Proposed Rules Title 1

TITLE 1. ADMINISTRATION

PART 15. TEXAS HEALTH AND HUMAN SERVICES COMMISSION

CHAPTER 358. MEDICAID ELIGIBILITY

The Health and Human Services Commission (HHSC) proposes the repeal of Chapter 358, Medicaid Eligibility, consisting of Subchapter A, §358.100 and §358.105, concerning general information; Subchapter B, §§358.200 - 358.205, 358.210, 358.215, and 358.220, concerning Medicare and third-party resources; Subchapter C, §§358.300, 358.301, 358.305, 358.310, 358.315, 358.316, 358.320, and 358.325, concerning basic program requirements; Subchapter D, §§358.400, 358.401, 358.405, 358.410, 358.415 - 358.417, 358.420, 358.425, 358.430 - 358.433, 358.435, and 358.440 - 358.444, concerning resources; Subchapter E, §§358.450 - 358.455, 358.460, 358.461, 358.465, 358.466, 358.470, and 358.475, concerning income; Subchapter F, §§358.500 - 358.506, 358.510, and 358.515, concerning budgets and payment plans; Subchapter G, §§358.600, 358.601, 358.603 - 358.605, 358.607, 358.609 - 358.612, 358.615, 358.617, 358.619 - 358.621, and 358.623, concerning application for Medicaid; Subchapter H, §§358.700, 358.701, 358.705, 358.710, 358.715, 358.720, and 358.725, concerning client rights and responsibilities; and Subchapter I, §§358.801, 358.803, 358.805, 358.807, 358.809, 358.811, 358.813, 358.815, 358.817, and 358.819, concerning the Medicaid Buy-In Program.

HHSC also proposes new Chapter 358, Medicaid Eligibility for the Elderly and People with Disabilities, consisting of Subchapter A, §§358.101, 358.103, 358.105, and 358.107, concerning general information; Subchapter B, §§358.201, 358.203, 358.205, 358.207, 358.209, 358.211, 358.213, 358.215, 358.217, and 358.219, concerning nonfinancial requirements; Subchapter C, Financial Requirements, consisting of Division 1, §358.301, concerning introduction; Division 2, §§358.321 - 358.327, 358.331, 358.333 - 358.339, 358.345 - 358.355, and 358.371, concerning resources; Division 3, §§358.381 - 358.387 and 358.391, concerning income; Division 4, §358.401 and §358.402, concerning transfer of assets; Division 5, §§358.411 - 358.423, concerning spousal impoverishment; and Division 6, §§358.431 - 358.441, concerning budgeting for eligibility and co-payment; Subchapter D, §§358.501, 358.505, 358.510, 358.515, 358.520, 358.525, 358.530, 358.535, 358.540, and 358.545, concerning application and eligibility determination; and Subchapter E, §§358.601 - 358.605, concerning rights and responsibilities of applicants and recipients.

Background and Justification

The existing rules in Chapter 358 provide financial and nonfinancial eligibility criteria HHSC uses to determine a person eligible for a Medicaid-funded program for the elderly and people with disabilities (MEPD). They also provide requirements for the Medicaid Buy-In Program and the Medicare Savings Program.

The proposed new rules in Chapter 358 replace the existing MEPD eligibility rules in Chapter 358. The new rules are being proposed to update agency names and rule cross-references made obsolete during the consolidation of health and human services agencies in 2004, to delete unnecessary language, revise or eliminate obsolete terminology, and to provide better and more helpful organization. Unless otherwise indicated in this proposal, the new rules do not substantially change current MEPD policy. Existing rules that contain procedures for HHSC staff or explanatory material that does not apply to eligibility (for example, explanations of Medicare or Social Security policy) are not included in the proposal. Rules governing the Medicare Savings Program, currently found in Chapter 358, Subchapter B, are proposed in new Chapter 359 elsewhere in this issue of the Texas Register. New rules governing the Medicaid Buy-In Program, currently found in Chapter 358, Subchapter I, are proposed in new Chapter 360 elsewhere in this issue of the Texas Register.

Government Code, §2001.039, requires that each state agency review and consider for re-adoption each rule adopted by that agency pursuant to the Government Code, Chapter 2001 (the Administrative Procedure Act). HHSC has reviewed all sections in Chapter 358 and has determined that, although the reasons for adopting rules governing Medicaid eligibility for the elderly and people with disabilities continue to exist, some of the rules in Chapter 358 are obsolete or unnecessary and others need updating. As a result of this review, HHSC is proposing these repeals and new sections.

Section-by-Section Summary

The proposed repeals delete Chapter 358 in its entirety.

New Subchapter A is entitled General Information and contains §§358.101, 358.103, 358.105, and 358.107. These sections set out HHSC's rules concerning purpose and scope, definitions, general Medicaid eligibility requirements, and coverage groups.

New Subchapter B is entitled Nonfinancial Requirements and contains §§358.201, 358.203, 358.205, 358.207, 358.209, 358.211, 358.213, 358.215, 358.217, and 358.219. These sections set out HHSC's rules concerning citizenship or qualified alien status; residence; social security numbers; eligibility as aged, blind, or disabled; and third-party resources.

New Subchapter C is entitled Financial Requirements and is further divided into five divisions. Division 1 is entitled Introduction and contains §358.301, which sets out the purpose and scope of the rules in the division.

Subchapter C, Division 2 is entitled Resources and contains §§358.321 - 358.327, 358.331, 358.333 - 358.339, 358.345 - 358.355, and 358.371. These sections set out HHSC's rules concerning resource eligibility and how a person's resources, including annuities, trusts, property, automobiles, and insurance policies, are counted in determining eligibility for MEPD.

Subchapter C, Division 3 is entitled Income and contains §§358.381 - 358.387 and 358.391. These sections set out HHSC's rules concerning income eligibility and how a person's income is counted in determining eligibility for MEPD.

Subchapter C, Division 4 is entitled Transfer of Assets and contains §358.401 and §358.402. These sections set out HHSC's rules governing a person's transfer of assets before and after the federal Deficit Reduction Act of 2005, including what constitutes a transfer of assets and how a transfer of assets affects Medicaid eligibility.

Subchapter C, Division 5 is entitled Spousal Impoverishment and contains §§358.411 - 358.423. These sections set out HHSC's rules governing the protection of income and resources for a community spouse, in accordance with 42 United States Code §1396r-5.

Subchapter C, Division 6 is entitled Budgeting for Eligibility and Co-payment and contains §§358.431 - 358.441. These sections set out HHSC's rules governing how HHSC budgets for a person's eligibility and co-payment, depending on whether the person is in an institutional or noninstitutional setting, whether the person is married, whether the person is considered a child, and whether the person is considered another person's parent. Proposed new §358.440 expands current policy concerning dependent allowances. Current policy allows for the deduction of a dependent allowance (in accordance with spousal impoverishment provisions) from the countable income of an institutionalized person's dependent relative if the institutionalized person has a community spouse. Proposed new §358.440 incorporates the current policy but also allows for the deduction of a dependent allowance (in the amount of the Social Security Income benefit rate) from the countable income of an institutionalized person's dependent relative if the person has no community spouse.

New Subchapter D is entitled Application and Eligibility Determination and contains §§358.501, 358.505, 358.510, 358.515, 358.520, 358.525, 358.530, 358.535, 358.540, and 358.545. These sections set out HHSC's rules concerning how a person applies for MEPD, application requirements, and time frames for eligibility determinations and redeterminations.

New Subchapter E is entitled Rights and Responsibilities of Applicants and Recipients and contains §§358.601 - 358.605. These sections set out HHSC's rules concerning the general rights and responsibilities of applicants and recipients, as well as disclosure of records, release of medical information, and restitution.

Fiscal Note

Thomas M. Suehs, Deputy Executive Commissioner for Financial Services, has determined that, for the first five years the proposed repeals and new sections are in effect, enforcing or administering the repeals and new sections does not have foreseeable implications relating to costs or revenues of state or local governments.

Small Business and Micro-business Impact Analysis

Mr. Suehs has determined that there will be no effect on small businesses or micro-businesses to comply with the proposal, because the proposed repeals and new rules will not require them to alter their business practices. There are no anticipated economic costs to persons who are required to comply with the proposed repeals and new sections. There is no anticipated negative impact on local employment.

Public Benefit and Costs

Joanne Molina, Deputy Executive Commissioner for Social Services, has determined that, for each year of the first five years the repeals and new sections are in effect, the anticipated public benefit expected as a result of enforcing the repeals and new sections is that the rules for determining eligibility for MEPD will be up-to-date, consistent with policy, and easier to use.

Regulatory Analysis

HHSC has determined that this proposal is not a "major environmental rule" as defined by §2001.0225 of the Texas Government Code. "Major environmental rule" is defined to mean a rule the specific intent of which is to protect the environment or reduce risks to human health from environmental exposure and that may adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of a state or a sector of the state. This proposal is not specifically intended to protect the environment or reduce risks to human health from environmental exposure.

Takings Impact Assessment

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

Public Comment

Written comments on the proposal may be submitted to Mary Nan Haylor, Health and Human Services Commission, Office of Family Services, MC-2090, 909 West 45th Street, Austin, TX 78751, or by e-mail to marynan.haylor@hhsc.state.tx.us, within 30 days after publication of this proposal in the Texas Register.

Public Hearing

HHSC will hold a public hearing on June 22, 2009, at 9:00 a.m. (Central Time) to receive public comment on the proposal. The hearing will be held in the Lone Star Conference Room of the Health and Human Services Commission, Braker Center, Building H, 11209 Metric Boulevard, Austin, Texas. Entry is through Security at the main entrance of the building, which faces Metric Boulevard. Persons requiring Americans with Disabilities Act (ADA) accommodation or auxiliary aids or services should contact Graciela Reyna by calling (512) 206-4778, at least 72 hours prior to the hearing so appropriate arrangements can be made.

SUBCHAPTER A. GENERAL INFORMATION

1 TAC §358.100, §358.105

(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 Health and Human Services Commission or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

Statutory Authority

The repeals are proposed under Texas Government Code, §531.0055, which provides the Executive Commissioner of HHSC with rulemaking authority; and §531.021, which authorizes HHSC to administer the federal medical assistance (Medicaid) program in Texas.

The repeals affect Texas Government Code, Chapter 531. No other statutes, articles, or codes are affected by this proposal.

§358.100.Definitions.

§358.105.Description of Eligible Clients.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901758

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

SUBCHAPTER B. MEDICARE AND THIRD-PARTY RESOURCES

1 TAC §§358.200 - 358.205, 358.210, 358.215, 358.220

Statutory Authority

The repeals affect Texas Government Code, Chapter 531. No other statutes, articles, or codes are affected by this proposal.

§358.200.Medicare Benefits.

§358.201.Qualified Medicare Beneficiaries (QMB) (Type Program 24).

§358.202.Medicaid Qualified Medicare Beneficiaries.

§358.203.Qualified Disabled and Working Individuals (QDWI) (Type Program 25).

§358.204.Specified Low-Income Medicare Beneficiaries (SLMB).

§358.205.Eligibility Requirements for Buy-in.

§358.210.Time Frames for Buy-in Enrollment.

§358.215.Third-party Resources (TPRs).

§358.220.Qualifying Individuals (QIs).

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901759

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

SUBCHAPTER C. BASIC PROGRAM REQUIREMENTS

1 TAC §§358.300, 358.301, 358.305, 358.310, 358.315, 358.316, 358.320, 358.325

Statutory Authority

The repeals affect Texas Government Code, Chapter 531. No other statutes, articles, or codes are affected by this proposal.

§358.300.United States Citizenship and Residence Requirements.

§358.301.Texas Residence Requirements.

§358.305.Eligibility Requirements for the Aged, Blind, or Disabled.

§358.310.Eligibility Requirements for Residents of Public Institutions.

§358.315.Preadmission Screening and Annual Resident Review (PASARR).

§358.316.Risk Assessment Criteria.

§358.320.Eligibility Requirements for Redetermination.

§358.325.Nursing Facility Recipients Discharged to Hospitals.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901760

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

SUBCHAPTER D. RESOURCES

1 TAC §§358.400, 358.401, 358.405, 358.410, 358.415 - 358.417, 358.420, 358.425, 358.430 - 358.433, 358.435, 358.440 - 358.444

Statutory Authority

The repeals affect Texas Government Code, Chapter 531. No other statutes, articles, or codes are affected by this proposal.

§358.400.General Resources.

§358.401.Fiduciary Agent.

§358.405.Categories of Resource Limits.

§358.410.Deeming of Resources.

§358.415.Ownership and Accessibility.

§358.416.Earned Income Tax Credits.

§358.417.Trusts--August 11, 1993, and After.

§358.420.Conversion of Resources.

§358.425.Replacement Value of Excluded Resources.

§358.430.Transfer of Assets.

§358.431.Transfer of Assets on or after February 8, 2006.

§358.432.Home Equity Treatment.

§358.433.Treatment of Entrance Fees of Individuals Residing in Continuing Care Retirement Communities.

§358.435.Liquid Resources.

§358.440.Nonliquid Resources.

§358.441.Real Property.

§358.442.Personal Property.

§358.443.Resources Essential to Self-support (Real and Personal Properties).

§358.444.Medicaid Treatment of Qualified Long-Term Care Partnership Program Insurance Policies.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901761

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

SUBCHAPTER E. INCOME

1 TAC §§358.450 - 358.455, 358.460, 358.461, 358.465, 358.466, 358.470, 358.475

Statutory Authority

The repeals affect Texas Government Code, Chapter 531. No other statutes, articles, or codes are affected by this proposal.

§358.450.General Principles Concerning Income.

§358.451.Sources of Earned Income.

§358.452.Earned Income Tax Credits.

§358.453.Wage-related Exemptions.

§358.454.Reduction of Pension and Benefit Checks for Recoupment of Overpayments.

§358.455.Unearned Income.

§358.460.Income Exemptions.

§358.461.Indian-related Exemptions.

§358.465.Income Exclusions.

§358.466.Special Income Exclusions.

§358.470.Variable Monthly Income.

§358.475.Deeming of Income.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901762

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

SUBCHAPTER F. BUDGETS AND PAYMENT PLANS

1 TAC §§358.500 - 358.506, 358.510, 358.515

Statutory Authority

The repeals affect Texas Government Code, Chapter 531. No other statutes, articles, or codes are affected by this proposal.

§358.500.Nonvendor Living Arrangements.

§358.501.Vendor Living Arrangements.

§358.502.Allowable Deductions.

§358.503.Protection of Spousal Income and Resources.

§358.504.Diversion of Income to a Dependent Relative.

§358.505.Budget Eligibility Requirements.

§358.506.Mandatory Payroll Deductions from Earned Income.

§358.510.Applied Income for SSI Clients.

§358.515.Medicare Skilled Nursing Facilities.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901763

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

SUBCHAPTER G. APPLICATION FOR MEDICAID

1 TAC §§358.600, 358.601, 358.603 - 358.605, 358.607, 358.609 - 358.612, 358.615, 358.617, 358.619 - 358.621, 358.623

Statutory Authority

The repeals affect Texas Government Code, Chapter 531. No other statutes, articles, or codes are affected by this proposal.

§358.600.Date of Application.

§358.601.Eligibility Determination.

§358.603.Client Notification.

§358.604.Application Process.

§358.605.Medical Effective Date.

§358.607.Written Application.

§358.609.Applicants and Their Allowed Representatives.

§358.610.Medicaid Coverage.

§358.611.Allowed Signatures.

§358.612.Processing Deadlines.

§358.615.Medical Care Identification.

§358.617.Denials.

§358.619.Administrative Denials.

§358.620.Cases Placed on Hold.

§358.621.Failure to Furnish Information.

§358.623.Previously Completed Application for Assistance.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901764

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

SUBCHAPTER H. CLIENT RIGHTS AND RESPONSIBILITIES

1 TAC §§358.700, 358.701, 358.705, 358.710, 358.715, 358.720, 358.725

Statutory Authority

The repeals affect Texas Government Code, Chapter 531. No other statutes, articles, or codes are affected by this proposal.

§358.700.Confidentiality of Case Records.

§358.701.Disclosure and Release of Client Information.

§358.705.Disclosure of Client Medical Records.

§358.710.Requirement To Provide Information (Reporting Changes).

§358.715.Willful Withholding of Information.

§358.720.Client Right To Appeal.

§358.725.Restitution.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901765

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

SUBCHAPTER I. MEDICAID BUY-IN PROGRAM

1 TAC §§358.801, 358.803, 358.805, 358.807, 358.809, 358.811, 358.813, 358.815, 358.817, 358.819

Statutory Authority

The repeals affect Texas Government Code, Chapter 531. No other statutes, articles, or codes are affected by this proposal.

§358.801.Overview and Purpose.

§358.803.Applying and Providing Information.

§358.805.Citizenship, Immigration Status, and Residency.

§358.807.Disability.

§358.809.Work.

§358.811.Income.

§358.813.Resources.

§358.815.Deeming of Income and Resources.

§358.817.Cost Sharing.

§358.819.Medical Effective Date.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901766

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

CHAPTER 358. MEDICAID ELIGIBILITY FOR THE ELDERLY AND PEOPLE WITH DISABILITIES

SUBCHAPTER A. GENERAL INFORMATION

1 TAC §§358.101, 358.103, 358.105, 358.107

Statutory Authority

The new sections are proposed under Texas Government Code, §531.0055, which provides the Executive Commissioner of HHSC with rulemaking authority; and §531.021, which authorizes HHSC to administer the federal medical assistance (Medicaid) program in Texas.

The new sections affect Texas Government Code, Chapter 531. No other statutes, articles, or codes are affected by this proposal.

§358.101.Purpose and Scope.

(a) This chapter establishes the Medicaid eligibility criteria for Medicaid-funded programs for the elderly and people with disabilities (MEPD) in Texas, which provide medical assistance to eligible persons as described in this chapter and in:

(1) Title XVI of the Social Security Act (42 U.S.C. §§1382 et seq.);

(2) Title XIX of the Social Security Act (42 U.S.C. §§1396a et seq.);

(3) 20 CFR Part 416, Supplemental security income for the aged, blind, and disabled;

(4) 42 CFR Part 435, Eligibility in the States, District of Columbia, the Northern Mariana Islands, and American Samoa;

(5) 42 U.S.C. Chapter 7, Social Security; and

(6) the Texas State Plan for Medical Assistance (Medicaid).

(b) Any section of the United States Code of Federal Regulations cited in this chapter is adopted by reference as a part of the rule in which it is cited.

(c) Medicaid eligibility, as described in this chapter, is only one of the criteria used to determine eligibility for MEPD. Additional criteria, including functional and other assessments, are established by each program and are governed by the rules of that program.

(d) Nothing in these rules shall be construed to violate the maintenance of eligibility requirements of section 5001 of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5) and make eligibility standards, methodologies, or procedures under the Texas State Plan for Medical Assistance (or any waiver under section 1115 of the Social Security Act (42 U.S.C. §1315)) more restrictive than the eligibility standards, methodologies, or procedures, respectively, under such plan (or waiver) that were in effect on July 1, 2008.

§358.103.Definitions.

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

(1) Section 1915(c) waiver program--A home or community-based service authorized for use in Texas by the Centers for Medicare and Medicaid Services in accordance with §1915(c) of the Social Security Act.

(2) Adverse action--A termination, suspension, or reduction of Medicaid eligibility or covered services.

(3) Annual review--The process of redetermining a person's continued eligibility for Medicaid.

(4) Appeal--A request for a review of an action or failure to act by the Texas Health and Human Services Commission (HHSC) that may result in a fair hearing.

(5) Applicant--A person seeking benefits under a Medicaid-funded program for the elderly and people with disabilities (MEPD) who is not currently receiving MEPD services.

(6) Application for assistance--A form prescribed by HHSC that a person uses to apply for MEPD or to have MEPD eligibility redetermined.

(7) Assets--All items a person owns that have monetary value. Assets include both income and resources.

(8) Authorized representative--An individual:

(A) who assists and represents a person in the application or eligibility redetermination process, and who is familiar with that person and that person's financial affairs; or

(B) who is a representative payee for an applicant or recipient for another federal benefit.

(9) Benefits office--A local HHSC office.

(10) Blind--A person who meets Supplemental Security Income (SSI) program requirements for blindness, as defined in 42 U.S.C. §1382c(a)(2).

(11) Budgeting--The process of determining a person's financial eligibility for MEPD or for calculating a co-payment.

(12) Burial space--A burial plot, grave site, crypt, mausoleum, urn, casket, niche, or other repository customarily and traditionally used for a deceased person's bodily remains. The term also includes necessary and reasonable improvements or additions to these spaces, including vaults, headstones, markers, or plaques; burial containers; arrangements for opening and closing the grave site; and contracts for care and maintenance of the grave site. Contracts for care and maintenance are sometimes referred to as endowment or perpetual care.

(13) Certification--HHSC's official authorization of an eligibility determination.

(14) CFR--Code of Federal Regulations.

(15) Community spouse--See Subchapter C, Division 5, §358.412 of this chapter (relating to Definitions).

(16) Co-payment--The amount of personal income a person must pay toward the cost of his or her care. Co-payment was formerly known as applied income.

(17) Countable income--The amount of a person's income that is not exempt or excluded.

(18) Countable resource--A resource owned by and accessible to a person that is not exempt or excluded.

(19) Coverage group--A group of people who are categorically eligible for MEPD under the Texas State Plan for Medical Assistance.

(20) Current market value--The amount of money an item would bring if sold in the current local market.

(21) Date of application--See §358.520 of this chapter (relating to Date of Application).

(22) Deeming--Counting all or part of the income or resources of another person (for example, a parent or spouse) as income or resources available to an applicant or recipient.

(23) Disabled--A person who meets SSI program requirements as defined in 42 U.S.C. §1382c(a)(3).

(24) Earned income--Income a person receives for services performed as an employee or from self-employment.

(25) Earned income tax credit--A special tax credit that reduces the federal tax liability of certain low-income working taxpayers.

(26) Eligibility determination--A decision made by HHSC concerning a person's initial eligibility for MEPD. This term does not include any functional or other assessment required for some MEPD services, unless the context clearly indicates otherwise.

(27) Eligibility redetermination--A decision made by HHSC concerning a person's continued eligibility for MEPD. This term does not include any functional or other assessment required for some MEPD services, unless the context clearly indicates otherwise.

(28) Equity value--The value of a resource based on its fair market value or current market value minus all money owed on the resources and, if sold, any costs usually associated with the sale.

(29) Exempt--Income or resources not counted for the purpose of determining eligibility or calculating a co-payment.

(30) Excluded--Income or resources not counted for the purpose of determining eligibility only.

(31) Fair hearing--An informal proceeding held before an impartial hearings officer in which a person or the person's representative appeals an action taken on the person's case.

(32) Fair market value--The current market value of a resource at the time of its sale or transfer.

(33) Family member--An applicant's or recipient's spouse, minor child, adult child, stepchild, adopted child, brother, sister, parent, or adoptive parent; or a spouse of the applicant's or recipient's minor child, adult child, stepchild, adopted child, brother, sister, parent, or adoptive parent.

(34) Fiduciary agent--A person or organization acting on behalf of or with the authorization of another person under circumstances that involve a high degree of confidence, good faith, and honesty. The term applies to anyone who acts in a financial capacity, whether formal or informal, regardless of title, such as representative payee, guardian, or conservator.

(35) Fraud--Deliberate misrepresentation or willful withholding of information for the purpose of obtaining public assistance, either for self or another person.

(36) Health Insurance Premium Payment Program--A Medicaid program that pays for the cost of medical premiums. The program reimburses recipients or employers for private health insurance payments for Medicaid-eligible persons when it is cost effective to do so.

(37) HHSC--The Texas Health and Human Services Commission.

(38) Home--A structure in which a person lives (including a mobile home, a houseboat, and a motor home), other buildings on the home property, and all adjacent land (including land separated by a road, river, or stream), in which the person has an ownership interest and that serves as his or her principal place of residence.

(39) Income--Any item a person receives in cash or in kind that can be used to meet his or her need for food or shelter. For purposes of determining MEPD financial eligibility, income includes the receipt of any item that can be applied, either directly or by sale or conversion, to meet the basic needs of food or shelter.

(40) Inheritance--Cash, other liquid resources, noncash items, or any right in real or personal property received as the result of someone's death. A person may not have access to his or her inheritance pending legal action or the discovery of the inheritance.

(41) Initial eligibility period--The time from a person's certification date to the person's first annual review.

(42) In-kind--Consisting of something (such as food, shelter, or replacement of a resource) that is not cash.

(43) Institution for mental diseases (IMD)--A hospital, nursing facility, or other institutional setting of more than 16 beds that is primarily engaged in providing diagnosis, treatment, or care of persons with mental diseases, including medical attention, nursing care, and related services. An IMD includes a state mental health facility operated by the Texas Department of State Health Services.

(44) Institutional care--Long-term nursing care, treatment, or services received in a Medicaid-certified long-term care facility.

(45) Institutional setting--A living arrangement in which a person applying for or receiving Medicaid lives in a Medicaid-certified long-term care facility or receives services under a §1915(c) waiver program.

(46) Insurance--The following terms apply to the definition of insurance:

(A) "The insured" means the person named in a life insurance policy whose death affects the proceeds and distribution of the policy.

(B) "The beneficiary" means the person or entity named in a contract to receive the proceeds of the policy upon the death of the insured.

(C) "The owner" means the person with the right to change the policy as the person sees fit. The owner is the only person who can receive the cash surrender value of the policy.

(D) "The insurer" is the company that contracts with the owner.

(E) "Cash surrender value" means the amount that the insurer pays the owner if the policy is cancelled before death or before it has matured. The cash surrender value usually increases with the age of the policy.

(F) A "participating life insurance policy" is one in which dividends are distributed to the policyholder.

(G) "Term life insurance" means life insurance that has no cash, loan, or dividend value, nor the potential for cash, loan, or dividend value.

(H) "Dividend" means a share of surplus funds allocated to the policyholders of a participating insurance policy. A dividend generally represents a previous overpayment of premiums.

(47) Intermediate care facility for persons with mental retardation or related conditions (ICF/MR)--A Medicaid-certified facility that provides care in a 24-hour specialized residential setting for persons with mental retardation or a related condition. An ICF/MR includes a state mental retardation facility operated by the Texas Department of Aging and Disability Services.

(48) Inter vivos trust--A trust established while the person creating the trust is still living.

(49) Level of care--The type of care a person is eligible to receive in an ICF/MR based upon an assessment of the person's need for care.

(50) Level of care determination--A determination made by the Texas Department of Aging and Disability Services that determines a person's level of care.

(51) Life estate--A right to real property conferred in a legal instrument on a person (beneficiary). The right is conferred for the duration of the beneficiary's lifetime or the lifetime of another person. The beneficiary usually has the right to possess, use, and receive profits from the real property during his or her possession.

(52) Liquid resource--Cash or other property that can be converted to cash within 20 working days.

(53) Long-term care facility--A nursing facility, ICF/MR, or IMD in which medical services are provided.

(54) Look-back period--The period of time HHSC considers to determine if a person transferred, gave away, disposed of, or otherwise reduced his or her countable resources and income without receiving equal value in return and with the intent to give away resources in order to qualify for MEPD.

(55) Medicaid--A state and federal cooperative program, authorized under Title XIX of the Social Security Act and the Texas Human Resources Code, that pays for certain medical and health care costs for people who qualify. Also known as the medical assistance program.

(56) Medical effective date--The date a person's Medicaid coverage begins.

(57) Medical necessity--The determination that a person requires the services of a licensed nurse in an institutional setting to carry out a physician's planned regimen for total care.

(58) Medical services--Services that are directed toward diagnostic, preventive, therapeutic, or palliative treatment of a medical condition and that are performed, directed, or supervised by a state-licensed health professional.

(59) Medicare--Medical coverage available under Title XVIII of the Social Security Act to people 65 years of age or older and to certain disabled people under 65 years of age.

(60) MEPD--A Medicaid-funded program for the elderly and people with disabilities. A public assistance program providing institutional and community-based health-related care for the elderly and people with disabilities. MEPD does not provide cash assistance. Examples of MEPD services and programs are:

(A) primary home care services;

(B) §1915(c) waiver programs, which provide community-based care as an alternative to institutional care;

(D) the Program of All-Inclusive Care for the Elderly (PACE).

(61) Mineral rights--Ownership interest in the oil, gas, or minerals beneath the surface of a piece of property.

(62) Month of application--The month in which the date of application falls.

(63) Noninstitutional setting--A living arrangement in which a person applying for or receiving Medicaid does not live in a long-term care facility or receive services under a §1915(c) waiver program.

(64) Nursing facility--An entity that provides organized and structured nursing care and services, and is subject to licensure under Texas Health and Safety Code, Chapter 242.

(65) Parent--A child's natural or adoptive parent or the spouse of the natural or adoptive parent.

(66) Pension funds--Monies held in a retirement fund under a plan administered by an employer or union, or an individual retirement account (IRA) or Keogh account as described in the Internal Revenue Code.

(67) Personal needs allowance--An amount of the recipient's income that a recipient in an institutional setting may retain for personal use.

(68) Primary home care services--Medicaid-funded, in-home attendant services provided to a person with a medical need for specific tasks to delay or prevent the person's need for institutional care.

(69) Principal place of residence--The home where a person resides, occupies, and lives.

(70) Provider--A person, group, or agency contracted to provide a Medicaid-funded service to a person for a fee.

(71) Public institution--An institution defined in 20 CFR §416.201.

(72) Real property--Land and improvements, including buildings and structures. Real property may also include a mine or quarry, standing timber, or minerals.

(73) Recipient--A person receiving benefits under MEPD, including a person whose Medicaid eligibility is being redetermined.

(74) Representative payee--A person or an organization selected to receive benefits on behalf of a recipient, if the recipient is not able to manage or direct the management of benefit payments in his or her own interest.

(75) Resources--Cash, other liquid assets, or any real or personal property, that a person (or spouse or parent, as appropriate):

(A) owns;

(B) has the right, authority, or power to convert to cash (if not already cash); and

(76) Restitution--Securing payment from a recipient when fraud is not indicated or pursued and when the recipient's co-payment has been undercharged because of previously unreported or underreported monthly income or resources.

(77) Retirement, Survivors, and Disability Insurance (RSDI)--Benefits provided under Title II of the Social Security Act.

(78) Retroactive coverage--Payment for Medicaid-reimbursable medical services received up to three months before the month of application.

(79) Social Security--A federal system of retirement and disability insurance for various categories of employed and dependent persons, funded through dedicated payroll taxes.

(80) Social Security Act--The federal statute that provides the authority for various programs referenced in this chapter, including Medicare and Medicaid. See also the definition in this section for certain titles in the Social Security Act.

(81) Social Security Administration (SSA)--The federal agency that issues Social Security numbers, administers Social Security benefit programs, and manages the SSI program.

(82) Social service--A service, other than a medical service, that is intended to assist a person with a physical disability or social disadvantage to function in society on a level comparable to that of a person who does not have such a disability or disadvantage. No in-kind items are expressly identified as social services.

(83) Special income limit--The income limit used to test MEPD eligibility for a person or couple in an institutional setting in accordance with §358.433 of this chapter (relating to Special Income Limit).

(84) Spousal impoverishment--Legislation implemented under §1924 of the Social Security Act (42 U.S.C. §1396r-5) designed to prevent the impoverishment of a family, usually a couple, when one spouse needs care in an institutional setting.

(85) State mental health facility--A state hospital or state center operated by the Texas Department of State Health Services that provides care for people with mental illness who need the safety, structure, and resources of an in-patient setting.

(86) State mental retardation facility--A state school or state center operated by the Texas Department of Aging and Disability Services that provides residential services and supports to assist people with mental retardation who may benefit from 24-hour supervision and active treatment.

(87) Supplemental Security Income (SSI) benefit rate--Standard payment amount in the SSI program.

(88) Supplemental Security Income (SSI) program--A federal income supplement program, funded by general tax revenues and managed by the SSA, that provides monthly income to people who are aged, blind, or disabled and have limited income and resources.

(89) Support and maintenance--The value of food and shelter that a person receives.

(90) Temporary Assistance for Needy Families--A program that provides temporary benefits (cash assistance) and work opportunities to families with needy dependent children, authorized under Title IV of the Social Security Act.

(91) Testamentary trust--A trust established by a will.

(92) Texas State Plan for Medical Assistance--Document describing the Medicaid-funded services provided in Texas, in accordance with §1902 of the Social Security Act (42 U.S.C. §1396a).

(93) Third-party resource--A source of payment for medical expenses other than Medicaid.

(94) Three months prior--The three calendar months before the month of application.

(95) Titles to Social Security Act--Divisions of the Social Security Act. Titles referenced in this chapter are:

(A) Title II, which governs RSDI benefits;

(B) Title XVI, which governs the SSI program;

(D) Title XIX, which governs Medicaid.

(96) Trust--A trust includes any legal instrument, device, or arrangement which may not be called a trust under state law, but which is similar to a trust. That is, it involves a grantor who transfers property to an individual or entity with fiduciary obligations with the intention that it be held, managed, or administered by the individual or entity for the benefit of the grantor or others. This can include (but is not limited to) escrow accounts, investment accounts, pension funds, irrevocable burial trusts, limited partnerships, and other similar entities managed by an individual or entity with the fiduciary obligations.

(97) Unearned income--Income that is not earned.

(98) U.S.C.--United States Code.

(99) Working day--Any day except Saturday, Sunday, a state holiday, or a federal holiday.

§358.105.General Medicaid Eligibility Requirements.

(a) To be determined eligible for a Medicaid-funded program for the elderly and persons with disabilities (MEPD), a person must:

(1) meet the criteria for an eligible coverage group, as described in §358.107 of this subchapter (relating to Coverage Groups);

(2) comply with the Texas Health and Human Services Commission's application and redetermination requirements, in accordance with Subchapter D of this chapter (relating to Application and Eligibility Determination);

(3) meet the nonfinancial eligibility requirements in Subchapter B of this chapter (relating to Nonfinancial Requirements); and

(4) meet the financial eligibility requirements in Subchapter C of this chapter (relating to Financial Requirements).

(b) Additional eligibility criteria for MEPD are established by each program and governed by the rules of that program.

