADR) Administrator--The trained coordinator designated by the Commission:

(A) to coordinate and oversee the negotiated rulemaking and ADR procedures used by the Department;

(B) to serve as a resource for any training needed to implement the negotiated rulemaking and ADR procedures; and

(C) to collect data concerning the effectiveness of the negotiated rulemaking and ADR procedures. The ADR Administrator also may conduct ADR proceedings.

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

(4) Claim--A demand for damages by the contractor based upon the Department's alleged breach of the contract.

(5) Commission--Texas Commission of Licensing and Regulation.

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

(7) Counterclaim--A demand by the Department relating to the contractor's claim.

(8) Day--A calendar day. If an act is required to occur on a day falling on a Saturday, Sunday, or holiday, the first working day which is not one of these days should be counted as the required day for purpose of this chapter.

(9) Department--Texas Department of Licensing and Regulation.

(10) General Counsel--The attorney designated by the Texas Department of Licensing and Regulation, who provides legal representation to the Commission and the Department.

(11) Interested parties--All persons who have timely submitted bids or proposals to provide goods or services pursuant to a contract with the Department or who have requested in writing to the Department to be notified of a vendor protest.

(12) Mediation--A confidential, informal dispute resolution process in which an impartial person, the mediator, facilitates communication between or among the parties to promote reconciliation, settlement, or understanding among them.

(13) Mediator--The person who presides over a mediation proceeding. The mediator shall encourage and assist the parties in reaching a settlement but may not compel or coerce the parties to enter into a settlement agreement. The mediator may be a Department employee, an employee from another Texas state agency, or a person in the mediation profession who is not a Texas state employee ("private mediator").

(14) Parties--The contractor and the Department, having entered into a contract in connection with which a claim of breach of contract has been filed under Subchapter D.

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

(16) Protesting Party--Any actual or prospective bidder, offeror, proposer, or contractor who submits a protest to the Department under Subchapter C.

(17) Purchasing Officer--A Departmental employee who has received certification as a Texas Public Purchaser and who is responsible for assisting with Departmental purchases, and who has been designated the Purchasing Officer for the purchase in question.

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 February 23, 2009.

TRD-200900778

William H. Kuntz, Jr.

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 5, 2009

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

SUBCHAPTER B. PROCUREMENTS

16 TAC §55.20, §55.30

STATUTORY AUTHORITY

STATUTORY PROVISIONS AFFECTED

§55.20.Historically Underutilized Businesses Program.

Pursuant to Texas Government Code, Chapter 2161, §2161.003, the Commission adopts by reference the rules of the Texas Comptroller of Public Accounts in 34 TAC Part 1, Chapter 20, Subchapter B.

§55.30.Bid Opening and Tabulation.

(a) The Commission adopts by reference the rules of the Texas Comptroller of Public Accounts in 34 TAC §20.35.

(b) The adoption of this rule is required by Texas Government Code, §2156.005(d).

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 February 23, 2009.

TRD-200900779

William H. Kuntz, Jr.

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 5, 2009

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

SUBCHAPTER C. VENDOR PROTESTS

16 TAC §55.40

STATUTORY AUTHORITY

STATUTORY PROVISIONS AFFECTED

§55.40.Protest Procedures.

(a) A protesting party who wishes to submit a grievance regarding the solicitation, evaluation, or award of a contract may formally protest to the Purchasing Officer. Such protests must be in writing and received by the Purchasing Officer within 10 business days after the protesting party knows, or should have known, of the occurrence of the action which is protested. Filed protests must conform to the requirements of this subsection and subsection (c), and shall be resolved in accordance with the procedure set forth in subsections (d) - (j). Copies of the protest must be mailed, hand-delivered or sent by facsimile transmission to the Purchasing Officer and other interested parties.

(b) In the event of a timely protest under this section, the Department shall not proceed further with the solicitation or with the award of the contract unless the Executive Director, after consultation with the Purchasing Officer and the General Counsel, makes a written determination that the award of the contract without delay is necessary to protect the best interests of the Department and the State.

(1) a specific identification of the statutory or regulatory provision(s) that the action complained of is alleged to have violated;

(2) a specific description of each act alleged to have violated the statutory or regulatory provision(s) identified in paragraph (1);

(3) a precise statement of the relevant facts;

(4) identification of the issue or issues the protesting party argues must be resolved;

(5) argument and authorities the protesting party offers in support of the protest; and

(6) a statement that copies of the protest have been mailed, hand-delivered or sent by facsimile transmission to the Department and all other identifiable interested parties.

(d) The Purchasing Officer shall have the authority, prior to an appeal to the Executive Director to settle and resolve the dispute concerning the solicitation or award of a contract. The Purchasing Officer may solicit written responses to the protest from interested parties.

(e) If the protest is not resolved by mutual agreement, the Purchasing Officer may proceed, after consultation with the General Counsel, with the issuance of a written determination on the protest as follows:

(1) The Purchasing Officer may determine that no violation of rules or statutes has occurred and shall so inform the protesting party, the Executive Director, and any other interested parties by letter that includes the reasons for the determination.

(2) If the Purchasing Officer determines that a violation of the rules or statutes may have occurred in a case where a contract has not been awarded, the Purchasing Officer shall so inform the protesting party, the Executive Director and other interested parties by letter that includes the reasons for the determination and the appropriate remedial action.

(3) If the Purchasing Officer determines that a violation of the rules or statutes may have occurred in a case where a contract has been awarded, the Purchasing Officer shall so inform the protesting party, the Executive Director and other interested parties by letter that includes the reasons for the determination, which may include a declaration that the contract is void.

(f) The protesting party may appeal a determination of a protest by the Purchasing Officer to the Executive Director. An appeal of the Purchasing Officer's determination must be in writing and must be received in the Department's office no later than 10 business days after the date of the Purchasing Officer's determination. The appeal shall be limited to a review of the Purchasing Officer's determination. Copies of the appeal must be mailed or delivered by the protesting party to the Purchasing Officer and other interested parties and must contain a certified statement that such copies have been provided.

(g) The Executive Director may confer with the General Counsel in a review of the matter appealed. The Executive Director has the discretion to consider documentation timely submitted by Departmental staff and interested parties. The Executive Director also has the discretion to refer the matter to the Commission for consideration at a regularly scheduled open meeting or may go forward with issuing a written decision on the protest.

(h) If a protest is appealed to the Executive Director under subsection (f) and thereafter is referred to the Commission by the Executive Director under subsection (g), specific requirements apply as follows:

(1) The Executive Director shall deliver copies of the appeal and responses of interested parties, if any, to the Commission.

(2) The Commission may consider documents that Departmental staff or interested parties have submitted and may confer with the General Counsel in their review of the appeal.

(3) The Commission's determination of the appeal shall be made on the record and reflected in the minutes of the open meeting, and shall be final.

(i) A protest or appeal that is not filed timely will not be considered unless good cause for the delay is shown or unless the Executive Director determines that a protest or appeal raises issues significant to procurement practices or procedures.

(j) A decision issued either by the Commission in open meeting, or in writing by the Executive Director, shall be the final administrative action of the Department.

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

Filed with the Office of the Secretary of State on February 23, 2009.

TRD-200900808

William H. Kuntz, Jr.

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 5, 2009

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

SUBCHAPTER D. NEGOTIATION OF CERTAIN CONTRACT DISPUTES

16 TAC §§55.50 - 55.61

STATUTORY AUTHORITY

STATUTORY PROVISIONS AFFECTED

§55.50.Applicability.

(a) In addition to the words and terms defined in §55.10, other words and terms, when used in this subchapter, shall have the meaning assigned by Texas Government Code, Chapter 2260, unless the context clearly indicates otherwise.

(b) This subchapter applies to claims for breach of contract asserted by a contractor against the Department under Texas Government Code, Chapter 2260.

(1) between the Department and the federal government or its agencies, another state, or another nation;

(2) between the Department and another unit of state government;

(3) between the Department and a local governmental body, or a political subdivision of another state;

(4) between a subcontractor and a contractor;

(5) within the exclusive jurisdiction of state or local regulatory bodies;

(6) within the exclusive jurisdiction of federal courts or regulatory bodies; or

(7) that are funded solely by federal grant funds.

§55.51.Prerequisites to Suit.

The procedures contained in this subchapter and Subchapter E are exclusive and required prerequisites to suit against the Department under Texas Civil Practice and Remedies Code, Chapter 107 and Texas Government Code, Chapter 2260.

§55.52.Sovereign Immunity.

This subchapter does not waive the Department's sovereign immunity to suit or liability.

§55.53.Notice of Claim for Breach of Contract.

(a) A contractor asserting a claim of breach of contract under Texas Government Code, Chapter 2260, shall file notice of the claim as provided by this section.

(b) The notice of claim shall:

(1) be in writing and signed by the contractor or the contractor's authorized representative;

(2) be delivered by hand, certified mail return receipt requested, or other verifiable delivery service, to the Department officer designated in the contract to receive a notice of claim of breach of contract under Texas Government Code, Chapter 2260; if no person is designated in the contract, the notice shall be delivered to the Department; and

(3) state in detail:

(A) the nature of the alleged breach of contract, including the date of the event that the contractor asserts as the basis of the claim and each contractual provision allegedly breached;

(B) a description of damages that resulted from the alleged breach, including the amount and method used to calculate those damages; and

(C) the legal theory of recovery, i.e., breach of contract, including the relationship between the alleged breach and the damages claimed.

(c) The notice of claim shall be delivered no later than 180 days after the date of the event that the contractor asserts as the basis of the claim.

§55.54.Department Counterclaim.

(a) If the Department asserts a counterclaim under Texas Government Code, Chapter 2260, the Department shall file notice of the counterclaim as provided by this section.