§358.107.Coverage Groups.

(a) General. This section describes the groups of people who are categorically eligible for a Medicaid-funded program for the elderly and people with disabilities (MEPD) under the Texas State Plan for Medical Assistance.

(b) Mandatory coverage groups. In accordance with 42 CFR Part 435, Subpart B, the Texas Health and Human Services Commission (HHSC) determines eligibility for MEPD for a person who falls into at least one of the following mandatory coverage groups:

(1) Supplemental Security Income (SSI) eligible. In accordance with 42 CFR §435.120, this is a person who is aged, blind, or disabled and is receiving SSI or deemed to be receiving SSI. The Social Security Administration (SSA) determines eligibility for SSI under Title XVI of the Social Security Act. If SSA determines that a person is eligible for SSI, HHSC accepts SSA's determination as an automatic determination of eligibility for Medicaid.

(2) Coverage for certain aliens. In accordance with 42 CFR §435.139, an alien, as defined in 42 CFR §435.406, is provided services necessary for the treatment of an emergency medical condition, as defined in 42 CFR §440.255.

(3) Disabled adult child. In accordance with §1634(c) of the Social Security Act (42 U.S.C. §1383c), this is a person who:

(A) is at least 18 years of age;

(B) became disabled before 22 years of age;

(C) is denied SSI because of receipt of or an increase in Retirement, Survivors, and Disability Insurance (RSDI) disabled children's benefits received on or after July 1, 1987, and any subsequent increase; and

(D) meets current SSI criteria, excluding the RSDI benefit described in subparagraph (C) of this paragraph.

(4) Historical 1972 income disregard. In accordance with 42 CFR §435.134, this is a person who:

(A) was receiving both public assistance and Social Security benefits in August 1972; and

(B) meets current SSI eligibility criteria, excluding from income the October 1972 cost-of-living adjustment (COLA) increase in Social Security benefits but not excluding subsequent COLA increases in Social Security benefits.

(5) Title II COLA disregard (Pickle). In accordance with 42 CFR §435.135(a) - (b), this is a person who:

(A) has been denied SSI for any reason since April 1977; and

(B) meets current SSI eligibility criteria, excluding from countable income any Social Security COLA increases received after the person last received both SSI and Social Security benefits in the same month.

(6) Disabled widow's or widower's COLA disregard. In accordance with 42 CFR §435.137, this is a person who:

(A) is 50 to 60 years of age;

(B) is ineligible for Medicare;

(D) meets SSI eligibility criteria, excluding from countable income the RSDI benefit and any subsequent COLA increases in RSDI.

(7) Early age widow's or widower's COLA disregard. In accordance with 42 CFR §435.138, this is a disabled person who was denied SSI due to early receipt of Social Security widow's or widower's benefits and:

(A) is at least 60 years of age;

(B) is not eligible for Medicare; and

(C) meets current SSI eligibility criteria, excluding from countable income the RSDI benefit and any subsequent COLA increases in RSDI.

(8) SSI denied children. In accordance with §1902(a)(10)(A)(i)(II) of the Social Security Act (42 U.S.C. §1396a(a)(10)(A)(i)(II)), this is a person who:

(A) is under 18 years of age;

(B) was receiving SSI on August 22, 1996;

(C) was subsequently denied SSI because of the change in disability criteria implemented by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (Public Law 104-193); and

(D) meets SSI eligibility criteria, including the disability criteria in effect before August 22, 1996.

(c) Optional coverage groups. In accordance with 42 CFR Part 435, Subpart C, HHSC determines Medicaid eligibility for MEPD for a person who falls into an optional coverage group described in this subsection. Although federal regulations may allow other optional coverage groups, HHSC does not provide benefits to a member of an optional coverage group unless the group is included in the Texas State Plan for Medical Assistance.

(1) Institutional. In accordance with 42 CFR §435.211, this is a person who would be eligible for SSI, as specified in 42 CFR §435.230, if the person were not in an institutional setting.

(2) Institutional special income limit. In accordance with 42 CFR §435.236, this is a person who has lived in an institutional setting for at least 30 consecutive days, as described in §358.433 of this chapter (relating to Special Income Limit), and is eligible under the special income limit.

(3) Section 1915(c) waiver program. In accordance with 42 CFR §435.217, this is a person who would be eligible for Medicaid if institutionalized, but is living in the community and receiving services under a §1915(c) waiver program.

(d) Other. In accordance with the Texas State Plan for Medical Assistance, HHSC determines Medicaid eligibility for MEPD for a person who meets the criteria for one of the following services:

(1) Primary home care services. This is a person who needs primary home care services and meets the criteria established in §1929(b)(2)(B) of the Social Security Act (42 U.S.C. §1396t(b)(2)(B)) but is not otherwise eligible for Medicaid.

(2) Program of All-Inclusive Care for the Elderly (PACE). In accordance with 42 CFR Part 460, this is a person who is enrolled in a PACE program under a PACE program agreement.

(3) Susan Walker v. Bayer Corporation services. A person who has received payments from the class action settlement of Susan Walker v. Bayer Corporation may be eligible for Medicaid as a result of excluding from countable resources the payments from the settlement.

(e) Retroactive coverage. In accordance with 42 CFR §435.914, HHSC may determine eligibility for retroactive coverage:

(1) for up to three months before the date of application for:

(A) an applicant;

(B) a person who has been denied SSI;

(C) a deceased person, if a representative for the deceased person requests that HHSC determine eligibility for retroactive coverage; and

(D) a person eligible under the SSI-denied-children coverage group in subsection (b)(8) of this section; and

(2) for up to two months before the month in which an SSI recipient's Medicaid coverage automatically begins.

(f) Medicare Savings Program. In accordance with 42 U.S.C. §1396a(a)(10)(E), HHSC may determine eligibility for a person who meets the criteria in Chapter 359 of this title (relating to Medicare Savings Program) for a Medicare Savings Program, which uses Medicaid funds to help the person pay for all or some of the person's out-of-pocket Medicare expenses, such as premiums, deductibles, or coinsurance.

(g) Medicaid Buy-In Program. In accordance with §1902(a)(10)A) (ii)(XIII) of the Social Security Act (42 U.S.C. §1396a(a)(10)(A)(ii)(XIII)), HHSC may determine eligibility for a person with a disability who is working and earning income and meets the criteria established in Chapter 360 of this title (relating to Medicaid Buy-In 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 May 11, 2009.

TRD-200901767

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

SUBCHAPTER B. NONFINANCIAL REQUIREMENTS

1 TAC §§358.201, 358.203, 358.205, 358.207, 358.209, 358.211, 358.213, 358.215, 358.217, 358.219

Statutory Authority

The new sections affect Texas Government Code, Chapter 531. No other statutes, articles, or codes are affected by this proposal.

§358.201.Purpose and Scope.

(a) This subchapter describes the nonfinancial Medicaid eligibility criteria for a Medicaid-funded program for the elderly and people with disabilities (MEPD).

(b) Financial Medicaid eligibility criteria for MEPD are described in Subchapter C of this chapter (relating to Financial Requirements).

§358.203.Citizenship and Qualified Alien Status.

(a) In accordance with 42 CFR §435.406, to be eligible for a Medicaid-funded program for the elderly and people with disabilities (MEPD), a person must be:

(1) a citizen or national of the United States (U.S.);

(2) an alien who entered the U.S. before August 22, 1996, who has lived in the U.S. continuously since entry, and who meets the definition of a qualified alien at 8 U.S.C. §1641; or

(3) an alien who entered the U.S. on or after August 22, 1996, who has lived in the U.S. continuously since entry, and who meets the definition of a qualified alien at 8 U.S.C. §1641 with the eligibility limitations in 8 U.S.C. §1612 and §1613.

(b) A person must provide proof of eligibility under subsection (a) of this section that establishes both identity and citizenship or alien status, unless the person:

(1) receives Supplemental Security Income (SSI) or has ever received SSI and was not denied due to citizenship;

(2) is entitled to or enrolled in any part of Medicare, as determined by the Social Security Administration (SSA); or

(3) is entitled to federal disability benefits based on SSA disability criteria.

§358.205.Alien Status for Treatment of an Emergency Medical Condition.

(a) Title XIX of the Social Security Act (42 U.S.C. §1396 et seq.) and 42 CFR §440.255 require the state to provide Medicaid for the treatment of an emergency medical condition to an alien who is ineligible for regular Medicaid due to immigration status. The Texas Health and Human Services Commission administers the program in Texas.

(b) To qualify for Medicaid for the treatment of an emergency medical condition, an alien must:

(1) be:

(A) a qualified alien as defined in 8 U.S.C. §1641 and not meet the requirements to receive Medicaid as described in 8 U.S.C. §1612 and §1613; or

(B) an undocumented non-qualifying alien as described in 8 U.S.C. §1611;

(2) be otherwise eligible for regular Medicaid services; and

(3) require treatment of an emergency medical condition as described in 42 CFR §440.255.

(c) An undocumented non-qualifying alien applying for Medicaid for the treatment of an emergency medical condition is exempt from providing proof of alien status or providing a Social Security number as described in 42 CFR §435.406(b).

§358.207.Residence.

To be eligible for a Medicaid-funded program for the elderly and people with disabilities, a person must be a resident of the United States (U.S.) and the state of Texas.

(1) U.S. residence.

(A) The U.S. residence requirement does not apply to:

(i) a child who is a citizen and is living with a parent who is a member of the U.S. Armed Forces assigned to permanent duty ashore outside the U.S.; or

(ii) to certain persons temporarily abroad for study.

(B) Once eligible for benefits, a person must maintain a presence in the U.S. in accordance with 42 U.S.C. §1382(f)(1). If a person has been outside the U.S. for 30 consecutive days, the person is not eligible for benefits until the person has been in the U.S. for 30 consecutive days.

(2) Texas residence. The Texas Health and Human Services Commission follows 42 CFR §435.403 in determining a person's state residence.

§358.209.Social Security Number.

In accordance with 42 CFR §435.910, a person must give his or her social security number to the Texas Health and Human Services Commission as a condition of eligibility, except as provided in §358.205(c) of this subchapter (relating to Alien Status for Treatment of an Emergency Medical Condition).

§358.211.Aged, Blind, or Disabled.

(a) To be eligible for a Medicaid-funded program for the elderly and people with disabilities (MEPD), a person must be aged, blind, or disabled, according to the following criteria:

(1) Aged. A person must be 65 years of age or older to be considered aged, in accordance with 42 U.S.C. §1382c(a)(1)(A).

(2) Blind.

(A) To be considered blind for eligibility purposes, a person must meet the criteria in 42 U.S.C. §1382c(a)(2).

(B) There is no minimum age requirement for a person who is blind.

(C) A person must have a medical determination of blindness before the Texas Health and Human Services Commission (HHSC) can determine eligibility.

(3) Disabled.

(A) To be considered disabled for eligibility purposes, a person must meet the criteria in 42 U.S.C. §1382c(a)(3).

(B) There is no minimum age requirement for a person who is disabled, unless the person lives in an institution for mental diseases as described in §358.213 of this subchapter (relating to Resident of an Institution for Mental Diseases).

(b) A person under 65 years of age who has applied for Supplemental Security Income, and subsequently applies for retroactive coverage, must have a medical determination of blindness or a disability effective during any month of coverage that the person was under 65 years of age.

§358.213.Resident of an Institution for Mental Diseases.

A person who lives in an institution for mental diseases must be 65 years of age or older to be eligible for a Medicaid-funded program for the elderly and people with disabilities.

§358.215.Inmates of Public Institutions.

An inmate of a public institution, including a jail, prison, reformatory, or other correctional or holding facility, as defined in 42 CFR §435.1009 and §435.1010, is not eligible for Medicaid payment for Medicaid-covered services received while residing in the public institution.

§358.217.Application for Other Benefits.

To be eligible for a Medicaid-funded program for the elderly and people with disabilities, a person must apply for and obtain, if eligible, all other benefits to which the person may be entitled, in accordance with 42 U.S.C. §1382(e)(2).

§358.219.Third-party Resources.

(a) Medicaid is considered the payor of last resort for a person's medical expenses. As a condition of eligibility, in accordance with 42 CFR §§433.138 - 433.148, an applicant or recipient must:

(1) assign to the Texas Health and Human Services Commission (HHSC) the applicant's or recipient's right to recover any third-party resources available for payment of medical expenses covered under the Texas State Plan for Medical Assistance; and

(2) report to HHSC any third-party resource within 60 days after learning about the third-party resource.

(b) If HHSC determines that a person's employer-based health insurance is cost-effective, the person must participate in HHSC's Health Insurance Premium Payment program as a condition of eligibility. HHSC denies eligibility to a person who voluntarily drops his or her employer-based health insurance or fails to provide HHSC with the information needed to determine cost effectiveness.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901768

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

SUBCHAPTER C. FINANCIAL REQUIREMENTS

DIVISION 1. INTRODUCTION

1 TAC §358.301

Statutory Authority

The new section is proposed under Texas Government Code, §531.0055, which provides the Executive Commissioner of HHSC with rulemaking authority; and §531.021, which authorizes HHSC to administer the federal medical assistance (Medicaid) program in Texas.

The new section affects Texas Government Code, Chapter 531. No other statutes, articles, or codes are affected by this proposal.

§358.301.Purpose and Scope.

(a) This subchapter describes:

(1) the financial eligibility criteria for a Medicaid-funded program for the elderly and people with disabilities (MEPD); and

(2) the budgeting process for determining financial eligibility and a co-payment amount, if applicable.

(b) The Texas Health and Human Services Commission determines a person's financial eligibility for MEPD by assessing the person's income and resources and applying federal income and resources eligibility criteria.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901769

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 2. RESOURCES

1 TAC §§358.321 - 358.327, 358.331, 358.333 - 358.339, 358.345 - 358.355, 358.371

Statutory Authority

The new sections affect Texas Government Code, Chapter 531. No other statutes, articles, or codes are affected by this proposal.

§358.321.General Treatment of Resources.

(a) The Texas Health and Human Services Commission (HHSC) follows §1613 of the Social Security Act (42 U.S.C. §1382b) and 20 CFR §416.1201 regarding the general treatment of resources.

(b) HHSC follows 20 CFR §416.1207 regarding the determination of resources. Resource determinations are made as of 12:01 a.m. on the first day of the month.

(c) If a person's countable resources exceed the resource limit as of 12:01 a.m. on the first day of the month, the person is not eligible for the entire month. Eligibility may be reestablished no sooner than the first day of the next month.

§358.322.Conversion of Resources.

If a person converts one type of resource to another, the new resource is counted according to the policy governing that type of resource. Cash received from the sale of a resource is counted as a resource, not as income. This includes proceeds from the sale of a natural resource, such as cutting timber from the person's home property and selling it as firewood, except as follows:

(1) If the owner leases the land or resource rights, the income received from the lease is unearned income.

(2) If the sale of the natural resource is part of the person's trade or business, the income received is self-employment income.

§358.323.Resource Limits.

A person or a couple meets resources eligibility criteria if the value of all countable resources does not exceed the resource limits in 20 CFR §416.1205.

(1) Individual resource limit. The individual resource limit applies to:

(A) an adult who is single, even if he or she lives with relatives;

(B) a child; and

(2) Couple resource limit. The couple resource limit applies to married adults who live in the same household.

§358.324.Deeming of Resources.

(a) The Texas Health and Human Services Commission (HHSC) follows deeming of countable resources in accordance with 20 CFR §416.1202.

(b) If a parent is a caretaker or a recipient in the Temporary Assistance for Needy Families Program, the parent's resources are not counted when considering deeming to a child.

(c) If a member of a household is temporarily absent as defined in 20 CFR §416.1167, HHSC continues to consider the absent person a member of the household for the purposes of deeming during a temporary absence, in accordance with 20 CFR §416.1167.

§358.325.Ownership Interest and Legal Right to Access a Resource.

The Texas Health and Human Services Commission (HHSC) follows 20 CFR §416.1201(a)(1) when considering whether a person has the right, authority, or power to liquidate a property or the person's share of the property.

§358.326.Unknown Assets.

If a person is unaware of the ownership of an asset, the asset is not counted as a resource for the period during which the person is unaware of the ownership. The asset is counted as income in the month that the person discovers the ownership. The asset is counted as a resource effective the first of the month after the month of discovery.

§358.327.Transactions Involving Agents.

(a) An action by a fiduciary agent is the same as an action by the person for whom the fiduciary agent acts.

(1) An asset held by a fiduciary agent for another person is not a countable asset to the fiduciary agent.

(2) An asset held by a fiduciary agent for another person is a countable asset to the person for whom the fiduciary agent acts, unless otherwise excludable.

(b) A person's resources are available if the resources are being managed by a legal guardian, representative payee, power of attorney, or fiduciary agent. If, however, a court denies a guardian or fiduciary agent access to the person's resources, the resources are not considered available to the person.

(1) If a person's guardianship papers do not show that a legal guardian is prohibited access, and if the court has not subsequently ruled a prohibition, the resources are considered available.

(2) A guardian's routine need to petition the court for permission to dispose of a person's resources is not a prohibition.

(3) When the court rules on a petition to dispose of a person's resources, resources are considered available only to the extent to which the court has made the resources available for the person's benefit.

§358.331.General Exclusions from Resources.

The Texas Health and Human Services Commission follows 20 CFR §416.1210 in determining what resources to exclude, and also excludes:

(1) patrimonial assets that are irrevocably turned over to a religious order following a vow of poverty, which are not considered a transfer of assets;

(2) reparation payments received under Sections 500 - 506 of the Austrian General Social Insurance Act;

(3) payments received under the Netherlands' Act on Benefits for Victims of Persecution 1940 - 1945; and

(4) payments made in the class settlement of the Susan Walker v. Bayer Corporation lawsuit.

§358.333.Treatment of Employment- and Retirement-Related Annuities.

(a) In this section:

(1) an employment-related annuity means an annuity that provides a return on prior services, as part of or in a similar manner to a pension or retirement plan; and

(2) a retirement-related annuity means an annuity purchased by or on behalf of an annuitant in an institutional setting.

(b) An employment-related annuity or a retirement-related annuity established before February 8, 2006, is not a countable resource. Income from such an annuity is treated in accordance with 20 CFR §§416.1120 - 416.1124.

(c) An employment-related annuity established or having a transaction on or after February 8, 2006, is not a countable resource. Income from such an annuity is treated in accordance with 20 CFR §§416.1120 - 416.1124.

(d) A retirement-related annuity with a purchase or transaction date on or after February 8, 2006, is not a countable resource, if the annuitant's income eligibility is determined under the special income limit. Income from such an annuity is treated in accordance with 20 CFR §§416.1120 - 416.1124, if the annuity:

(1) is an annuity described in subsection (b) or (q) of §408 of the Internal Revenue Code of 1986; or

(2) is purchased with proceeds from:

(A) an account or trust described in subsection (a), (c), or (p) of §408 of the Internal Revenue Code of 1986;

(B) a simplified employee pension (within the meaning of §408(k) of the Internal Revenue Code of 1986; or

§358.334.Treatment of a Nonemployment-Related Annuity with a Purchase or Transaction Date before February 8, 2006.

(a) This section describes the Texas Health and Human Services Commission's (HHSC's) treatment of nonemployment-related annuities purchased or having a transaction date before February 8, 2006. In this section, a nonemployment-related annuity means a revocable or irrevocable annuity a person may purchase to provide income.

(b) A nonemployment-related annuity is not a countable resource if the annuity:

(1) is irrevocable;

(2) pays out principal in equal monthly installments and pays out interest in either equal monthly installments or in amounts that result in increases of the monthly installments at least annually;

(3) is guaranteed to return within the person's life expectancy at least the person's principal investment plus a reasonable amount of interest (based on prevailing market interest rates at the time of the annuity purchase, as determined by HHSC);

(4) names the state of Texas or HHSC as the residual beneficiary of amounts payable under the annuity contract, not to exceed any Medicaid funds expended on the person during the person's lifetime, except as described in subsection (c) of this section; and

(5) is issued by an insurance company licensed and approved to do business in the state of Texas.

(c) If a person in an institutional setting is married and the spousal impoverishment provisions of §358.413 of this subchapter (relating to Spousal Impoverishment Treatment of Income and Resources) apply, the requirement in subsection (b)(4) of this section does not apply to a nonemployment-related annuity purchased by or for a community spouse.

(d) A nonemployment-related annuity that does not meet the requirements of subsection (b) or (c) of this section is a countable resource.

(1) HHSC applies transfer-of-assets provisions in Division 4 of this subchapter (relating to Transfer of Assets) to an annuity that is a countable resource and does not meet the criterion in subsection (b)(3) of this section. The date of the transfer of assets is the date of the annuity purchase or, if applicable, the date the annuity contract was last amended in exchange for consideration. HHSC determines the amount of the transfer by assessing the difference between the life expectancy of the person and the number of years remaining until the annuity is paid out. The amount payable during that period is the amount of the transfer of assets.

(2) If the annuity is a countable resource and is revocable, HHSC:

(A) counts the amount refundable upon revocation of the annuity as the value of the resource; and

(B) applies transfer-of-assets provisions in Division 4 of this subchapter if the person sells the annuity for less than the amount refundable upon revocation.

(3) If the annuity is a countable resource and is irrevocable, HHSC:

(A) counts fair market value as the value of the resource and presumes fair market value is 80% of the annuity's total remaining payout;

(B) applies transfer-of-assets provisions in Division 4 of this subchapter if the annuity is sold for less than the purchase price minus the amount of principal already paid; and

(C) if the terms of the annuity contract are non-negotiable, applies transfer-of-assets provisions in Division 4 of this subchapter to the total remaining payout.

(e) Income from a nonemployment-related annuity that is not a countable resource under subsection (c) of this section is treated in accordance with 20 CFR §§416.1120 - 416.1124.

§358.335.Treatment of Annuities with a Purchase or Transaction Date on or after February 8, 2006.

(a) This section describes the Texas Health and Human Services Commission's (HHSC's) treatment of nonemployment-related annuities purchased or having a transaction date on or after February 8, 2006. In this section, a nonemployment-related annuity means a revocable or irrevocable annuity a person may purchase to provide income.

(b) A nonemployment-related annuity is not a countable resource if the annuity:

(1) is irrevocable;

(2) is nonassignable;

(3) provides for payments in equal amounts during the term of the annuity, with no deferral and no balloon payments made;

(4) is guaranteed to return within the person's life expectancy at least the person's principal investment (that is, it is actuarially sound, as determined in accordance with actuarial publications of the Office of the Chief Actuary of the United States Department of Health and Human Services); and

(5) names the state of Texas as the remainder beneficiary in the first position for at least the total amount of Medicaid paid on behalf of a person in an institutionalized setting.

(c) If a person in an institutionalized setting is married and the spousal impoverishment provisions of §358.413 of this subchapter (relating to Spousal Impoverishment Treatment of Income and Resources) apply, a nonemployment-related annuity is not a countable resource if the annuity meets the requirements of subsection (b)(1) - (4) of this section and the annuity:

(1) names the state of Texas as the remainder beneficiary in the first position for at least the total amount of Medicaid paid on behalf of the person in an institutional setting; or

(2) names the state of Texas in the second position if the community spouse or a minor or disabled child is named in the first position.

(d) A nonemployment-related annuity that is revocable is a countable resource. For a revocable nonemployment-related annuity, HHSC:

(1) uses fair market value to determine the value of the resource; and

(2) applies transfer-of-assets provisions in Division 4 of this subchapter (relating to Transfer of Assets) based on the amount already paid out of the annuity.

(e) A nonemployment-related annuity that is irrevocable is not a countable resource. For an irrevocable nonemployment-related annuity, HHSC:

(1) applies transfer-of-assets provisions in Division 4 of this subchapter to the purchase price of the annuity; and

(2) for a transaction involving an existing annuity, applies transfer-of-assets provisions to the remaining payout value at the time of the transaction.

(f) Income from an annuity that is not a countable resource is treated in accordance with 20 CFR §§416.1120 - 416.1124.

§358.336.Treatment of Testamentary or Inter Vivos Trusts.

(a) In this section, the following words have the following meanings, unless the context clearly indicates otherwise.

(1) Testamentary trust--A trust established by will.

(2) Inter vivos trust--A trust established while the person creating the trust is still living.

(b) Resources in a testamentary or inter vivos trust are countable to a person if the person is the trustee and has the legal right to revoke the trust and use the money for the person's own benefit.

(1) If a person does not have access to the trust, then the trust is not counted as a resource.

(2) If a person's access to a trust is restricted (that is, only the trustee (other than the person) or the court may withdraw the principal), then the value of the trust as a resource is not counted, even if:

(A) the person's legal guardian is the trustee;

(B) the trust provides a regular, specified payment to the person; or

(3) If a trust is not counted as a resource, payments from the trust made to or on behalf of the person are counted as income, except payments used to purchase medical or social services for the person.

§358.337.Treatment of a Medicaid-qualifying Trust.

(a) A Medicaid-qualifying trust (MQT) is a trust that a recipient, the recipient's spouse or guardian, or anyone holding the recipient's power of attorney establishes using the recipient's money. The recipient is the beneficiary of an MQT. A trust meeting this definition that was established between June 1, 1986, and August 10, 1993, is an MQT. A trust meeting this definition that was established before June 1, 1986, is treated as a standard inter vivos trust.

(b) Except as described in §358.338 of this division (relating to Treatment of a Trust Established with Zebley v. Sullivan Settlement Funds), the Texas Health and Human Services Commission (HHSC) counts potential distributions from an MQT as resources available to a person, whether or not distributions are actually made.

(1) The amount available to the person is the maximum amount the trustee could distribute under the terms of the trust.

(2) If distribution is not made, the maximum amount the trustee may distribute under terms of the trust is considered an available resource.

(3) If a trust does not specify an amount for distribution, and if the trustee has access to and use of the principal, then HHSC counts:

(A) the corpus of the trust as a resource; and

(B) payments from the trust to or for the benefit of the person as income.

§358.338.Treatment of a Trust Established with Zebley v. Sullivan Settlement Funds.

(a) The Texas Health and Human Services Commission excludes a Medicaid-qualifying trust established for a minor child using a lump sum payment received in the settlement of Zebley v. Sullivan from countable resources under undue hardship provisions. Undue hardship exists because the minor child would otherwise be forced to spend the settlement funds on services now covered by Medicaid when the funds will be needed once the minor child reaches majority.

(b) A trust established using Zebley v. Sullivan settlement funds is excluded under undue hardship policy, even when the trust is set up on or after August 11, 1993.

§358.339.Treatment of Trusts on and after August 11, 1993.

(a) Introduction. The Texas Health and Human Services Commission (HHSC) follows §1917(d) of the Social Security Act (42 U.S.C. §1396p(d)) regarding the treatment of trusts established on or after August 11, 1993, using a person's assets. The trust provisions apply to a person receiving benefits under a Medicaid-funded program for the elderly and people with disabilities (MEPD), whether the person is in an institutional or a noninstitutional setting. However, transfer-of-assets provisions apply only to a person in an institutional setting.

(b) Limited partnerships.

(1) A limited partnership is a "similar legal device" to a trust. In accordance with the definition of a trust in §1917(d)(6) of the Social Security Act (42 U.S.C. §1396p(d)(6)), HHSC treats a limited partnership as a trust and applies the provisions of this section to a limited partnership. The general partners of a limited partnership act as trustee, and the limited partners are the equivalent of beneficiaries of an irrevocable trust. To the extent that the general partners can make each limited partner's ownership interest available to him, that interest is a countable resource and not a transfer of assets. However, a transfer of assets has occurred to the extent that:

(A) the value of the share of ownership purchased by the limited partner is less than the amount the limited partner invested; and

(B) the general partners cannot make the limited partner's share available to the limited partner.

(2) If transfer-of-assets provisions apply, a limited partnership is not considered a trust instrument when determining the look-back period.

(1) A QIT is an irrevocable trust established for the benefit of a person or the person's spouse, or both, the corpus of which is composed only of the person's or the couple's income (including accumulated income). The trust must include a provision that the State is designated as the residuary beneficiary to receive, at the person's death, funds remaining in the trust equal to the total amount of Medicaid paid on the person's behalf.

(2) Characteristics of a QIT are as follows:

(A) The trust must be irrevocable.

(B) The trust must contain only the person's income. If resources are placed in the trust, it is not a QIT. However, some banks may require nominal deposits to establish a financial account to fund the trust. Nominal amounts of the person's resources, or another party's funds, may be used to establish the account without invalidating the trust or being counted as gift income to the person. Once the trust account is established, however, only the person's income should be directed to the trust account.

(C) The person's income does not have to be directly deposited into the trust. However, the income for which the trust is established must be deposited into the trust during the month it is received by the person.

(D) A QIT may be established with any or all sources of a person's income, but the income source must be identified and the entire income source must be deposited. For example, the trust may be established for a person's private pension income, but not the person's Social Security income. If a trust is established with only half of the pension income, it is not a QIT.

(3) A QIT is not counted as a resource.

(4) Income directed to a QIT is not counted when testing eligibility for services in an institutional setting.

(A) Income must be directed to the trust account during the calendar month in which it is received. Any source of nonexempt or nonexcludable income that is not directed to the QIT account during the calendar month of receipt is countable income for that month. If countable income exceeds the income limit, the person is income-ineligible for the month. An applicant may not be certified for any calendar month in which the applicant is income-ineligible. For a recipient, HHSC requests restitution in the amount of the provider payment for any calendar month in which the person is income-ineligible.

(B) Income directed to the trust is counted in determining eligibility for a person in a noninstitutional setting and for a person applying for or receiving benefits from a Medicare Savings Program as described in Chapter 359 of this title (relating to Medicare Savings Program).

(C) Income paid from the trust for an institutional setting co-payment or to purchase other medical services for the person is not countable income for eligibility purposes. Income paid from the trust directly to the person or otherwise spent for the person's benefit is countable income for eligibility purposes.

(D) A person cannot use income from a QIT to purchase eligibility for a §1915(c) waiver program.

(E) If the trustee directs to the trust account different sources of income than those identified in the QIT, but directs entire sources and countable income remains within the special income limit, eligibility is not affected.

(5) If the trust instrument requires that the income placed in the trust must be paid out of the trust for the person's care in an institutional setting, transfer-of-assets provisions do not apply because the person receives fair market value for the income that was placed into the trust. However, if there is no such requirement or the income is not used for the person's care, transfer-of-assets provisions apply. The income must be paid out by the end of the month after the month funds were placed in the trust to avoid application of the transfer-of-assets provisions. Transfer-of-assets provisions do not apply when the QIT provisions allow payments to or for the benefit of the person's spouse.

(6) The institutional setting co-payment amount is based on the person's total income (income directed to the trust as well as income not directed to the trust), minus the standard co-payment deductions. Costs of trust administration are not budgeted in the co-payment calculation. Transfer-of-assets provisions do not apply when legal and accounting fees necessary to maintain the trust are paid from the trust.

(7) HHSC disregards the income placed in a QIT for eligibility purposes for the first month that the person has a valid signed trust and enough income is placed in the account to reduce the remaining income below the special income limit.

(d) Undue hardship.

(1) As provided under §1917(d) of the Social Security Act (42 U.S.C. §1396p(d)(5)), this section does not apply if application of the trust provisions in this section would work an undue hardship on the person. Undue hardship exists if application of the trust provisions would:

(A) deprive the person of medical care so that the person's health or his life would be endangered; or

(B) deprive the person of food, shelter, or other necessities of life.

(2) Undue hardship does not exist if a person is inconvenienced or must restrict his or her lifestyle but is not at risk of serious deprivation. Undue hardship relates to hardship to the person, not to relatives or authorized representatives of the person.

(3) Before requesting a waiver of the trust provisions on the grounds of undue hardship, a person must make reasonable efforts to recover assets placed in a trust, such as petitioning the court to dissolve the trust. HHSC determines undue hardship after receiving a request for a waiver of the trust provisions on the grounds of undue hardship. The person has the right to appeal HHSC's determination on undue hardship.

§358.345.Entrance Fees for Continuous Care Retirement Communities.

The Texas Health and Human Services Commission follows §1917(g) of the Social Security Act (42 U.S.C. §1396p(g)) regarding the treatment of entrance fees of a person residing in a continuous care retirement community.

§358.346.Funds Held in Financial Institution Accounts.

The Texas Health and Human Services Commission follows 20 CFR §416.1208 regarding the treatment of funds held in financial institution accounts, except the balance of funds in a financial institution account as of 12:01 a.m. on the first day of the month is reduced by the amount of any funds encumbered before that time, including any checks written, that have not yet been processed by the financial institution.

§358.347.Nonliquid Resources.

The Texas Health and Human Services Commission follows 20 CFR §416.1201(c) regarding the definition and treatment of nonliquid resources, except with regard to the treatment of an automobile as described in §358.354 of this division (relating to Automobiles).

§358.348.Exclusion of a Home.

(a) The Texas Health and Human Services Commission follows 20 CFR §416.1212 regarding the treatment of a home, except HHSC does not count the equity value of a home that is the principal place of residence of an applicant or recipient or the applicant's or recipient's spouse:

(1) if the home is in Texas, and the applicant or recipient occupies or intends to return to the home; or

(2) if the home meets the criteria in §358.415(b) of this subchapter (relating to Calculation of the Spousal Protected Resource Amount).

(b) For a person or couple living in an institutional setting, if the person or couple transfers ownership of the home for less than market value while the home is excluded, the transfer automatically nullifies the exclusion.

§358.349.Exceptions to Treatment of Excess Real Property.

(a) The Texas Health and Human Services Commission (HHSC) follows 20 CFR §416.1245 regarding the treatment of excess real property, except the property continues to be excluded for as long as:

(1) the person continues to make reasonable efforts to sell it; and

(2) including the property as a countable resource would result in a determination of excess resources.

(b) Once the property is sold, the equity value received is a countable resource in the month following the month of sale. If the sale was for less than the fair market value or current market value, the sale of the property is subject to the transfer-of-assets provisions in Division 4 of this subchapter (relating to Transfer of Assets).

§358.350.Life Estates and Remainder Interest.

The Texas Health and Human Services Commission (HHSC) counts both a life estate and a remainder interest in property as resources, except as described in paragraph (3) of this section.

(1) Life estates. A life estate provides a person, for the person's lifetime, certain rights in a property, while transferring ownership of the property to another person. The duration of a life estate is measured by the lifetime of the owner of the life estate, or by the occurrence of some event. The contract establishing a life estate, however, may restrict one or more rights of the owner of the life estate. The owner of a life estate does not have fee simple title to the property nor the right to sell the entire property. In most situations, the owner of a life estate has the right to:

(A) possess the property;

(B) use the property;

(D) sell his or her life estate interest.

(2) Remainder interest. A remainder interest, which is created when a life estate is established, gives a person owning a remainder interest the right to ownership of the property upon the death of the owner of the life estate. A person owning a remainder interest in the property has the right to sell his or her remainder interest unless the person is prohibited from doing so by a legal restriction.

(3) Exclusion for life estates and remainder interests. Life estates and remainder interests are not counted as resources if:

(A) the property is the person's home and can be excluded under §358.348 of this division (relating to Exclusion of a Home);

(B) a contract restriction prevents the person from disposing of the person's interest;

(D) the property is placed for sale and the person is in an institutional setting.

(4) Determination of value. If a person has a life estate or remainder interest that is not excludable under paragraph (3) of this section, HHSC determines the value of the resource according to the age of the owner of the life estate and the equity value of the property. The person has the right to rebut HHSC's determination of the value of the resource. To do so, the person must present a statement from a knowledgeable source.

(5) A purchase of a life estate before April 1, 2006, is not considered a transfer of assets, unless the purchase price of the life estate exceeds the fair market value (FMV) of the life estate. If the purchase price of the life estate exceeds the FMV of the life estate, the transfer-of-assets provisions in Division 4 of this subchapter (relating to Transfer of Assets) apply.

(6) A purchase of a life estate on or after April 1, 2006, is a transfer of assets, subject to the transfer-of-assets provisions in Division 4 of this subchapter, unless the person purchasing a life estate in another person's home resides in the home and continues to reside in the home for at least one year after the date of purchase.

§358.351.Mineral Rights.

(a) The Texas Health and Human Services Commission counts the equity value of a person's ownership of or interest in mineral rights as a resource, unless the mineral rights are:

(1) connected with property excluded as a home; or

(2) excluded as property essential to self-support under 20 CFR §§416.1220, 416.1222, and 416.1224.

(b) Ownership of mineral rights may or may not be associated with ownership of land. Surface rights are ownership interests in the exterior or upper boundary of land. Ownership of mineral rights does not automatically indicate ownership of surface rights.

§358.352.Burial Spaces.

The Texas Health and Human Services Commission follows 20 CFR §416.1231 regarding the definition, treatment, and exclusion of burial spaces, except that a burial space purchased by a person is:

(1) excluded from countable resources if it is held for the person, the person's spouse, or anyone of the person's choosing; and

(2) counted as a resource if the purchase was made for investment purposes.

§358.353.Term and Burial Insurance.

The Texas Health and Human Services Commission does not count term insurance or burial insurance as a resource, except as described in paragraphs (3) and (4) of this section.

(1) Term insurance is a contract of temporary protection. The insured pays relatively small premiums for a limited number of years, and the company agrees to pay the face amount of the policy only if the insured dies within the time specified in the policy. It has no cash surrender value.

(2) Burial insurance is a form of term insurance. By its terms, burial insurance can only be used to pay the burial expenses of the insured.

(3) If a term insurance policy has been purchased by a life insurance company and premiums are used to purchase separate whole life coverage, the whole life coverage is subject to the provisions of 20 CFR §416.1230.

(4) If a term insurance policy is a participating life insurance policy, any dividend accumulation at interest is a countable resource.

§358.354.Automobiles.

(a) The Texas Health and Human Services Commission (HHSC) follows 20 CFR §416.1218 regarding the definition, treatment, and exclusion of automobiles.

(b) In addition to the one automobile HHSC excludes regardless of value, HHSC excludes a second automobile, in accordance with 20 CFR §416.1218(b)(1), if:

(1) the automobile has been modified to accommodate a person with a disability, and there is a household member (other than the applicant or recipient) who has a disability and must use the automobile; or

(2) the household is made up of more than one person and:

(A) a household member (other than the applicant or recipient) requires an additional automobile for transportation to and from work; and

(B) the applicant or recipient requires one automobile available for medical use at all times.

§358.355.Qualified Long-Term Care Partnership Program Insurance Policies.

(a) This section describes the Long-Term Care Partnership Program under which a person's resources are disregarded in the eligibility determination equal to the amount of benefits paid to or on behalf of a person by a Long-Term Care Partnership policy.

(b) The Texas Health and Human Services Commission (HHSC) administers the Long-Term Care Partnership Program.

(c) In this section, the following words and terms have the following meanings, unless the context clearly indicates otherwise:

(1) "Long-Term Care Partnership Program" means the program established under the Texas Human Resources Code, Chapter 32, Subchapter C.

(2) "Qualified plan holder" means the beneficiary of a qualified long-term care benefit plan that meets the requirements set forth in subsection (d) of this section.

(3) "Resource disregard" means the total equity value of resources not exempt under rules governing Medicaid eligibility that are disregarded in determining eligibility for Medicaid.

(4) "Resource protection" means the extension to a plan holder of an approved plan of a dollar-for-dollar resource disregard in determining Medicaid eligibility.

(5) "Dollar-for-dollar resource disregard" means a resource disregard in which the amount of the disregard is equal to the sum of benefit payments made on behalf of the approved plan holder.

(d) A Long-Term Care Partnership Program policy is one that meets all of the following requirements:

(1) On the date the policy was issued, the state in which the insured resided had in place an approved Medicaid state plan amendment under 42 U.S.C. §1396p(b).

(2) The policy meets the requirements set forth by the Texas Department of Insurance under Title 28, Part 1, Chapter 3 of the Texas Administrative Code (relating to Life, Accident and Health Insurance and Annuities).

(e) At application for long-term care services, the qualified plan holder receives a dollar-for-dollar disregard of his or her resources.

(1) HHSC determines Medicaid eligibility in accordance with this chapter.

(2) A person may apply for Medicaid before exhausting the benefits of a Long-Term Care Partnership Program policy. If a person applies for and is eligible to receive Medicaid before the Long-Term Care Partnership Program policy is exhausted, the Long-Term Care Partnership Program insurer must make payment for medical assistance to the maximum extent of its liability before Medicaid funds may be used to pay providers for covered services as established in this chapter.

(3) If a person has applied for and been found eligible to receive Medicaid and subsequently receives additional resources, the person continues to be eligible for Medicaid if the total resources do not exceed the individual resource limit after applying the dollar-for-dollar resource disregard.

>(f) If the Long-Term Care Partnership Program is discontinued, a person who purchased a Long-Term Care Partnership Program policy before the date the program is discontinued remains eligible to receive the dollar-for-dollar resource exclusion.

§358.371.Treatment of Other Resources.

The Texas Health and Human Services Commission follows the federal regulations indicated in the table in this section regarding the treatment of resources not otherwise described in this division:

Figure: 1 TAC §358.371

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901770

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 3. INCOME

1 TAC §§358.381 - 358.387, 358.391

Statutory Authority

The new sections affect Texas Government Code, Chapter 531. No other statutes, articles, or codes are affected by this proposal.

§358.381.General Treatment of Income.

(a) The Texas Health and Human Services Commission (HHSC) follows §1612 of the Social Security Act (42 U.S.C. §1382a) and 20 CFR §§416.1101 - 416.1104 regarding the definition and general treatment of income for the purpose of determining financial eligibility and calculating a co-payment.

(b) A lump sum payment is countable income in the month of receipt and is a resource thereafter.

(c) A person in an institutional setting may retain a personal needs allowance (PNA) in an amount set by the HHSC executive commissioner in accordance with Chapter 32 of the Texas Human Resources Code.

(1) The PNA is not applied toward the cost of medical assistance furnished in an institutional setting.

(2) For a person receiving the reduced SSI benefit rate, HHSC issues a supplement to give the person a PNA at the minimum level set by the HHSC executive commissioner.

(d) An action by a fiduciary agent is the same as an action by the person for whom the fiduciary agent acts.

(1) Monies received by a fiduciary agent for another person are not income to the fiduciary agent. If the fiduciary agent is authorized to keep part of the money as compensation for services rendered, the compensation for services rendered is unearned income to the fiduciary agent.

(2) Monies received by a fiduciary agent for another person are charged as income to the person when the monies are received by the fiduciary agent.

§358.382.Variable Monthly Income.

The Texas Health and Human Services Commission averages monthly countable income that is predictable but varies in amount from month to month.

§358.383.Deeming of Income.

The Texas Health and Human Services Commission follows 20 CFR §§416.1160 - 416.1166 regarding the definition and treatment of deemed income for a person in a noninstitutional setting.

§358.384.Temporary Absence.

The Texas Health and Human Services Commission follows 20 CFR §416.1149 and §416.1167 regarding the definition and treatment of a temporary absence from a person's living arrangement for deeming purposes for a person in a noninstitutional setting.

§358.385.Cafeteria Plan Benefits.

The Texas Health and Human Services Commission exempts cafeteria plan benefits as defined in and based on §125 of the Internal Revenue Code (IRC), except that:

(1) cash received under a cafeteria plan in lieu of benefits is not exempt, but is counted as earned income; and

(2) payroll deductions used to purchase cafeteria plan benefits in addition to or instead of those purchased under a salary reduction agreement are not exempt, but are part of the employee's wages and are counted as earned income.

§358.386.Reduction of Pension and Benefit Checks for Recoupment of Overpayments.

If a person's pension or benefit checks are reduced because of recovery of overpayments, the following apply:

(1) All overpayments except Retirement, Survivors, and Disability Insurance (RSDI).

(A) If a person was receiving Supplemental Security Income (SSI) or assistance under a Medicaid-funded program for the elderly and people with disabilities (MEPD) at the time of overpayment, the Texas Health and Human Services Commission (HHSC) disregards as income the amount being recovered. HHSC counts the net amount of the benefit (for example, the gross benefit minus the amount being recouped) for the purpose of determining eligibility and calculating a co-payment.

(B) If a person was not receiving SSI or assistance under MEPD at the time of overpayment, HHSC counts the recovered amount as income. HHSC counts the gross amount of the benefit for the purpose of determining eligibility and calculating a co-payment.

(2) RSDI overpayments.

(A) If a person receives an overpayment of Social Security (RSDI or Title II) benefits, recoupment is not voluntary. HHSC counts the net amount of the RSDI benefit (for example, the gross RSDI minus the amount being recouped) for the purpose of determining eligibility and calculating a co-payment.

(B) If a person receives an overpayment of SSI benefits and the person is still eligible for SSI, the recoupment is voluntary. HHSC determines if the person signed a voluntary agreement for recoupment. If there is a signed agreement, HHSC counts the gross RSDI for the purpose of determining eligibility and calculating a co-payment. If there is no signed agreement, there should be no recoupment from RSDI benefits.

(C) If a person receives an overpayment of SSI benefits and the person is no longer eligible for SSI, recoupment of any RSDI or Title II benefits is not voluntary. HHSC counts the net amount of the RSDI benefit (that is, the gross RSDI minus the amount being recouped) for eligibility and applied income purposes.

§358.387.Income Exclusions.

(a) The Texas Health and Human Services Commission (HHSC) follows 20 CFR §416.1112 and §416.1124 regarding income exclusions, except when testing income eligibility under the special income limit HHSC does not allow the exclusions:

(1) in 20 CFR §416.1112(c)(4), (5), and (7); or

(2) in 20 CFR §416.1124(c)(12), unless:

(A) the person meets the criteria under §1929(b)(2)(B) of the Social Security Act (42 U.S.C. §1396t(b)(2)(B)); and

(B) the Centers for Medicare and Medicaid Services has authorized HHSC to allow the exclusion.

(b) HHSC also excludes income described in the appendix to Subpart K in 20 CFR Part 416.

§358.391.Treatment of Other Income.

The Texas Health and Human Services Commission follows the federal regulations indicated in the table in this section regarding the treatment of income not otherwise described in this division:

Figure: 1 TAC §358.391

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901771

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 4. TRANSFER OF ASSESTS

1 TAC §358.401, §358.402

Statutory Authority

The new sections affect Texas Government Code, Chapter 531. No other statutes, articles, or codes are affected by this proposal.

§358.401.Transfer of Assets on or after February 8, 2006.

(a) This section applies to a person in an institutional setting whose date of application or program transfer request date is on or after October 1, 2006, and who takes an action defined by this section to be a transfer of assets on or after February 8, 2006.

(b) The Texas Health and Human Services Commission (HHSC) uses the definitions under the provisions of §1917(e) of the Social Security Act (42 U.S.C. §1396p(h)).

(1) Assets include all income and resources of a person and of the person's spouse, including any income or resources that the person or the person's spouse is entitled to but does not receive because of action:

(A) by the person or the person's spouse;

(B) by an individual, including a court or administrative body, with legal authority to act in place of or on behalf of the person or the person's spouse; or

(C) by any individual, including any court or administrative body, acting at the direction or upon the request of the person or the person's spouse.

(2) The term "income" has the meaning given such term in §1612 of the Social Security Act (42 U.S.C. §1382a).

(3) The term "resources" has the meaning given such term in §1613 of the Social Security Act (42 U.S.C. §1382b), without regard (in the case of a person in an institutional setting) to the exclusion of the home.

(1) the person's spouse;

(2) an individual, including a court or administrative body, with legal authority to act in place of or on behalf of the person or person's spouse; and

(3) any individual, including a court or administrative body, acting at the direction or upon the request of the person or the person's spouse.

(d) HHSC applies the penalty for transfers of assets under the provisions of §1917(c)(1) of the Social Security Act (42 U.S.C. §1396p(c)(1)). The provisions of §358.402 of this division (relating to Transfer of Assets before February 8, 2006) continue in effect for transfers on or after February 8, 2006, except to the extent that they are inconsistent with this section.

(1) This paragraph establishes HHSC's treatment of transfers made on or after February 8, 2006, the date of enactment of the Deficit Reduction Act of 2005.

(A) Disposing of assets. If a person in an institutional setting or the spouse of such a person disposes of assets for less than fair market value on or after the look-back date specified in subparagraph (B) of this paragraph, the person is ineligible for medical assistance for services described in subparagraph (C) of this paragraph during the period beginning on the date specified in subparagraph (D) of this paragraph and equal to the number of months specified in subparagraph (E) of this paragraph.

(B) Look-back period.

(i) The look-back date specified in this subparagraph is a date that is 36 months (or, in the case of payments involving a trust or portions of a trust that are treated as assets disposed of by the person pursuant to §358.402(e)(2) of this division or in the case of any other disposal of assets made on or after February 8, 2006, the date of enactment of the Deficit Reduction Act of 2005, 60 months) before the date specified in clause (ii) of this subparagraph.

(ii) The date specified in this clause, with respect to:

(I) a person in an institutional setting, except a person receiving services under a §1915(c) waiver program, is the first date as of which the person both is in an institutional setting and has applied for medical assistance under the Texas State Plan for Medical Assistance; or

(II) a person receiving services under a §1915(c) waiver program, is the date on which the person applies for medical assistance under the Texas State Plan for Medical Assistance or, if later, the date on which the person disposes of assets for less than fair market value.

(C) Ineligible for medical assistance for services. A person in an institutional setting who disposes of assets as described in subparagraph (A) of this paragraph is ineligible for the following services:

(i) nursing facility services;

(ii) a level of care in any institution equivalent to that of nursing facility services; and

(iii) Section 1915(c) waiver program services.

(D) Beginning date of penalty.

(i) In the case of a transfer of asset made before February 8, 2006, the date of enactment of the Deficit Reduction Act of 2005, the beginning date of penalty, specified in this subparagraph, is the first day of the first month during or after which assets have been transferred for less than fair market value and which does not occur in any other periods of ineligibility under this subsection.

(ii) In the case of a transfer of asset made on or after February 8, 2006, the date of enactment of the Deficit Reduction Act of 2005, the beginning date of penalty, specified in this subparagraph, is the first day of a month during or after which assets have been transferred for less than fair market value, or the date on which the person is eligible for medical assistance under the Texas State Plan for Medical Assistance and would otherwise be receiving institutional level of care described in subparagraph (C) of this paragraph based on an approved application for such care but for the application of the penalty period, whichever is later, and which does not occur during any other period of ineligibility under this subsection.

(E) Length of ineligibility period.

(i) With respect to a person in an institutional setting, except a person receiving services under a §1915(c) waiver program, the number of months of ineligibility under this subparagraph for such person is equal to the total, cumulative uncompensated value of all assets transferred by the person (or person's spouse) on or after the look-back date specified in subparagraph (B)(i) of this paragraph, divided by the average monthly cost to a private patient of nursing facility services in the state at the time of application.

(ii) With respect to a person receiving services under a §1915(c) waiver program, the number of months of ineligibility under this subparagraph for such person must not be greater than a number equal to the total, cumulative uncompensated value of all assets transferred by the person (or person's spouse) on or after the look-back date specified in subparagraph (B)(i) of this paragraph, divided by the average monthly cost to a private patient of nursing facility services in the state at the time of application.

(iii) The number of months of ineligibility otherwise determined under clause (i) of this subparagraph with respect to the disposal of an asset shall be reduced:

(I) in the case of periods of ineligibility determined under clause (i) of this subparagraph, by the number of months of ineligibility applicable to the person under clause (ii) of this subparagraph has a result of such disposal; and

(II) in the case of periods of ineligibility determined under clause (ii) of this subparagraph, by the number of months of ineligibility applicable to the person under clause (i) of this subparagraph as a result of such disposal.

(iv) HHSC does not round down, or otherwise disregard any fractional period of ineligibility determined under clause (i) or (ii) of this subparagraph with respect to the disposal of assets.

(F) Annuity. The purchase of an annuity made on or after February 8, 2006, the date of enactment of the Deficit Reduction Act of 2005, is treated as the disposal of an asset for less than fair market value unless:

(i) the State is named as the remainder beneficiary in the first position for at least the total amount of medical assistance paid on behalf of the annuitant under this title; or

(ii) the State is named as such a beneficiary in the second position after the community spouse or minor or disabled child and is named in the first position if such spouse or a representative of such child disposes of any such remainder for less than fair market value.

(G) Annuity exceptions. With respect to a transfer of assets, the term "assets" includes an annuity purchased on or after February 8, 2006, the date of enactment of the Deficit Reduction Act of 2005, by or on behalf of an annuitant who has applied for medical assistance with respect to services in an institutional setting unless:

(i) the annuity is:

(I) an annuity described in subsection (b) or (q) of section 408 of the Internal Revenue Code of 1986; or

(II) purchased with proceeds from:

(-a-) an account or trust described in subsection (a), (c), or (p) of section 408 of such Code;

(-b-) a simplified employee pension (within the meaning of section 408(k) of such Code); or

(-c-) a Roth IRA described in section 408A of such Code; or

(ii) the annuity:

(I) is irrevocable and nonassignable;

(II) is actuarially sound (as determined in accordance with actuarial publications of the Office of the Chief Actuary of the United States Department of Health and Human Services); and

(III) provides for payments in equal amounts during the term of the annuity, with no deferral and no balloon payments made.

(H) Promissory note, loan, or mortgage. In the case of a promissory note, loan, or mortgage that does not satisfy the requirements of clauses (i) through (iii) of this subparagraph, the value of such note, loan, or mortgage is the outstanding balance due as of the date of the person's application for medical assistance for services described in subparagraph (C) of this paragraph and this amount would be used to determine the length of ineligibility. For purposes of this paragraph with respect to a transfer of assets, the term "assets" includes funds used to purchase, on or after April 1, 2006, a promissory note, loan, or mortgage unless such note, loan, or mortgage:

(i) has a repayment term that is actuarially sound (as determined in accordance with actuarial publications of the Office of the Chief Actuary of the Social Security Administration);

(ii) provides for payments to be made in equal amounts during the term of the loan, with no deferral and no balloon payments made; and

(iii) prohibits the cancellation of the balance upon the death of the lender.

(I) Life estate. For purposes of this paragraph with respect to a transfer of assets, the term "assets" includes the purchase of a life estate interest in another individual's home made on or after April 1, 2006, unless the purchaser resides in the home for a period of at least one year after the date of the purchase.

(2) HHSC allows exceptions to transfers of assets under the provisions of §1917(c)(2) of the Social Security Act (42 U.S.C. §1396p(c)(2), if:

(A) the assets transferred were a home, and title to the home was transferred to:

(i) the spouse of such person;

(ii) a child of such person who:

(I) is under 21 years of age; or

(II) is blind or disabled as defined in §1614 of the Social Security Act (42 U.S.C. §1382c);

(iii) a sibling of such person who has an equity interest in such home and who was residing in such person's home for at least one year immediately before the date the person transferred to an institutional setting; or

(iv) a son or daughter of such person (other than a child described in clause (ii) of this subparagraph) who was residing in such person's home for a period of at least two years immediately before the date the person transferred to an institutional setting and who, as determined by the State, provided care to such person which permitted such person to reside at home rather than in such an institution or facility;

(B) the assets:

(i) were transferred to the person's spouse or to another for the sole benefit of the person's spouse;

(ii) were transferred from the person's spouse to another for the sole benefit of the person's spouse;

(iii) were transferred to a trust (including a trust described in §358.452(e)(2) of this division) established solely for the benefit of the person's child described in subparagraph (A)(ii)(II) of this paragraph; or

(iv) were transferred to a trust (including a trust described in §358.452(e)(2) of this division) established solely for the benefit of a person under 65 years of age who is disabled as defined in §1614(a)(3) of the Social Security Act (42 U.S.C. §1382c(a)(3));

(i) the person intended to dispose of the assets either at fair market value, or for other valuable consideration;

(ii) the assets were transferred exclusively for a purpose other than to qualify for medical assistance; or

(iii) all assets transferred for less than fair market value have been returned to the person; or

(D) HHSC:

(i) determines that the denial of eligibility would work an undue hardship when application of the transfer of assets provision would deprive the person:

(I) of medical care such that the person's health or life would be endangered; or

(II) of food, clothing, shelter, or other necessities of life; and

(ii) provides for:

(I) notice to recipients that an undue hardship exception exists;

(II) a timely process for determining whether an undue hardship waiver will be granted; and

(III) a process under which an adverse determination can be appealed.

(3) Under paragraph (2)(D) of this subsection, a facility in which the person in an institutional setting is residing may file an undue hardship waiver application on behalf of the person with the consent of the person or the person's authorized representative.

(4) For purposes of this subsection effective on or after February 8, 2006, the date of enactment of the Deficit Reduction Act of 2005, in the case of an asset held by a person in common with another individual or individuals in a joint tenancy, tenancy in common, or similar arrangement, the asset (or the affected portion of such asset) is considered to be transferred by such person when any action is taken, either by such person or by any other individual, that reduces or eliminates such person's ownership or control of such asset.

(5) HHSC does not provide for any period of ineligibility for a person due to transfer of resources for less than fair market value except in accordance with this subsection. In the case of a transfer by the spouse of a person which results in a period of ineligibility for medical assistance for such person, HHSC apportions such period of ineligibility (or any portion of such period) among the person and the person's spouse if the spouse otherwise becomes eligible for medical assistance.

(6) In this subsection, the term "resources" has the meaning given such term in §1613 of the Social Security Act (42 U.S.C. §1382b), without regard (in the case of a person in an institutional setting) to the exclusion of the home.

(e) Impact on spousal protected resource amount. In spousal situations, if assets are transferred to a third party before institutionalization or by the community spouse, HHSC does not include the uncompensated amount of the transfer in calculating the spousal protected resource amount or countable resources upon application for Medicaid.

(f) Transfer of income.

(1) A person may incur a transfer penalty by transferring income. Transfers of income include:

(A) waiving the right to receive an inheritance even in the month of receipt;

(B) giving away a lump sum payment even in the month of receipt; or

(2) The date of transfer is the date of the actual change in income. Interspousal transfers of income are permitted (for example, obtaining a court order to have community property pension income paid to a community spouse).

(3) Because revocable waivers of pension benefits can be revoked and the benefits reinstated, no uncompensated value is developed, and no transfer-of-assets penalty is incurred. Such waivers are subject to the utilization-of-benefits policy, and the person must apply for reinstatement of the full pension amount or the person is ineligible for all Medicaid benefits.

(g) Disclosure and treatment of annuities. HHSC, under the provisions of §1902(a)(18) of the Social Security Act (42 U.S.C. §1396a(18)), requires the following as a condition for the provision of medical assistance for services described in subsection (d)(1)(C) of this section:

(1) An application for assistance (including any recertification of eligibility for such assistance) must disclose a description of any interest the person or community spouse has in an annuity (or similar financial instrument as directed by the United States Department of Health and Human Services), regardless of whether the annuity is irrevocable or is treated as an asset. Such application or recertification form must include a statement that under paragraph (2) of this subsection the State becomes a remainder beneficiary under such an annuity or similar financial instrument by virtue of the provision of such medical assistance.

(2) In the case of disclosure concerning an annuity under subsection (d)(1)(F) of this section, HHSC notifies the issuer of the annuity of the right of the State under such subsection as a preferred remainder beneficiary in the annuity for medical assistance furnished to the person. Nothing in this paragraph shall be construed as preventing such an issuer from notifying persons with any other remainder interest of the State's remainder interest under such subsection.

(3) HHSC establishes categories of transactions that may be treated as a transfer of asset for less than fair market value as the United States Department of Health and Human Services provides guidance.

(4) Nothing in this subsection shall be construed as preventing HHSC from denying eligibility for medical assistance for a person based on the income or resources derived from an annuity described in paragraph (1) of this subsection.

§358.402.Transfer of Assets before February 8, 2006.

(a) Introduction.

(1) The Omnibus Budget Reconciliation Act of 1993 (OBRA 1993) (P.L. 103-66) revised policy for transfers of assets that occur on or after August 11, 1993, when an uncompensated value remains.

(2) The penalty for transfers of assets affects payments for institutional facility services (nursing facility (NF) care, intermediate care facility for persons with mental retardation or related conditions (ICF/MR) provider services, care in state mental retardation facilities, and care in institutions for mental diseases (IMD)) and eligibility for §1915(c) waiver program services. Both the recipient and the service provider are notified of the penalty period.

(3) Except for residents of state mental retardation facilities, persons in an institutional setting remain eligible for all other Medicaid benefits and continue to receive monthly identification forms for the length of the penalty period. For residents of state mental retardation facilities, Medicaid eligibility is denied for any penalty period resulting from an uncompensated transfer of assets. This is because the only Medicaid benefit a resident of a state mental retardation facility receives is provider payments.

(4) If the Medicaid eligibility of a person receiving services under a §1915(c) waiver program requires receipt of waiver services, then the person is ineligible for all Medicaid benefits for the length of the penalty period. Denial of §1915(c) waiver program services based on an uncompensated transfer of assets does not disqualify the person for pure Qualified Medicare Beneficiary (QMB) or Specified Low-Income Medicare Beneficiary (SLMB) benefits, as described in Chapter 359 of this title (relating to Medicare Savings Program).

(5) A person in a noninstitutional setting who is eligible for Medicaid may transfer assets without penalty, provided the person does not become institutionalized or apply for §1915(c) waiver program services. A transfer of assets does not affect eligibility for QMB or SLMB benefits.

(6) In spousal situations, if assets are transferred to a third party before institutionalization or by the community spouse, the Texas Health and Human Services Commission (HHSC) does not include the uncompensated amount of the transfer in calculating the spousal protected resource amount or countable resources upon application for Medicaid.

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

(1) Person--"Person" includes the applicant or recipient, as well as:

(A) the person's spouse;

(B) an individual, including a court or administrative body, with legal authority to act in place of or on behalf of the person or person's spouse; and

(C) any individual, including a court or administrative body, acting at the direction or upon the request of the person or the person's spouse.

(2) Assets--

(A) Assets include all income and resources of a person and of the person's spouse, including any income or resources that the person or the person's spouse is entitled to but does not receive because of action:

(i) by the person or the person's spouse;

(ii) by an individual, including a court or administrative body, with legal authority to act in place of or on behalf of the person or the person's spouse; or

(iii) by any individual, including a court or administrative body, acting at the direction or upon the request of the person or the person's spouse.

(B) Actions that would cause income or resources not to be received include:

(i) irrevocably waiving pension income;

(ii) waiving the right to receive an inheritance;

(iii) not accepting or accessing injury settlements; and

(iv) a defendant diverting tort settlements into a trust or similar device to be held for the benefit of the plaintiff.

(1) A person may incur a transfer penalty by transferring income on or after August 11, 1993. Transfers of income include:

(A) waiving the right to receive an inheritance even in the month of receipt;

(B) giving away a lump sum payment even in the month of receipt; or

(2) The date of transfer is the date of the actual change in income, if on or after August 11, 1993. Interspousal transfers of income are permitted (for example, obtaining a court order to have community property pension income paid to a community spouse).

(d) Exceptions to transfers of assets.

(1) Transfer of the person's home does not result in a penalty when the title is transferred to the person's:

(A) spouse, who lives in the home (the transfer penalty applies when the community spouse transfers the home without full compensation);

(B) minor or disabled child (a disabled child must meet Social Security Administration disability criteria; there is no age limit for a disabled child for transfer of assets purposes);

(C) sibling who has equity interest in the home and has lived there for at least one year before the person transferred to an institutional setting; or

(D) son or daughter (other than a disabled or minor child) who lived in the home for at least two years before the person transferred to an institutional setting and provided care that prevented institutionalization. To substantiate this claim, there must be a written statement from the person's attending physician or a professional social worker familiar with the case documenting the care provided by the son or daughter.

(2) Assets, including the person's home, may be transferred without resulting in a penalty when:

(A) transferred to the person's spouse or to another for the sole benefit of that spouse, or from the person's spouse to another for the sole benefit of that spouse;

(B) transferred to the person's child or to a trust, including an exception trust described in §1917(d)(4) of the Social Security Act (42 U.S.C. §1396p(d)(4)), established solely for the benefit of the person's child. The child must meet Social Security Administration disability criteria. There is no age limit for a disabled child for transfer of assets purposes;

(C) transferred to a trust, including an exception trust as specified in §1917(d)(4) of the Social Security Act (42 U.S.C. §1396p(d)(4)), established for the sole benefit of a person under 65 years of age who meets Social Security Administration disability criteria;

(D) satisfactory evidence exists that the person intended to dispose of the resource at fair market value;

(E) satisfactory evidence exists that the transfer was exclusively for some purpose other than to qualify for Medicaid;

(F) imposition of a penalty would cause undue hardship;

(G) a person changes a joint bank account to establish separate accounts to reflect correct ownership of and access to funds; or

(H) a person purchases an irrevocable funeral arrangement or assigns ownership of an irrevocable funeral arrangement to a third party.

(3) In determining whether an asset was transferred for the sole benefit of a spouse, child, or person with a disability, there must be a written instrument of transfer, such as a trust document, which legally binds the parties to a specified course of action and which clearly sets out the conditions under which the transfer was made, as well as who can benefit from the transfer. The instrument or document must provide for the spending of the funds involved for the benefit of the person on a basis that is actuarially sound based on the life expectancy of the person involved. When the instrument or document does not so provide, there can be no exemption from the penalty. Exception trusts created under §1917(d)(4) of the Social Security Act (42 U.S.C. §1396p(d)(4)) are exempt from the actuarially sound distribution provisions of this section.

(4) The situations in paragraphs (1) - (3) of this subsection are the only situations in which an uncompensated transfer does not result in a penalty for care in an institutional setting. Under the transfer provisions of OBRA 1993, the home is not an excluded resource for a person in an institutional setting. Therefore, if the home of a person in an institutional setting is transferred, unless the transfer meets one of the criteria in paragraphs (1) - (3) of this subsection, it could affect payment for the person's care in an institutional setting.

(e) Look-back period.

(1) Penalties may be assessed for transfers occurring on or after the look-back date. Penalties cannot be assessed for time frames prior to the look-back period.

(2) The law prescribes a 36-month look-back period for most uncompensated transfers. However, there is a 60-month look-back period for certain transfers involving trusts. The look-back periods for trusts and distributions from trusts are defined in subparagraphs (A) and (B) of this paragraph.

(A) Revocable trusts.

(i) Payments from a revocable trust to or for the benefit of someone other than an applicant or recipient have a 60-month look-back period.

(ii) Making a revocable trust irrevocable with payments from corpus/income foreclosed to the applicant or recipient is a transfer of assets and has a 60-month look-back period.

(B) Irrevocable trusts.

(i) Payments from an irrevocable trust (where trustee distributions are not foreclosed to the applicant or recipient) which are made to (or for the benefit of) someone other than the applicant or recipient have a 36-month look-back period.

(ii) Creating an irrevocable trust where trustee payments are foreclosed to the applicant or recipient is a transfer of assets with a 60-month look-back period.

(iii) Creating an irrevocable trust where the trustee initially has discretion to make payments to the applicant or recipient (or for the applicant's or recipient's benefit), but where payments are foreclosed to the applicant or recipient at a later date is a transfer of assets as of the date payments are foreclosed to the applicant or recipient. The look-back period is 60 months.

(3) The look-back period is 36 months (or 60 months) from the later of the date of:

(A) institutionalization; or

(B) Medicaid application.

(4) When a person is already a Medicaid recipient before entering an NF, ICF/MR, state mental retardation facility, or IMD, the look-back period begins with institutional entry.

(5) When a person applies and is certified for Medicaid more than once because of multiple institutional stays or periods of ineligibility, the look-back date is based on the later of the earliest application for Medicaid or the initial entry into the facility.

(6) When a person applies for a §1915(c) waiver program, the look-back period is 36 months or 60 months from the later of the date:

(A) of application for waiver services (completed, signed application form is received in HHSC office); or

(B) after application that the person transfers assets.

(7) When a person applies for services in an institutional setting but is not certified and then reapplies, a new look-back period is based on the latest application.

(8) When a person applies and is certified for a §1915(c) waiver program, subsequently is denied, and reapplies for waiver services, the initial look-back period is still in effect.