(b) The notice of counterclaim shall:

(1) be in writing;

(2) be delivered by hand, certified mail return receipt requested or other verifiable delivery service to the contractor or representative of the contractor who signed the notice of claim of breach of contract; and

(3) state in detail:

(A) the nature of the counterclaim;

(B) a description of damages or offsets sought, including the amount and method used to calculate those damages or offsets; and

(c) The notice of counterclaim shall be delivered to the contractor no later than 60 days after the Department's receipt of the contractor's notice of claim.

(d) Nothing herein precludes the Department from initiating a lawsuit for damages against the contractor in a court of competent jurisdiction.

§55.55.Duty to Negotiate.

The parties shall negotiate in accordance with the timetable set forth in §55.56 to attempt to resolve all claims and counterclaims filed under this subchapter. No party is obligated to settle with the other party as a result of the negotiation. The parties may agree to mediate a claim in accordance with Subchapter E.

§55.56.Timetable.

(a) Following receipt of a contractor's notice of claim, the Department or designated representative shall review the contractor's claim and the Department's counterclaim, if any, and initiate negotiations with the contractor to attempt to resolve the claim and counterclaim.

(b) Subject to subsection (c), the parties shall begin negotiations within a reasonable period of time, not to exceed 120 days after the date the Department receives the contractor's notice of claim.

(c) The parties may conduct negotiations according to an agreed schedule as long as they begin negotiations no later than the deadline set forth in subsection (b).

(d) Subject to subsection (e), the parties shall complete the negotiations that are required by this subchapter as a prerequisite to a contractor's request for contested case hearing no later than 270 days after the Department receives the contractor's notice of claim.

(e) The parties may agree in writing to extend the time for negotiations on or before the 270th day after the Department receives the contractor's notice of claim. The agreement shall be signed by representatives of the parties with authority to bind each respective party.

(f) The contractor may request a contested case hearing before the State Office of Administrative Hearings (SOAH) pursuant to §55.61 after the 270th day after the Department receives the contractor's notice of claim, or the expiration of any extension agreed to under subsection (e).

(g) The parties may agree to mediate the dispute at any time before the 120th day after the Department receives the contractor's notice of claim and before the expiration of any extension agreed to by the parties pursuant to subsection (e). The mediation shall be governed by Subchapter E.

(h) Nothing in this section is intended to prevent the parties from commencing negotiations earlier than the deadline established in subsection (b), or from continuing or resuming negotiations after the contractor requests a contested case hearing before SOAH.

§55.57.Conduct of Negotiation.

(a) A negotiation under this division may be conducted by any method, technique, or procedure authorized under the contract or agreed upon by the parties. The parties may conduct negotiations with the assistance of one or more neutral third parties. The parties may choose to mediate their dispute in accordance with Subchapter E.

(b) To facilitate meaningful evaluation and negotiation of the claims and any counterclaims, the parties may exchange relevant documents that support their respective claims, defenses, counterclaims or positions.

(c) The Department may also negotiate, mediate, or settle with a contractor concerning any assertion by a contractor which does not constitute either a notice of claim or a claim under this subchapter or Texas Government Code, Chapter 2260. Such actions by the Department do not constitute a waiver of sovereign immunity or of statutory or regulatory requirements for a notice of claim.

§55.58.Settlement Approval Procedures.

The parties' settlement approval procedures shall be disclosed prior to, or at the beginning of negotiations. To the extent possible, the parties shall select negotiators who are knowledgeable about the subject matter of the dispute, who are in a position to reach agreement, and who can credibly recommend approval of an agreement.

§55.59.Settlement Agreement.

(a) A settlement agreement may resolve an entire claim or any designated and severable portion of a claim.

(b) To be enforceable, a settlement agreement must be in writing and signed by the Department, or the Department's authorized representative, and a representative of the contractor who has authority to bind the contractor.

(c) A partial settlement does not waive a contractor's rights under Texas Government Code, Chapter 2260, as to the parts of the claim that are not resolved.

§55.60.Cost of Negotiation.

Unless the parties agree otherwise, each party shall be responsible for its own costs incurred in connection with a negotiation, including, without limitation, the costs of attorneys' fees, consultant's fees and expert's fees.

§55.61.Contested Case Hearings for Contract Disputes.

(a) If a claim of breach of contract is not resolved in its entirety through negotiation or mediation in accordance with this subchapter or Subchapter E on or before the 270th day after the Department receives the notice of claim, or after the expiration of any extension agreed to by the parties pursuant to §55.56(e), the contractor may file a request with the Department for a contested case hearing before State Office of Administrative Hearings (SOAH).

(b) A request for a contested case hearing must state the legal and factual basis for the claim and must be delivered to the Department within 90 days after the 270th day or the expiration of any written extension agreed to pursuant to §55.56(e).

(c) The Department shall forward the contractor's request for contested case hearing to the SOAH within a reasonable period of time, not to exceed 30 days, after receipt of the request. Referral of a request for hearing to SOAH does not constitute waiver by the Department of statutory or regulatory requirements for the notice of claim, the claim, or the request for hearing.

(d) The parties may agree to submit the case to the SOAH before the 270th day after the notice of claim is received by the Department if they have achieved a partial resolution of the claim or if an impasse has been reached in the negotiations and proceeding to a contested case hearing would serve the interests of justice.

(e) Contested case hearings shall be conducted in compliance with Texas Government Code, Chapter 2260, this subchapter, and the rules and procedures of the SOAH applicable to hearings on contract claims.

(f) Provisions of Chapter 60 of this title, regarding requests for and conduct of contested case hearings, do not apply to hearings conducted under this subchapter.

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

Filed with the Office of the Secretary of State on February 23, 2009.

TRD-200900780

William H. Kuntz, Jr.

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 5, 2009

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

SUBCHAPTER E. MEDIATION OF CERTAIN CONTRACT DISPUTES

16 TAC §§55.70 - 55.82

STATUTORY AUTHORITY

STATUTORY PROVISIONS AFFECTED

§55.70.Applicability.

(b) This subchapter applies to claims for breach of contract asserted by a contractor against the Department under Texas Government Code, Chapter 2260.

(1) between the Department and the federal government or its agencies, another state, or another nation;

(2) between the Department and another unit of state government;

(3) between the Department and a local governmental body, or a political subdivision of another state;

(4) between a subcontractor and a contractor;

(5) within the exclusive jurisdiction of state or local regulatory bodies;

(6) within the exclusive jurisdiction of federal courts or regulatory bodies; or

(7) that are funded solely by federal grant funds.

§55.71.Prerequisites to Suit.

The procedures contained in this subchapter and Subchapter D are exclusive and required prerequisites to suit against the Department under Texas Civil Practice and Remedies Code, Chapter 107 and Texas Government Code, Chapter 2260.

§55.72.Sovereign Immunity.

This subchapter does not waive the Department's sovereign immunity to suit or liability.

§55.73.Mediation.

The parties may agree to mediate, through an impartial third party who is acceptable to both parties, a claim filed under Subchapter D. The parties may be assisted in the mediation by legal counsel or other individual.

§55.74.Appointment of the Mediator.

(a) For each claim referred for mediation, the ADR Administrator shall:

(1) preside over the mediation proceeding;

(2) assign a Departmental mediator;

(3) appoint a mediator from another state agency; or

(4) appoint a private mediator.

(b) A private mediator may be hired provided that:

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

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

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

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

(d) Unless the parties agree otherwise in writing, each party shall be responsible for its own costs incurred in connection with the mediation, including without limitation, costs of document reproduction, attorney's fees, consultant fees and expert fees.

(e) The ADR Administrator may assign a substitute or additional mediator to a proceeding as the ADR Administrator deems necessary.

§55.75.Qualifications of the Mediator.

(a) All mediators must have completed a minimum of 40 hours of Texas mediation training as prescribed under Texas Civil Practices and Remedies Code, Chapter 154.

(b) All mediators shall subscribe to the ethical guidelines for mediators adopted by the ADR Section of the State Bar of Texas.

§55.76.Disqualifications of the Mediator.

(a) If the mediator is a State Office of Administrative Hearings ALJ, that person will not also sit as the ALJ for the case if the claim goes to hearing.

(b) If the mediator is an employee of the Department and the dispute does not settle, that mediator will not have any further contact or involvement concerning the claim.

§55.77.Qualified Immunity of the Mediator.

The mediator shall have the qualified immunity prescribed by the Texas Civil Practice and Remedies Code §154.055, if applicable.

§55.78.Confidentiality of Mediation and Final Settlement Agreement.

(a) A mediation conducted under this division is confidential in accordance with Texas Government Code, §2009.054 and Texas Civil Practice and Remedies Code §154.053 and §154.073.

(b) The confidentiality of a final settlement agreement, to which the Department is a signatory that is reached as a result of the mediation is governed by the Public Information Act, Texas Government Code, Chapter 552.

§55.79.Settlement Approval Procedures.

The parties' settlement approval procedures shall be disclosed by the parties prior to the mediation. To the extent possible, the parties shall select representatives who are knowledgeable about the subject matter of the dispute, who are in a position to reach agreement, and who can credibly recommend approval of an agreement.

§55.80.Initial Settlement Agreement.

Any settlement agreement reached during mediation shall be signed by representatives of the contractor and the Department, and shall describe any procedures that the parties must follow to obtain final and binding approval of the agreement.

§55.81.Final Settlement Agreement.

A final settlement agreement reached during or as a result of a mediation that resolves an entire claim or counterclaim, or any designated and severable portion of a claim or counterclaim, shall comply with §55.59.

§55.82.Referral to State Office of Administrative Hearings.

If mediation does not resolve the claim to the satisfaction of the contractor, the contractor may request that the claim be referred to State Office of Administrative Hearings in accordance with §55.61.

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 February 23, 2009.

TRD-200900781

William H. Kuntz, Jr.

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 5, 2009

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

CHAPTER 60. TEXAS COMMISSION OF LICENSING AND REGULATION

The Texas Department of Licensing and Regulation ("Department") proposes the repeal of existing rules at 16 Texas Administrative Code Chapter 60, §§60.1, 60.10, 60.60 - 60.66, 60.80 - 60.84, 60.100, 60.101, 60.150 - 60.160, 60.170 - 60.173, 60.200, 60.210, 60.220, 60.230, 60.240, and 60.241; and proposes new rules §§60.1, 60.10, 60.20 - 60.24, 60.30, 60.31, 60.40, 60.50 - 60.54, 60.80 - 60.83, 60.100 - 60.102, 60.200, 60.300 - 60.311, and 60.400 - 60.409, regarding procedural rules related to the Texas Commission of Licensing and Regulation ("Commission") and the Department.

JUSTIFICATION

The current rules at 16 TAC Chapter 60 implement the statutory requirements under Texas Occupations Code, Chapter 51, the enabling statute for the Commission and the Department. As the result of a rule review conducted in accordance with Texas Government Code §2001.039 see the October 12, 2008, issue of the Texas Register (33 TexReg 8562). The Department is proposing that the current rules be repealed and replaced with two new rule chapters. The Department has determined that these changes are necessary to ensure that the rules: (1) include and accurately reflect all of the requirements of Texas Occupations Code, Chapter 51 and other statutes affecting state agencies; (2) reflect the Commission's and the Department's current policies, procedures and practices; and (3) do not contain provisions that are more appropriately located elsewhere, such as an employee handbook.

EXPLANATION OF NEW RULES

The current rules at 16 TAC Chapter 60 address the responsibilities of the Commission and the Department, and include provisions addressing licensees, applicants, vendors and potential contractors. Proposed new Chapter 55, which is published in the Proposed Rules section of this issue of the Texas Register, addresses administrative services issues including procurements, contracts, and vendor contract disputes. Proposed new Chapter 60 addresses the role and responsibilities of the Commission and the Department and various issues involving licensees, license applicants, and other interested parties. The proposed new rules include many of the provisions found in the current Chapter 60 rules, which are being repealed.

Proposed new Chapter 60 has 10 subchapters. Subchapter A states the statutory authority for adopting rules and provides definitions used in the chapter. Subchapter B provides details regarding the powers and responsibilities of the Commission and the Department and provides information regarding public meetings and advisory boards. Subchapter C provides details regarding the statutory authority of the Department to issue and renew licenses and documents current licensing practices and procedures that are applicable to all licensing programs.

Subchapter D documents the Commission's and Department's authority under Texas Occupations Code, Chapter 53 to deny an initial or renewal license application, to suspend or revoke a current license, or to deny a person the opportunity to take an examination if the person has a criminal conviction. Subchapter E provides information regarding examinations including rescheduling, security, and results. Subchapter F sets out the fees that are applicable for all programs.

Subchapter G addresses the rulemaking authority of the Commission and the Department. Subchapter H provides information regarding the Department's complaint handling processes. Subchapter I sets out the processes and procedures for contested cases. Subchapter J reflects the agency's use of mediation to resolve disputes in contested cases.

FISCAL IMPACT ON STATE AND LOCAL GOVERNMENT

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

PUBLIC BENEFITS

Mr. Kuntz also has determined that for each year of the first five-year period the proposed repeal and new rules are in effect, the public benefit will be rules that provide more information to the public and that reflect the current policies, practices and procedures of the Commission and the Department. In addition, because of the structure and organization of the proposed new rules, it should be easier for licensees, applicants, and the general public to find the specific information they are searching for in the rules.

PROBABLE ECONOMIC COSTS

Mr. Kuntz has determined that there are no anticipated economic costs to small or micro-businesses or to persons who are required to comply with the repeal and new rules as proposed.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS

PUBLIC COMMENTS

SUBCHAPTER A. AUTHORITY AND RESPONSIBILITIES

16 TAC §60.1, §60.10

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

STATUTORY AUTHORITY

The repeal is proposed as the result of a rule review conducted in accordance with Texas Government Code §2001.039. The repeal is proposed under Texas Occupations Code, §51.201(b) and §51.203, which authorize the Commission, the Department's governing body, to adopt rules as necessary to implement Chapter 51 and any other law establishing a program regulated by the Department.

STATUTORY PROVISIONS AFFECTED

The statutory provisions affected by the repeal are those set forth in Texas Occupations Code, Chapter 51, the Commission's and Department's enabling statute. In addition, the following statutes establishing specific programs regulated by the Department are affected: Texas Agriculture Code, Chapters 301 and 302 (Weather Modification and Control); Texas Business and Commerce Code, Chapter 92 (Rental Purchase Agreements-Loss Damage Waivers); Texas Government Code, Chapters 57 (Licensed Court Interpreters) and 469 (Architectural Barriers); Texas Health and Safety Code, Chapters 76 (Discount Health Care Programs), 754 (Elevators and Escalators), and 755 (Boilers); Texas Labor Code, Chapters 91 (Staff Leasing Services) and 92 (Temporary Common Worker Employers); and Texas Occupations Code, Chapters 953 (For Profit Legal Service Contract Companies), 1152 (Property Tax Consultants), 1202 (Industrialized Housing and Buildings), 1302 (Air Conditioning and Refrigeration Contractors and Technicians), 1304 (Service Contract Providers and Administrators), 1305 (Electricians), 1601 (Barbers), 1602 (Cosmetology), 1802 (Auctioneers), 1901 (Water Well Drillers), 1902 (Water Well Pump Installers), 2052 (Combative Sports), 2105 (Talent Agencies), 2303 (Vehicle Storage Facilities), 2306 (Vehicle Protection Product Warrantors), 2308 (Tow Trucks and Operators), and 2501 (Personnel Employment Services). No other statutes, articles, or codes are affected by the proposal.

§60.1.Authority.

§60.10.Definitions.

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

Filed with the Office of the Secretary of State on February 23, 2009.

TRD-200900782

William H. Kuntz, Jr.

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 5, 2009

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

SUBCHAPTER B. ORGANIZATION

16 TAC §§60.60 - 60.66

STATUTORY PROVISIONS AFFECTED

§60.60.Responsibilities of the Commission--General Provisions.

§60.61.Responsibilities of the Commission--Meetings.

§60.62.General Powers and Duties of the Commission.

§60.63.Responsibilities of the Department and Executive Director.

§60.64.Duration of Advisory Committee/Boards/Councils.

§60.65.Petition for Adoption of Rules.

§60.66.Negotiated Rulemaking.

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 February 23, 2009.

TRD-200900783

William H. Kuntz, Jr.

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 5, 2009

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

SUBCHAPTER C. FEES

16 TAC §§60.80 - 60.84

STATUTORY PROVISIONS AFFECTED

§60.80.Program Fees.

§60.81.Charges for Providing Copies of Public Information.

§60.82.Dishonored Check Fee.

§60.83.Late Renewal Fees.

§60.84.Examination Fee Refund or Examination Rescheduling.

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 February 23, 2009.

TRD-200900784

William H. Kuntz, Jr.

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 5, 2009

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

SUBCHAPTER D. PRACTICE AND PROCEDURE

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

STATUTORY PROVISIONS AFFECTED

§60.100.Purpose and Scope.

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

§60.150.Disposition by Agreement.

§60.151.Alternative Dispute Resolution.

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

§60.153.Appointment of Mediator.

§60.154.Qualifications of Mediators.

§60.155.Commencement of ADR.

§60.156.Stipulations.

§60.157.Agreements.

§60.158.Confidentiality.

§60.159.Place and Nature of Hearings.

§60.160.Failure to Attend Hearing and Default.

§60.170.The Adjudicative Hearing Record.

§60.171.Proposals for Decision.

§60.172.Filing of Exceptions and Replies.

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

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

Filed with the Office of the Secretary of State on February 23, 2009.

TRD-200900785

William H. Kuntz, Jr.

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 5, 2009

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

SUBCHAPTER E. ADMINISTRATION

DIVISION 1. VEHICLES

16 TAC §60.200

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

STATUTORY PROVISIONS AFFECTED

§60.200.Assignment and Use of Agency Vehicles.

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 February 23, 2009.

TRD-200900786

William H. Kuntz, Jr.

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 5, 2009

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

DIVISION 2. TRAINING

16 TAC §60.210

STATUTORY PROVISIONS AFFECTED

§60.210.Employee Training and Education.

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 February 23, 2009.

TRD-200900787

William H. Kuntz, Jr.

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 5, 2009

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

DIVISION 3. HISTORICALLY UNDERUTILIZED BUSINESSES

16 TAC §60.220

STATUTORY PROVISIONS AFFECTED

§60.220.Historically Underutilized Businesses Program.

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 February 23, 2009.

TRD-200900788

William H. Kuntz, Jr.

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 5, 2009

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

DIVISION 4. BID OPENING AND TABULATION

16 TAC §60.230

STATUTORY PROVISIONS AFFECTED

§60.230.Bid Opening and Tabulation.

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 February 23, 2009.

TRD-200900789

William H. Kuntz, Jr.

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 5, 2009

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

DIVISION 5. VENDOR PROTESTS

16 TAC §60.240, §60.241

STATUTORY PROVISIONS AFFECTED

§60.240.Definitions.

§60.241.Protest Procedures.

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 February 23, 2009.

TRD-200900790

William H. Kuntz, Jr.