(9) When a look-back period is established, the person is certified, and then moves from a Medicaid-certified long-term care facility to a §1915(c) waiver program or vice versa, the initial look-back period is still in effect. This is true even when there is a gap in eligibility periods.

(10) Any additional transfers of assets that occur after the person is certified for Medicaid may be assessed a penalty.

(f) Calculation of penalty period.

(1) There is no limit to the penalty period under OBRA 1993. The penalty period is determined by dividing the uncompensated value of all assets transferred by the average monthly cost of nursing facility care for a private-pay patient.

(2) The penalty period calculation applies to the transfer of both income and resources.

(3) The same penalty period calculation is used for a person who applies for a §1915(c) waiver program. Penalty periods continue to run if a person moves from a Medicaid-certified long-term care facility to a §1915(c) waiver program or vice versa.

(4) The penalty period begins the month of transfer. However, a new penalty period cannot be imposed while a previous penalty period is still in effect. Therefore, the penalty periods assessed under OBRA 1993 rules for multiple transfers that overlap run separately but consecutively.

(5) If a penalty period ends and a subsequent transfer occurs, a new penalty period is established effective the month of the subsequent transfer. This means there may be a gap between penalty periods.

(6) When multiple transfers occur during the look-back period in such a way that the penalty periods for each overlap, the transfers are treated as a single event. The uncompensated values are lumped together and divided by the average monthly rate for a private-pay patient in a nursing facility. If multiple transfers occur in such a way that the penalty periods do not overlap, then the transfers are treated as separate events and the penalty periods are calculated separately.

(g) Apportioning penalty periods between spouses.

(1) When a person's spouse transfers an asset that results in a penalty for the person, the penalty period must, in certain instances, be apportioned between the spouses. Both spouses must be eligible for Medicaid in an institutional setting during the same time period for apportionment to occur. Apportionment occurs when:

(A) the spouse:

(i) is institutionalized and is Medicaid eligible; or

(ii) would be eligible for a §1915(c) waiver program; and

(B) some portion of the penalty against the person remains at the time the conditions in this paragraph are met.

(2) When one spouse is no longer subject to a penalty (for example, the spouse is no longer in an institutional setting, or the spouse dies), the remaining penalty period applicable to both spouses must be served by the remaining spouse.

(h) Return of transferred asset.

(1) For transfers occurring on or after August 11, 1993, if the transferred asset is subsequently returned to the person, the transfer is nullified and the penalty period is erased retroactive to the month of transfer. The asset is treated as though never transferred, and is excluded or counted, as appropriate, in determining the person's eligibility for those months in which the asset was in someone else's possession. In spousal cases, if the person or the person's spouse transferred an asset before the person entered the nursing facility and the asset is returned after institutionalization, the spousal protected resource amount must also be recalculated.

(2) For a penalty period to be nullified, all of the asset in question or its fair market value must be returned to the person. When only part of an asset or its equivalent value is returned, the penalty period can be reduced but not eliminated. For example, if only half the value of the asset is returned, the penalty period can be reduced by one-half. Payment on the principal of a note is the return of a transferred asset and reduces the penalty accordingly.

(i) Spouse-to-spouse transfers under spousal impoverishment provisions.

(1) There are no restrictions on interspousal transfers occurring from the date of institutionalization to the date of application; the reason is that at application and throughout the initial eligibility period (12 full months following the medical effective date), the combined countable resources of the couple are considered in determining eligibility. For the same reason, interspousal transfers are also permitted before institutionalization. A penalty can result when the community spouse transfers assets to a third party, not for the sole benefit of either spouse.

(2) To remain eligible at the end of the initial eligibility period, the person in an institutional setting must reduce resources to which the person has access at least to the resource limit. If the person chooses, the person may, during the initial eligibility period, transfer resources from his or her name to the community spouse's name with no penalty applied to the transfer. The transfer-of-assets policy applies only to transfer of assets for less than fair market value to someone other than the community spouse if not for the sole benefit of that spouse.

(3) Transfer penalties apply when the community spouse transfers his or her separate property before institutionalization, or after institutionalization but before certification. Transfer penalties apply when the community spouse transfers community property both before and after institutionalization, if not for the sole benefit of the spouse.

(j) Compensation. Compensation, in the form of funds, real property, or services, must actually have been provided to a person. Future compensation does not satisfy the compensation requirement except for annuities which are actuarially sound. Compensation, however, may be in the form of payment or assumption of a legal debt owed by the individual making the transfer. Compensation is not allowed for services that would be normally provided by a family member (such as house painting or repairs, mowing lawns, grocery shopping, cleaning, laundry, preparing meals, transportation to medical care). The person must provide valid receipts for financial expenditures or written statements from the individuals who were paid to provide the services. If the person receives additional cash compensation that was not a part of the transfer agreement from the party who received the transferred asset, the uncompensated value of the transferred asset must be reduced by the amount of the additional compensation and as of the date the compensation is received. Cash compensation includes direct payments to a third party to meet the person's food, shelter, or medical expenses, including nursing facility bills, incurred after the date of the transfer. Compensation for a transferred asset must be provided according to terms of an agreement established on or before the date of transfer. This agreement must have been established exclusively for purposes other than obtaining or retaining eligibility for Medicaid services.

(k) Participation in transfers. Any action by a person's co-owner(s) to eliminate the person's ownership interest or control of a joint asset, with or without the person's consent, is a transfer of assets. Placing another person's name on an account or other asset that results in limiting the person's control of an asset (right to dispose) is a transfer of assets.

(l) Rebuttal procedures.

(1) Notification of opportunity for rebuttal. If any amount of uncompensated value exists, HHSC advises the person or authorized representative of the amount of uncompensated value and the length of the penalty period. The penalty period applies unless the person provides convincing evidence that the disposal was solely for some purpose other than to obtain Medicaid services. If, within the periods specified in this paragraph, the person or authorized representative makes no effort to rebut the presumption that the transfer was solely to obtain Medicaid services, HHSC assumes that the presumption is valid. The rebuttal period is five working days after oral notification (by HHSC to the person) and seven working days after written notification.

(2) Rebuttal of the presumption. Transfer-of-assets statutes presume that all transfers for less than fair market value are to obtain Medicaid services. The person or authorized representative is responsible for providing convincing evidence that the transaction in question was exclusively for some other purpose. To rebut the presumption, the person or authorized representative must provide a written statement and any relevant documentation to substantiate his or her statement. The statement, oral or written, must include at least the following:

(A) purpose for transferring the asset;

(B) attempts to dispose of the asset at fair market value;

(D) means of or plan for self-support after the transfer; and

(E) relationship to the person to whom the asset was transferred.

(m) Undue hardship.

(1) A person may claim undue hardship when imposition of a transfer penalty would result in discharge to the community and/or inability to obtain necessary medical services so that the person's life is endangered. Undue hardship also exists when imposition of a transfer penalty would deprive the person of food, clothing, shelter, or other necessities of life. Undue hardship relates to hardship to the person, not the relatives or responsible parties of the person. Undue hardship does not exist when imposition of the transfer penalty merely causes the person inconvenience or when imposition might restrict his lifestyle but would not put him at risk of serious deprivation.

(2) Undue hardship may exist when any one of the following conditions specified in subparagraphs (A) - (C) of this paragraph exists:

(A) location of the receiver of the asset is unknown to the person, or other family members, or other interested parties, and the person has no place to return in the community and/or receive the care required to meet his or her needs;

(B) the person can show that physical harm may come as a result of pursuing the return of the asset, and the person has no place to return in the community and/or receive the care required to meet his or her needs; or

(C) receiver of the asset is unwilling to cooperate with the person and HHSC, and the person has no place to return in the community and/or receive the care required to meet his or her needs.

(3) If a person claims undue hardship, HHSC makes a decision on the situation as soon as possible but within 30 days after receipt of the request for a waiver of the penalty. The person has the right to appeal an adverse decision on undue hardship.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901772

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 5. SPOUSAL IMPOVERISHMENTS

1 TAC §§358.411 - 358.423

Statutory Authority

The new sections affect Texas Government Code, Chapter 531. No other statutes, articles, or codes are affected by this proposal.

§358.411.Purpose and Application.

(a) This division establishes the criteria under which income and resources are protected for a community spouse, in accordance with 42 U.S.C. §1396r-5.

(b) This division applies to an institutionalized spouse whose continuous period in an institutional setting begins on or after September 30, 1989. For this division only, a reference to an institutional setting includes the receipt of services under the Program of All-Inclusive Care for the Elderly (PACE).

(c) This division applies to a person who is in an institutional setting and has a community spouse. It is not necessary for the community spouse to meet citizenship and residency requirements.

(d) This division does not apply to a couple with a void or annulled marriage.

(e) In the case of a divorce, the provisions of this division apply through the end of the calendar month of the court order granting the divorce.

§358.412.Definitions.

In this division, the following words and terms have the following meanings, unless the context clearly indicates otherwise.

(1) Community spouse--The spouse of an institutionalized spouse who is not living in a setting that provides medical care and services.

(2) Dependent family member--A minor or dependent child, dependent parent, or dependent sibling of an institutionalized spouse or a community spouse who resides with the community spouse.

(3) Institutional setting--In this division only, a living arrangement in which a person applying for or receiving Medicaid:

(A) lives in a Medicaid-certified long-term care facility;

(B) receives services under a §1915(c) waiver program; or

(4) Institutionalized spouse--A person who:

(A) receives care in an institutional setting;

(B) has met or is likely to meet the criterion in subparagraph (A) of this paragraph for at least 30 consecutive days; and

(5) Spousal protected resource amount (SPRA)--That portion of a couple's combined countable resources reserved for the community spouse and deducted from the couple's combined countable resources in determining eligibility.

§358.413.Spousal Impoverishment Treatment of Income and Resources.

The Texas Health and Human Services Commission follows §1924 of the Social Security Act (42 U.S.C. §1396r-5), regarding the treatment of income and resources for certain institutionalized spouses in institutional settings.

§358.414.Assessment of Resources to Determine a Spousal Protected Resource Amount.

(a) Assessment. Upon request of either the institutionalized spouse or the community spouse, or either spouse's authorized representative, the Texas Health and Human Services Commission (HHSC) assesses the couple's resources to determine the spousal protected resource amount (SPRA). The request and assessment may be made any time from the beginning of the continuous period in an institutional setting to the date of application for Medicaid.

(b) Assessment request. If the request described in subsection (a) of this section is not part of an application for Medicaid, the couple must provide information on their resources and verification as required by HHSC. If the couple does not provide the verification within the time frame requested by HHSC, HHSC does not complete the assessment and takes no further action.

(c) Assessment date. HHSC assesses the couple's combined countable resources as of 12:01 a.m. on the first day of the month in which the first continuous period in an institutional setting began. When determining the first day of the month in an institutional setting for the SPRA, HHSC may count days the person spent in a hospital if the person admits directly from the hospital to an institutional setting. After the continuous period begins, hospital stays and therapeutic home visits are not considered as breaks in the 30-consecutive-day period.

§358.415.Calculation of the Spousal Protected Resource Amount.

(a) The Texas Health and Human Services Commission (HHSC) calculates the spousal protected resource amount (SPRA) as of the assessment date described in §358.414(c) of this division (relating to Assessment of Resources to Determine a Spousal Protected Resource Amount).

(b) When determining the SPRA, HHSC excludes the following resources regardless of value:

(1) one automobile; and

(2) a home, if:

(A) the community spouse or dependent family member continues to live in the home while the person is in the institutional setting;

(B) the community spouse lives in another state on out-of-state property, whether or not the institutionalized spouse has ownership interest; or

(C) the community spouse had been living in the out-of-state property as a home but is not residing there during the assessment and initial eligibility period and the community spouse signs a statement of intent to return to the home.

(1) one-half of the couple's combined countable resources, not to exceed the maximum resource amount set by federal law; or

(2) the minimum resource amount set by federal law.

(d) HHSC calculates the SPRA as described in this section whether the SPRA is calculated at the time of application for Medicaid or before an application for Medicaid is filed. After HHSC determines the SPRA, the SPRA does not change unless:

(1) the SPRA was based on incomplete or inaccurate information, as described in §358.416(f)(1) of this division (relating to Initial Application and the Spousal Protected Resource Amount); or

(2) the SPRA is expanded as described in §358.420 of this division (relating to Expanding the Spousal Protected Resource Amount).

(e) The couple may not appeal the SPRA at the time of the assessment. The couple may appeal the SPRA after an application for Medicaid is filed.

§358.416.Initial Application and the Spousal Protected Resource Amount.

(a) Upon receiving an application for Medicaid, the Texas Health and Human Services Commission (HHSC) calculates the couple's combined countable resources, without regard to community or separate property laws or the spouses' respective ownership interests, as of 12:01 a.m. on the first day of the month in which eligibility is being determined. HHSC follows the resource exclusions for an automobile and a home, regardless of value, as described in §358.415 of this division (relating to Calculation of the Spousal Protected Resource Amount).

(b) If an assessment of resources to determine the spousal protected resource amount (SPRA) has not previously been completed, HHSC determines the SPRA at initial application, in accordance with §358.415 of this division.

(c) HHSC deducts the SPRA from the couple's combined countable resources calculated in subsection (a) of this section. To be eligible for Medicaid, the institutionalized spouse must have countable resources that do not exceed the individual resource limit described in 20 CFR §416.1205 and meet all other eligibility criteria.

(d) If the SPRA determined at assessment is either the federal minimum or maximum resource amount, and the federal minimum or maximum resource amount increases before completion of the initial application for Medicaid, HHSC uses the federal minimum and maximum resource amounts in effect at the time of completion of the initial application.

(e) If the institutionalized spouse is found ineligible for Medicaid at the initial application and reapplies, HHSC deducts the same SPRA for subsequent applications.

(f) If an institutionalized spouse, after having been certified, is subsequently denied and reapplies for Medicaid:

(1) if the institutionalized spouse should never have been certified and was denied because of unreported resources, HHSC calculates a new SPRA at reapplication, taking into account the previously unreported resources; and

(2) if the institutionalized spouse was denied for any other reason, HHSC does not deduct the SPRA and counts only the institutionalized spouse's resources at reapplication.

§358.417.Treatment of Resources after the Initial Eligibility Period.

(a) After the initial eligibility period, the Texas Health and Human Services Commission (HHSC) does not apply the spousal protected resource amount and counts only the institutionalized spouse's resources for the purpose of eligibility redetermination, in accordance with Division 2 of this subchapter (relating to Resources).

(b) After the initial eligibility period, HHSC excludes:

(1) a home in accordance with §358.348 of this subchapter (relating to Exclusion of a Home); and

(2) an automobile in accordance with §358.354 of this subchapter (relating to Automobiles).

§358.418.Refusal of a Community Spouse to Cooperate.

(a) If a community spouse refuses to cooperate in providing information to establish a spousal protected resource amount (SPRA), the Texas Health and Human Services Commission (HHSC) does not complete the assessment and takes no further action.

(b) If an assessment is undertaken in conjunction with an eligibility determination at the initial application, and a community spouse refuses to furnish information, HHSC determines the living arrangement before the continuous period in an institutional setting began.

(1) If the couple was living in the same household, HHSC denies the application based on the couple's failure to furnish information. Living in the same household includes temporary separations.

(2) If the couple was not living in the same household, HHSC determines the purpose of separation, the length of separation, and resources or income commingled or managed jointly by one spouse or a third party.

(c) If the community spouse refuses to cooperate in providing information, and circumstances indicate possible abuse or neglect by the community spouse, HSHC considers the institutionalized spouse as an individual for purposes of determining eligibility and calculating the co-payment.

§358.419.Separation to Circumvent Medicaid Policy.

(a) The Texas Health and Human Services Commission (HHSC) evaluates the information provided by a couple to determine if a couple separated before the continuous period in an institutional setting began to avoid the pooling of resources under Medicaid spousal impoverishment provisions, if:

(1) the separation occurred after a change in the health of the institutionalized spouse;

(2) the community spouse potentially owns separate resources; or

(3) the ownership of commingled resources was changed recently.

(b) A couple has the right to rebut HHSC's determination that a separation occurred to circumvent Medicaid policy. To rebut HHSC's determination, either spouse or either spouse's authorized representative must provide a written statement or evidence to HHSC to substantiate the separation as directed on the written notification of HHSC's determination that a separation occurred to circumvent Medicaid policy.

(c) If HHSC determines that circumstances indicate there was no intent to circumvent Medicaid policy, HHSC treats the institutionalized spouse as an individual for purposes of determining Medicaid eligibility and calculating the co-payment.

§358.420.Expanding the Spousal Protected Resource Amount.

(a) This section applies to an institutionalized spouse whose continuous period in an institutional setting begins on or after September 1, 2004.

(b) An institutionalized spouse may request that HHSC expand the spousal protected resource amount (SPRA) to produce additional income for the community spouse. To determine whether to expand the SPRA, HHSC considers the countable amount of non-resource-produced and non-investment income of the community spouse and compares the countable amount of non-resource-produced and non-investment income to the minimum monthly maintenance needs allowance (MMMNA). The MMMNA is the minimum income level for a community spouse set by the Centers for Medicare and Medicaid Services.

(1) If the community spouse's countable non-resource-produced and non-investment income is less than the MMMNA, HHSC considers the available income (countable non-resource-produced income minus the personal needs allowance) of the institutionalized spouse and adds the institutional spouse's available income to the community spouse's countable non-resource-produced and non-investment income and compares the combined incomes to the MMMNA.

(2) If the total amount of the community spouse's own income plus the amount of available income diverted from the institutionalized spouse is equal to or greater than the MMMNA, then HHSC does not expand the SPRA.

(3) If the total amount of the community spouse's own income plus the amount of available income diverted from the institutionalized spouse is less than the MMMNA, then HHSC determines an expanded SPRA as described in subsections (c) - (e) of this section.

(c) If, after the diversion of the institutionalized spouse's available income, the community spouse's total income is less than the MMMNA, the couple can protect an amount of resources equal to the dollar amount that must be deposited in a one-year certificate of deposit (CD), at current interest rates, to produce interest income equal to the difference between the MMMNA in effect at the time of the request and other countable income not generated by either spouse's countable resources. The couple is not required to invest in the CD as a condition of eligibility.

(d) To determine the amount of the expanded SPRA, HHSC determines the current interest rate of a one-year CD as published in the local newspaper or provided by a local bank. HHSC then determines the amount of resources required to produce income, at the specified interest rate, that would increase the community spouse's income to the MMMNA.

(e) The amount of resources to be protected is determined by using the methodology described in paragraphs (1) - (4) of this subsection. This methodology is to be used to determine the maximum amount of resources to be protected regardless of the actual income the couple's resource may or may not be producing.

(1) Subtract from the amount of the MMMNA the community spouse's monthly income from all sources other than resources of the couple (including any income that must first be diverted by the institutionalized spouse as required by subsection (b) of this section). The result is the additional monthly income needed by the community spouse.

(2) Multiply by 12 the additional monthly income needed by the community spouse (from paragraph (1) of this subsection). The product equals the annual income needed by the community spouse.

(3) Divide the product from paragraph (2) of this subsection by the interest rate described in subsection (d) of this section. The result is the expanded SPRA, subject to paragraph (4) of this subsection.

(4) The expanded SPRA must not exceed the value of the couple's combined countable resources as of the first month of the continuous period in an institutional setting.

§358.421.Treatment of Income for Eligibility and Co-payment.

(a) To be eligible for Medicaid, an institutionalized spouse must have countable income that does not exceed the special income limit for an individual and meet all other eligibility criteria.

(b) In determining the income of an institutionalized spouse or community spouse for purposes of determining a co-payment, the Texas Health and Human Services Commission (HHSC) follows §1924(b)(2) and (d) of the Social Security Act (42 U.S.C. §1396r-5(b)(2) and (d)). See also Division 6 of this subchapter (relating to Budgeting for Eligibility and Co-payment).

§358.422.Notice and Fair Hearing.

The Texas Health and Human Services Commission (HHSC) follows §1924(e) of the Social Security Act (42 U.S.C. §1396r-5(e)) concerning notices and fair hearings for matters relating to spousal impoverishment.

§358.423.Transfer of Assets and Spousal Impoverishment.

See Division 4 of this subchapter (relating to Transfer of Assets) for requirements governing a transfer of assets under spousal impoverishment circumstances.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901773

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 6. BUDGETING FOR ELIGIBILITY AND CO-PAYMENT

1 TAC §§358.431 - 358.441

Statutory Authority

The new sections affect Texas Government Code, Chapter 531. No other statutes, articles, or codes are affected by this proposal.

§358.431.Definitions.

In this division, the following words and terms have the following meanings, unless the context clearly indicates otherwise.

(1) Child--Has the meaning given in 20 CFR §416.1856.

(2) Couple--Two persons who live together and:

(A) present themselves to the community as husband and wife, intend to be married, and are considered to be married under state law;

(B) are determined to be husband and wife for purposes of receiving Social Security benefits; or

(3) Dependent relative--A relative who was living in the home of an applicant or recipient before the applicant's or recipient's absence and who is unable to support himself or herself outside of the person's home due to medical, social, or other reasons.

(4) Parent--Has the meaning given in 20 CFR §416.1881.

§358.432.Eligibility Budgets.

The Texas Health and Human Services Commission (HHSC) prepares an eligibility budget to determine a person's financial eligibility for Medicaid. The type of eligibility budget HHSC prepares depends on:

(1) where the person lives and whether a person is married or not married at the beginning of each month;

(2) whether a person is considered a child; and

(3) whether a person is considered another person's parent.

§358.433.Special Income Limit.

The Texas Health and Human Services Commission uses a special income limit to determine income eligibility under circumstances established in this section. The special income limit for a person is equal to or less than 300 percent of the full individual Supplemental Security Income (SSI) benefit rate. The special income limit for a couple is twice the special income limit for an individual.

(1) To qualify for the special income limit, a person or couple must have countable income that exceeds the reduced SSI benefit rate; and:

(A) must:

(i) reside in:

(I) a Medicaid-certified long-term care facility for 30 consecutive days; or

(II) a Medicaid-certified institution for mental diseases for 30 consecutive days, if the person is 65 years of age or older; and

(ii) receive a level of care or medical necessity determination that qualifies the person or couple for Medicaid; or

(B) must be approved by the Texas Department of Aging and Disability Services to receive services under a §1915(c) waiver program and receive the services within one month after approval.

(2) The 30 consecutive days described in paragraph (1)(A) of this section are not disrupted if the person:

(A) makes a three-day therapeutic home visit with a planned return to the facility;

(B) is admitted to a hospital with a planned return to the facility; or

(i) to a §1915(c) waiver program; or

(ii) to another Medicaid-certified facility.

(3) If a person dies before meeting the 30-consecutive-day requirement without moving to a noninstitutional setting, the person is considered to have met the requirement for application of the special income limit.

§358.434.Budget Types for a Noninstitutional Setting.

(a) Individual budget. The Texas Health and Human Services Commission (HHSC) prepares an individual budget for a person in a noninstitutional setting if the person is:

(1) single;

(2) widowed;

(3) divorced; or

(4) married and is:

(A) an applicant separated from his or her spouse at the time of application; or

(B) a recipient separated from his or her spouse during the previous month.

(b) Couple budget. HHSC prepares a couple budget for a couple in a noninstitutional setting if:

(1) the couple meets the definition of a couple in §358.431 of this division (relating to Definitions);

(2) each spouse is an applicant or a recipient; and

(3) both spouses are in the same coverage group.

(c) Companion budget. HHSC prepares a companion budget for a person in a noninstitutional setting who has an ineligible spouse if:

(1) the couple meets the definition of a couple in §358.431 of this division; and

(2) the person lives with the ineligible spouse during any part of a calendar month.

§358.435.Noninstitutional Eligibility Budgets.

(a) Scope. The Texas Health and Human Services Commission (HHSC) prepares a noninstitutional eligibility budget to determine financial eligibility for a person or couple in a noninstitutional setting, if the person or couple:

(1) applies for retroactive coverage;

(2) applies for or has eligibility redetermined under a federally mandated Medicaid-funded program for the elderly and people with disabilities as described in §358.107 of this chapter (relating to Coverage Groups); or

(3) applies for or has eligibility redetermined under §1929(b)(2)(B) of the Social Security Act.

(b) Individual budget. In preparing an eligibility budget for a person who meets the criteria in §358.434(a) of this division (relating to Budget Types for a Noninstitutional Setting), HHSC:

(1) counts the person's income in accordance with §1612 of the Social Security Act (42 U.S.C. §1382a);

(2) counts the person's resources in accordance with §1613 of the Social Security Act (42 U.S.C. §1382b);

(3) applies the individual resource limit in accordance with 20 CFR §416.1205; and

(4) applies the appropriate income limit, effective the month of eligibility determination, as follows:

(A) for a person who meets the criterion in subsection (a)(1) or (2) of this section, the income limit is the full individual Supplemental Security Income (SSI) benefit rate; and

(B) for a person who meets the criterion in subsection (a)(3) of this section, the income limit is the special income limit based on 300 percent of the full individual SSI benefit rate.

(c) Couple budget. In preparing an eligibility budget for a couple who meets the criteria in §358.434(b) of this division, HHSC:

(1) counts the income of both spouses in accordance with §1612 of the Social Security Act;

(2) counts the resources of both spouses in accordance with §1613 of the Social Security Act;

(3) applies the couple resource limit in accordance with 20 CFR §416.1205; and

(4) applies the appropriate income limit, effective the month of eligibility determination, as follows:

(A) for a couple who meets the criteria in subsection (a)(1) or (2) of this section, the income limit is the full couple SSI benefit rate; and

(B) for a couple who meets the criteria in subsection (a)(3) of this section, the income limit is twice the special income limit based on 300 percent of the full individual SSI benefit rate.

(d) Companion budget. In preparing an eligibility budget for a person who meets the criteria in §358.434(c) of this division, HHSC:

(1) counts the income of both spouses in accordance with §1612 of the Social Security Act;

(2) counts the resources of both spouses in accordance with §1613 of the Social Security Act;

(3) deems the ineligible spouse's income and resources;

(4) applies the couple resource limit in accordance with 20 CFR §416.1205; and

(5) applies the appropriate income limit, effective the month of eligibility determination, as follows:

(A) for a person who meets the criterion in subsection (a)(1) or (2) of this section, the income limit is the full individual SSI benefit rate; and

(B) for a person who meets the criterion in subsection (a)(3) of this section, the income limit is the special income limit based on 300 percent of the full individual SSI benefit rate.

§358.436.Budget Types for an Institutional Setting.

(a) Individual budget. The Texas Health and Human Services Commission (HHSC) prepares an individual budget for a person in an institutional setting if the person is:

(1) single;

(2) widowed;

(3) divorced; or

(4) married and meets the criteria in subsection (c) of this section, but the community spouse refuses to cooperate in providing information and circumstances indicate possible abuse or neglect by the community spouse.

(b) Couple budget. HHSC prepares a couple budget for a couple in an institutional setting if:

(1) the couple meets the definition of a couple in §358.431 of this division (relating to Definitions);

(2) each spouse is an applicant or a recipient; and

(3) both spouses are in the same coverage group.

(c) Institutional companion budget. HHSC prepares an institutional companion budget for a person in an institutional setting if:

(1) the person has a community spouse; and

(2) the couple meets the definition of a couple in §358.431 of this division, except the criterion that the couple live together does not apply.

§358.437.Institutional Eligibility Budgets.

(a) Scope. The Texas Health and Human Services Commission (HHSC) prepares an institutional eligibility budget to determine financial eligibility for a person or couple in an institutional setting, if the person or couple:

(1) applies for retroactive coverage; or

(2) applies for or has eligibility redetermined under a federally optional Medicaid-funded program for the elderly and people with disabilities as described in §358.107 of this chapter (relating to Coverage Groups).

(b) Individual budget. In preparing an eligibility budget for a person who meets the criteria in §358.433 of this division (relating to Special Income Limit) and §358.436(a) of this division (relating to Budget Types for an Institutional Setting), HHSC:

(1) counts the person's income in accordance with §1612 of the Social Security Act (42 U.S.C. §1382a);

(2) counts the person's resources in accordance with §1613 of the Social Security Act (42 U.S.C. §1382b);

(3) applies the individual resource limit in accordance with 20 CFR §416.1205; and

(4) applies the special income limit effective the month of eligibility determination.

(c) Couple budget. In preparing an eligibility budget for a couple who meets the criteria in §358.433 of this division and §358.436(b) of this division, HHSC:

(1) counts the income of both spouses in accordance with §1612 of the Social Security Act;

(2) counts the resources of both spouses in accordance with §1613 of the Social Security Act;

(3) applies the couple resource limit in accordance with 20 CFR §416.1205; and

(4) applies the special income limit, effective the month of eligibility determination.

(d) Institutional companion budget. In preparing an eligibility budget for a person who meets the criteria in §358.433 of this division and §358.436(c) of this division, HHSC:

(1) applies spousal impoverishment treatment of income and resources under 42 U.S.C. §1936r-5, counting income of both spouses in accordance with §1612 of the Social Security Act and resources of both spouses in accordance with §1613 of the Social Security Act;

(2) follows resource eligibility in accordance with 42 U.S.C. §1396r-5;

(3) bases income eligibility on the income of the person in the institutional setting; and

(4) applies the special income limit effective the month of determination.

(e) Less than 30 consecutive days. In preparing an eligibility budget for a person or couple in an institutional setting who does not meet the criteria in §358.433 of this division, HHSC applies the criteria in §358.435 of this division (relating to Noninstitutional Eligibility Budgets).

§358.438.Determination of Co-payment.

(a) After a person or couple in an institutional setting is determined eligible for a Medicaid-funded program for the elderly and people with disabilities, the Texas Health and Human Services Commission (HHSC) determines the person's or couple's co-payment in accordance with:

(1) Section 1902(a)(17) of the Social Security Act (42 U.S.C. §1396a(17)), relating to the general authority;

(2) Section 1902(a)(50) and (q) of the Social Security Act (42 U.S.C. §1396a(50) and (q)), relating to personal needs; and

(3) Section 1924 of the Social Security Act (42 U.S.C. §1396r-5), relating to institutionalized spouses with community spouses.

(b) To determine the co-payment for a person or couple in an institutional setting, HHSC follows 42 CFR §§435.725, 435.726, and 435.735, including the optional deduction for a home maintenance allowance for a person or couple described in 42 CFR §435.725(d).

(c) To determine the co-payment for a person or couple receiving services under the Program of All-Inclusive Care for the Elderly (PACE)in a PACE setting, HHSC follows §1934(i) of the Social Security Act (42 U.S.C. §1396u-4(i)).

(d) HHSC follows §1924(d) of the Social Security Act (42 U.S.C. §1396r-5(d)), concerning the protection of income for the community spouse, to determine the minimum monthly maintenance needs allowance, and to determine an institutionalized spouse's co-payment.

§358.439.Guardian Fee.

(a) The Texas Health and Human Services Commission (HHSC) may deduct a guardian fee, if any, in an amount set by the court, from a person's total countable income, in determining the person's co-payment.

(b) HHSC deducts the guardian fee from total countable income after deducting the personal needs allowance, but before deducting any other allowances.

§358.440.Dependent Allowance.

(a) In determining a person's co-payment, the Texas Health and Human Services Commission (HHSC) may deduct a dependent allowance from a person's total countable income.

(1) For a person with at least one dependent relative at home, HHSC allows the individual Social Security Income (SSI) benefit rate for each dependent relative and deducts the individual SSI benefit rate from the dependent relative's countable income.

(2) For a person with a spouse and a least one dependent relative at home, when spousal impoverishment provisions apply, HHSC determines the dependent allowance in accordance with 42 U.S.C. §1396r-5.

(b) The amount of the dependent allowance may be appealed based on undue hardship caused by financial duress as determined by HHSC, in accordance with HHSC's fair hearing rules in Chapter 357 of this title (relating to Hearings).

§358.441.Payroll Deductions.

(a) In determining a person's co-payment, the Texas Health and Human Services Commission (HHSC) calculates earned income each month by subtracting the following mandatory payroll deductions:

(1) income tax;

(2) social security tax;

(3) required retirement withholding; and

(4) required uniform expenses.

(b) After a person or couple in an institutional setting is determined eligible, HHSC applies the payroll deductions described in subsection (a) of this section to:

(1) an applicant or recipient;

(2) an applicant's or recipient's spouse; and

(3) a dependent relative of either spouse.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901774

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

SUBCHAPTER D. APPLICATION AND ELIGIBILITY DETERMINATION

1 TAC §§358.501, 358.505, 358.510, 358.515, 358.520, 358.525, 358.530, 358.535, 358.540, 358.545

Statutory Authority

The new sections affect Texas Government Code, Chapter 531. No other statutes, articles, or codes are affected by this proposal.

§358.501.Purpose and Scope.

(a) This subchapter establishes the application and eligibility determination processes for a person seeking health care benefits from a Medicaid-funded program for the elderly and people with disabilities (MEPD).

(b) This subchapter applies to both initial applications for assistance and eligibility redeterminations for MEPD, unless the context clearly indicates otherwise.

§358.505.Application Process Overview.

(a) The Texas Health and Human Services Commission (HHSC) gives anyone the opportunity to apply for a Medicaid-funded program for the elderly and people with disabilities (MEPD), in accordance with 42 CFR §435.906. A person can apply for MEPD by submitting:

(1) an application for assistance to HHSC; or

(2) an application for Supplemental Security Income (SSI) to the Social Security Administration.

(b) Under the application submittal process described in subsection (a)(1) of this section, a person must follow the requirements in §358.515 of this subchapter (relating to Application Requirements) to obtain an eligibility determination from HHSC.

(c) In accordance with 42 CFR §435.120 and §435.909(b)(1), an application for SSI as described in subsection (a)(2) of this section serves as an application for MEPD. A person receiving or deemed to be receiving SSI derives eligibility for MEPD from the person's SSI eligibility and does not require an eligibility determination from HHSC.

§358.510.Authorized Representative.

In accordance with 42 CFR §435.908, an authorized representative may accompany, assist, and represent an applicant or recipient in the application or eligibility redetermination process.

§358.515.Application Requirements.