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 5, 2009

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

CHAPTER 60. PROCEDURAL RULES OF THE COMMISSION AND THE DEPARTMENT

SUBCHAPTER A. GENERAL PROVISIONS

16 TAC §60.1, §60.10

STATUTORY AUTHORITY

STATUTORY PROVISIONS AFFECTED

§60.1.Authority.

§60.10.Definitions.

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

(1) Advisory Board--A board, committee, council, or other body that is established by law to advise the Commission or Department on rules, policies, and/or technical matters.

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

(3) Alternative Dispute Resolution (ADR) Administrator--The trained coordinator designated by the Commission:

(A) to coordinate and oversee the negotiated rulemaking and ADR procedures used by the Department;

(B) to serve as a resource for any training needed to implement the negotiated rulemaking and ADR procedures; and

(C) to collect data concerning the effectiveness of the negotiated rulemaking and ADR procedures. The ADR Administrator also may conduct ADR proceedings.

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

(5) APA--The Administrative Procedure Act (Texas Government Code, Chapter 2001).

(6) Applicant--Any person seeking a license from the Department.

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

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

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

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

(11) Director of Enforcement--The person who directs and oversees investigations, prosecutions, and other activities of the enforcement division of the Texas Department of Licensing and Regulation.

(12) Emergency--Any of the following events that prevent a person from taking a scheduled examination:

(A) death of a spouse or family member within the second degree of consanguinity;

(B) personal medical necessity;

(D) severe weather or act of God that prevents the person from reaching the examination site.

(13) Executive Director--The head administrative official of the Texas Department of Licensing and Regulation.

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

(15) License--A license, certificate, registration, title, commission, or permit issued by the Department.

(16) License holder--A person who holds a license issued by the Department.

(17) Mediation--A confidential, informal dispute resolution process in which an impartial person, the mediator, facilitates communication between or among the parties to promote reconciliation, settlement, or understanding among them.

(18) Mediator--The person who presides over a mediation. The mediator shall encourage and assist the parties in reaching a settlement but may not compel or coerce the parties to enter into a settlement agreement. The mediator may be a Department employee, an employee from another Texas state agency, or a person in the mediation profession who is not a Texas state employee ("private mediator").

(19) Negotiated Rulemaking--A consensus-based process in which the Department develops a proposed rule by using a neutral facilitator and a balanced negotiating committee composed of representatives of all interests that the rule will affect including those interests represented by the Department itself. See Negotiated Rulemaking Act, Texas Government Code, Chapter 2008.

(20) Party--A person admitted to participate in a contested case.

(21) Penalty or Administrative Penalty--A monetary fine imposed by the Commission or the Executive Director on a licensee or other person who has violated this chapter or a statute or rule governing a program regulated by the Department.

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

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

(24) Presiding Officer--The Commission member designated by the Governor to serve as the lead Commission official as defined under Texas Occupations Code, §51.056.

(25) Respondent--Any person, regardless of whether the person is licensed or unlicensed, who is charged with violating a law establishing a regulatory program administered by the Department or a rule adopted by or an order issued by the Commission or the Executive Director.

(26) Rule--Any Commission statement of general applicability that implements, interprets, or prescribes law or policy, or describes the procedure or practice requirements of the Department or Commission.

(27) Sanction--An action by the Commission or Executive Director against a license holder or another person, including the denial, suspension, or revocation of a license, the reprimand of a license holder, the placement of a license holder on probation, or refusal to renew.

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

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

Filed with the Office of the Secretary of State on February 23, 2009.

TRD-200900791

William H. Kuntz, Jr.

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 5, 2009

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

SUBCHAPTER B. POWERS AND RESPONSIBILITIES

16 TAC §§60.20 - 60.24

STATUTORY AUTHORITY

STATUTORY PROVISIONS AFFECTED

§60.20.General Powers and Duties of the Commission.

(a) The Commission shall have primary responsibility for policy-making activities including but not limited to:

(1) setting fees;

(2) adopting rules;

(3) imposing sanctions and penalties; and

(4) issuing final orders in contested cases.

(b) The Commission shall have the sole responsibility for the adoption of rules proposed by the Department or the Commission.

(c) The Commission shall provide reasonable accommodations, as required by the Americans with Disabilities Act of 1990, Public Law 101-336 and any subsequent amendments, for the public to participate in the programs regulated by the Department.

(d) Upon request, the Commission shall provide reasonable access to persons who do not speak English to the programs regulated by the Department.

§60.21.Commission Meetings--Procedures.

(a) Every regular, special, or called meeting of the Commission shall be open to the public as provided by the Government Code, Chapter 551 ("the Open Meetings Act").

(b) Meetings will be conducted according to the current edition of Robert's Rules of Order Newly Revised in all instances to which they are applicable as long as they are not inconsistent with the constitution, the statutes and the rules of the Commission. Any Robert's Rules of Order Newly Revised may be modified as deemed necessary by the presiding officer for the proper conduct of the meeting subject to an objection by a Commission member.

(c) A quorum for the Commission is a majority of all the members of the Commission as designated by statute. When a quorum is present, a motion before the Commission is carried by an affirmative vote of the majority of the Commissioner members present that are participating in the vote.

(d) The presiding officer may limit the number and length of comments provided on any item on the agenda subject to an objection from a Commission member.

(e) As a member of the Commission, the presiding officer may make motions without the necessity of relinquishing the chair subject to an objection from a Commission member.

(f) The Commission shall provide the public with a reasonable opportunity to appear before the Commission and to speak on any issue under the Commission's jurisdiction. Persons wishing to speak at a Commission meeting may sign in at the beginning of the meeting and may speak during the public comment portion of the meeting.

§60.22.General Powers and Duties of the Department and the Executive Director.

(a) The Executive Director shall have primary responsibility to manage the operations and administration of the Department as provided by Texas Occupations Code Chapter 51 and other applicable law, including but not limited to:

(1) issuing licenses;

(2) resolving complaints;

(3) conducting investigations and inspections;

(4) imposing agreed order sanctions and administrative penalties; and

(5) administering exams.

(b) The Executive Director may approve agreed orders in contested cases and shall have authority to issue other orders as provided by law or as delegated by the Commission.

(d) The Executive Director may implement any emergency orders or proclamations issued by the Governor to suspend or amend existing statutes and rules. The Executive Director will notify the Commission of the Department's actions to comply with the Governor's emergency orders or proclamations.

§60.23.Commission and Executive Director--Imposing Sanctions and Penalties.

(a) The Commission or Executive Director may deny a license application or license renewal, or suspend or revoke any license, if:

(1) the license was obtained or attempted to be obtained by fraud or false representation;

(2) any required documents submitted as part of the initial or renewal application packet are falsified;

(3) the person refused to permit or interfered with an inspection or investigation by an authorized representative of the Commission or Executive Director;

(4) the person permitted the use or display of his license by a person not authorized by law to use that license;

(5) the person has been convicted of a crime or an offense that carries the possibility of confinement in a state or federal facility; or

(6) the person violates a law establishing a regulatory program administered by the Department, or a rule or order of the Commission or the Department.

(b) The Commission or Executive Director shall consider the factors set forth in Texas Occupations Code, §51.302(b) and may:

(1) issue a written reprimand to the person that specifies the violation;

(2) revoke, suspend, or deny the person's license;

(3) place on probation a person whose license has been suspended;

(4) refuse to renew the person's license; or

(5) impose administrative penalties on the person.

(1) report regularly to the Executive Director on matters that are the basis of the probation;

(2) limit practice to the areas prescribed by the Commission or Executive Director;

(3) complete professional education until the person attains a degree of skill satisfactory to the Commission or Executive Director in those areas that are the basis for the probation; or

(4) complete any other remedial actions agreed to by the parties.

(d) If a person has outstanding or unpaid administrative penalties, which were imposed by the Commission or the Executive Director, the Department may place a hold on the person's license and the person will not be able to renew the license until the administrative penalties are paid.

§60.24.Advisory Boards.

(a) Unless otherwise provided by law, the presiding officer of the Commission, with the Commission's approval, shall appoint the members of each advisory board.

(b) The purpose, duties, manner of reporting, and membership requirements of each advisory board are detailed in the statutes and rules of the specific program regulated by the Department.

(c) In accordance with Texas Government Code, §2110.008, the Commission establishes the following periods during which the advisory boards listed will continue in existence. The automatic abolishment date of each advisory board will be the date listed for that board unless the Commission subsequently establishes a different date:

(1) Advisory Board on Barbering--09/01/2010;

(2) Advisory Board on Cosmetology--09/01/2010;

(3) Architectural Barriers Advisory Committee--09/01/2010;

(4) Air Conditioning and Refrigeration Advisory Council--09/01/2010;

(5) Auctioneer Education Advisory Board--09/01/2010;

(6) Board of Boiler Rules--09/01/2010;

(7) Electrical Safety and Licensing Advisory Board--09/01/2010;

(8) Elevator Advisory Board--09/01/2010;

(9) Licensed Court Interpreter Advisory Board--09/01/2010;

(10) Medical Advisory Committee--09/01/2010;

(11) Property Tax Consultants Advisory Council--09/01/2010;

(12) Towing and Storage Advisory Board--09/01/2010;

(13) Vehicle Protection Product Warrantor Advisory Board--09/01/2010;

(14) Water Well Drillers Advisory Council--09/01/2010; and

(15) Weather Modification Advisory Committee--09/01/2010.

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 February 23, 2009.

TRD-200900792

William H. Kuntz, Jr.

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 5, 2009

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

SUBCHAPTER C. LICENSE APPLICATIONS

16 TAC §60.30, §60.31

STATUTORY AUTHORITY

STATUTORY PROVISIONS AFFECTED

§60.30.Initial License Applications.

(a) All license applications must be submitted on Department-approved forms.

(b) An applicant must complete all licensure requirements within one year of the date the application is received by the Department, or the application shall be deemed void.