(a) To apply for a Medicaid-funded program for the elderly and people with disabilities (MEPD) under the application submittal process described in §358.505(a)(1) and (b) of this subchapter (relating to Application Process Overview), and in accordance with 42 CFR §435.907, an applicant, authorized representative, or someone acting responsibly for the applicant (if the applicant is incompetent or incapacitated) must:

(1) use the application prescribed by the Texas Health and Human Services Commission (HHSC) and complete it according to HHSC instructions:

(A) in writing, using a paper application obtained via telephone, Internet request, or other means;

(B) online, using the application process available over the Internet;

(D) in person, by visiting an HHSC benefits office;

(2) provide all requested information according to HHSC instructions; and

(3) sign the application for assistance under penalty of perjury.

(b) If someone helps an applicant or authorized representative complete the application for assistance, the name of the person completing the form must appear as requested on the application.

(c) If HHSC sends an applicant or authorized representative a request for missing information or verification documents, or both, the applicant or authorized representative must provide the requested information to HHSC by the due date given in the request, or eligibility may be denied.

§358.520.Date of Application.

(a) The date of application is the date on which:

(1) the Texas Health and Human Services Commission receives an application for assistance in accordance with subsection (c) of this section; or

(2) an application for Supplemental Security Income is filed with the Social Security Administration.

(b) If an application for assistance is received after the close of business, the date of application is the next working day.

(c) For purposes of determining the date of application for an application for assistance received under subsection (a)(1) of this section:

(1) an application received via fax or mail must contain, at a minimum, the applicant's name, address, and valid signature; and

(2) an application received via telephone or the Internet:

(A) must contain, at a minimum, the applicant's name and address; and

(B) the applicant must provide a valid signature within 45 days after the date of application.

§358.525.Previously Completed Application for Assistance.

An application for assistance remains valid for 90 days after a date of denial, if the Texas Health and Human Services Commission denies eligibility. An applicant may use his or her previously completed application to reapply during the 90-day period, in accordance with HHSC instructions.

§358.530.Eligibility Determination.

(a) Time frame for determination. After an applicant or authorized representative provides all information and verification documents requested, the Texas Health and Human Services Commission (HHSC) makes an eligibility determination within the following time frames, in accordance with 42 CFR §435.911:

(1) by the 90th day after the date of application if the applicant is applying on the basis of a disability;

(2) by the 45th day after the date of application for all other applicants; or

(3) beyond the time frames established in paragraphs (1) and (2) of this subsection under unusual circumstances, such as those set forth in 42 CFR §435.911.

(b) Basis for determination. HHSC decides whether an applicant meets the eligibility criteria for a Medicaid-funded program for the elderly and people with disabilities based on:

(1) a complete, signed, and dated application for assistance;

(2) information obtained from an interview, if an interview occurred; and

(3) required verification documents.

§358.535.Notice of Eligibility Determination.

(a) After making an initial eligibility determination, the Texas Health and Human Services Commission (HHSC) sends the applicant, in accordance with 42 CFR §435.912:

(1) a written notice of eligibility, including notice of any co-payment the person must pay and the medical effective date described in §358.540 of this subchapter (relating to Medical Effective Date); or

(2) a written notice of ineligibility, explaining the reason for the decision and the specific provision supporting the decision.

(b) After making an eligibility redetermination, HHSC sends the recipient a written notice of any change in eligibility or co-payment.

(c) The written notice informs the applicant or recipient of the right to request a hearing to appeal the eligibility determination. The hearing is held in accordance with 42 CFR Part 431, Subpart E and HHSC's fair hearing rules in Chapter 357 of this title (relating to Hearings).

§358.540.Medical Effective Date.

(a) If a person is eligible for a Medicaid-funded program for the elderly and people with disabilities (MEPD), the Texas Health and Human Services Commission (HHSC) includes in the notice of eligibility the date that the person's Medicaid benefits will begin, which is known as the medical effective date.

(b) HHSC determines the medical effective date:

(1) in accordance with 42 CFR §435.914, as the first day of the month in which a person meets all eligibility criteria, which may be up to three months before the date of application if:

(A) during the three months before the month of application, the person received MEPD services covered under the Texas State Plan for Medical Assistance; and

(B) would have been eligible for MEPD at the time the services were received if the person had applied (or someone had applied on behalf of the person), regardless of whether the person is alive when application for MEPD is made; or

(2) as approved by the Centers for Medicare and Medicaid Services for a §1915(c) waiver program.

§358.545.Eligibility Redetermination.

(a) In accordance with 42 CFR §435.916, the Texas Health and Human Services Commission (HHSC) redetermines a person's eligibility for a Medicaid-funded program for the elderly and people with disabilities (MEPD):

(1) at least every 12 months;

(2) after HHSC receives information about a change in the person's circumstances, such as living arrangement, income, or resources, that may affect MEPD eligibility; and

(3) at the appropriate time based on an anticipated change in the person's circumstances.

(b) If the result of an eligibility redetermination causes an adverse action, HHSC:

(1) gives timely and adequate notice of the proposed action to terminate, discontinue, or suspend MEPD eligibility;

(2) gives timely and adequate notice to reduce or discontinue MEPD services; and

(3) informs the person of the right to request a hearing to appeal the adverse action in accordance with 42 CFR Part 431, Subpart E and HHSC's fair hearing rules in Chapter 357 of this title (relating to 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 May 11, 2009.

TRD-200901775

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

SUBCHAPTER E. RIGHTS AND RESPONSIBILITIES OF APPLICANTS AND RECIPIENTS

1 TAC §§358.601 - 358.605

Statutory Authority

The new sections affect Texas Government Code, Chapter 531. No other statutes, articles, or codes are affected by this proposal.

§358.601.Rights.

An applicant or recipient has the right to:

(1) be treated fairly and equally regardless of race, color, religion, national origin, gender, political beliefs, or disability;

(2) have information collected for determining his or her eligibility to be treated as confidential;

(3) request a review of an action;

(4) have his or her eligibility tested for other programs before HHSC denies eligibility;

(5) review all information that contributed to an eligibility decision; and

(6) request a fair hearing to appeal an action by HHSC.

§358.602.Disclosure of Official Records and Information.

The Texas Health and Human Services Commission follows 20 CFR §§401 - 403 concerning disclosure of information about a person, both with and without the person's consent; the maintenance of records; and the general guidelines in deciding whether to make a disclosure.

§358.603.Release of Medical Information.

A person requesting assistance on the basis of disability must complete a medical information release form.

§358.604.Responsibility To Provide Information and Report Changes.

(a) An applicant or recipient must provide the Texas Health and Human Services Commission (HHSC) the necessary documentation and information to determine eligibility for Medicaid.

(b) An applicant or recipient must report to HHSC certain events that affect benefits in accordance with 20 CFR Subpart G.

§358.605.Fraud Referral and Restitution.

(a) The Texas Health and Human Services Commission (HHSC) follows 42 CFR §§455.13 - 455.16 for issues governing fraud referral and restitution.

(b) HHSC evaluates a person's willful withholding of information for fraud, including:

(1) willful misstatements, oral or written, made by the person or the person's authorized representative in response to oral or written questions from HHSC concerning the person's income, resources, or other circumstances that may affect the amounts of benefits, including understatements or omission of information about income and resources; and

(2) willful failure by the person or the person's authorized representative to report changes in income, resources, or other circumstances that may affect the amount of benefits, if HHSC has clearly notified the person or the person's authorized representative of the person's obligation to report these changes.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901776

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

CHAPTER 359. MEDICARE SAVINGS PROGRAM

1 TAC §§359.101, 359.103, 359.105, 359.107, 359.109

The Health and Human Services Commission (HHSC) proposes new Chapter 359, governing the Medicare Savings Program (MSP), consisting of §§359.101, 359.103, 359.105, 359.107, and 359.109. The proposed new rules concern the legal basis and eligibility requirements for the coverage available under MSP, which uses Medicaid funds to help eligible persons pay for all or some of their out-of-pocket Medicare expenses, such as premiums, deductibles, or coinsurance.

Background and Justification

HHSC administers MSP in accordance with 42 United States Code (U.S.C.) §1396a(a)(10)(E). The administrative rules governing MSP are currently found in 1 TAC Chapter 358, Subchapter B, which HHSC is proposing for repeal elsewhere in this issue of the Texas Register. HHSC proposes placement of the MSP rules in their own chapter to give the program greater visibility and to provide the public with easier access to the rules.

HHSC is proposing no substantive changes to the rules governing MSP. The proposal primarily renumbers the existing rules, makes corresponding adjustments to the rule text as appropriate, and provides cites to the federal regulations.

Section-by-Section Summary

Proposed new §359.101 describes the legal basis and purpose of MSP. Section §359.101 also lists the current components of MSP, which are: (1) the Qualified Medicare Beneficiary Program (QMB), (2) the Specified Low-Income Medicare Beneficiary Program (SLMB), (3) the Qualifying Individual Program (QI), and (4) the Qualified Disabled and Working Individual Program (QDWI).

Proposed new §359.103 describes the scope, eligibility criteria, and eligibility effective date for QMB, which pays Medicare premiums, deductibles, and coinsurance for an eligible person.

Proposed new §359.105 describes the scope, eligibility criteria, and eligibility effective date for SLMB, which pays Medicare Part B premiums for an eligible person who has an income that is greater than 100% but less than 120% of the federal poverty level.

Proposed new §359.107 describes the scope, eligibility criteria, and eligibility effective date for QI, which pays Medicare Part B premiums for an eligible person who has an income that is at least 120% but less than 135% of the federal poverty level.

Proposed new §359.109 describes the scope, eligibility criteria, and eligibility effective date for QDWI, which pays Medicare Part A premiums for an eligible person who has a monthly income equal to or less than 200% of the federal poverty level.

Fiscal Note

Thomas M. Suehs, Deputy Executive Commissioner for Financial Services, has determined that, for the first five years the proposed new sections are in effect, enforcing or administering the new sections does not have foreseeable implications relating to costs or revenues of state or local governments.

Small Business and Micro-business Impact Analysis

Mr. Suehs has determined that there will be no effect on small businesses or micro-businesses to comply with the proposal, because the proposed rules will not require them to alter their business practices. There are no anticipated economic costs to persons who are required to comply with the proposed rules. There is no anticipated negative impact on local employment.

Public Benefit and Costs

Regulatory Analysis

Takings Impact Assessment

Public Comment

Public Hearing

Statutory Authority

The new sections affect Texas Government Code, Chapter 531. No other statutes, articles, or codes are affected by this proposal.

§359.101.Purpose and Scope.

(a) This chapter describes the assistance available and eligibility requirements for the Medicare Savings Program. Authorized under 42 U.S.C. §1396a(a)(10)(E), the Medicare Savings Program uses Medicaid funds to help eligible persons pay for all or some of their out-of-pocket Medicare expenses, such as premiums, deductibles, or coinsurance.

(b) The Texas Health and Human Services Commission (HHSC) manages the Medicare Savings Program, which consists of the following:

(1) the Qualified Medicare Beneficiary (QMB) Program;

(2) the Specified Low-Income Medicare Beneficiary (SLMB) Program;

(3) the Qualified Individual (QI) Program; and

(4) the Qualified Disabled and Working Individual (QDWI) Program.

(c) Nothing in these rules shall be construed to violate the maintenance of eligibility requirements of section 5001 of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5) and make eligibility standards, methodologies, or procedures under the Texas State Plan for Medical Assistance (or any waiver under section 1115 of the Social Security Act (42 U.S.C. §1315)) more restrictive than the eligibility standards, methodologies, or procedures, respectively, under such plan (or waiver) that were in effect on July 1, 2008.

§359.103.Qualified Medicare Beneficiary Program.

(a) Authorized under 42 U.S.C. §1396a(a)(10)(E)(i), the Qualified Medicare Beneficiary (QMB) Program pays Medicare premiums, deductibles, and coinsurance for a person who meets the requirements of this section. A person receiving Medicaid may also receive QMB benefits if the person meets the requirements of this section.

(b) To be eligible for QMB coverage, a person must:

(1) be entitled to benefits under Medicare Part A; and

(2) meet income and resources requirements in 42 U.S.C. §1396d(p).

(1) is in the custody of penal authorities as defined in 42 C.F.R. §411.4(b); or

(2) is over 20 years of age and under 65 years of age and resides in an institution for mental diseases.

(d) A person's QMB eligibility begins on the first day of the month after the month the person is certified for QMB benefits.

(e) A person with QMB coverage is not eligible for three months prior medical coverage.

§359.105.Specified Low-Income Medicare Beneficiary Program.

(a) Authorized under 42 U.S.C. §1396a(a)(10)(E)(iii), the Specified Low-Income Medicare Beneficiary (SLMB) Program pays only Medicare Part B premiums for a person who meets the requirements of this section. A person receiving Medicaid may also receive SLMB benefits if the person meets the requirements of this section.

(b) To be eligible for SLMB coverage, a person must meet the eligibility criteria for QMB coverage in §359.103(b) of this chapter (relating to Qualified Medicare Beneficiary Program), except the person must have an income that is greater than 100% but less than 120% of the federal poverty level.

(1) is in the custody of penal authorities as defined in 42 C.F.R. §411.4(b); or

(2) is over 20 years of age and under 65 years of age and resides in an institution for mental diseases.

(d) A person's SLMB eligibility may begin with the month of application.

(e) A person with SLMB coverage is eligible for three months prior medical coverage, if all criteria are met.

§359.107.Qualifying Individual Program.

(a) Authorized under 42 U.S.C. §1396a(a)(10)(E)(iv) the Qualifying Individual (QI) Program pays only Medicare Part B premiums to a person who meets the requirements of this section. A person cannot be eligible for regular Medicaid and QI coverage at the same time.

(b) To be eligible for QI coverage, a person must meet the eligibility criteria for Qualified Medicare Beneficiary coverage in §359.103(b) of this chapter (relating to Qualified Medicare Beneficiary Program), except the person must have income that is at least 120% but less than 135% of the federal poverty level.

(d) A person's QI eligibility may begin with the month of application.

(e) A person with QI coverage is eligible for three months prior medical coverage if all criteria are met. The three-month prior period cannot extend back into the previous calendar year.

§359.109.Qualified Disabled and Working Individual Program.

(a) Authorized under 42 U.S.C. §1396a(a)(10)(E)(ii), the Qualified Disabled and Working Individual (QDWI) Program pays only Medicare Part A premiums for a person who meets the requirements of this section. A person cannot be eligible for regular Medicaid and QDWI coverage at the same time.

(b) To be eligible for QDWI coverage, a person must:

(1) be under 65 years of age;

(2) be entitled to benefits under Medicare Part A;

(3) not otherwise be eligible for Medicaid;

(4) have a monthly income equal to or less than 200% of the federal poverty level; and

(5) have no more than twice the countable resources allowed under the Supplemental Security Income (SSI) program, as described in §1611 of the Social Security Act (42 U.S.C. §1382).

(c) A person's QDWI eligibility begins in accordance with the coverage period described in §1818A of the Social Security Act (42 U.S.C. §1395i-2a(c)).

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901777

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

CHAPTER 360. MEDICAID BUY-IN PROGRAM

1 TAC §§360.101, 360.103, 360.105, 360.107, 360.109, 360.111, 360.113, 360.115, 360.117, 360.119

The Health and Human Services Commission (HHSC) proposes new Chapter 360, governing the Medicaid Buy-In Program (MBI), consisting of §§360.101, 360.103, 360.105, 360.107, 360.109, 360.111, 360.113, 360.115, 360.117, and 360.119. The proposed new rules concern the application process, eligibility requirements, and medical effective date for MBI, which provides Medicaid benefits to working persons with disabilities, regardless of age, who apply for Medicaid and meet the MBI eligibility criteria.

Background and Justification

HHSC administers MBI under §531.02444 of the Texas Government Code and provides Medicaid benefits under the option explained in §1902(a)(10)(A)(ii)(XIII) of the Social Security Act. The administrative rules governing MBI are currently found in 1 TAC Chapter 358, Subchapter I, which HHSC is proposing for repeal elsewhere in this issue of the Texas Register. HHSC proposes placement of the MBI rules in their own chapter to give the program greater visibility and to provide the public with easier access to the rules.

With the exception of proposed new §360.109, concerning work requirements, and proposed new §360.117, concerning cost sharing, HHSC is proposing no substantive changes to the rules governing MBI. The proposal primarily renumbers the existing rules and makes corresponding adjustments to the rule text as appropriate.

Section-by-Section Summary

Proposed new §360.101 explains the purpose of MBI and gives the legal basis for the program. in state and federal law.

Proposed new §360.103 establishes the application process and requirements for MBI, including the requirement that an applicant or recipient provide HHSC with all requested documentation and information that HHSC advises is necessary to determine or redetermine an applicant's or recipient's eligibility.

Proposed new §§360.105, 360.107, 360.111, and 360.113 require that, for a person to be eligible for MBI, the person must meet the criteria for citizenship, immigration status, and residency; disability; income; and resources as indicated in the proposed rules.

Proposed new §360.109 requires an MBI recipient to work and have earnings. Specific requirements in the existing rule for a recipient to earn income are replaced in the proposed rule with a requirement that the recipient must prove that he or she is working and earning income.

Proposed new §360.115 establishes the deeming requirements for income and resources for purposes of MBI eligibility.

Proposed new §360.117 requires an MBI recipient to pay monthly premiums based on the recipient's countable earned and countable unearned income. The proposal specifies the current amounts for monthly earned income premiums and the upper premium limit for the MBI program. Monthly earned income premiums range from $20 to $40 for individuals with earned income above 150 percent of the federal poverty level. The upper limit for total monthly premiums (earned income premiums plus unearned income premiums) is $500. These changes will help clarify the monthly premium amounts for the MBI program.

Proposed new §360.119 establishes the effective date on which an MBI recipient's coverage begins.

Fiscal Note

Thomas M. Suehs, Deputy Executive Commissioner for Financial Services, has determined that, for the first five years the proposed new sections are in effect, there will be no fiscal impact to state government. The proposed rules will not result in any fiscal implications for local health and human services agencies. Local governments will not incur additional costs.

Small Business and Micro-business Impact Analysis

Mr. Suehs has determined that there will be no effect on small businesses or micro-businesses to comply with the proposal, because they will not be required to alter their business practices as a result of the rule. There are no anticipated economic costs to persons who are required to comply with the proposed rules. There is no anticipated negative impact on local employment.

Public Benefit and Costs

Joanne Molina, Deputy Executive Commissioner for Social Services, has determined that, for each year of the first five years the new sections are in effect, the anticipated public benefit expected as a result of enforcing the new sections is that having MBI rules in their own chapter will lead to greater awareness of the program and the benefits it provides for working people with disabilities. The new sections will also help clarify the monthly premium amounts for the MBI program.

Regulatory Analysis

Takings Impact Assessment

Public Comment

Public Hearing

Statutory Authority

The new sections are proposed under Texas Government Code, §531.0055, which provides the Executive Commissioner of HHSC with rulemaking authority; §531.021, which authorizes HHSC to administer the federal medical assistance (Medicaid) program in Texas; and §531.02444, which authorizes HHSC to administer a Medicaid Buy-In Program and to adopt rules to govern it.

The new sections affect Texas Government Code, Chapter 531. No other statutes, articles, or codes are affected by this proposal.

§360.101.Overview and Purpose.

(a) This chapter governs the eligibility requirements for the Medicaid Buy-In Program (MBI), which is authorized under §531.02444 of the Texas Government Code, and which provides Medicaid benefits under the option explained in §1902(a)(10)(A)(ii)(XIII) of the Social Security Act (42 U.S.C. §1396a(a)(10)(A)(ii)(XIII)). All references in this chapter to MBI mean the Medicaid Buy-In Program.

(b) MBI is administered by the Texas Health and Human Services Commission (HHSC). All references in this chapter to HHSC mean the Texas Health and Human Services Commission.

(c) MBI provides Medicaid benefits to working persons with disabilities, regardless of age, who apply for Medicaid and meet the requirements explained in this chapter.

§360.103.Applying and Providing Information.

(a) A person applies for MBI by completing an application for MBI and submitting it to HHSC. The date of receipt of the signed application by HHSC is the application filing date, and thus establishes the application month explained in §360.119 of this chapter (relating to Medical Effective Date).

(b) HHSC notifies an MBI recipient in writing when it is time to redetermine the recipient's eligibility. This usually occurs once per year, although HHSC may require a person to reapply sooner if HHSC determines that a special review of the person's eligibility is appropriate. An MBI recipient must reapply when HHSC sends written notice of the requirement to the recipient's case address of record. The written notice explains the deadline to reapply. If an MBI recipient fails to reapply by the deadline stated in the written notice, HHSC may terminate the recipient's MBI eligibility.

(c) HHSC sends in writing to the person's case address of record the eligibility decision on an application, reapplication, or reported change. If the person disagrees, the person has the right to request a fair hearing to appeal HHSC's decision, as explained in HHSC's fair hearing rules in Chapter 357 of this title (relating to Hearings).

(d) An applicant for MBI must provide HHSC with all requested documentation and information that HHSC advises is necessary to determine the applicant's eligibility. If the applicant fails or refuses to provide requested information by the date specified in a written request from HHSC, HHSC may deny the application for failure to furnish information. When this occurs but the person later provides the requested information, the date that the requested information is provided to HHSC becomes the application filing date explained in subsection (a) of this section.

(e) A person who applies for or is receiving MBI must report to HHSC within 10 calendar days any information that may impact the person's eligibility. If a person fails to comply with the requirements of this subsection, HHSC may redetermine the person's eligibility as of the date the information should have been reported to HHSC.

§360.105.Citizenship, Immigration Status, and Residency.

To be eligible for MBI, a person must meet the citizenship, immigration status, and residency requirements in Chapter 358, Subchapter B, of this title (relating to Nonfinancial Requirements).

§360.107.Disability.

To be eligible for MBI, a person must be disabled as defined by the Social Security Administration for purposes of the federal Supplemental Security Income program, as explained in 20 CFR §416.905 and §416.906, except the requirement that the person be unable to engage in any substantial gainful activity does not apply.

§360.109.Work.

To be eligible for MBI, a person must be working and earning income. The person must provide evidence of earnings that is satisfactory to HHSC.

§360.111.Income.

(a) Earned income.

(1) To be eligible for MBI, a person's monthly countable earned income must be less than 250% of the federal poverty level.

(2) Countable earned income means earned income for purposes of the Supplemental Security Income (SSI) program minus all applicable exclusions and exemptions, as explained in 20 CFR §§416.1110 - 416.1112.

(b) Unearned income is entirely excluded under this section, but is considered in the determination of a person's monthly premium amount, as explained in §360.117 of this chapter (relating to Cost Sharing).

§360.113.Resources.

(a) To establish and maintain eligibility for MBI, a person's countable resources must be equal to or less than $3,000 plus the amount of the Supplemental Security Income (SSI) resource limit for an individual that is explained in 20 CFR §416.1205. Countable resources means resources for SSI purposes as defined in 20 CFR §416.1205, minus all applicable exemptions and exclusions explained in 20 CFR §§416.1207 - 416.1239.

(b) In addition to the exemptions and exclusions explained in subsection (a) of this section, the following are not countable resources under this section:

(1) Independence accounts.

(A) An independence account (IA) is a segregated account in a financial institution, the purpose of which is to save for future health care and work-related expenses to increase an individual's independence and employment potential.

(B) Only a person's own earned income may be deposited into an IA, and amounts deposited cannot exceed 50% of the person's gross earnings. If for any SSA Qualifying Quarter a person deposits more than 50% of the person's gross earnings into an account that is designated as an IA, the account loses its IA designation and the funds in the account become a countable resource for the 12-month period beginning with the first month after the SSA Qualifying Quarter. An SSA Qualifying Quarter is a three-month period that ends on March 31, June 30, September 30, and December 31 of each calendar year and during which a person's reported earnings and FICA contributions are enough for SSA to give the person Social Security wage credits.

(C) Only health care or work-related expenses may be paid from an IA. For any SSA Qualifying Quarter, if funds in an IA account are used for any other purpose, the account loses its IA designation and the funds in the account become a countable resource for the 12-month period beginning with the first month after the SSA Qualifying Quarter.

(2) Retirement related tax-sheltered accounts. Retirement related tax-sheltered accounts include IRAs, 401(k)s, TSAs, and KEOUGHs that comply with IRS regulations.

§360.115.Deeming of Income and Resources.

(a) For purposes of MBI eligibility, each person is considered a household of one.

(b) If a person lives with a spouse, the person and spouse are each considered a household of one. The assets of each spouse are considered only with respect to that spouse. In the case of assets owned jointly by both spouses, one half is considered with respect to each spouse.

(c) If a person is a minor and lives with his or her parents, the assets of the parents are not considered with respect to the eligibility of the minor.

§360.117.Cost Sharing.

(a) Monthly premiums. As a condition of establishing initial MBI eligibility and to remain eligible, a person must pay monthly premiums, as explained in this section, based on the amount of the person's countable earned and countable unearned income.

(b) Countable earned income. For purposes of this section, countable earned income is as defined in 20 CFR §416.1110 and §416.1111, minus:

(1) earned income that is excluded by federal law, as explained in 20 CFR §416.1112(b); and

(2) mandatory payroll deductions for federal income tax, FICA, and retirement withholding.

(c) Countable unearned income. For purposes of this section, countable unearned income means unearned income, as defined in 20 CFR §§416.1120 - 416.1123, minus the exclusions and exemptions explained in 20 CFR §416.1124.

(d) Calculation of monthly premium. The monthly premium amount equals the amount of a person's countable unearned income for the month that exceeds the Supplemental Security Income (SSI) federal benefit rate for an individual, plus:

(1) $20 when monthly countable earned income is above 150% of the federal poverty level (FPL) up to and including 185% of the FPL;

(2) $25 when monthly countable earned income is above 185% of the FPL up to and including 200% of the FPL;

(3) $30 when monthly countable earned income is above 200% of the FPL up to and including 250% of the FPL; or

(4) $40 when monthly countable earned income is above 250% of the FPL.

(e) Upper limit on monthly premiums. The upper limit for the total monthly premium per person is $500. If the unearned income premium amount plus the earned income premium amount equals or exceeds $500, then the total monthly premium remains at $500.

(f) Payment of monthly premiums to establish initial eligibility. If the calculation explained in subsection (d) of this section results in an amount greater than $0, HHSC sends the person a written notice of the person's potential eligibility as described in this subsection. The initial eligibility period begins with the earliest benefit month and continues through the end of the latest benefit month identified on the written notice of the person's potential eligibility. This subsection explains the procedures that are followed and the requirements the person must meet to establish eligibility under this section for any or all of the months within the initial eligibility period. The steps are as follows:

(1) HHSC determines that the person is potentially eligible if the person meets all eligibility requirements for MBI other than the requirements of this section.

(2) HHSC sends the person a written notice (the notice) of the person's potential eligibility. The notice identifies the earliest month of potential eligibility and the amount of the monthly premiums due for each month in the initial eligibility period.

(3) The notice also includes:

(A) the total amount in monthly premiums that must be paid to obtain MBI coverage for the entire initial eligibility period; and

(B) the deadline by which payment must be submitted.

(4) The person chooses whether to pay the monthly premiums for either the entire initial eligibility period or for only a portion of the initial eligibility period (according to the months during which the person desires MBI coverage).

(5) The person submits to HHSC, by the deadline stated in the notice, either the total amount due as explained in the notice or a lesser amount if the person is not seeking coverage for the entire initial eligibility period.

(6) If the person submits payment of less than the total amount due to obtain MBI coverage for the entire initial eligibility period, HHSC applies the amount submitted first to satisfy the monthly premium for the month following the month of the notice, then to each prior month of potential eligibility, in reverse chronological order. After this, if any amount remaining is less than the premium for a full month's coverage, HHSC refunds that amount to the person.

(7) HHSC notifies the person of MBI eligibility and of the beginning date of MBI coverage, based on the amount submitted by the person under paragraph (5) of this subsection.

(8) If no amount is submitted by the deadline stated in the notice, or if the amount submitted is less than one month's premium such that it is refunded to the person as explained in paragraph (6) of this subsection, HHSC denies the person MBI eligibility. A person denied under this paragraph must file a new application for MBI before eligibility can be established.

(g) Payment of monthly premiums after initial eligibility. Monthly premiums after a person establishes initial eligibility under subsection (f) of this section are due and payable to HHSC no later than the last calendar day of each month, and are applied to the following month's eligibility and coverage of MBI benefits. If a monthly premium payment that is due is not received by HHSC by the end of the month, after written notice, HHSC may terminate the person's MBI eligibility.

§360.119.Medical Effective Date.

Beginning with the three months before the application month, the eligibility effective date for MBI coverage is the first day of the first month in which a person meets all eligibility criteria, including the timely payment of monthly premiums as explained in §360.117 of this chapter (relating to Cost Sharing).

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901778

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

CHAPTER 372. TEXAS WORKS

The Health and Human Services Commission (HHSC) proposes the repeal of Chapter 372, Texas Works, consisting of Subchapter A, §§372.1 - 372.6, concerning overview and purpose; Subchapter B, Eligibility, consisting of Division 1, §§372.101 - 372.107, concerning TANF certified groups; Division 2, §§372.151 - 372.153, concerning food stamp households; Division 3, §§372.201 - 372.205, concerning citizenship; Division 4, §372.251 and §372.252, concerning residency; Division 5, §372.301, concerning domicile; Division 6, §§372.351 - 372.358, concerning resources; Division 7, §§372.401 - 372.410, concerning income; Division 8, §§372.451 - 372.459, concerning time limits; and Division 9, §372.501, concerning criminal activity; Subchapter C, Associated Programs, consisting of Division 1, §372.601, concerning food stamps in disaster situations; Division 2, §§372.651 - 372.656, concerning the Simplified Nutritional Assistance Program; Division 3, §372.701 and §372.702, concerning the TANF Non-Cash Program; Division 4, §§372.751 - 372.754, concerning the TANF State Program; and Division 5, §372.801 and §372.802, concerning One-Time TANF (OTTANF); Subchapter D, Application Process, consisting of Division 1, §§372.901 - 372.906, concerning application; Division 2, §§372.951 - 372.958, concerning interview; and Division 3, §§372.1001 - 372.1003, concerning case disposition; Subchapter E, Participation Requirements, consisting of Division 1, §372.1101, concerning social security numbers; Division 2, §§372.1151 - 372.1156, concerning the TANF Personal Responsibility Agreement (PRA); Division 3, §§372.1201 - 372.1204, concerning finger imaging; Division 4, §§372.1251 - 372.1253, concerning TANF workforce orientation; Division 5, §§372.1301 - 372.1304, concerning third-party resources; Division 6, §§372.1351 - 372.1353, concerning work; and Division 7, §§372.1401 - 372.1404, concerning reporting changes; Subchapter F, Benefits, consisting of Division 1, §§372.1501 - 372.1529, concerning benefits in general; Division 2, §§372.1551 - 372.1554, concerning overpayments; and Division 3, §§372.1601 - 372.1603, concerning restoration; and Subchapter G, §§372.1701 - 372.1720, concerning retailer requirements.

HHSC concurrently proposes new Chapter 372, Temporary Assistance for Needy Families and Supplemental Nutrition Assistance Programs, consisting of Subchapter A, §§372.1 - 372.6, concerning overview and purpose; Subchapter B, Eligibility, consisting of Division 1, §§372.101 - 372.108, concerning Temporary Assistance for Needy Families (TANF) certified groups; Division 2, §§372.151 - 372.153, concerning Supplemental Nutrition Assistance Program (SNAP) households; Division 3, §§372.201 - 372.205, concerning citizenship; Division 4, §372.251 and §372.252, concerning residency; Division 5, §372.301, concerning domicile requirements for TANF; Division 6, §§372.351 - 372.356, concerning resources; Division 7, §§372.401 - 372.411, concerning income; Division 8, §§372.451 - 372.457, concerning time limits; and Division 9, §372.501, concerning disqualifications due to criminal activity; Subchapter C, Associated Programs, consisting of Division 1, §372.601, concerning SNAP benefits for disaster victims; Division 2, §§372.651 - 372.655, concerning SNAP-Combined Application Project (SNAP-CAP); Division 3, §372.701 and §372.702, concerning the TANF Non-Cash Program; Division 4, §§372.751 - 372.753, concerning the TANF State Program (TANF-SP); and Division 5, §372.801 and §372.802, concerning One-Time TANF (OTTANF); Subchapter D, Application Process, consisting of Division 1, §§372.901 - 372.906, concerning applications; Division 2, §§372.951 - 372.958, concerning interviews; and Division 3, §§372.1001 - 372.1003, concerning case disposition; Subchapter E, Participation Requirements, consisting of Division 1, §372.1101, concerning social security number requirements; Division 2, §§372.1151 - 372.1156, concerning the TANF Personal Responsibility Agreement (PRA); Division 3, §§372.1201 - 372.1204, concerning finger imaging; Division 4, §§372.1251 - 372.1253, concerning TANF workforce orientation; Division 5, §§372.1301 - 372.1303, concerning third-party resources; Division 6, §§372.1351 - 372.1353, concerning work; and Division 7, §§372.1401 - 372.1404, concerning reporting changes; Subchapter F, Benefits, consisting of Division 1, §§372.1501 - 372.1521, concerning benefits in general; Division 2, §372.1551 and §372.1552, concerning overpayments; and Division 3, §372.1601, concerning restoration of benefits; and Subchapter G, §§372.1701 - 372.1716, concerning retailer requirements.

Background and Justification

The existing rules in Chapter 372 provide eligibility criteria HHSC uses to determine a person eligible for assistance through SNAP (formerly the Food Stamp Program) and TANF, as well as requirements that govern client and retailer participation in the programs.

The purpose of the repeals is to allow for a complete rewrite of Chapter 372. The proposed new rules replace the rules proposed for repeal in Chapter 372. The new rules are proposed to update agency names and rule cross-references made obsolete during the consolidation of health and human services agencies in 2004; to eliminate the question-and-answer format; to incorporate necessary updates, including changing the name of the Food Stamp Program to SNAP to reflect the new name established by Congress; and where possible, to cite the appropriate federal law or regulation and explain that HHSC follows the federal law or regulation. Unless otherwise indicated in this proposal, the new rules do not impose any new requirements that are not already in policy and in use. The rules primarily clarify existing policies and incorporate changes resulting from the federal Food, Conservation, and Energy Act of 2008.