(c) If the applicant does not meet the deadline established in subsection (b), the applicant must reapply for a new license by complying with the requirements and procedures, including any examination requirements and payment of fees.

§60.31.License Renewal Applications.

(a) All license renewal applications must be submitted on Department-approved forms.

(b) A license holder will be notified by the Department, not later than the 30th day before the date a person's license is scheduled to expire, of impending expiration of the license.

(c) Non-receipt of a license renewal notice from the Department does not exempt a person from any requirements of this chapter or the chapter governing the specific program.

(d) To renew and maintain continuous licensure, the license holder must complete all of the renewal requirements under this chapter and the chapter governing the specific program, including continuing education requirements, prior to the expiration of the license.

(e) A complete renewal application, along with applicable fees, must be filed with the Department or postmarked prior to license expiration to avoid payment of a late renewal fee.

(f) Any continuing education that is required to be fulfilled as part of the renewal application must be completed prior to the license expiration date to avoid payment of a late renewal fee.

(g) A late renewal, if available, means the license holder will have an unlicensed period from the expiration date of the expired license to the issuance date of the renewed license. During the unlicensed period, a person may not perform any act that requires a license under this chapter or the chapter governing the specific program.

(h) A license holder must complete all license renewal requirements within one year of the date the license expires, or the renewal application shall be deemed void.

(i) If the licensee does not meet the deadline established in subsection (h), the person must reapply for a new license by complying with the requirements and procedures, including any examination requirements and payment of fees.

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 February 23, 2009.

TRD-200900793

William H. Kuntz, Jr.

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 5, 2009

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

SUBCHAPTER D. CRIMINAL CONVICTIONS

16 TAC §60.40

STATUTORY AUTHORITY

The new rule is proposed as the result of a rule review conducted in accordance with Texas Government Code §2001.039. The new rules are proposed under Texas Occupations Code, §51.201(b) and §51.203, which authorize the Commission, the Department's governing body, to adopt rules as necessary to implement Chapter 51 and any other law establishing a program regulated by the Department. In addition, the new rules are proposed in accordance with Texas Occupations Code, Chapters 53 and 55; Texas Government Code, Chapters 551, 552, 2001, 2008, 2009, and 2110; and Texas Civil Practice and Remedies Code, Chapter 154.

STATUTORY PROVISIONS AFFECTED

§60.40.Individuals with Criminal Convictions.

(a) Texas Occupations Code, Chapter 53 provides that the Commission or Executive Director may suspend or revoke an existing license, disqualify a person from receiving a license, or deny to a person the opportunity to be examined for a license because of a person's conviction of a felony or misdemeanor if the crime directly relates to duties and responsibilities of a licensee. This subsection applies to persons who are not imprisoned at the time the Commission or Executive Director considers the conviction.

(b) A person currently incarcerated because of a felony conviction may not sit for a license examination, obtain a license, or renew a previously issued license under this chapter or any statute governing a program regulated by the Department.

(c) A person whose license is revoked by operation of law under Texas Occupations Code, §53.021(b) must wait until release from imprisonment before applying for a new license.

(d) In considering whether a criminal conviction directly relates to the duties and responsibilities of the occupation for which the person is applying, the Commission and/or Executive Director shall consider the factors listed in Texas Occupations Code, §53.022 and the Criminal Conviction Guidelines established in accordance with Texas Occupations Code, §53.025.

(e) In determining the present fitness of a person who has been convicted of a crime, the Commission and/or Executive Director shall consider the factors and guidelines referenced in subsection (d) and the factors listed in Texas Occupations Code, §53.023.

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 February 23, 2009.

TRD-200900794

William H. Kuntz, Jr.

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 5, 2009

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

SUBCHAPTER E. EXAMINATIONS

16 TAC §§60.50 - 60.54

STATUTORY AUTHORITY

STATUTORY PROVISIONS AFFECTED

§60.50.Examination Rescheduling.

A person may reschedule an examination at no charge if the person:

(1) notifies the examination provider at least two days prior to the date of the examination; or

(2) provides the Department, as soon as possible, with documentation acceptable to the Department of the person's inability to take the examination because of an emergency.

§60.51.Examination Fee Refund.

To obtain a refund of an examination fee, a person who is unable to take the examination must:

(1) provide written notice to the Department not less than 10 days prior to the date of the examination; or

(2) provide the Department, as soon as possible, with documentation acceptable to the Department of the person's inability to take the examination because of an emergency.

§60.52.Examination Security.

(a) When an examination is required to obtain a license, an applicant or prospective applicant may make use of only such assistance as is available and authorized for all persons taking the examination. A person who uses or provides unauthorized assistance in connection with an examination violates this section. Conduct that violates this section includes but is not limited to the following:

(1) obtaining or attempting to obtain from any source examination questions or answers for use by an applicant, prospective applicant, or any other person, including a person associated with a school or examination preparation course;

(2) providing or attempting to provide examination questions or answers to an applicant, prospective applicant, or any other person, including a person associated with a school or examination preparation course;

(3) presenting a falsified or fraudulent document to gain entry to an examination;

(4) presenting a falsified or fraudulent document concerning an individual's results from an examination;

(5) taking an examination for another person;

(6) as an applicant or prospective applicant, knowingly allowing another person to take an examination for the applicant or prospective applicant;

(7) while taking an examination, using any materials not authorized by the Department or testing service for use in the examination, including but not limited to notes or study aides;

(8) bringing to the examination site or leaving the examination site with examination questions or answers obtained from the current examination or from previous examination attempts;

(9) while taking an examination, communicating with any person, other than an authorized representative of the Department or testing service, about the examination; or

(10) for open book examinations, bringing any materials into the examination, including hand-written notes in approved reference materials, other than those materials approved by the Department or testing service.

(b) The contents of any examination that is required for the issuance of a Department license are confidential.

§60.53.Access to Examinations.

(a) Reasonable accommodation for examinations will be made available as required by the Americans with Disabilities Act of 1990, Public Law 101-336.

(b) Upon request, examinations may be offered in a foreign language at the expense of the requestor.

§60.54.Examination Results.

(a) Examination results are valid for one year from the date of the examination, unless stated otherwise in specific program statutes or rules.

(b) An applicant who fails to meet the time period prescribed by subsection (a) must reapply to retake the examination.

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 February 23, 2009.

TRD-200900795

William H. Kuntz, Jr.

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 5, 2009

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

SUBCHAPTER F. FEES

16 TAC §§60.80 - 60.83

STATUTORY AUTHORITY

STATUTORY PROVISIONS AFFECTED

§60.80.Program Fees.

(a) Most fees set by the Commission are published in the rules relating to the statutes assigned to the Department. These program fees include fees for initial applications, renewals, duplicate licenses, examinations, and any other fees specific to a particular program.

(b) All program fees are non-refundable unless stated otherwise.

§60.81.Charges for Providing Copies of Public Information.

In providing public information the Department adheres to the standards for cost of copies as adopted under 1 TAC Part 3, Chapter 70, §§70.1 - 70.12.

§60.82.Dishonored Check Fee.

If a check, drawn to the Texas Department of Licensing and Regulation is dishonored by a payor, the Department shall charge a fee of $50 to the drawer or endorser for processing the dishonored check. The Department shall notify the drawer or endorser of the fee by sending a request for payment of the dishonored check and the processing fee by certified mail to the last known business address of the person as shown in the records of the Department. If the Department has sent a request for payment in accordance with the provisions of this section, the failure of the drawer or endorser to pay the processing fee within 15 days after the Department has mailed the request is a violation of these rules and subject to enforcement.

§60.83.Late Renewal Fees.

(a) A person whose license has been expired for 90 days or less may renew the license by paying a late renewal fee equal to 1 and 1/2 times the renewal fee.

(b) A person whose license has been expired for more than 90 days but less than one year may renew the license by paying a late renewal fee equal to two times the renewal fee.

(d) Pursuant to Texas Occupations Code, §55.002, an individual who fails to renew a license in a timely manner is exempt from the requirement to pay a late renewal fee and is not subject to any other penalty as a result of failing to renew the license in a timely manner if the individual furnishes to the Department satisfactory documentation that the individual failed to renew the license in a timely manner because the individual was on active duty in the United States armed forces serving outside this state. An individual to whom this subsection applies may renew the license by paying the renewal 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 February 23, 2009.

TRD-200900796

William H. Kuntz, Jr.

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 5, 2009

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

SUBCHAPTER G. RULEMAKING

16 TAC §§60.100 - 60.102

STATUTORY AUTHORITY

STATUTORY PROVISIONS AFFECTED

§60.100.Rulemaking.

The Commission and the Department will follow the rulemaking procedures established in the Administrative Procedures Act (Texas Government Code, Chapter 2001), except when §60.101 of this subchapter is applicable.

§60.101.Negotiated Rulemaking.

(a) It is the Commission's policy to engage in negotiated rulemaking procedures under Texas Government Code, Chapter 2008, when appropriate. When the Commission finds that proposed rules are likely to be complex, or controversial, or to affect disparate groups, negotiated rulemaking may be proposed.

(b) When negotiated rulemaking is proposed, the Commission will appoint a convener to assist in determining whether it is advisable to proceed. The convener shall perform the duties and responsibilities contained in Texas Government Code, Chapter 2008.

(c) If the convener recommends proceeding with negotiated rulemaking and the Commission adopts the recommendation, the Department shall initiate negotiated rulemaking according to the provisions of Texas Government Code, Chapter 2008.

§60.102.Petition for Adoption of Rules.

Any interested party may request adoption of a rule(s) by submitting a letter of request to the Department with a draft of the rule(s) attached. As a minimum the request should contain:

(1) items to be deleted should be bracketed or lined through;

(2) items added should be underlined; and

(3) the rationale for the requested rule change.

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

Filed with the Office of the Secretary of State on February 23, 2009.

TRD-200900797

William H. Kuntz, Jr.

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 5, 2009

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

SUBCHAPTER H. COMPLAINT HANDLING

16 TAC §60.200

STATUTORY AUTHORITY

STATUTORY PROVISIONS AFFECTED

§60.200.Complaints.

(a) Complaints against a person or entity regulated by the Department are accepted in all forms, and under all circumstances, except as provided under subsection (b).

(b) A complaint must be filed within two years of the event giving rise to the complaint. Complaints filed after the above stated period will not be accepted by the Department unless the complainant can show good cause to the Executive Director for the late filing.

(c) Unless stated otherwise in the statutes or rules governing a specific program regulated by the Department, the Executive Director shall require license holders to notify consumers and service recipients of the name, mailing address, and telephone numbers of the Department for purposes of directing complaints to the Department. The notification shall be included on:

(1) the written contract for services of an individual or entity regulated by the Department;

(2) a sign prominently displayed in the place of business of each individual or entity regulated by the Department if the consumers or service recipients must visit the place of business for said service or products; and

(3) a bill for service provided by an individual or entity regulated by the Department.

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

Filed with the Office of the Secretary of State on February 23, 2009.

TRD-200900798

William H. Kuntz, Jr.

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 5, 2009

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

SUBCHAPTER I. CONTESTED CASES

16 TAC §§60.300 - 60.311

STATUTORY AUTHORITY

STATUTORY PROVISIONS AFFECTED

§60.300.Purpose and Scope.

(a) Unless otherwise provided by statute or by the provisions of this subchapter, this subchapter will govern the institution, conduct, and determination of all contested cases under the APA.

(b) SOAH acquires jurisdiction over a contested case at certain stages of the adjudicative matter, as prescribed under the APA. SOAH's rules of procedure, 1 TAC Chapter 155, govern during the period when SOAH has jurisdiction over the contested case.

(c) In the case of a conflict between SOAH's rules of procedure and the rules in this subchapter, SOAH's rules of procedure will control for the time period starting after the Request to Docket Case form has been filed and concluding after the final amendments or corrections to the proposal for decision have been filed.

(d) The rules in this subchapter shall not be construed so as to enlarge, diminish, modify, or otherwise alter the jurisdiction, powers, or authority of the Commission, the Executive Director, or the substantive rights of any person or agency.

§60.301.Filing of Documents.

(a) The original of all pleadings and other documents requesting action or relief in a contested case, shall be filed with SOAH once it acquires jurisdiction. Pleadings, other documents, and service to SOAH shall be directed to the Docketing Division of the State Office of Administrative Hearings at its address in Austin, Texas. The time and date of filing shall be determined by the file stamp affixed by SOAH. Unless otherwise ordered by the ALJ, only the original and no additional copies of any pleading or document shall be filed.

(b) Unless otherwise provided by law, after a proposal for decision has been issued, originals of documents requesting relief, such as exceptions to the proposal for decision or requests to reopen the hearing, shall be filed with the Department's Executive Director and/or Commission and a copy served on the Department's enforcement division, at their address in Austin, Texas; or by facsimile if the documents contain 20 or fewer pages including exhibits. Filings may be made until 5:00 p.m. on business days. Copies shall be filed with SOAH.

§60.302.Notice of Alleged Violations.

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

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

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

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

(3) a statement that the Respondent has the right to a hearing to contest the alleged violation, the amount of the recommended penalty and/or sanction, or both.

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

(1) Setting of hearing;

(2) Assignment of an ALJ; and/or

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

§60.303.Notice of Other Proceedings.

The Department shall provide notice to all parties in accordance with Texas Government Code §2001.052, and Texas Occupations Code, Chapter 51.

§60.304.Disposition by Agreement.

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

(b) The Commission may designate its chairperson and/or the Executive Director to adopt or reject stipulations, settlement agreements, or consent orders.

(c) Parties agreeing to disposition by agreement shall prepare written stipulations, consent order, or settlement agreement, containing proposed findings of fact and conclusions of law, which shall be signed by all the agreeing parties and their designated representatives.

(d) Upon receipt of the written stipulations, consent order, or settlement agreement the Executive Director and/or the Commission may:

(1) adopt the written stipulations, consent order, or settlement agreement and issue a final order;

(2) reject the written stipulations, consent order, or settlement agreement and remand the contested case for a hearing before SOAH;

(3) reject the written stipulations, consent order, or settlement agreement and order further investigation by the Department; or

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

§60.305.Place and Nature of Hearings.

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

§60.306.Failure to Attend Hearing and Defaults.

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

(b) Where a Respondent fails to answer to the Notice of Alleged Violation, the Department may present to the Commission and/or the Executive Director a motion for default order along with a proposed default order containing findings of fact and conclusions of law. Respondents will be notified as to the time and place the motion for default order will be considered. If a Respondent attends at the time and place prescribed in the notice, an administrative hearing may be set in accordance with §60.302(c) of this subchapter.

(c) After receiving a notice proposing denial of an application or a notice proposing denial of an opportunity to take an examination, an Applicant may request a hearing in writing within twenty days of receipt of the notice or forfeit the right to a hearing unless otherwise provided by applicable law. There is a rebuttable presumption that notice is received three days after the notice was mailed.

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

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

§60.307.Hearing Costs.

(a) Costs associated with the contested case hearing before SOAH shall be determined according to the provisions in 1 TAC §155.43, except as noted in subsections (b) and (c).

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

(c) Any party who needs a certified or licensed language interpreter for presentation of its case shall be responsible for requesting the services of an interpreter by contacting SOAH and by following SOAH procedures provided in 1 TAC Chapter 155.

§60.308.Proposals for Decision.

Proposed decisions for contested cases issued by a SOAH ALJ shall be brought before the Commission for decision, in accordance with the APA.

§60.309.Filing of Exception and Replies.

(a) Any party of record may, within 15 days after the date of service of a proposal for decision, file exceptions to the proposal for decision with the Executive Director of the Department and/or the Commission, as appropriate. Replies to such exceptions may be filed within 15 days after the deadline for filing such exceptions. Copies of exceptions and replies shall be filed with SOAH and served on the enforcement division of the Department as provided by §60.301(b) of this subchapter.

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

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

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

(b) The timely filing of a motion for rehearing is a prerequisite to appeal. A motion for rehearing must be filed by a party not later than the 20th day after the date on which the party or the party's attorney of record is notified of the decision or order.

(c) In the absence of a timely filed motion for rehearing, a decision or order is final on the expiration of the period for filing a motion for rehearing as described in subsection (b). The decision is not appealable.

(d) If a timely motion for rehearing is filed as described in subsection (b), the Commission or Executive Director will act on a motion for rehearing not later than the 45th day after the date on which the party or the party's attorney of record is notified of the decision or order. The Commission or Executive Director may by written order extend the time for taking action, but may not extend the time beyond the 90th day after the date on which the party or the party's attorney of record is notified of the decision or order. The decision or order is final and appealable on the date an order overruling a motion for rehearing is signed or on the date the motion is overruled by operation of law.

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

(f) A petition for judicial review must be filed in a District Court of Travis County Texas within 30 days after the order is final and appealable, as provided under the APA. A party filing a petition for judicial review must also comply with the requirements of Texas Occupations Code, §51.307.

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

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

§60.311.Corrected Orders.

The Executive Director may enter a corrected order to correct a clerical mistake in an 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 February 23, 2009.

TRD-200900799

William H. Kuntz, Jr.

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 5, 2009

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

SUBCHAPTER J. MEDIATION FOR CONTESTED CASES

16 TAC §§60.400 - 60.409

STATUTORY AUTHORITY

STATUTORY PROVISIONS AFFECTED

§60.400.Alternative Dispute Resolution--Mediation.

In addition to the procedures under §60.304 of this chapter, the Department uses mediation as an alternative method for resolving contested cases consistent with Texas Government Code, Chapters 2001 and 2009; Texas Civil Practice and Remedies Code, Chapter 154; and the model guidelines for the use of ADR by state agencies developed by SOAH.

§60.401.Referral of Contested Matter for Mediation.

The Department's Director of Enforcement, on behalf of the Department, may seek to resolve a contested matter through mediation involving all parties, and if so, shall refer the matter for mediation in accordance with this subchapter.

§60.402.Appointment of Mediator.

(a) For each matter referred for mediation, the ADR Administrator shall:

(1) preside over the mediation proceeding;

(2) assign a Departmental mediator;

(3) appoint a mediator from another state agency; or

(4) appoint a private mediator.

(b) A private mediator may be appointed provided that:

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

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

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

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

(e) The ADR Administrator may assign a substitute or additional mediator to a proceeding as the ADR Administrator deems necessary.

§60.403.Qualifications of Mediators.

(a) All mediators must have completed a minimum of 40 hours of Texas mediation training as prescribed under Texas Civil Practices and Remedies Code, Chapter 154.

(b) All mediators shall subscribe to the ethical guidelines for mediators adopted by the ADR Section of the State Bar of Texas.

§60.404.Disqualifications of Mediators.

(a) If the mediator is a SOAH ALJ, that person will not also sit as the ALJ for the case if the contested matter goes to hearing.

(b) If the mediator is an employee of the Department and the dispute does not settle, that mediator will not have any further contact or involvement concerning the contested matter.

§60.405.Qualified Immunity of the Mediator.

The mediator shall have the qualified immunity prescribed by the Texas Civil Practice and Remedies Code, §154.055, if applicable.

§60.406.Commencement of Mediation.