Texas Government Code, §2001.039, requires that each state agency review and consider for re-adoption each rule adopted by that agency pursuant to the Texas Government Code, Chapter 2001 (the Administrative Procedure Act). HHSC has reviewed all sections in Chapter 372 and has determined that the reasons for adopting rules governing TANF and SNAP continue to exist; however, the rules are in need of updating. As a result of this review, HHSC is proposing these repeals and new sections.

Section-by-Section Summary

New Subchapter A is entitled Overview and Purpose and contains §§372.1 - 372.6. These sections set out HHSC's rules concerning purpose and scope; definitions used in the chapter; and the legal basis, funding, and administration of TANF and SNAP.

New Subchapter B is entitled Eligibility and is further divided into nine divisions. Division 1 is entitled TANF Certified Groups and contains §§372.101 - 372.108. These sections set out HHSC's rules concerning the caretaker, composition of a certified group, required group members, and excluded group members.

Subchapter B, Division 2 is entitled SNAP Households and contains §§372.151 - 372.153. These sections set out HHSC's rules concerning the provision of SNAP benefits, required SNAP household members, and how HHSC determines a household's eligibility for SNAP benefits.

Subchapter B, Division 3 is entitled Citizenship and contains §§372.201 - 372.205. These sections set out HHSC's rules concerning TANF and SNAP citizenship requirements and HHSC's requirements for providing proof of citizenship.

Subchapter B, Division 4 is entitled Residency and contains §372.251 and §372.252. These sections set out HHSC's rules concerning residency requirements for TANF and SNAP.

Subchapter B, Division 5 is entitled Domicile and contains §372.301, which establishes who must live in the household to be included in a TANF case for benefits. Proposed new §372.301 adds a new provision that allows HHSC to make an exception to the domicile requirement, if HHSC determines that a person in the household is temporarily absent.

Subchapter B, Division 6 is entitled Resources and contains §§372.351 - 372.356. These sections set out HHSC's rules concerning the treatment of a household's resources for determining eligibility for TANF and SNAP, resource limits, and the consequences of transferring resources.

Subchapter B, Division 7 is entitled Income and contains §§372.401 - 372.411. These sections set out HHSC's rules concerning the treatment of a household's income for TANF and SNAP, income eligibility requirements, determining whose income counts, what income is countable what income is excluded, allowable deductions from countable income, and projecting future household income.

Subchapter B, Division 8 is entitled Time Limits and contains §§372.451 - 372.457. These sections set out HHSC's rules concerning the maximum amount of time a person is eligible to receive TANF and SNAP benefits and allowable exemptions to those time limits.

Subchapter B, Division 9 is entitled Criminal Activity and contains §372.501, which concerns the disqualification of a person from receiving TANF and SNAP benefits for certain criminal activities.

New Subchapter C is entitled Associated Programs and is further divided into five divisions. Division 1 is entitled SNAP Benefits for Disaster Victims and contains §372.601, which describes how HHSC administers SNAP benefits to people temporarily during and after a disaster.

Subchapter C, Division 2 is entitled SNAP-Combined Application Project (SNAP-CAP) and contains §§372.651 - 372.655. These sections set out HHSC's rules concerning SNAP-CAP, which provides SNAP benefits to recipients of Supplemental Security Income (SSI) under a simplified application and certification process. Proposed new §372.652 reflects the new minimum age requirement for SNAP-CAP, which was lowered from 65 to 50 years of age with the implementation of the federal Food, Conservation, and Energy Act of 2008 on October 1, 2008.

Subchapter C, Division 3 is entitled TANF Non-Cash Program and contains §372.701 and §372.702. These sections set out HHSC's rules concerning the TANF Non-Cash Program, which provides services but not cash assistance to eligible people.

Subchapter C, Division 4 is entitled TANF State Program (TANF-SP) and contains §§372.751 - 372.753. These sections set out HHSC's rules concerning TANF-SP, which is a state-created and state-funded program that is similar to TANF, except limited to certain Texas counties and two-parent households.

Subchapter C, Division 5 is entitled One-Time TANF (OTTANF) and contains §372.801 and §372.802. These sections set out HHSC's rules concerning OTTANF, which is an option within the TANF Program that provides an eligible person with a single lump-sum assistance payment, instead of monthly TANF benefits. Proposed new §372.802 clarifies that loss of employment does not include voluntary quit without good cause.

New Subchapter D is entitled Application Process and is further divided into three divisions. Division 1 is entitled Application and contains §§372.901 - 372.906. These sections set out HHSC's rules concerning the process and requirements for making application for benefits under TANF and SNAP, treatment of incomplete applications, setting the application file date, the application processing time frame, designation of an authorized representative, and choosing to apply for TANF.

Subchapter D, Division 2 is entitled Interview and contains §§372.951 - 372.958. These sections set out HHSC's rules concerning interview requirements for TANF and SNAP applicants and recipients, the expedited SNAP application process, periodic eligibility reviews, and renewal notifications. Proposed new §372.951 incorporates a new HHSC policy, allowed by the U.S. Department of Agriculture, Food and Nutrition Service (FNS), to conduct telephone interviews of SNAP applicants at initial application, if HHSC chooses to do so. Proposed new §372.957 establishes an eligibility period of 36 months for a categorically eligible SNAP household in which all members receive SSI, as approved by FNS.

Subchapter D, Division 3 is entitled Case Disposition and contains §§372.1001 - 372.1003. These sections set out HHSC's rules concerning HHSC's notification of its eligibility decision, a person's right to appeal HHSC's decision, and reopening a denied application.

New Subchapter E is entitled Participation Requirements and is further divided into seven divisions. Division 1 is entitled Social Security Numbers and contains §372.1101, which sets out HHSC's rule governing requirements for TANF and SNAP household members to provide their Social Security numbers.

Subchapter E, Division 2 is entitled The TANF Personal Responsibility Agreement (PRA) and contains §§372.1151 - 372.1156. These sections set out HHSC's rules governing the PRA, which is a written agreement that defines the responsibilities of TANF recipients and is a condition of participation in the TANF program. The sections concern the purpose and scope of the PRA, the consequences of not signing a PRA, the PRA requirements, how a person cooperates with PRA requirements, the consequences of noncooperation with PRA requirements, and good cause for noncooperation with PRA requirements. Proposed new §372.1156 adds good cause for noncooperation with school attendance requirements of the PRA.

Subchapter E, Division 3 is entitled Finger Imaging and contains §§372.1201 - 372.1204. These sections set out HHSC's rules concerning the legal basis and purpose for taking a person's fingerprints, which allows HHSC to verify a person's identity to help prevent fraud; compliance with the finger-imaging requirement; exemptions from finger imaging; and the consequences of noncompliance with the finger-imaging requirement. Proposed new §372.1203 clarifies the reasons a person may be exempt from the finger-imaging requirement if the person is temporarily unable to travel to the finger-imaging site.

Subchapter E, Division 4 is entitled TANF Workforce Orientation and contains §§372.1251 - 372.1253. These sections set out HHSC's rules concerning requirements for a person to attend a workforce orientation as a condition of TANF eligibility, exemptions allowed for not attending a workforce orientation, and the consequence for noncompliance with the workforce orientation requirement.

Subchapter E, Division 5 is entitled Third-party Resources and contains §§372.1301 - 372.1303. These sections set out HHSC's rules concerning the requirement that a TANF recipient who receives Medicaid must cooperate in identifying and pursuing any third party that may be liable for medical expenses and reimburse the State for medical expenses paid by Medicaid that should have been paid by a third-party resource.

Subchapter E, Division 6 is entitled Work and contains §§372.1351 - 372.1353. These sections set out HHSC's rules concerning work requirements for SNAP and the consequences for a TANF parent who participates in a strike.

Subchapter E, Division 7 is entitled Reporting Changes and contains §§372.1401 - 372.1404. These sections set out HHSC's rules concerning which changes TANF and SNAP households must report to HHSC and the time frames for reporting those changes.

New Subchapter F is entitled Benefits and is further divided into three divisions. Division 1 is entitled Benefits in General and contains §§372.1501 - 372.1521. These sections set out the definitions used in the subchapter and rules concerning maximum and minimum benefit amounts; how HHSC determines monthly benefits; benefit time frames; appropriate use of benefits; issuance of access to benefits, including use of the electronic benefits transfer (EBT) card; cash back; transaction charges; using benefits after moving from Texas; lost or stolen EBT cards and benefits; account balance and transaction errors; and action taken on non-accessed benefits.

Subchapter F, Division 2 is entitled Overpayments and contains §372.1551 and §372.1552. These sections set out HHSC's rules concerning overpayment of benefits, including repayment of overpayments.

Subchapter F, Division 3 is entitled Restoration and contains §372.1601. This section sets out HHSC's rules concerning circumstances under which HHSC restores TANF and SNAP benefits to a household. Proposed new §372.1601 implements a new policy in which TANF benefits will be restored following the same requirements as restoration of SNAP benefits, except TANF households that do not receive benefits for the month of application due to proration are not eligible for restoration of benefits back to the application date, as they are with restoration of SNAP benefits.

New Subchapter G is entitled Retailer Requirements and contains §§372.1701 - 372.1716. These sections set out HHSC's rules concerning the requirements for a retailer to participate in the EBT system to accept SNAP or TANF benefits or both. These sections contain the definitions used in the subchapter, as well as rules concerning point-of-sale terminals, manual voucher transactions, electronic manual voucher transactions, liability implications, third-party processors, transaction disputes, and out-of-state transactions. Proposed new §372.1708 and §372.1709 add rules governing store-and-forward (an electronic back-up for a retailer's online system) as an alternative to manual voucher transactions, in accordance with 7 CFR §274.12(m).

Fiscal Note

Thomas M. Suehs, Deputy Executive Commissioner for Financial Services, has determined that, for the first five years the proposed repeals and new sections are in effect, enforcing or administering the repeals and new section does not have foreseeable implications relating to costs or revenues of state or local governments.

Small Business and Micro-business Impact Analysis

Mr. Suehs has determined that there will be no effect on small businesses or micro-businesses to comply with the proposal, because the rules do not require them to alter their business practices. There are no anticipated economic costs to persons who are required to comply with the proposed rules. There is no anticipated negative impact on local employment.

Public Benefit and Costs

Joanne Molina, Deputy Executive Commissioner for Social Services, has determined that, for each year of the first five years the repeals and new sections are in effect, the anticipated public benefit expected as a result of enforcing the repeals and new sections is that HHSC's rules governing TANF and SNAP will be up-to-date, consistent with policy, and easier to use.

Regulatory Analysis

Takings Impact Assessment

Public Comment

Written comments on the proposal may be submitted to Eric McDaniel, Texas Health and Human Services Commission, Office of Family Services, MC-2039, 909 West 45th Street, Austin, TX 78751, or by e-mail to eric.mcdaniel@hhsc.state.tx.us, within 30 days after publication of this proposal in the Texas Register.

Public Hearing

HHSC will hold a public hearing on June 22, 2009, at 1:00 p.m. (Central Time) to receive public comment on the proposal. The hearing will be held in the Lone Star Conference Room of the Health and Human Services Commission, Braker Center, Building H, 11209 Metric Boulevard, Austin, Texas. Entry is through Security at the main entrance of the building, which faces Metric Boulevard. Persons requiring Americans with Disabilities Act (ADA) accommodation or auxiliary aids or services should contact Graciela Reyna by calling (512) 206-4778, at least 72 hours prior to the hearing so appropriate arrangements can be made.

SUBCHAPTER A. OVERVIEW AND PURPOSE

1 TAC §§372.1 - 372.6

Statutory Authority

The repeals are proposed under Texas Government Code, §531.0055, which provides the Executive Commissioner of HHSC with rulemaking authority; Texas Human Resources Code, Chapter 31, which authorizes HHSC to administer financial assistance programs, and Chapter 33, which authorizes HHSC to administer nutritional assistance programs.

The repeals affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.1.What assistance programs does this chapter cover?

§372.2.What do certain words and terms in this chapter mean?

§372.3.What is the legal basis for this chapter's assistance programs?

§372.4.What are the purposes of this chapter's assistance programs?

§372.5.Who provides the money for this chapter's assistance programs?

§372.6.Who administers this chapter's assistance programs?

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901812

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

SUBCHAPTER B. ELIGIBILITY

DIVISION 1. TANF CERTIFIED GROUPS

1 TAC §§372.101 - 372.107

Statutory Authority

The repeals affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.101.Whom does the TANF Program benefit?

§372.102.Who is a caretaker under the TANF Program?

§372.103.Whom may DHS include in a certified group?

§372.104.Whom does DHS require be included in a certified group?

§372.105.When does DHS include a stepparent who lives in the household in the certified group?

§372.106.Does DHS include the spouse of a caretaker in the certified group?

§372.107.Whom does DHS exclude from the certified group?

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901813

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 2. FOOD STAMP HOUSEHOLDS

1 TAC §§372.151 - 372.153

Statutory Authority

The repeals affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.151.Whom does the Food Stamp Program benefit?

§372.152.Does DHS require people who live together to apply for food stamps together?

§372.153.How does DHS determine the food stamp eligibility of various other types of households?

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901814

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 3. CITIZENSHIP

1 TAC §§372.201 - 372.205

Statutory Authority

The repeals affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.201.What are the citizenship requirements for the TANF Program?

§372.202.Does DHS require TANF applicants to prove eligibility under §3.201 of this chapter?

§372.203.What are the citizenship requirements for the Food Stamp Program?

§372.204.Does DHS require Food Stamp Program applicants to prove eligibility under §3.203 of this chapter?

§372.205.Does DHS report to the Immigration and Naturalization Service (INS) undocumented aliens who apply for assistance?

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901815

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 4. RESIDENCY

1 TAC §372.251, §372.252

Statutory Authority

The repeals affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.251.What are the residency requirements for the TANF Program?

§372.252.What are the residency requirements for the Food Stamp 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 May 11, 2009.

TRD-200901816

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 5. DOMICILE

1 TAC §372.301

(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 Health and Human Services Commission or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

Statutory Authority

The repeal is proposed under Texas Government Code, §531.0055, which provides the Executive Commissioner of HHSC with rulemaking authority; Texas Human Resources Code, Chapter 31, which authorizes HHSC to administer financial assistance programs, and Chapter 33, which authorizes HHSC to administer nutritional assistance programs.

The repeal affects Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.301.What are the domicile requirements for the TANF 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 May 11, 2009.

TRD-200901817

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 6. RESOURCES

1 TAC §§372.351 - 372.358

Statutory Authority

The repeals affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.351.What are resources in the TANF and Food Stamp programs?

§372.352.How do resources affect eligibility in the TANF and Food Stamp programs?

§372.353.How does DHS determine the value of a non-cash resource?

§372.354.What are the countable resource limits of the TANF and Food Stamp programs?

§372.355.Whose resources does DHS count in determining TANF and Food Stamp program eligibility?

§372.356.What resources does DHS count in the TANF Program?

§372.357.What resources does DHS count in the Food Stamp Program?

§372.358.May members of a household transfer resources without affecting their eligibility for assistance under this chapter?

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901818

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 7. INCOME

1 TAC §§372.401 - 372.410

Statutory Authority

The repeals affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.401.What is income in the TANF and Food Stamp programs?

§372.402.How does income affect eligibility in the TANF and Food Stamp programs?

§372.403.Whose income does DHS count in the TANF Program?

§372.404.What income does HHSC count when determining TANF eligibility?

§372.405.Whose income does DHS count when determining food stamp eligibility?

§372.406.What income does DHS count when determining food stamp eligibility?

§372.407.May members of a TANF or food stamp household fail to pursue or accept income without affecting their eligibility for assistance?

§372.408.How does DHS determine income eligibility for the TANF and Food Stamp programs?

§372.409.What does DHS deduct from countable income in the TANF and Food Stamp programs?

§372.410.How does DHS estimate how much income a household will receive in the future?

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901819

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 8. TIME LIMITS

1 TAC §§372.451 - 372.459

Statutory Authority

The repeals affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.451.What are time limits in the TANF and Food Stamp programs?

§372.452.To whom does DHS apply time limits in the TANF and Food Stamp programs?

§372.453.What happens when a TANF recipient exhausts a time limit?

§372.454.What are the exemptions from the TANF time limit requirements?

§372.455.When must a TANF recipient request a time limit exemption?

§372.456.Who is subject to the 60-month lifetime limit for the receipt of TANF cash assistance?

§372.457.How may a TANF household remain eligible after reaching the 60-month lifetime limit?

§372.458.What are the exemptions from the Food Stamp Program's time limit requirements?

§372.459.How does a food stamp recipient who is disqualified because of time limits become eligible again?

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901820

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 9. CRIMINAL ACTIVITY

1 TAC §372.501

Statutory Authority

The repeal affects Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.501.What criminal activities disqualify a person from receiving TANF benefits?

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901821

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

SUBCHAPTER C. ASSOCIATED PROGRAMS

DIVISION 1. FOOD STAMPS IN DISASTER SITUATIONS

1 TAC §372.601

Statutory Authority

The repeal affects Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.601.Are food stamp benefits available to victims of disasters who might not otherwise be eligible?

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901822

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 2. SIMPLIFIED NUTRITIONAL ASSISTANCE PROGRAM (SNAP)

1 TAC §§372.651 - 372.656

Statutory Authority

The repeals affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.651.What is the Simplified Nutritional Assistance Program (SNAP)?

§372.652.Who is eligible for SNAP?

§372.653.What is the SNAP application process?

§372.654.What is the SNAP certification process?

§372.655.Does DHS require SNAP recipients to report changes?

§372.656.How does DHS determine the amount of SNAP benefits?

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901823

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 3. TANF NON-CASH PROGRAM

1 TAC §372.701, §372.702

Statutory Authority

The repeals affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.701.What is the TANF Non-Cash Program and what services does the program provide?

§372.702.What are the eligibility requirements for the TANF Non-Cash 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 May 11, 2009.

TRD-200901824

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 4. TANF STATE PROGRAM

1 TAC §§372.751 - 372.754

Statutory Authority

The repeals are proposed under Texas Government Code, §531.0055, which provides the Executive Commissioner of HHSC with rulemaking authority; Texas Human Resources Code, Chapter 31, which authorizes HHSC to administer financial assistance programs; Chapter 33, which authorizes HHSC to administer nutritional assistance programs; and Chapter 34, which authorizes HHSC to administer a state temporary assistance and support services program.

The repeals affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31, 33, and 34. No other statutes, articles, or codes are affected by this proposal.

§372.751.What is the TANF State Program?

§372.752.What are the requirements of TANF-SP?

§372.753.Is there any difference in determining eligibility for TANF-SP as compared to the TANF Program?

§372.754.Is there any difference in determining the amount of benefits in TANF-SP as compared to the TANF 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 May 11, 2009.

TRD-200901825

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 5. ONE-TIME TANF (OTTANF)

1 TAC §372.801, §372.802

Statutory Authority

The repeals affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.801.What is One-Time TANF (OTTANF)?

§372.802.What are the requirements for One-Time TANF (OTTANF)?

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901826

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

SUBCHAPTER D. APPLICATION PROCESS

DIVISION 1. APPLICATION

1 TAC §§372.901 - 372.906

Statutory Authority

The repeals affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.901.How does a person apply for TANF or food stamps?

§372.902.Does DHS accept incomplete applications?

§372.903.What is the application file date?

§372.904.What is the time frame for processing TANF or food stamp applications?

§372.905.When may TANF and food stamp applicants or clients designate an authorized representative?

§372.906.Is the TANF Program the best choice for families seeking assistance?

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901827

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 2. INTERVIEW

1 TAC §§372.951 - 372.958

Statutory Authority

The repeals affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.951.Where does DHS conduct TANF and food stamp eligibility interviews?

§372.952.How does DHS schedule and notify applicants of the date and location of an interview?

§372.953.What happens at the interview?

§372.954.What action does DHS take at the end of the interview?

§372.955.What procedure does DHS follow when delaying an eligibility decision?

§372.956.How does DHS process food stamp applications from applicants who need food immediately?

§372.957.How often does DHS review eligibility in TANF and food stamp cases?

§372.958.How do TANF or food stamp recipients know when it is time to reapply for benefits?

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901828

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 3. CASE DISPOSITION

1 TAC §§372.1001 - 372.1003

Statutory Authority

The repeals affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.1001.What types of eligibility notices does DHS provide to TANF and food stamp applicants?

§372.1002.May TANF and food stamp households appeal DHS's decisions affecting their benefits?

§372.1003.Does DHS reopen denied applications without requiring a household to file a new application?

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901829

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

SUBCHAPTER E. PARTICIPATION REQUIREMENTS

DIVISION 1. SOCIAL SECURITY NUMBERS

1 TAC §372.1101

Statutory Authority

The repeal affects Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.1101.Are TANF and food stamp applicants required to provide Social Security numbers?

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901830

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 2. THE TANF PERSONAL RESPONSIBILITY AGREEMENT (PRA)

1 TAC §§372.1151 - 372.1156

Statutory Authority

The repeals affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.1151.What is the TANF personal responsibility agreement (PRA) and to whom does it apply?

§372.1152.What happens if a person who is required to sign a PRA fails or refuses to do so?

§372.1153.What are the PRA requirements?

§372.1154.How does a person cooperate with each PRA requirement?

§372.1155.What happens when a person fails or refuses to cooperate with a requirement of a PRA that the person has signed?

§372.1156.What are good cause reasons for noncooperation with a PRA requirement?

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901831

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 3. FINGER IMAGING

1 TAC §§372.1201 - 372.1204

Statutory Authority

The repeals affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.1201.What is finger imaging and what is its purpose?

§372.1202.Who must comply with finger-imaging requirements?

§372.1203.Who is exempt from the finger-imaging requirement?

§372.1204.What happens if a household member fails to comply with the finger-imaging requirement?

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901832

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 4. TANF WORKFORCE ORIENTATION

1 TAC §§372.1251 - 372.1253

Statutory Authority

The repeals affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.1251.What is the TANF workforce orientation requirement and who must comply with it?

§372.1252.Does DHS exempt some TANF members from the workforce orientation requirement?

§372.1253.What penalty does DHS apply if a person fails to comply with the workforce orientation requirement?

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901833

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 5. THIRD-PARTY RESOURCES

1 TAC §§372.1301 - 372.1304

Statutory Authority

The repeals affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.1301.What is a third-party resource?

§372.1302.Who must comply with third-party resource requirements?

§372.1303.What are the third-party resource requirements?

§372.1304.What happens when an individual fails to comply with the third-party resource requirements?

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901834

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 6. WORK

1 TAC §§372.1351 - 372.1353

Statutory Authority

The repeals affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.1351.What are the food stamp work requirements?

§372.1352.What happens if a non-exempt household member fails to comply with food stamp work requirements?

§372.1353.What happens if a parent in a TANF household participates in a strike?

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901835

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 7. REPORTING CHANGES

1 TAC §§372.1401 - 372.1404

Statutory Authority

The repeals affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.1401.What changes must a TANF household report?

§372.1402.What changes must a food stamp household report?

§372.1403.How long does a household have to report a change?

§372.1404.How soon does DHS take action on a reported 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 May 11, 2009.

TRD-200901836

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

SUBCHAPTER F. BENEFITS

DIVISION 1. BENEFITS IN GENERAL

1 TAC §§372.1501 - 372.1529

Statutory Authority

The repeals affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.1501.What do certain words and terms in this division mean?

§372.1502.What are the maximum benefit amounts in the TANF and Food Stamp programs?

§372.1503.What are the minimum benefit amounts in the TANF and Food Stamp Programs?

§372.1504.In what dollar amounts does DHS issue food stamp benefits?

§372.1505.How does DHS determine the monthly amount of benefits in the TANF and Food Stamp programs?

§372.1506.When do TANF and food stamp benefits begin?

§372.1507.How are benefits affected if a TANF recipient stops participating in the work subsidy program?

§372.1508.What is a TANF supplemental grandparent payment?

§372.1509.Does DHS require a TANF or food stamp household to repay benefits for a month a member dies or leaves the home?

§372.1510.What may recipients purchase with food stamp and TANF benefits?

§372.1511.May recipients use food stamp benefits to purchase prepared meals?

§372.1512.What is Electronic Benefit Transfer (EBT)?

§372.1513.What is an EBT card?

§372.1514.Who controls access to the EBT account?

§372.1515.How does a primary cardholder use the EBT card?

§372.1516.Which households must have authorized representatives?

§372.1517.Does DHS allow access to EBT benefits by anyone other than the primary cardholder?

§372.1518.How does DHS put TANF and food stamp benefits into a household's EBT account?

§372.1519.Where may TANF and food stamp households use their EBT benefits?

§372.1520.Do food retailers give change in cash to food stamp households purchasing food with EBT food account benefits?

§372.1521.Do businesses charge EBT accounts when the EBT card is used?

§372.1522.What happens to the benefits in an EBT food account if a food stamp household moves out of Texas?

§372.1523.What happens to the benefits in a TANF cash account if the TANF household moves out of Texas?

§372.1524.What is DHS's procedure if EBT benefits cannot be used because of a disaster like a hurricane or flood?

§372.1525.What happens if the EBT card is lost or stolen?

§372.1526.Does DHS replace lost or stolen TANF or food stamp benefits?

§372.1527.What happens to EBT benefits a TANF or food stamp household does not use?

§372.1528.Under what circumstances does DHS cancel and remove benefits from a TANF or food stamp household's EBT account?

§372.1529.Who answers questions about EBT cash and food balances for TANF and food stamp households?

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901837

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 2. OVERPAYMENTS

1 TAC §§372.1551 - 372.1554

Statutory Authority

The repeals affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.1551.What happens if a TANF household is overpaid?

§372.1552.What are the reasons a TANF household may be overpaid?

§372.1553.How do TANF households repay benefits?

§372.1554.What are the rules governing repayment of food stamp benefits?

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901838

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 3. RESTORATION

1 TAC §§372.1601 - 372.1603

Statutory Authority

The repeals affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.1601.When does DHS restore TANF benefits?

§372.1602.Does DHS restore TANF benefits to households that no longer receive benefits?

§372.1603.When does DHS restore food stamp benefits?

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901839

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

SUBCHAPTER G. RETAILER REQUIREMENTS

1 TAC §§372.1701 - 372.1720

Statutory Authority

The repeals affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.1701.What do certain words and terms in this subchapter mean?

§372.1702.What are DHS's requirements for retailers and third-party processors to participate in the EBT system?

§372.1703.What are the general conditions for retailers and third-party processors to participate in the EBT system?

§372.1704.What are POS requirements for retailers operating terminals supplied by the retailer management EBT contractor?

§372.1705.What are DHS's requirements for retailers that redeem food stamp benefits to deploy POS terminals?

§372.1706.What are the procedures for off-line (manual) transactions?

§372.1707.What process is followed for off-line (manual) vouchers with delayed telephone verification or preliminary telephone verification?

§372.1708.What are DHS's off-line (manual) procedures for retailers with electronic voucher transaction capacity?

§372.1709.What are the liability implications for off-line (manual) transactions?

§372.1710.How do retailers choose qualified third-party EBT processors?

§372.1711.How does DHS reimburse retailers and third-party processors for EBT transactions?

§372.1712.How are EBT account discrepancies of settlement totals and the corresponding adjustments handled?

§372.1713.What does a retailer or third-party processor do if it did not receive or disagrees with the amount of an individual EBT transaction reimbursement to its bank account?

§372.1714.What are some reasons that could lead to a dispute?

§372.1715.How long does a retailer or third-party processor have to dispute a transaction?

§372.1716.How are transaction disputes resolved?

§372.1717.When are transaction disputes resolved?

§372.1718.What action does a retailer or third-party processor take if it disagrees with the resolution of a transaction dispute?

§372.1719.What option does a retailer or third-party processor have if it is dissatisfied with the decision from Lone Star Technology Department's informal review?

§372.1720.How do retailers or third-party processors outside of Texas accept TANF and food stamp benefits issued by the state of Texas?

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901840

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

CHAPTER 372. TEMPORARY ASSISTANCE FOR NEEDY FAMILIES AND SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAMS

SUBCHAPTER A. OVERVIEW AND PURPOSE

1 TAC §§372.1 - 372.6

Statutory Authority

The new sections are proposed under Texas Government Code, §531.0055, which provides the Executive Commissioner of HHSC with rulemaking authority; and Texas Human Resources Code, Chapter 31, which authorizes HHSC to administer financial assistance programs, and Chapter 33, which authorizes HHSC to administer nutritional assistance programs.

The new sections affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.1.Purpose and Scope.

This chapter covers the following programs:

(1) the Temporary Assistance for Needy Families (TANF) Program; and

(2) the Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program.

§372.2.Definitions.

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

(1) Authorized representative--In the TANF Program, a person whom the certified group authorizes to apply for or manage the TANF benefits on behalf of the certified group but who is not included in the certified group. In SNAP, a person whom the household authorizes to apply for or manage the SNAP benefits on behalf of the household. References in this chapter to a certified group, client, or household include an authorized representative, unless the context indicates otherwise.

(2) Budgetary needs amount--In the TANF Program, a set dollar amount that represents the monthly amount needed by the certified group to pay for food, clothing, housing, utilities, and incidental expenses (which include day-to-day transportation, telephone, laundry, unreimbursed medical expenses, recreation, and household supplies).

(3) Caretaker--In the TANF Program, a person who cares for a dependent child, who meets relationship requirements in §372.108 of this chapter (relating to Relationship Requirement), whom the Texas Health and Human Services Commission (HHSC) includes in the certified group, and who ordinarily receives and manages the TANF benefits for the certified group.

(4) Certified group--The person or group of relatives whose needs HHSC includes together in a TANF case.

(5) CFR--The Code of Federal Regulations.

(6) Child--A person under 18 years of age. In the TANF Program, a child also includes a person under 19 years of age as long as the person is a full-time student in a secondary school (or participant in an equivalent vocational or technical training program) and the person is reasonably expected to complete the school (or the training) before the person's 19th birthday.

(7) Choices--The TANF employment and training program administered by the Texas Workforce Commission.

(8) Client--In the TANF Program, the member of the certified group who receives benefits for the certified group. In SNAP, the member of the household who receives benefits for the household.

(9) Dependent child--In the TANF Program, a child as described in the Texas Human Resources Code, §31.002(b). The term also means a child who has been deprived of parental support because of the death, absence, or incapacity of a parent who does not have enough income or resources for a reasonable subsistence compatible with health and safety, and who is living with a caretaker.

(10) Fair market value--The amount of money an item would bring if sold in the current local market.

(11) Family--A group of relatives living together who meet the relationship requirements in §372.108 of this chapter.

(12) Federal Poverty Guidelines--The household income guidelines issued annually and published in the Federal Register by the U.S. Department of Health and Human Services. Percentages of these guidelines are used to determine income eligibility for TANF, SNAP, and certain other public assistance programs.

(13) Household--The person or persons whose needs HHSC includes in a SNAP case for benefits. In the TANF Program, the family members who live together.

(14) Parent--A mother or father, as established through biological relationship or legal process.

(15) Payee--In the TANF Program, a person who receives and manages the TANF benefits for a certified group and who otherwise qualifies as a caretaker, except HHSC does not include the person in the certified group. HHSC designates a payee when no one in the household qualifies or wants to be caretaker.

(16) Personal Responsibility Agreement (PRA)--In the TANF Program, a written agreement that defines the responsibilities of participants.

(17) Protective payee--In the TANF Program, a person whom HHSC selects to receive and manage benefits for the certified group instead of the caretaker. HHSC may designate a protective payee whenever HHSC determines that the caretaker has failed to comply with one or more program requirements.

(18) Recognizable needs amount--In the TANF Program, a set dollar amount that is 25% of the budgetary needs amount for the certified group.

(19) Representative payee--In the TANF Program, a person designated to receive and manage the household's benefits for a client who is incapacitated or incompetent.

(20) Sibling--A brother, sister, half brother, or half sister, as established by biological relationship or legal process. A sibling does not include a stepbrother or stepsister.

(21) SNAP--Supplemental Nutrition Assistance Program, formerly known as the Food Stamp Program.

(22) TANF--Temporary Assistance for Needy Families.

(23) TANF Non-Cash Program--A component of the TANF Program providing TANF-funded services relating to matters such as education, employment, and the prevention and treatment of substance abuse, but that does not provide benefits (for example, cash assistance).

(24) TANF Program--A program providing temporary benefits (cash assistance) and work opportunities to families with needy dependent children. References in this chapter to the TANF Program also include the TANF State Program (TANF-SP), unless the context clearly indicates otherwise.

(25) TANF State Program (TANF-SP)--The state-created and state-funded program that is the same as the TANF Program, except limited to certain Texas counties and two-parent households. References in this chapter to TANF include TANF-SP, unless the context clearly indicates otherwise.

(26) Texas Health and Human Services Commission (HHSC)--The state agency that administers the TANF Program and SNAP in Texas.

(27) U.S.--The United States of America.

(28) U.S.C.--United States Code.

§372.3.Legal Basis.

(a) For the TANF Program, the federal law basis is:

(1) Title IV of the Social Security Act (42 U.S.C. §601 et seq.); and

(2) the federal regulations in 45 CFR, Parts 260 through 265.

(b) To the extent the regulations described in subsection (a) of this section impose federal mandates that apply to Texas, Texas Health and Human Services Commission (HHSC) incorporates the regulations by reference for administration of TANF in Texas. If the regulations provide options from which Texas may choose, or if Texas is granted a waiver from a federal mandate, the rules of this chapter and other applicable state administrative rules and policy describe the options Texas has chosen and the waivers Texas has been granted.

(1) the Texas Human Resources Code, Chapter 31, which authorizes the HHSC to administer the TANF Program in Texas;

(2) the Texas Human Resources Code, Chapter 34, which authorizes HHSC to administer the TANF State Program; and

(3) the rules of this chapter, as well as other applicable HHSC rules.

(d) For SNAP, the federal law basis is:

(1) 7 U.S.C. §2011 et seq.; and

(2) the federal regulations in 7 CFR, Parts 271 through 283.