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

(b) After a Request for Docket Case form has been submitted to SOAH, the contested case is subject to SOAH's procedures under 1 TAC Chapter 155, and it is at the discretion of the ALJ whether mediation may apply or may continue to apply to a contested case.

§60.407.Stipulations.

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

§60.408.Agreements.

(a) All agreements between or among parties that are reached as a result of mediation must be committed to writing and the terms of the agreement will be incorporated in an order that is subject to approval by the Executive Director or Commission.

(b) A final written agreement to which the Department is a signatory that is reached as a result of the mediation is subject to or excepted from required disclosure in accordance with Texas Government Code, Chapter 552.

§60.409.Confidentiality.

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

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

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

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

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

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 February 23, 2009.

TRD-200900800

William H. Kuntz, Jr.

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 5, 2009

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

PART 9. TEXAS LOTTERY COMMISSION

CHAPTER 401. ADMINISTRATION OF STATE LOTTERY ACT

SUBCHAPTER B. LICENSING OF SALES AGENTS

16 TAC §401.153

The Texas Lottery Commission (Commission) proposes amendments to 16 TAC §401.153 (Qualifications for License). The purpose of the proposed amendments is to redefine the term "professional gambler" as used in the State Lottery Act, Texas Government Code, Chapter 466 and the rules of the Commission. The Commission published amendments to §401.153 (Qualifications for License) in the November 14, 2008, issue of the Texas Register (33 TexReg 9168). At a public meeting on February 20, 2009, the Commission voted to withdraw the proposed amendments and propose new amendments to §401.153 (Qualifications for License).

Kathy Pyka, Controller, has determined that for each year of the first five years the amendments will be in effect, there will be no significant fiscal impact for state or local governments as a result of the proposed amendments. There will be no adverse effect on small businesses, micro businesses, or local or state employment. There will be no additional economic cost to persons required to comply with the amendments as proposed. Furthermore, an Economic Impact Statement and Regulatory Flexibility Analysis is not required because the amendments will not have an economic effect on small businesses as defined in Texas Government Code §2006.001(2).

Michael Anger, Director of the Lottery Operations Division, has determined that for each year of the first five years the proposed amendments would be in effect, the public benefit anticipated from the adoption of the proposed amendments is providing licensees and others with a clear meaning of the term "professional gambler" as it relates to qualifications for licensing of sales agents.

The Commission requests comments on the amendments from any interested person. Comments on the proposed amendments may be submitted to Pete Wassdorf, Assistant General Counsel, by mail at Texas Lottery Commission, P.O. Box 16630, Austin, Texas 78761-6630; by facsimile at (512) 344-5189; or by email at www.legal.input@lottery.state.tx.us. Comments must be received within 60 days after publication of this proposal in order to be considered.

The amendments are proposed under the specific requirement of Texas Government Code Chapter 466, Subchapter E, §466.205(b), and the authority of Texas Government Code §466.015, which provides the Commission with the authority to adopt rules governing the operation of the lottery. The amendments are also proposed under the authority of Texas Government Code §467.102, which provides the Commission with the authority to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction.

This proposal is intended to implement Texas Government Code, §466.205(b).

§401.153.Qualifications for License.

(a) (No change.)

(b) The director may grant or deny an application for a license under this subchapter based on any one or more factors listed in subsection (a) of this section. In addition, the director shall deny an application for a license under this subchapter upon a finding that the applicant:

(1) has been convicted of a felony, criminal fraud, gambling or a gambling-related offense, or a misdemeanor involving moral turpitude, if less than 10 years has elapsed since the termination of the sentence, parole, mandatory supervision, or probation served for the offense;

(2) is or has been a professional gambler. The term "professional gambler" means a person who:

(A) has engaged in conduct in Texas proscribed by Title 10, Chapter 47, §§47.02, 47.03, 47.04, or 47.05 of the Texas Penal Code as the primary source of income. (The term "primary source of income" as used in this subparagraph means more than 50 percent of the person's income on an annual basis);

(i) In adopting the definitions in subsection (b)(2)(A) of this section, the conduct proscribed by the Texas Penal Code does not include any conduct for which an exception to criminal prosecution applies, or any conduct for which a person may be entitled to an affirmative defense, including, but not limited to those affirmative defenses allowed under §47.09 of the Texas Penal Code.

(ii) In adopting the definitions in subsection (b)(2)(A) of this section, the conduct proscribed by the Texas Penal Code does not include any conduct which would be excepted from prosecution because the conduct was excepted from a definition under Texas Penal Code §47.01, which is essential to prosecution; or

(B) has been convicted under the laws of any state, or governing jurisdiction outside of the United States of being a professional gambler, as defined by the law of that jurisdiction; or

~~[(2) A "professional gambler" is a person whose profession is, or whose major source of income derives from, playing games of chance for profit;]~~

(3) - (10) (No change.)

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

Filed with the Office of the Secretary of State on February 23, 2009.

TRD-200900776

Kimberly L. Kiplin

General Counsel

Texas Lottery Commission

Earliest possible date of adoption: April 5, 2009

For further information, please call: (512) 344-5012

CHAPTER 402. CHARITABLE BINGO ADMINISTRATIVE RULES

SUBCHAPTER A. ADMINISTRATION

16 TAC §402.104

The Texas Lottery Commission (Commission) proposes new 16 TAC §402.104 (Professional Gambler and Gambling Promoter). The purpose of the new rule is to define the terms "professional gambler" and "gambling promoter" as used in the Bingo Enabling Act, Texas Occupations Code, Chapter 2001. The Commission published a proposed new §402.104 (Professional Gambler and Gambling Promoter) in the November 14, 2008, issue of the Texas Register (33 TexReg 9171). At a public meeting on February 20, 2009, the Commission voted to withdraw the proposed rule and to propose a new Professional Gambler and Gambling Promoter rule.

Kathy Pyka, Controller, has determined that for each year of the first five years the proposed new rule will be in effect, there will be no significant fiscal impact for state or local governments as a result of the new rule. There will be no adverse effect on small businesses, micro businesses, or local or state employment. There will be no additional economic cost to persons required to comply with the new rule as proposed. Furthermore, an Economic Impact Statement and Regulatory Flexibility Analysis is not required because the new rule will not have an economic effect on small businesses as defined in Texas Government Code §2006.001(2).

Philip D. Sanderson, Director of the Charitable Bingo Operations Division, has determined that for each year of the first five years proposed new rule will be in effect, the public benefit anticipated is providing licensees and others with clear and concise meanings of the terms "professional gambler" and "gambling promoter" as related to the eligibility of a person for a manufacturer's or distributor's license.

The Commission requests comments on the proposed new rule from any interested person. Comments on the proposed rule may be submitted to Pete Wassdorf, Assistant General Counsel, by mail at Texas Lottery Commission, P.O. Box 16630, Austin, Texas 78761-6630; by facsimile at (512) 344-5189; or by email at www.legal.input@lottery.state.tx.us. Comments on the proposed new rule must be received within 60 days after publication in order to be considered.

The new rule is proposed under Texas Occupations Code §2001.054, which authorizes the Commission to adopt rules to enforce and administer the Bingo Enabling Act, and under Government Code §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of this chapter and the laws under the Commission's jurisdiction.

The proposed new rule implements Texas Occupations Code, Chapter 2001.

§402.104.Professional Gambler and Gambling Promoter.

(a) The term "gambling promoter" means a person who has:

(1) engaged in conduct in Texas proscribed by Title 10, Chapter 47, §47.03 of the Texas Penal Code; or

(2) been convicted in any state, or governing jurisdiction outside of the United States under a law that is fundamentally equivalent to promotion of gambling as proscribed by Title 10, Chapter 47, §47.03 of the Texas Penal Code.

(b) The term "professional gambler" means a person who:

(1) has engaged in conduct in Texas proscribed by Title 10, Chapter 47, §§47.02, 47.03, 47.04, or 47.05 of the Texas Penal Code as the primary source of income. (The term "primary source of income" as used in this paragraph, means more than 50 percent of the person's income on an annual basis.); or

(2) has been convicted under the laws of any state, or governing jurisdiction outside of the United States of being a professional gambler, as defined by the law of that jurisdiction; or

(3) has, on three or more occasions been convicted of a gambling offense in any state or governing jurisdiction;

(c) In adopting the definitions in subsections (a) and (b) of this section, the conduct proscribed by the Texas Penal Code does not include any conduct for which an exception to criminal prosecution applies, or any conduct for which a person may be entitled to an affirmative defense, including, but not limited to those affirmative defenses allowed under §47.09 of the Texas Penal Code.

(d) In adopting the definitions in subsections (a) and (b) of this section, the conduct proscribed by the Texas Penal Code does not include any conduct which would be excepted from prosecution because the conduct was excepted from a definition under Texas Penal Code §47.01, which is essential to prosecution.

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 February 23, 2009.

TRD-200900775

Kimberly L. Kiplin

General Counsel

Texas Lottery Commission

Earliest possible date of adoption: April 5, 2009

For further information, please call: (512) 344-5012

SUBCHAPTER D. LICENSING REQUIREMENTS

16 TAC §402.402

The Texas Lottery Commission (Commission) proposes amendments to 16 TAC §402.402 (relating to Registry of Bingo Workers). The purpose of the proposed amendments is to remove reference to a 'primary' operator, to clarify the consequences of failing to renew a worker's registration timely, and the consequences of submission of an incomplete worker registry application. Additionally, the proposed amendments include an explanation of when fingerprint cards are required, the option of requesting a hearing when found non-qualified to be listed on the registry, and when a worker whose listing on the registry has been denied or revoked may reapply. Finally, the proposed amendments set forth a definition for "usher", and language has been added at subsection (b) to specify that any person that carries out or performs the functions of a caller, cashier, manager, operator, usher, or salesperson, as defined in subsection (a), must be listed on the Registry of Approved Bingo Workers.

Kathy Pyka, Controller, has determined that for each year of the first five years the proposed amendments will be in effect, there will be no significant fiscal impact for state or local governments as a result of the proposed amendments. There will be no adverse effect on small businesses, micro businesses, or local or state employment. There will be no additional economic cost to persons required to comply with the amendments as proposed. Furthermore, an Economic Impact Statement and Regulatory Flexibility Analysis is not required because the proposed amendments will not have an economic effect on small businesses as defined in Texas Government Code §2006.001(2).

Philip D. Sanderson, Director of the Charitable Bingo Operations Division, has determined that for each year of the first five years the proposed amendments will be in effect, the public benefit anticipated is to provide to individuals specific information about the consequences of submitting an incomplete application and failing to renew their registration. In addition, the proposed amendments explain the specific process for requesting a hearing and provide clarification as to when a non-qualified person may reapply to be listed on the registry and when fingerprint cards are required.

The Commission requests comments on the proposed amendments from any interested person. Comments on the proposed rule may be submitted to Sandra Joseph, Special Counsel, by mail at Texas Lottery Commission, P.O. Box 16630, Austin, Texas 78761-6630; by facsimile at (512) 344-5189; or by email at www.legal.input@lottery.state.tx.us. The Commission will hold a public hearing on this proposal at 10:00 a.m. on March 18, 2009, at 611 E. 6th Street, Austin, Texas 78701. Comments must be received within 30 days after publication of this proposal in order to be considered.

The amendments are proposed under Texas Occupations Code §2001.054, which authorizes the Commission to adopt rules to enforce and administer the Bingo Enabling Act, and under Texas Government Code §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of this chapter and the laws under the Commission's jurisdiction. The proposed amendments implement Texas Occupations Code, Chapter 2001.

§402.402.Registry of Bingo Workers.

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

(1) Caller--an individual who operates the bingo ball selection device and announces the balls selected.

(2) Cashier--an individual who sells and records bingo card and pull tab sales to bingo players and/or pays winners the appropriate prize.

(3) Completed Application--A registry application or renewal form prescribed by the Commission which is legible and lists at a minimum the applicant's complete legal name, address, social security number or registry number, date of birth, race, gender and signature.

(4) [~~(3)~~] Manager--an individual who oversees the day-to-day operation of the bingo premises.

(5) [~~(4)~~] Operator--means an active bona fide member of a licensed authorized organization that has been designated on a form prescribed by the Commission prior to acting in the capacity as the organization's [~~primary~~] operator. [~~An individual designated by an authorized organization as an "alternate operator" shall perform all the duties and responsibilities of an operator in the absence of the primary operator.~~]

[(5) Sales Person--an individual who monitors bingo players, sells bingo cards and pull tabs, verifies winners and/or awarding prizes. A sales person may be referred to as a floor worker, runner or usher.]

(6) Salesperson--an individual who monitors bingo players, sells bingo cards and pull tabs, verifies winning cards and pull-tabs and/or delivers the prize money to the winners; may be referred to as an usher, floor worker, or runner.

(7) Usher--an individual who monitors bingo players, sells bingo cards and pull tabs, verifies winning cards and pull-tabs and/or delivers the prize money to the winners; may be referred to as a salesperson, floor worker or runner.

(b) Who must be listed on the Registry of Approved Bingo Workers. Any person who carries out or performs the functions of a caller, cashier, manager, operator, usher, or salesperson as defined in subsection (a) of this section [~~The following persons~~] must be listed on the Registry of Approved Bingo Workers prior to being involved in the conduct of bingo. [:]

~~[(1) Operator]~~

~~[(2) Manager]~~

~~[(3) Cashier]~~

~~[(4) Usher]~~

~~[(5) Caller]~~

~~[(6) Salesperson]~~

(c) Each individual must submit a completed Texas Application for Registry of Approved Bingo Workers as prescribed by the Commission to remain on the Registry of Approved Bingo Workers.

(d) The registrant will be added to the registry as soon as possible after the Commission has determined that the person is eligible to be involved in the conduct of bingo or act as an operator.

(e) For purposes of the Registry of Approved Bingo Workers, each operator must be designated on the licensed authorized organization's license to conduct bingo application pursuant to the Texas Occupations Code, §2001.102(10) as the member who will be responsible for the conduct of bingo under the terms of the license and the Bingo Enabling Act. [An individual included on the registry may not serve as the primary operator for an organization until the approved license to conduct bingo has been issued to the licensed organization listing the individual as the operator, received by the organization, and displayed at the location. ] An organization must submit the name of a registered operator on a form prescribed by the Commission prior to the individual's [~~operator~~] acting in the capacity of an [~~primary~~] operator. An operator who fails to renew their intent to remain on the registry prior to the registry expiration may not serve as an operator in any manner, including signing applications and forms on behalf of the organization, until re-listed on the registry after filing the required forms.

(f) Expiration of listing on registry of approved bingo workers. A registrant's listing on the registry is valid for three years from the last date of inclusion on the registry, unless the individual's listing is removed for cause prior to the expiration of three years. Every three years after the date the person's name is listed on the registry the individual shall submit a completed renewal form prescribed by the Commission stating the person's intent to remain on the registry. Failure to timely submit the prescribed form will result in the deletion of the worker's name from the registry. A person whose name is deleted from the registry due to failure to verify the intent to remain on the registry may be re-listed on the registry by filing the required form. A registered worker who fails to timely submit the prescribed form to renew listing on the registry may not be involved in the conduct of bingo until the worker is again added to the registry. Payment for serving in a position listed in subsection (b) of this section by a person not listed on the registry is not an authorized expense. It is the responsibility of the licensed authorized organization to review the registry to confirm that the worker's registration is current.

(g) How to be listed on the Registry of Approved Bingo Workers. For a person to be listed on the Registry of Approved Bingo Workers, a person must:

(1) submit a completed [~~complete a~~] Texas Application for Registry of Approved Bingo Workers form as prescribed by the Commission;

(2) submit the required fee for the cost of the card or form; [~~and~~]

(3) submit a verifiable FBI or DPS fingerprint card if at the time of registration:

(A) the person is residing outside of Texas; or

(B) the person maintains a driver's license or registration in another state; and

(4) [~~(3)~~] be determined by the Commission to not be ineligible under Texas Occupations Code, §2001.105(a)(6).

(h) Incomplete Applications. The Commission will notify the applicant at the address provided if the registry application or renewal form submitted is not complete and will identify what is missing. The original application will be returned to the applicant for correction and resubmission. It is the responsibility of the registry applicant to resubmit a completed application before it may be processed. Failure to submit an FBI or DPS fingerprint card, if required, is grounds for denial or removal of the registration.

(i) [~~(h)~~] An individual listed on the registry must notify the Commission of any changes to information contained on the Texas Application for Registry of Approved Bingo Workers on file with the Commission within 30 days of the change in information. Such notification shall be in writing or other approved electronic means.

(j) [~~(i)~~] Identification Card for Approved Bingo Worker.

(1) The Commission will issue an identification card indicating that the person is listed in the registry. A registered worker and operator must wear his/her identification card while on duty.

(2) The identification card worn by the registered worker or operator while on duty must be visible. The identification card shall list the individual's name and unique registration number, as issued by the Commission. An individual may obtain the unique registration number from the Registry of Approved Bingo Workers on the Commission's website or by requesting the number from the Commission.

(3) An identification card is not transferable and may be worn only by the individual identified on the card.

(4) Upon request by a Commission employee, a person described in subsection (a) of this section shall present personal photo identification in order to verify the identification card is that person's card.

(k) [~~(j)~~] How to Obtain Approved Identification Cards.

(1) A completed identification card may be obtained from the Commission by submitting the required fee and submitting the required form.

(2) The fee for an identification card or identification card form may not exceed $5.00.

(3) A person who has been approved to work in charitable bingo may complete an identification card form provided by the Commission for use while on duty. Blank identification card forms may be obtained from the Commission. The person requesting the identification card form(s) must submit the required fee and the required form for the blank identification card form.

(4) The identification card prepared by the individual may only be on a prescribed Commission card form and must be legible and include the individual's name and registration number.

(l) [~~(k)~~] A licensed authorized organization which is reporting conduct where there is a substantial basis for believing that the conduct would constitute grounds for removal or refusal to list on the registry shall make the report in writing to: Bingo Registry, Texas Lottery Commission, P.O. Box 16630, Austin, Texas 78761-6630.

(m) [~~(l)~~] The provisions of the Texas Occupations Code, §2001.313 related to the registry of bingo workers do not apply to an authorized organization that does not have an annual license to conduct bingo who receives a temporary license to conduct bingo.

(n) [~~(m)~~] If the Commission proposes to refuse to add or proposes to remove the person from the Registry of Approved Bingo Workers consistent with Texas Occupations Code, §2001.313, the Commission will give notice of the proposed action as provided by Government Code, Chapter 2001.

(o) A person receiving notice that the Commission intends to refuse to add to or intends to remove the person from the Registry of Approved Bingo Workers may request a hearing. Failure to submit a written request for a hearing within 30 calendar days of the date of the notice will result in the denial of the application or removal of the registered worker from the registry.

(p) A person who has been denied or removed from the registry through the hearing process because of an offense listed under Texas Occupations Code, §2001.105(b), may only reapply to be listed ten years after the termination date of a sentence, parole, mandatory supervision, or community supervision served for the offense. Applications received earlier will not be processed.

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 February 23, 2009.

TRD-200900774

Kimberly L. Kiplin

General Counsel

Texas Lottery Commission

Earliest possible date of adoption: April 5, 2009

For further information, please call: (512) 344-5012