(e) To the extent the regulations described in subsection (d) of this section impose federal mandates that apply to Texas, HHSC incorporates the regulations by reference for administration of SNAP in Texas. If the regulations provide options from which Texas may choose, or if Texas is granted a waiver from a federal mandate, the rules of this chapter and other applicable state administrative rules and policy describe the options Texas has chosen and the waivers Texas has been granted.

(f) For SNAP, the state law basis is:

(1) the Texas Human Resources Code, Chapter 33, which authorizes HHSC to administer SNAP in Texas; and

(2) the rules of this chapter, as well as other applicable HHSC rules.

(g) The Texas Workforce Commission provides TANF and SNAP employment and hiring activities and support services as described in Title 40 of the Texas Administrative Code, Chapter 811 (relating to Choices) and Chapter 813 (relating to Food Stamp Employment and Training).

§372.4.Purpose of TANF and SNAP.

(a) The TANF Program encourages self-sufficiency by providing temporary cash assistance and work opportunities to needy families with dependent children.

(b) SNAP encourages improved diets by providing nutrition assistance to low-income individuals or groups.

§372.5.Funding for TANF and SNAP.

(a) The federal government and the State of Texas provide the funding for the TANF Program. The State of Texas fully funds the TANF State Program.

(b) The federal government provides most of the funding for SNAP and the State of Texas funds the rest. Federal funds pay for SNAP benefits and for one-half of the administrative costs. The State of Texas pays the other half of the administrative costs.

§372.6.TANF and SNAP Administrator.

(a) The Texas Health and Human Services Commission (HHSC) administers the TANF Program in Texas under guidance from the U.S. Department of Health and Human Services.

(1) HHSC:

(A) develops the state plan, policies, and procedures;

(B) certifies eligible children and families for benefits and services; and

(2) The U.S. Department of Health and Human Services:

(A) approves the state plan;

(B) provides funding, guidance, and regulations; and

(b) HHSC administers SNAP in Texas, under guidance from the U.S. Department of Agriculture, Food and Nutrition Service.

(1) HHSC:

(A) develops the state plan;

(B) certifies eligible individuals and groups for benefits; and

(2) The U.S. Department of Agriculture, Food and Nutrition Service:

(A) approves the state plan;

(B) provides guidance and regulations;

(D) authorizes and manages food retailers.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901841

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

SUBCHAPTER B. ELIGIBILITY

DIVISION 1. TANF CERTIFIED GROUPS

1 TAC §§372.101 - 372.108

Statutory Authority

The new sections affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.101.Receiving TANF Benefits.

(a) The TANF Program provides benefits by certified group, meaning to an individual or group of relatives living together in a family setting whose needs the Texas Health and Human Services Commission includes together in the TANF case. A certified group must include at least one dependent child.

(b) A recipient of TANF benefits must use the benefits to provide for the needs of the children in the certified group.

§372.102.Caretaker.

(a) A caretaker is a person who cares for a dependent child, whom the Texas Health and Human Services Commission includes in the certified group, and who ordinarily receives and manages the TANF benefits for the certified group.

(b) To qualify as a caretaker, a person must:

(1) reside in a family setting with, supervise, and care for:

(A) a dependent child;

(B) a child who receives Supplemental Security Income (SSI), foster care, or adoption subsidy payments; or

(2) by blood, marriage, or adoption, be related to the child as described in §372.108 of this division (relating to Relationship Requirement).

§372.103.Composition of a TANF Certified Group.

(a) The Texas Health and Human Services Commission (HHSC) may include together in a TANF certified group:

(1) each dependent child; and

(2) each relative of a dependent child:

(A) living with the child in a family setting being established or maintained as shown by the relative through continuing responsibility for the child's day-to-day care; and

(B) whose relationship to the child, by blood, marriage, or adoption extends up to the degree indicated in §372.108 of this division (relating to Relationship Requirement).

(b) HHSC may continue to include a person in a certified group after the person has entered a nursing facility, so long as HHSC determines the person's stay in the nursing facility is temporary.

§372.104.Required TANF Certified Group Members.

Unless a person is excluded under §372.107 of this division (relating to Excluded TANF Certified Group Members), the Texas Health and Human Services Commission requires the TANF certified group to include:

(1) the dependent child for whom application is made;

(2) each parent of a dependent child living in the household; and

(3) each sibling of a dependent child living in the household.

§372.105.Eligibility for a Stepparent.

The Texas Health and Human Services Commission includes in the TANF certified group a stepparent living in the household only if the parent is disabled or is not living in the household.

§372.106.Eligibility for the Spouse of a Caretaker.

If the caretaker is not the child's parent, the Texas Health and Human Services Commission does not include the spouse of the caretaker in the TANF certified group, except as described in §372.105 of this division (relating to Eligibility for a Stepparent).

§372.107.Excluded TANF Certified Group Members.

The Texas Health and Human Services Commission (HHSC) excludes from the TANF certified group:

(1) an authorized representative, payee, or protective payee;

(2) a recipient of Supplemental Security Income (SSI), foster care, or adoption subsidy payments; and

(3) a person disqualified from receiving TANF benefits or ineligible to receive TANF benefits, because HHSC determines the person:

(A) does not meet an eligibility requirement relating to the person's:

(i) age (because, for example, the person does not meet the definition of a child);

(ii) citizenship as explained in Division 3 of this subchapter (relating to Citizenship);

(iii) residency as explained in Division 4 of this subchapter (relating to Residency);

(iv) domicile as explained in Division 5 of this subchapter (relating to Domicile); or

(v) relationship status (because, for example, the person is not within the degree of relationship required by §372.108 of this division (relating to Relationship Requirement);

(B) committed an intentional TANF program violation as described in §357.562(b) of this title (relating to Determination and Disposition of Intentional Program Violations);

(D) failed to comply with Subchapter E, Division 5 of this chapter (relating to Third-party Resources);

(E) has exhausted the time limits for receiving TANF benefits under Division 8 of this subchapter (relating to Time Limits);

(F) failed to comply with §372.1401 of this chapter (relating to Changes a TANF Household Must Report);

(G) is a fugitive as explained in §372.501(1) of this subchapter (relating to Disqualifications Due to Criminal Activity); or

(H) has been convicted of a felony drug offense as explained in §372.501(2) of this subchapter.

§372.108.Relationship Requirement.

In the TANF Program, a person meets the relationship requirement, if the person is by law, marriage, or adoption a child's:

(1) father, mother, brother, or sister;

(2) stepfather or stepmother (if the child's legal parent is disabled or if there is no legal parent in the household);

(3) stepbrother or stepsister;

(4) grandparent, to the degree of a "great, great, great" grandparent;

(5) uncle or aunt, to the degree of a "great, great" uncle or aunt;

(6) nephew or niece, to the degree of a "great, great" nephew or niece;

(7) first cousin; or

(8) first cousin once removed.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901842

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 2. SNAP HOUSEHOLDS

1 TAC §§372.151 - 372.153

Statutory Authority

The new sections affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.151.Receiving SNAP Benefits.

SNAP provides benefits by household, as defined in 7 CFR §273.1. A household may consist of an individual or a group of individuals who live together.

§372.152.Required SNAP Household Members.

The Texas Health and Human Services Commission follows 7 CFR §273.1(b), which requires including in the household certain people living together.

§372.153.Determining SNAP Household Eligibility.

To determine eligibility for SNAP benefits of each of the following various types of households, the Texas Health and Human Services Commission follows the federal regulation or regulations in 7 CFR indicated in the following table:

Figure: 1 TAC §372.153

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901843

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 3. CITIZENSHIP

1 TAC §§372.201 - 372.205

Statutory Authority

The new sections affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.201.TANF Citizenship Requirements.

To be eligible for TANF benefits, a person must be:

(1) a citizen of the U.S.;

(2) an alien who legally entered the U.S. before August 22, 1996, and who meets the eligibility criteria in 8 U.S.C. §1641(b) or (c); or

(3) an alien who legally entered the U.S. on or after August 22, 1996, and who meets the eligibility criteria in 8 U.S.C. §1612(b) and §1613, except that a legal permanent resident alien is eligible after residing in the U.S. for five years only if the alien meets one of the following eligibility requirements:

(A) the alien is an honorably discharged veteran or active duty military personnel;

(B) the alien is a spouse, unmarried surviving spouse, or minor unmarried child of an honorably discharged veteran or active duty military personnel (if a surviving spouse of a deceased veteran or active duty military person, the surviving spouse must not have remarried);

(C) the alien entered the U.S. before August 22, 1996, and remained continuously present in the U.S. (a single absence from the U.S. of more than 30 days or a combined absence of more than 90 days interrupts the "continuous presence") since at least August 21, 1996, until obtaining qualifying immigrant status (an alien who entered the U.S. without proper documents or overstayed his or her visa, is treated the same as an alien who entered and remained in the U.S. with valid immigration documents);

(D) the alien entered the U.S. with a status described in Chart C and meets those eligibility criteria, or meets the criteria in A-343, How to Determine Eligibility for Battered Aliens; or

(E) the alien meets the 40 qualifying quarters requirements in A-354, Verifying 40 "Qualifying Quarters," and five years have passed since the alien's legal date of entry.

§372.202.Verifying Citizenship for TANF.

(a) TANF applicants must prove eligibility under §372.201 of this division (relating to TANF Citizenship Requirements). The Texas Health and Human Services Commission (HHSC) determines what proof is required. Applicants are responsible for providing proof. HHSC may obtain proof of citizenship from the Texas Bureau of Vital Statistics or from the Social Security Administration.

(b) HHSC disqualifies TANF applicants HHSC determines have failed without good cause to prove eligibility under §372.201 of this division.

(c) HHSC may grant good cause to a TANF applicant who has not complied with subsection (a) of this section and may postpone the requirement to provide proof until the next eligibility assessment, if the applicant:

(1) made a good faith effort to provide the proof; and

(2) was unable to provide proof because of circumstances beyond the applicant's control.

§372.203.SNAP Citizenship Requirements.

To be eligible for SNAP, a person must be:

(1) a citizen of the U.S.; or

(2) an alien legally admitted to the U.S. who meets the eligibility criteria in 8 U.S.C. §1612(a)(2).

§372.204.Verifying Citizenship for SNAP.

(a) The Texas Health and Human Services Commission (HHSC) requires proof of citizenship from a SNAP applicant if HHSC determines the applicant's citizenship is questionable. Applicants are responsible for proving eligibility under §372.203 of this division (relating to SNAP Citizenship Requirements) upon request.

(b) HHSC disqualifies applicants who fail to prove eligibility under §372.203 of this division until proof is provided.

§372.205.Reporting Undocumented Alien Applicants.

The Texas Health and Human Services Commission reports to the United States Citizenship and Immigration Service only those aliens who apply for TANF or SNAP benefits and who have a final order of deportation, as required for SNAP by 7 U.S.C. §2020(e).

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901844

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 4. RESIDENCY

1 TAC §372.251, §372.252

Statutory Authority

The new sections affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.251.Residency Requirements for TANF.

(a) A person must be a Texas resident to be eligible for TANF benefits. A person meets the residency requirement if the Texas Health and Human Services Commission (HHSC) determines the person lives in Texas and intends to remain in Texas permanently or for an indefinite time.

(b) A migrant or itinerant worker meets the residency requirement if HHSC determines the migrant or itinerant worker lives in Texas, entered the state with a job commitment or an intention to seek employment, and is not receiving TANF benefits from another state.

(c) A TANF recipient who leaves Texas but returns within 90 days and declares the out-of-state stay was not permanent may establish residency for the period the person was out of state, as determined by HHSC, and may be eligible for retroactive TANF benefits for the period the person was out of state.

§372.252.Residency Requirements for SNAP.

(a) To be eligible for SNAP benefits, a person must live in Texas.

(b) The Texas Health and Human Services Commission follows 7 CFR §273.3 in determining a SNAP applicant's residency, which does not require a person to reside in a permanent dwelling or express an intent to reside in Texas permanently.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901845

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 5. DOMICILE

1 TAC §372.301

Statutory Authority

The new section is proposed under Texas Government Code, §531.0055, which provides the Executive Commissioner of HHSC with rulemaking authority; and Texas Human Resources Code, Chapter 31, which authorizes HHSC to administer financial assistance programs.

The new section affects Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapter 31. No other statutes, articles, or codes are affected by this proposal.

§372.301.Domicile Requirements for TANF.

(a) Each person the Texas Health and Human Services Commission (HHSC) includes in a TANF case for benefits must live in the household, unless HHSC has determined the person is temporarily out of the home.

(b) An unmarried minor parent must live in an adult supervised setting, as determined by HHSC, to be eligible for TANF benefits.

(c) HHSC may consider a person to be living in the household even though the person has entered a nursing facility, so long as HHSC determines the person's stay in the nursing facility is temporary.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901846

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 6. RESOURCES

1 TAC §§372.351 - 372.356

Statutory Authority

The new sections affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.351.Overview of Resources.

(a) In the TANF Program, resources are cash (or its equivalent) and property that is convertible to cash (or its equivalent). Resources include:

(1) cash from income not obligated in the month of receipt; and

(2) lump sum payments received intermittently and no more often than once annually.

(b) In SNAP, the Texas Health and Human Services Commission follows the definition of resources in 7 CFR §273.8(c).

§372.352.Resource Eligibility Requirements.

(a) In TANF, a household meets the resources eligibility requirement if the household's countable resources are at or below the applicable resource limits explained in §372.354 of this division (relating to Treatment of Resources in TANF).

(b) In SNAP, a household meets the resources eligibility requirement if the household's countable resources are at or below the applicable resource limits explained in §372.355 of this division (relating to Treatment of Resources in SNAP).

§372.353.Determining the Value of a Non-Cash Resource.

(a) The Texas Health and Human Services Commission (HHSC) considers the value of a non-cash resource, except for a vehicle, to be the actual amount of money available from the sale of the resource. HHSC determines the value by subtracting any money owed on the resource and any costs usually associated with selling the resource from the resource's fair market value.

(b) HHSC considers the value of a vehicle to be its fair market value.

§372.354.Treatment of Resources in TANF.

(a) In the TANF Program, the countable resources limit is $1,000.

(b) Unless a resource is excluded under subsection (c) of this section, the Texas Health and Human Services Commission (HHSC) counts the resources of:

(1) the members of the certified group;

(2) each parent of a child in the certified group living in the household and ineligible or disqualified from receiving TANF benefits;

(3) each sibling of a dependent child in the certified group living in the household and disqualified from receiving TANF benefits; and

(4) the sponsors and the sponsors' spouses, for a household containing a sponsored alien.

(1) an amount up to $7,500 per person of prepaid burial insurance (or of a prepaid funeral plan);

(2) burial plots;

(3) crime victim compensation funds;

(4) earned income tax credit payments to applicants the month of receipt and the following month, and to recipients the month of receipt and the following 11 months;

(5) the homestead and surrounding real property, including:

(A) any structure, including a houseboat or a motor home, the household uses as its residence;

(B) surrounding real property divided by a public right-of-way (such as a street or road) but not divided by real property owned by others; and

(C) the homestead if it is temporarily unoccupied due to employment, training for future employment, illness, casualty, or natural disaster, as long as the household intends to return;

(6) resources HHSC determines are not accessible to the household, including:

(A) jointly owned property as described for SNAP in 7 CFR §273.8(d); and

(B) trust funds as described for SNAP in 7 CFR §273.8(e)(8);

(7) business property, including property retained for income-producing business purposes;

(8) vehicles used to transport a disabled household member and property used to maintain such vehicles;

(9) the cash value of all life insurance policies;

(10) funds from the earned income of a child as described in §372.404(2) of this subchapter (relating to Countable and Excluded Income in TANF);

(11) personal possessions HHSC determines are essential for daily living, such as clothing, jewelry, furniture, livestock, and farm equipment;

(12) funds from a reimbursement intended for and actually used in the month of receipt to repair or replace a lost or damaged resource excluded under this section, but HHSC counts the funds from such a reimbursement, beginning in the month after receipt, to the extent the funds were not used as intended to repair or replace the lost or damaged resource;

(13) federal, state, or local government payments provided to rebuild a home or replace personal possessions damaged in a disaster, including payments under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. §5121, et seq.), if the recipient is subject to legal sanction if the payment is not used as intended;

(14) any resource federal law excludes;

(15) funds in a retirement account excluded under 7 U.S.C. §2014(g);

(16) funds in an education account excluded under 7 U.S.C. §2014(g);

(17) loans, if the circumstances satisfy HHSC that there exists an understanding the money will be repaid, and the applicant or recipient reasonably explains to HHSC how the money will be repaid;

(18) funds from educational assistance payments (but only during the quarter, semester, or applicable period the payment is intended to cover);

(19) the value of real property the household is making a good faith effort to sell at a reasonable price;

(20) funds excluded under §372.355(d) of this division (relating to Treatment of Resources in SNAP);

(21) funds excluded under §372.404(25) of this subchapter; and

(22) the fair market value of one automobile up to $4,650.

§372.355.Treatment of Resources in SNAP.

(a) In SNAP, the Texas Health and Human Services Commission (HHSC) follows 7 CFR §273.8(a) and (b) to determine the countable resources limit. Unless a household is considered categorically eligible for SNAP under 7 CFR §273.2(j) by receiving Supplemental Security Income, TANF cash, or TANF non-cash benefits, the countable resource limit for a household is the amount of liquid resources and excess vehicle values specified in 7 CFR §273.8(b).

(b) HHSC follows 7 CFR §273.8 to determine whose resources to count in SNAP.

(c) HHSC follows 7 CFR §273.8 to determine what resources are counted, and 7 CFR §273.8(e) and 7 U.S.C. §2014(g) to determine what resources are excluded.

(d) HHSC also excludes:

(1) up to $2,000 of gifts annually from tax-exempt organizations provided to children with life-threatening conditions;

(2) independent living payments to youths who are leaving foster care, as provided by the Social Security Act, Title IV-E (42 U.S.C. §670 et seq.);

(3) funds from payments up to $2,000 to Native Americans made under the federal Old Age Assistance Claims Settlement Act (25 U.S.C. §2301) or the federal Alaska Native Claims Settlement Act (43 U.S.C. §1601);

(4) funds from payments made to volunteers under Title I of the Domestic Volunteer Services Act of 1973 (regardless of whether the recipient was receiving SNAP benefits at the time of receipt);

(5) funds from adoption subsidy payments made under Title IV-A and Title IV-E of the Social Security Act;

(6) funds from insurance policy dividends;

(7) funds from veterans payments earmarked as a housebound allowance or as an aid and attendance allowance;

(8) $15,000 for the first vehicle and $4,650 for each additional vehicle; and

(9) resources of categorically eligible households as described in 7 CFR §273.8(a).

§372.356.Consequences of Transferring Resources.

(a) In the TANF Program, the Texas Health and Human Services Commission (HHSC) calculates a period of ineligibility based on the fair market value of a resource the household transfers without compensation:

(1) during the three months before the application file date described in §372.903 of this chapter (relating to Application File Date), if the resource is countable under §372.354 of this division (relating to Treatment of Resources in TANF); and

(2) during any period HHSC has certified the household for TANF benefits, if the resource is countable under §372.354 of this division.

(b) In SNAP, HHSC follows 7 CFR §273.8(i) to determine whether a transfer of resources by an applicant or recipient affects the applicant's or recipient's eligibility.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901847

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 7. INCOME

1 TAC §§372.401 - 372.411

Statutory Authority

The new sections affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.401.Overview of Income.

(a) In the TANF Program, income is the receipt of cash or its equivalent, either earned or unearned, a person may directly or indirectly use to meet basic needs (such as food, clothing, and shelter). Earned income is compensation received from employment or job training and includes military and flight pay, allowances for housing and food, and receipts from self-employment (but not receipts from ownership of property involving less than 20 hours of work per week, which are unearned income). All other income is unearned income, including dividends and withdrawals from excluded resources. Lump-sum payments occurring no more than once annually are considered a resource. Lump-sum payments occurring more than once annually are considered income.

(b) In SNAP, the Texas Health and Human Services Commission follows the definition of income in 7 CFR §273.9(b).

§372.402.Income Eligibility Requirements.

In TANF and SNAP, a household meets the income eligibility requirement if the household's countable income is at or below the applicable income limits explained in §372.408 of this division (relating to Determining Income Eligibility).

§372.403.Determining Whose Income Counts in TANF.

Unless the income is excluded under §372.404 of this division (relating to Countable and Excluded Income in TANF), the Texas Health and Human Services Commission counts the income of:

(1) members of the certified group;

(2) each parent of a child in the certified group living in the household and ineligible or disqualified from receiving TANF benefits;

(3) each sibling of a dependent child in the certified group living in the household and disqualified from receiving TANF benefits;

(4) stepparents living with the certified group;

(5) parents living with an unmarried minor parent recipient; and

(6) sponsors and the sponsors' spouses, for a household with a sponsored alien.

§372.404.Countable and Excluded Income in TANF.

In the TANF program, the Texas Health and Human Services Commission (HHSC) counts all income of a person described in §372.403 of this division (relating to Determining Whose Income Counts in TANF), except HHSC excludes the following:

(1) any income federal law excludes;

(2) the earned income of a child who is:

(A) a full-time student, as defined by the school (regardless of how many hours the child works); or

(B) a part-time student employed less than 30 hours a week;

(3) up to $300 per federal fiscal quarter in cash gifts and contributions from private, nonprofit organizations and based on need;

(4) up to $75 per month in regular child support payments per household, except HHSC counts all child support payments a household receives if HHSC determines the household violated an agreement to assign child support to the State;

(5) income legally diverted before actual receipt, such as payments a parent makes for alimony, child support, and to dependents outside the home;

(6) proceeds from claims on insurance policies to compensate a loss or used to pay medical expenses;

(7) payments from federal volunteer programs for volunteer service, such as payments:

(A) for volunteer service in a senior citizen volunteer program, under the Domestic Volunteer Service Act (42 U.S.C. §5000 et seq.);

(B) for volunteer service to Volunteers in Service to America (VISTA), under 42 U.S.C. §§4951 - 4960; and

(8) payments from federal programs for on-the-job training made to a child under 19 years of age and under the parental control of another household member, including payments made under any law described in paragraph (7) of this section, or under the Workforce Investment Act of 1998;

(9) the value of any benefits received under a government nutrition assistance program based on need, including benefits under SNAP, the Child Nutrition Act of 1966, the National School Lunch Act, and the Older Americans Act of 1965;

(10) foster care payments;

(11) payments made under a government housing assistance program based on need;

(12) energy assistance payments;

(13) job training payments that:

(A) are earmarked as reimbursement for training-related expenses; and

(B) do not duplicate payment for an item covered by budgetary needs;

(14) a lump sum provided and used to pay burial, legal, or medical bills, or to replace damaged or lost possessions, except HHSC does not exclude amounts from lump sums used for another purpose;

(15) reimbursements for monies spent on items not covered by budgetary needs;

(16) amounts deducted from royalties for production expenses and severance taxes;

(17) all income of Supplemental Security Income recipients;

(18) third-party funds received and used for a third-party beneficiary who is not a household member;

(19) vendor payments from funds not legally obligated to the household;

(20) veterans benefits for special needs items not covered by budgetary needs;

(21) workers' compensation payments legally obligated to the recipient that are earmarked and used for medical expenses;

(22) the amount of any nonfarm self-employment income offsetting a tax deduction taken that year for a farm loss, for households with farms generating income of at least $1,000 annually;

(23) any income described in §372.355(d) of this subchapter (relating to Treatment of Resources in SNAP);

(24) any income described in §372.354(c)(4), (13), (17), and (18) of this subchapter (relating to Treatment of Resources in TANF);

(25) crime victim's compensation payments; and

(26) the earned income of a person who marries a caretaker or payee, for the first six months from the date of the marriage, if:

(A) the caretaker or payee is receiving TANF benefits on the date of the marriage; and

(B) the combined income of the person and the caretaker or payee, countable under this section, not exceeding 200% of the Federal Poverty Guidelines, as calculated based on the total number of the following persons:

(i) the caretaker or payee;

(ii) the person who marries the caretaker or payee;

(iii) each child living in the household who is related to the caretaker, payee, or person within the degree described in §372.108 of this chapter (relating to Relationship Requirement); and

(iv) a required member if not disqualified or ineligible.

§372.405.Determining Whose Income Counts in SNAP.

The Texas Health and Human Services Commission follows 7 CFR §273.9 to determine whose income to count in SNAP.

§372.406.Countable and Excluded Income in SNAP.

(a) In SNAP, the Texas Health and Human Services Commission (HHSC) follows 7 CFR §273.9 to determine what income to count, and 7 CFR §273.9(c) and 7 U.S.C. §2014(d) to determine what income to exclude.

(b) HHSC also excludes:

(1) payments described in §372.404(7) of this division (relating to Countable and Excluded Income in TANF);

(2) any income described in §372.355(d) of this subchapter (relating to Treatment of Resources in SNAP); and

(3) amounts deducted from royalties for production expenses and severance taxes.

§372.407.Consequences for Failure to Pursue Other Income.

(a) In SNAP, there is no requirement for members of a household to pursue or accept income; however, a recipient not exempt from work requirements must accept a suitable job as noted in §372.1351 of this chapter (relating to SNAP Work Requirements).

(b) In the TANF Program, a person described in §372.403 of this division (relating to Determining Whose Income Counts in TANF), without good cause, must pursue and accept all income to which the person is legally entitled. The Texas Health and Human Services Commission (HHSC) may determine a certified group ineligible for TANF benefits due to a household member's failure to comply with this requirement.

(1) the potential income is Supplemental Security Income (SSI), the person is physically or mentally unable to apply for the SSI, and HHSC fails to assist the person with the SSI application process; or

(2) if HHSC determines that pursuing or accepting the income:

(A) causes financial hardship to the household;

(B) is not cost-effective;

(D) requires the assistance of an attorney, which the person was unable to obtain after making a reasonable effort.

§372.408.Determining Income Eligibility.

(a) In the TANF Program, the Texas Health and Human Services Commission (HHSC) determines income eligibility by applying the following tests:

(1) Budgetary needs test. The first income eligibility test for TANF applicants, the budgetary needs test applies to households that have not received TANF benefits during the four months before the application month. HHSC determines the applicable budgetary needs amount from the table in paragraph (2) of this subsection, based on the persons in the certified group and whether the household includes a second parent. A household passes this test if the total income under §372.403 of this division (relating to Determining Whose Income Counts in TANF) does not exceed the budgetary needs amount.

(2) Recognizable needs test. The second income eligibility test for TANF applicants, the recognizable needs test applies to the continuing income eligibility of TANF recipients. HHSC determines the applicable recognizable needs amount from the following table, based on the persons in the certified group and whether the household includes a second parent. A household passes this test if the total income under §372.403 of this division, minus all applicable deductions in §372.409 of this division (relating to Allowable Deductions from Countable Income in TANF), is equal to or less than the recognizable needs amount.

Figure: 1 TAC §372.408(a)(2) (.pdf)

(b) In SNAP, HHSC follows 7 CFR §273.9 and §273.10 to determine income eligibility.

§372.409.Allowable Deductions from Countable Income in TANF.

(a) In the TANF Program, the Texas Health and Human Services Commission (HHSC) deducts the following amounts, in the order listed, for each person in the certified group:

(1) a standard work-related expense up to $120 from earned income;

(2) a disregard of 90% of earned income over $120, up to a maximum disregard amount of $1,400, which:

(A) is allowed the first four months the earnings should be budgeted;

(B) is allowed no more than four months in any 12-month period; and

(i) for a full calendar year after HHSC applies the maximum disregard of $1,400, beginning on the date HHSC first determines the household ineligible for TANF; and

(ii) if HHSC determines the client voluntarily quit a job without good cause within 60 days before applying for TANF;

(3) the actual cost of dependent child care needed to allow a household member to work, up to $200 monthly for each dependent child under age two and up to $175 monthly for each dependent child age two or older (or incapacitated adult); and

(4) the amount of any farm loss not excluded under §372.404(22) of this division (relating to Countable and Excluded Income in TANF).

(b) In the case of a parent ineligible or disqualified from receiving TANF benefits under Division 3 of this subchapter (relating to Citizenship); Division 8 of this subchapter (relating to Time Limits); or §372.301(b) of this subchapter (relating to Domicile Requirements for TANF), HHSC deducts only the following from income and counts any amount remaining as unearned income of the members of the certified group:

(1) the amount of any alimony or child support payments paid to or for nonhousehold members;

(2) the amount of any payments the parent makes to tax dependents not living in the home of the parent;

(3) the standard $120 work-related expense deduction; and

(4) the applicable budgetary needs amount indicated in the table in §372.408(a)(2) of this division (relating to Determining Income Eligibility) corresponding to the following number of persons:

(A) the parent; plus

(B) each member of the household:

(i) who is not included in the certified group for any reason other than failing to meet the eligibility requirement in Division 3 of this subchapter; and

(ii) whom the parent can claim as a tax dependent or is legally obligated to support.

(c) In the case of a parent who is ineligible or disqualified from receiving TANF benefits for any reason other than those described in subsection (b) of this section, HHSC allows deductions from countable income as indicated in subsection (a) of this section; however, HHSC does not include the disqualified parent in the certified group.

(d) In the case of a stepparent who is not in the certified group, HHSC deducts only the following and counts any amount remaining as unearned income of the members of the certified group:

(1) the standard $120 work-related expense deduction from earned income;

(2) the amount of any payments the stepparent makes for alimony or child support paid to or for nonhousehold members;

(3) the amount of any payments the stepparent makes to tax dependents not living in the home of the stepparent; and

(4) the applicable budgetary needs amount indicated in the table in §372.408(a)(2) of this division corresponding to the following number of persons:

(A) the stepparent; plus

(B) each member of the household:

(i) not included in the certified group for any reason other than failing to meet the eligibility requirement in Division 3 of this subchapter; and

(ii) whom the stepparent can claim as a tax dependent or is legally obligated to support.

(e) In the case of a parent of an unmarried minor parent choosing not to apply for TANF, HHSC deducts only the following and counts any amount remaining as unearned income of the members of the certified group:

(1) the standard $120 work-related expense deduction from earned income;

(2) the amount of any payments the parent makes for alimony or child support paid to or for nonhousehold members;

(3) the amount of any payments the parent makes to tax dependents not living in the home of the parent; and

(4) the applicable budgetary needs amount indicated in the table in §372.408(a)(2) of this division that corresponds to the following number of persons:

(A) the parent; plus

(B) each member of the household:

(i) not included in the certified group for any reason other than failing to meet the eligibility requirement in Division 3 of this subchapter; and

(ii) whom the parent can claim as a tax dependent or is legally obligated to support.

§372.410.Allowable Deductions from Countable Income in SNAP.

In SNAP, the Texas Health and Human Services Commission (HHSC) follows 7 CFR §273.9 and HHSC:

(1) does not deduct costs related to self-employment income from illegal activities;

(2) allows an uncapped excess shelter deduction for households with an elderly or disabled member, even if the member is disqualified;

(3) deducts a standard utility allowance for households that qualify due to out-of-pocket heating and cooling costs;

(4) deducts a basic utility allowance for households with utility expenses that do not qualify for the standard utility allowance in paragraph (3) of this section;

(5) allows a standard shelter deduction for homeless households under 7 CFR §273.9(d)(1); and

(6) gives elderly or disabled households the option of deducting actual allowable medical expenses (as explained in 7 CFR §273.9(d)(3)) or, using a standard medical deduction, which is a set amount HHSC negotiates annually with the U.S. Department of Agriculture, Food and Nutrition Service.

§372.411.Projecting Future Household Income.

(a) In both TANF and SNAP, the Texas Health and Human Services Commission (HHSC) follows 7 CFR §273.10(c) to budget future anticipated income.

(b) To convert weekly or biweekly payments to monthly amounts, HHSC multiplies weekly payments by 4.33 and biweekly payments by 2.17.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901848

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 8. TIME LIMITS

1 TAC §§372.451 - 372.457

Statutory Authority

The new sections affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.451.Time Limits.

(a) Time limits in TANF and SNAP are a set maximum amount of time a person is eligible to receive a benefit. A person becomes ineligible for a benefit once the time limit for that benefit has expired.

(b) In the TANF Program, the Texas Health and Human Services Commission (HHSC) applies time limits:

(1) in all areas of the state;

(2) to all cases of TANF cash assistance; and

(3) to all adult members of the certified group.

(c) In SNAP, HHSC follows 7 CFR §273.24 and applies time limits to household members ages 18 to 49 who fail to meet the work requirement described in §372.1351 of this chapter (relating to SNAP Work Requirements), unless the household member is exempt as described in §372.456 of this division (relating to SNAP Time Limit Exemptions).

(d) A TANF recipient who exhausts a time limit becomes ineligible for TANF cash assistance for five years, unless the person demonstrates that the person is exempt from the time limit on the basis of hardship, as outlined in §372.452 of this division (relating to TANF Time Limit Exemptions).

§372.452.TANF Time Limit Exemptions.

(a) The Texas Health and Human Services Commission (HHSC) may exempt a recipient and continue TANF cash assistance after a time limit expires if HHSC determines:

(1) the recipient cooperated with all applicable Choices requirements during the time the recipient was subject to the time limit (as explained in §372.1154(g) of this chapter (relating to Cooperating with Personal Responsibility Agreement Requirements)); and

(2) the recipient meets one of the following hardship criteria:

(A) severe personal hardship, for such reasons as:

(i) a terminal or permanent disabling illness or injury;

(ii) temporary incapacity due to illness or injury; or

(iii) the need to provide 30 or more days of care to a close family member (does not have to be a household member) who is disabled due to a temporary, permanent, or terminal illness or injury; or

(B) local economic hardship, for reasons such as:

(i) the recipient lives in a county with an unemployment rate of more than 10% (this is also known as a county hardship); or

(ii) the recipient completed an independent job search, including contacting at least 40 potential employers within 30 days, but failed to find employment earning at least the amount of the TANF cash assistance plus any applicable work-expense disregard (this is also known as an employment hardship).

(b) A recipient HHSC exempted from a time limit due to the employment hardship explained in subsection (a)(2)(B)(ii) of this section must search for work by contacting at least 40 potential employers each month of the exemption period. If HHSC determines the recipient has not met this requirement, the recipient loses the employment hardship exemption and may not receive another employment hardship exemption during the five-year period of ineligibility.

§372.453.Requesting a TANF Time Limit Exemption.

A TANF recipient must request a time limit exemption:

(1) in the case of a severe personal hardship as described at §372.452(a)(2)(A) of this division (relating to TANF Time Limit Exemptions), within 90 days after:

(A) the date the personal illness or injury began; or

(B) the date the recipient is needed to care for a close family member;

(2) in the case of a county hardship as described at §372.452(a)(2)(B)(i) of this division, at any time during the recipient's five-year period of ineligibility; and

(3) in the case of an employment hardship as described at §372.452(a)(2)(B)(ii) of this division, within 90 days after the date that the recipient exhausts the TANF time limit, loses a job, or experiences a reduction in work hours.

§372.454.60-Month Lifetime TANF Cash Limit.

The Texas Health and Human Services Commission (HHSC) follows 45 CFR §264.1 and applies a 60-month lifetime limit to all TANF households with an adult in the certified group. HHSC counts both TANF and TANF-State Program cash assistance benefit months toward the 60-month lifetime limit.

§372.455.Continuing Eligibility Beyond the 60-Month Lifetime TANF Cash Limit.

(a) A TANF household subject to ineligibility due to the 60-month lifetime TANF cash limit is eligible for extended TANF cash assistance if:

(1) Texas Health and Human Services Commission (HHSC) records indicate each adult member of the certified group cooperated with any applicable Choices or child support requirements for at least 48 months of the 60-month period; and

(2) HHSC determines any adult in the household meets one or more of the following hardship criteria:

(A) the adult has a verified mental or physical disability expected to last more than 180 days, is certified to receive community-based services through the Texas Department of Aging and Disability Services (DADS), and the adult has applied for or agrees to apply for Supplemental Security Income (SSI) benefits;

(B) the adult is listed as the primary caregiver for a family member receiving community-based services from DADS or who has a verified mental or physical disability expected to last more than 180 days, and who has applied for or agrees to apply for SSI benefits;

(D) the adult currently resides in a county that does not offer full Choices services;

(E) the adult resided in a county without full Choices services during at least one month of the last 12 countable months of the 60-month period; or

(F) the adult:

(i) was unable to obtain or maintain employment, other than migrant or seasonal work, during the last 12 months before the end of the 60-month period, earning at least enough to have exceeded the TANF income limit if the earnings were calculated without taking the earned income deduction that is explained in §372.409 of this subchapter (relating to Allowable Deductions from Countable Income in TANF);

(ii) had no more than one Choices penalty during the 60-month period; and

(iii) did not voluntarily quit a job during the last 12 months of the 60-month period.

(b) Eligibility for extended TANF cash assistance under subsection (a)(2)(D) - (F) of this section is limited to a total of 24 months.

(c) A household receiving extended TANF benefits permanently loses eligibility for the extended TANF benefits if HHSC determines an adult member of the certified group failed without good cause to comply with the TANF Choices or child support requirements.

§372.456.SNAP Time Limit Exemptions.

The Texas Health and Human Services Commission (HHSC) may exempt a person from a SNAP time limit if HHSC determines the person:

(1) meets the criteria explained in 7 CFR §273.24(c);

(2) resides in a federally approved waiver area to which the time limit does not apply, as described in 7 U.S.C. §2015(o)(4); or

(3) resides in a county in which SNAP Employment and Training is not provided.

§372.457.Regaining SNAP Eligibility After a Time Limit Disqualification.

A person disqualified because of SNAP time limits regains eligibility if the person:

(1) meets the work requirement as provided by 7 CFR §273.24(d) and (e); or

(2) becomes exempt from the time limit under §372.456 of this division (relating to SNAP Time Limit Exemptions).

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901849

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 9. CRIMINAL ACTIVITY

1 TAC §372.501

Statutory Authority

The new section affects Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.501.Disqualifications Due to Criminal Activity.

In TANF and SNAP, a person is disqualified from receiving benefits if the Texas Health and Human Services Commission determines the person:

(1) is a fugitive (a person fleeing to avoid prosecution or confinement for a felony criminal conviction, or found by a court to be violating federal or state probation or parole); or

(2) is convicted of a felony drug offense committed on or after April 1, 2002.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901850

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

SUBCHAPTER C. ASSOCIATED PROGRAMS

DIVISION 1. SNAP BENEFITS FOR DISASTER VICTIMS

1 TAC §372.601

Statutory Authority

The new section is proposed under Texas Government Code, §531.0055, which provides the Executive Commissioner of HHSC with rulemaking authority; and Texas Human Resources Code, Chapter 33, which authorizes HHSC to administer nutritional assistance programs.

The new section affects Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapter 33. No other statutes, articles, or codes are affected by this proposal.

§372.601.SNAP Benefits for Disaster Victims.

To address the specific nutrition needs of disaster victims for a temporary period during and after a disaster, the Texas Health and Human Services Commission may:

(1) administer SNAP benefits to disaster victims as explained in 7 U.S.C. §2014(h); and

(2) request that the U.S. Department of Agriculture, Food and Nutrition Service grant waivers from applicable requirements of the SNAP regulations.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901851

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 2. SNAP-COMBINED APPLICATION PROJECT (SNAP-CAP)

1 TAC §§372.651 - 372.655

Statutory Authority

The new sections affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapter 31. No other statutes, articles, or codes are affected by this proposal.

§372.651.Overview of SNAP-CAP.

SNAP-Combined Application Project (SNAP-CAP) is a demonstration project the Texas Health and Human Services Commission administers to improve access to SNAP for elderly and disabled individuals.

§372.652.SNAP-CAP Eligibility Requirements.

A recipient is eligible for SNAP-CAP if the recipient:

(1) receives Supplemental Security Income;

(2) lives in Texas;

(3) is 50 years of age or older (unless the U.S. Department of Agriculture, Food and Nutrition Service approves modifications to this requirement in the waiver);

(4) is not receiving SNAP benefits (unless the U.S. Department of Agriculture, Food and Nutrition Service approves modifications to this requirement in the waiver); and

(5) is not institutionalized.

§372.653.SNAP-CAP Application Process.

(a) The Texas Health and Human Services Commission (HHSC) identifies potentially eligible Supplemental Security Income (SSI) recipients and mails them a simplified application.

(b) To apply, the SSI recipient completes and signs the application, and submits the simplified application to the HHSC Centralized Benefit Services unit.

§372.654.SNAP-CAP Certification Process.

(a) The Texas Health and Human Services Commission (HHSC), Centralized Benefit Services unit processes SNAP-CAP applications without requiring an interview and without the involvement of the local HHSC office (except in special situations when local office assistance is requested).

(b) HHSC certifies eligible applicants as single person households.

(c) Using Social Security Administration data obtained under Supplemental Security Income regulations, HHSC certifies eligible applicants for 36 months of benefits at a time.

(d) HHSC provides each SNAP-CAP recipient a standard monthly benefit amount, as approved by the U.S. Department of Agriculture, Food and Nutrition Service. The SNAP-CAP benefit amount is a set amount based on what the average SNAP benefit amount would be under the regular SNAP policy. A recipient with high shelter costs may receive a higher standard benefit amount than a recipient with lower shelter costs, as required by the U.S. Department of Agriculture, Food and Nutrition Service.

(e) HHSC sends the applicant a notice of eligibility upon certification.

§372.655.Reporting Changes.

The Texas Health and Human Services Commission does not require SNAP-CAP participants to report changes between certification periods.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901852

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 3. TANF NON-CASH PROGRAM

1 TAC §372.701, §372.702

Statutory Authority

The new sections are proposed under Texas Government Code, §531.0055, which provides the Executive Commissioner of HHSC with rulemaking authority; and Texas Human Resources Code, Chapters 31 and 34, which authorize HHSC to administer financial assistance programs.

The new sections affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 34. No other statutes, articles, or codes are affected by this proposal.

§372.701.Overview of the TANF Non-Cash Program.

(a) The TANF Non-Cash Program is a component of the TANF Program, with different eligibility requirements, providing services but not cash assistance.

(b) The Texas Health and Human Services Commission (HHSC) provides information about the TANF Non-Cash Program to SNAP applicants and others who are potentially eligible. HHSC describes the program's TANF-funded services, including services relating to the prevention and treatment of substance abuse, adult education, and employment.

§372.702.TANF Non-Cash Eligibility Requirements.

(a) An applicant is eligible for services under the TANF Non-Cash Program if the Texas Health and Human Services Commission (HHSC) determines the household's countable liquid resources combined with any excess vehicle value do not exceed $5,000.

(b) HHSC determines a household's excess vehicle value by adding together:

(1) the amount of the fair market value of one countable vehicle exceeding $15,000; and

(2) the amount of the fair market value of other countable vehicles exceeding $4,650.

(c) In evaluating a household's eligibility for the TANF Non-Cash Program, HHSC applies any applicable exclusions in §372.354 of this chapter (relating to Treatment of Resources in TANF).

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901853

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 4. TANF STATE PROGRAM (TANF-SP)

1 TAC §§372.751 - 372.753

Statutory Authority

The new sections affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapter 31. No other statutes, articles, or codes are affected by this proposal.

§372.751.Overview of the TANF State Program.

The TANF State Program (TANF-SP) is a state-created and state-funded program that is the same as the TANF Program, except limited to certain Texas counties and two-parent households. The Texas Health and Human Services Commission determines who participates in TANF-SP.

§372.752.TANF-State Program Eligibility Requirements.

TANF-State Program (TANF-SP) participants must meet all TANF program requirements in this chapter, except a TANF-SP participant is not required to assign child support payments received by the participant to the State.

§372.753.Determining Eligibility and Benefits.

The Texas Health and Human Services Commission (HHSC) determines eligibility and benefits for the TANF-State Program the same way it determines eligibility and benefits for the TANF Program, except HHSC counts as unearned income the amount of any monthly child support payments above $75 received by a participant in determining the household's:

(1) income eligibility under Subchapter B, Division 7, of this chapter (relating to Income); and

(2) benefits under Subchapter F, Division 1, of this chapter (relating to Benefits in General).

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901854

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 5. ONE-TIME TANF (OTTANF)

1 TAC §372.801, §372.802

Statutory Authority

The new sections affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapter 31. No other statutes, articles, or codes are affected by this proposal.

§372.801.Overview of One-Time TANF.

One-Time TANF is an option within the TANF Program. Instead of monthly TANF benefits, the applicant receives a single lump sum assistance payment.

§372.802.One-Time TANF Eligibility Requirements.

(a) A One-Time TANF (OTTANF) applicant must:

(1) meet all TANF eligibility and participation requirements in this chapter, except the requirement at §372.1154(g) of this chapter (relating to Cooperating with Personal Responsibility Agreement Requirements) to participate in the Choices work program;

(2) not have received an OTTANF benefit during the 12 months before the application month;

(3) be in need of emergency assistance; and

(4) be employed or likely to be employed within a short period of time.

(b) The household meets the criteria in subsection (a)(2) and (3) of this section if a caretaker adult:

(1) is facing a crisis due to the loss or potential loss of transportation or shelter, or due to a medical emergency that temporarily prevents the person from working;

(2) lost employment during the period beginning two months before the application month through the month the Texas Health and Human Services Commission (HHSC) determines the household's eligibility (loss of employment does not include voluntary quit without good cause); or

(3) graduated from a university, college, junior college, or technical training school within the 12 months before the application month through the month HHSC determines household eligibility and:

(A) is unemployed or underemployed;

(B) is not currently enrolled in an institution of higher learning;

(C) provides proof of his or her degree or certificate of completion from a university, college, junior college, or technical training school; and

(D) received TANF benefits or an OTTANF benefit anytime in the 12 months before enrolling or while attending a university, college, junior college, or technical training school.

(c) In the case of a household with only one adult in the certified group, the household meets the criteria in subsection (a)(2) and (3) of this section if:

(1) a child in the household lost the financial support of a parent or stepparent through death, divorce, separation, abandonment, or termination or reduction of financial support within the last 12 months before the application month through the month HHSC determines household eligibility; and

(2) the adult has a history of employment within the 12 months before the application month or the month HHSC determines household eligibility.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901855

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

SUBCHAPTER D. APPLICATION PROCESS

DIVISION 1. APPLICATION

1 TAC §§372.901 - 372.906

Statutory Authority

The new sections affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.901.Applying for TANF or SNAP.

(a) A person applies for benefits under the TANF Program:

(1) on the Internet at www.yourtexasbenefits.com;

(2) over the telephone by calling 2-1-1; or

(3) by completing a paper application and mailing or faxing it to the Texas Health and Human Services Commission (HHSC).

(b) A person applies for SNAP benefits or for both TANF and SNAP:

(1) on the Internet at www.yourtexasbenefits.com; or

(2) by completing a paper application and mailing or faxing it to HHSC.

(1) from an HHSC benefits office or other location that carries the application;

(2) by printing, downloading, or requesting a paper application at www.yourtexasbenefits.com;

(3) by calling 2-1-1; or

(4) by submitting a written request by mail or fax to HHSC.

(d) To apply, a person or the person's authorized representative must:

(1) provide all requested information in accordance with HHSC instructions (upon request, HHSC will assist);

(2) sign and date the application; and

(3) submit the signed and dated application to HHSC in accordance with HHSC instructions.

(e) If all members of a household have applied with the Social Security Administration for Supplemental Security Income (SSI) benefits, but they do not yet receive SSI, the household may apply for SNAP benefits at the Social Security office.

(f) A person receiving SSI may choose to apply for SNAP benefits under the SNAP-Combined Application Project (SNAP-CAP), as explained in §372.653 of this chapter (relating to SNAP-CAP Application Process).

§372.902.Incomplete Applications.

(a) The Texas Health and Human Services Commission (HHSC) accepts incomplete applications if they contain the applicant's name, address, and an acceptable signature (meaning the applicant's signature or the signature of a person HHSC is satisfied has authority to represent the applicant).

(b) An applicant who fails to complete the application must provide the omitted information during the eligibility interview and, as a result, may have a longer than normal interview.

§372.903.Application File Date.

The application file date is the date, determined by the Texas Health and Human Services Commission (HHSC), that HHSC receives an acceptable application.

§372.904.Application Processing Time Frame.

(a) For a TANF application, the Texas Health and Human Services Commission (HHSC) certifies or denies the application by the 45th day after the application file date explained in §372.903 of this division (relating to Application File Date), unless the household is subject to a one-month period of demonstrating cooperation as explained in §372.1155(d) of this chapter (relating to Consequence for Noncooperation with Personal Responsibility Agreement Requirements), in which case the application processing period is extended by the time period for demonstrating cooperation.

(b) For a SNAP application, except in the case of an expedited application as described in §372.956 of this subchapter (relating to Expedited SNAP Application Process), HHSC certifies or denies the application as soon as possible but not later than 30 days after the application file date explained in §372.903 of this division. If the 30th day is not a workday, then the processing period ends on the last previous workday.

(c) The first day of the application processing period is the day after the application file date, except as described in subsection (d) of this section.

(d) In SNAP, if an applicant resides in an institution and is also applying for Supplemental Security Income, the first day of the application processing period is the day the applicant is released from the institution, if the day is after the application file date.

§372.905.Designation of an Authorized Representative.

(a) TANF applicants or recipients may designate an authorized representative to represent the household in the application and review process if the household is unable to conduct business due to incapacity or incompetence. The Texas Health and Human Services Commission (HHSC) may designate another person or entity as authorized representative and protective payee to apply for and manage benefits on the household's behalf if HHSC determines a parent is not using the benefits for his or her dependent child's needs.

(b) SNAP applicants or recipients may designate an authorized representative according to the requirements in 7 CFR §273.2.

§372.906.Choosing to Apply for TANF Benefits.

(a) The TANF Program may not be the best choice for some families seeking assistance. Together, Texas Health and Human Services Commission (HHSC) staff and potential applicants discuss the program and explore the family's situation and needs. HHSC explains:

(1) assistance is temporary;

(2) alternatives must be explored;

(3) adults should seek employment and pursue other resources (such as child support from an absent parent); and

(4) a TANF application is also a request to help family members find jobs.

(b) As appropriate, HHSC encourages potential applicants to seek independence and self-sufficiency by, for example, choosing employment instead of TANF assistance. To support employment, families may apply for Medicaid coverage, SNAP benefits, or both.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901856

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 2. INTERVIEW

1 TAC §§372.951 - 372.958

Statutory Authority

The new sections affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.951.Interview Requirements.

(a) Except as noted in §372.654 of this chapter (relating to SNAP-CAP Certification Process), the Texas Health and Human Services Commission (HHSC) requires an interview to determine eligibility for:

(1) TANF and SNAP applicants;

(2) TANF recipients at the periodic eligibility review; and

(3) SNAP recipients at recertification.

(b) HHSC conducts the interview with applicants and recipients face-to-face if:

(1) the applicant or recipient requests a face-to-face interview;

(2) a member of the household is currently disqualified from TANF or SNAP because of an intentional program violation, unless the household proves to HHSC's satisfaction that the interview requirement is a hardship as described in subsection (c)(2) of this section;

(3) HHSC is unable to reach the applicant or recipient by telephone.

(c) Unless the applicant or recipient requests a face-to-face interview, HHSC conducts the interview with the applicant or recipient by telephone if the household provides HHSC a contact telephone number and:

(1) all adult members of the household are elderly or disabled and have no earned income;

(2) a hardship as determined by HHSC (such as illness, prolonged severe weather, transportation difficulties, or conflict with a work or training schedule) prevents a face-to-face interview in the office;

(3) the applicant resides in a shelter for battered women and would be in danger if she left the center; or

(4) HHSC chooses to conduct the interview by telephone.

§372.952.Interview Scheduling.

(a) The Texas Health and Human Services Commission (HHSC) schedules TANF and SNAP interviews after the application file date explained in §372.903 of this subchapter (relating to Application File Date). HHSC attempts to schedule interviews on dates and at times that accommodate the needs of applicants. For example, if the only adult is working, HHSC may schedule the interview after working hours.

(b) Unless HHSC interviews the applicant on the day of application, HHSC provides applicants with advance written notice of the date, time, and location of the interview. If the interview location is the applicant's home, the notice may set the time as "morning" or "afternoon."

§372.953.Interview Content.

(a) During TANF and SNAP interviews, the Texas Health and Human Services Commission (HHSC):

(1) provides information; and

(2) asks questions to obtain eligibility information and verifications.

(b) Applicants are primarily responsible for proving their eligibility; however, HHSC may provide reasonable assistance. HHSC allows an applicant at least 10 calendar days to provide proof of an eligibility factor.

(c) In TANF cases, as a condition of eligibility, applicants and recipients must provide HHSC any requested information or designate a source of the information acceptable to HHSC. Applicants and recipients must cooperate during the eligibility process and during any later reviews, such as quality control reviews and audits. Such required cooperation includes answering HHSC questions regarding how the household meets its expenses based on the income and resources reported to HHSC, and providing verification of the answers to such questions. HHSC may deny benefits for failure to cooperate.

(d) In SNAP cases, HHSC follows 7 CFR §273.2(d), allowing a person who has lost eligibility to reapply.

§372.954.Action Taken After an Interview.

After the TANF or SNAP interview, the Texas Health and Human Services Commission:

(1) certifies an eligible household;

(2) denies an ineligible household or an individual household member who fails to meet or prove an eligibility factor, or who fails to agree to or, after agreeing, fails to comply with a requirement; or

(3) delays the eligibility decision, as provided by §372.955 of this division (relating to Delayed Eligibility Decisions).

§372.955.Delayed Eligibility Decisions.

(a) If the Texas Health and Human Services Commission (HHSC) delays a TANF or SNAP eligibility decision to give an applicant time to prove eligibility information, HHSC informs the applicant in writing of possible sources of available proof. The notice to delay an eligibility decision specifies:

(1) the reason for the delay;

(2) what information HHSC needs from the applicant or what action the applicant or HHSC must take; and

(3) the final date by which:

(A) the applicant must provide the requested information or prove he has taken the required action; or

(B) HHSC must take action.

(b) An applicant's failure to provide information or to take a required action may result in adverse action, including denial of the application.

§372.956.Expedited SNAP Application Process.

(a) The Texas Health and Human Services Commission (HHSC) follows 7 CFR §273.2(i) and expedites SNAP eligibility decisions for applicants in need of emergency food benefits.

(b) For applicants who qualify for expedited service, HHSC provides an eligibility decision no later than the workday after the application is filed.

(1) within seven days after application, for an applicant living in a drug or alcohol treatment center; or

(2) within five days after release from a public institution, for a joint SNAP and Supplemental Security Income applicant released from a public institution.

(d) HHSC may choose to postpone certain eligibility steps to expedite SNAP services, including the verification of the eligibility information required by 7 CFR §273.2(i)(4). HHSC does not postpone the following requirements:

(1) verification of the identity of the person interviewed, as required by 7 CFR §273.2(f)(1)(vii);

(2) verification that household members who are subject to the 20-hour-per-week work requirement explained in 7 CFR §273.24 meet this requirement; and

(3) finger imaging of nonexempt household members who are present during the eligibility interview, as required by §372.1202 of this chapter (relating to Finger-imaging Requirement).

§372.957.Periodic Eligibility Review.

(a) In some TANF cases, the Texas Health and Human Services Commission (HHSC) elects to review eligibility every 12 months, but in most cases, HHSC reviews eligibility every six months.

(b) SNAP eligibility periods vary from one to 12 months, based on household circumstances and as determined by HHSC, except:

(1) as explained in §372.654 of this chapter (relating to SNAP-CAP Certification Process); and

(2) for a categorically eligible household in which all members receive Supplemental Security Income, the eligibility period is 36 months (as approved by the U.S. Department of Agriculture, Food and Nutrition Service).

§372.958.Renewal Notification.

(a) Before the end of the eligibility period, the Texas Health and Human Services Commission (HHSC) mails a review form to the household. HHSC schedules an appointment for an eligibility interview when the recipient returns the application.

(b) HHSC follows 7 CFR §273.14(b) and notifies SNAP households of the expiration of their certification periods.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901857

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 3. CASE DISPOSITION

1 TAC §§372.1001 - 372.1003

Statutory Authority

The new sections affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.1001.Notification of Final Eligibility Decision.

(a) In the TANF Program, the Texas Health and Human Services Commission (HHSC) notifies TANF applicants in writing of HHSC's final eligibility decision. The written notice informs the applicant or recipient of the right to request a hearing to appeal the eligibility determination.

(b) In SNAP, HHSC provides notice:

(1) to SNAP applicant households as explained in 7 CFR §273.10(g)(1);

(2) related to recertification as explained in 7 CFR §273.10(g)(2); and

(3) related to returned or undeliverable mail as explained in 7 CFR §273.13(c).

§372.1002.Appeal of Eligibility Decision.

TANF and SNAP households may appeal Texas Health and Human Services Commission (HHSC) decisions as provided by HHSC's fair hearing rules in Chapter 357 of this title (relating to Hearings).

§372.1003.Reopening a Denied Application.

(a) Applications. When processing SNAP and TANF applications, the Texas Health and Human Services Commission (HHSC) follows 7 CFR §273.2(h)(2)(i)(A) and reopens a denied application, so long as the household complies with the missed requirements as required by the federal regulation. HHSC otherwise requires the household to file a new application.

(b) SNAP recertifications. HHSC follows 7 CFR §273.14(e)(2) and reopens a denied SNAP application for recertification, so long as the household complies with the missed requirements as required by the federal regulation. HHSC otherwise requires the household to file a new application.

(c) TANF periodic reviews. For TANF periodic reviews, HHSC follows the same policy for SNAP recertifications in subsection (b) of this section, except HHSC reopens the denied application if the household complies with the missed requirements within 60 days after the original file date. HHSC otherwise requires the household to file a new application.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901858

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

SUBCHAPTER E. PARTICIPATION REQUIREMENTS

DIVISION 1. SOCIAL SECURITY NUMBERS

1 TAC §372.1101

Statutory Authority

The new section affects Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.1101.Social Security Number Requirements.

(a) In the TANF Program, all certified group members must either provide a social security number (SSN) or demonstrate having applied for an SSN. The Texas Health and Human Services Commission (HHSC) postpones requiring proof of application for an SSN for a child who is six months of age or younger until either the next review of eligibility or the sixth month after the child's birth month, whichever is later.

(b) For SNAP, household members must meet the requirements in 7 CFR §273.6.

(c) HHSC verifies with the Social Security Administration the accuracy of the SSN provided by a TANF or SNAP applicant. Household members must cooperate to clear any discrepancies.

(d) HHSC may disqualify a person from TANF benefits, SNAP benefits, or both, if HHSC determines that the person has failed to comply with this section.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901859

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 2. THE TANF PERSONAL RESPONSIBILITY AGREEMENT (PRA)

1 TAC §§372.1151 - 372.1156

Statutory Authority

The new sections affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapter 31. No other statutes, articles, or codes are affected by this proposal.

§372.1151.Purpose and Scope of the Personal Responsibility Agreement.

(a) A Personal Responsibility Agreement (PRA) is a written agreement that defines the responsibilities of a participant in the TANF Program and the State.

(b) As a condition of participation in the TANF Program, the following persons must sign and cooperate with the requirements of a PRA:

(1) each adult in a certified group;

(2) each minor parent in a certified group whom the Texas Health and Human Services Commission (HHSC) certifies as an adult; and

(3) each payee.

(c) A person described in subsection (b) of this section must cooperate with every requirement of a PRA the person has signed, unless HHSC determines the person is exempt from a particular requirement.

§372.1152.Consequence of Not Signing a Personal Responsibility Agreement.

If a household member who is required to sign a Personal Responsibility Agreement fails or refuses to do so, the Texas Health and Human Services Commission denies TANF benefits to the household.

§372.1153.Personal Responsibility Agreement Requirements.

(a) A Personal Responsibility Agreement (PRA) of a payee contains the following requirements:

(1) Child support. The parent of a dependent child must cooperate if necessary to establish the paternity of the dependent child and to establish or enforce child support.

(2) Children's health checkups. A dependent child must complete early and periodic screening, diagnosis, and treatment checkups on schedule.

(3) Children's immunizations. A dependent child must be immunized unless the child is exempt, as prescribed by the Texas Health and Safety Code, §161.004.

(4) Children's school attendance. A dependent child under 18 years of age and a parent under 19 years of age must attend school regularly, if the child or parent has not completed high school or its equivalent, unless the child or parent is exempt under the Texas Education Code, §25.086.

(5) No drug or alcohol abuse. A person must refrain from abusing alcohol and from possessing, using, or selling marijuana or a controlled substance in violation of the Texas Health and Safety Code, Chapter 481.

(b) The PRA of an adult in a certified group and a minor parent in a certified group whom the Texas Health and Human Services Commission (HHSC) has certified as an adult contains all the requirements in subsection (a) of this section and the following requirements:

(1) Retaining employment. The person must refrain from voluntarily quitting employment of at least 30 hours per week without good cause.

(2) Activities toward becoming self-sufficient. The person must engage in an activity toward becoming self-sufficient through participation in an education, job placement, employment skills, volunteer, or work program.

(3) Parenting skills training. If appropriate, the person must attend appropriate parenting skills training classes.

§372.1154.Cooperating with Personal Responsibility Agreement Requirements.

(a) Child support.

(1) A person cooperates with this requirement:

(A) for a person who is not exempt, by:

(i) assigning the right to receive child support payments to the State of Texas;

(ii) providing information to the Texas Health and Human Services Commission (HHSC) for a referral to the Office of the Attorney General (OAG) to, if necessary, establish the paternity of a dependent child, and to establish or enforce child and medical support; and

(iii) cooperating with Title IV-D program rules as specified in §55.3 and §55.4 of this title (relating to Cooperation Required for Recipients of Child Support Services; and Determination of Cooperation); or

(B) for a person who claims to be exempt, by providing HHSC any requested information to verify the exemption.

(2) A person is exempt from the child support requirement if the OAG or HHSC determines:

(A) the person is a participant in the TANF State Program;

(B) the child was conceived as a result of incest or rape;

(C) adoption proceedings for the child are pending and the parent of the child, for three months or less, has been working with an agency to decide whether to place the child for adoption;

(D) the child may be physically or emotionally harmed by cooperation;

(E) the parent may be physically harmed, or emotionally harmed to the extent of impairing the parent's ability to care for the child, by cooperation; or

(F) the requirement is waived under 45 CFR §260.52(c) in accordance with the requirements of the Texas Human Resources Code, §31.0322.

(b) Children's health checkups.

(1) A person cooperates with this requirement by:

(A) enrolling the child in the Texas Health Steps Program administered by the Texas Department of State Health Services (DSHS);

(B) ensuring that the child participates in the Texas Health Steps Program; and

(2) HHSC communicates with DSHS, or the Medicaid insurance carrier that DSHS contracts with, to verify cooperation with this requirement.

(1) for a child who is not exempt, by:

(A) ensuring that the child receives all appropriate immunization shots on schedule (or in accordance with any alternate immunization schedule prescribed for the child); and

(B) submitting verification to HHSC in the form of an immunization record from a licensed medical professional or a record showing the child attends a public school; or

(2) for a child who is exempt under the Texas Health and Safety Code, §161.004, by verifying the exemption to HHSC with information such as:

(A) medical records indicating or a statement from a licensed physician stating that immunization is not in the child's best medical interests; or

(B) a statement by the caretaker or parent that the requirement violates the caretaker's or parent's religious beliefs or conscience.

(d) Children's school attendance. A person cooperates with this requirement:

(1) for a child who is not exempt, by:

(A) ensuring regular school attendance by each person in the household subject to the requirement; and

(B) submitting verification to HHSC on request, such as a written or oral statement from the school; or

(2) for a child who is exempt under the Texas Education Code, §25.086, by providing HHSC any requested information that would verify the exemption.

(e) No drug or alcohol abuse. HHSC verifies cooperation with this requirement by obtaining criminal history information on the person from the Texas Department of Public Safety or another law enforcement agency. HHSC considers a person to be cooperating with this requirement if the person is neither convicted of nor receives deferred adjudication for:

(1) a crime involving alcohol abuse; or

(2) an offense under the Texas Health and Safety Code, Chapter 481, involving marijuana or another controlled substance.

(f) Retaining employment. A person cooperates with this requirement by not voluntarily quitting a job of 30 or more hours per week without good cause to do so. HHSC determines cooperation with this requirement. When HHSC learns that the person no longer has the job, HHSC investigates and decides whether the work separation was a voluntary quit, and if so, whether there was good cause to quit under §372.1156 of this division (relating to Good Cause for Noncooperation with Personal Responsibility Agreement Requirements).

(1) Voluntarily quitting a job means any separation from employment that HHSC determines was initiated by the person, regardless of whether the employer or the person claims that the person resigned or was fired. For example, HHSC may decide the work separation was not a voluntary quit if a person resigned at the employer's demand. Similarly, HHSC may decide the work separation was a voluntary quit when a person is fired for reasons such as leaving a job unannounced.

(2) HHSC does not consider either of the following to be a separation from employment:

(A) a reduction in work hours below 30 per week, if the person continues to work for the same employer; or

(B) the ending of a self-employment enterprise.

(g) Activities toward becoming self-sufficient.

(1) A person who is not exempt cooperates with this requirement by enrolling and participating in the Choices work program administered by the Texas Workforce Commission (TWC). TWC determines cooperation with the Choices work program and informs HHSC of noncooperation.

(2) A person who claims to be exempt from this requirement cooperates by demonstrating the exemption to HHSC or TWC.

(3) A person is exempt from this requirement (but may choose to voluntarily participate, as applicable) if the person:

(A) chooses the One-Time TANF benefit instead of regular TANF benefits, as explained in §372.802 of this chapter (relating to One-Time TANF Eligibility Requirements);

(B) lives in a county that does not offer Choices work program services;

(C) is a caretaker relative of a disabled person who lives in the home and requires the caretaker relative's presence, or is a single person caring for a child under one year of age;

(D) is a single grandparent 50 years of age or older caring for a child under three years of age;

(E) is disabled and the disability is expected to last more than 180 days;

(F) is pregnant and unable to work as a result of the pregnancy; or

(G) is 60 years of age or older.

(h) Parenting skills training. A person cooperates with this requirement by:

(1) ensuring that each minor parent in the certified group and each parent in the certified group with a child in the home under five years of age attends parenting skills training classes; and

(2) submitting verification to HHSC, such as a written or oral statement from the provider of the training.

§372.1155.Consequence for Noncooperation with Personal Responsibility Agreement Requirements.

(a) If a person fails or refuses to cooperate with a requirement of a Personal Responsibility Agreement (PRA) the person signed, the Texas Health and Human Services Commission (HHSC) takes the applicable action described in subsections (b) - (d) of this section, unless the person demonstrates good cause for the noncooperation as explained in §372.1156 of this division (relating to Good Cause for Noncooperation with Personal Responsibility Agreement Requirements).

(b) HHSC stops TANF benefits to a person and to the household for a one-month period or until the person demonstrates cooperation with the requirement of the PRA for which the sanction was imposed, whichever is longer.

(c) If a person fails or refuses to cooperate with either of the requirements described in §372.1154(a) or (g) of this division (relating to Cooperating with Personal Responsibility Agreement Requirements), HHSC denies Medicaid benefits to the person (but not to other members of the household who are receiving Medicaid), unless the person demonstrates to HHSC:

(1) the person is pregnant; or

(2) the person is under age 19.

(d) If a person fails to cooperate for two consecutive months, HHSC terminates the person's and the household's eligibility for TANF benefits. The person must reapply for TANF benefits and demonstrate cooperation with all PRA requirements that apply to the person for a one-month period before the person or the household may again receive TANF benefits.

§372.1156.Good Cause for Noncooperation with Personal Responsibility Agreement Requirements.

(a) Child support. The Texas Health and Human Services Commission (HHSC) grants good cause for noncooperation with child support requirements only if the person demonstrates:

(1) the person was exempt under §372.1154(a)(2) of this division (relating to Cooperating with Personal Responsibility Agreement Requirements) at the time of the noncooperation; or

(2) the noncooperation resulted from other circumstances the person could not control (reasons that do not conflict with Title IV-D program rules).

(b) Children's health checkups. HHSC grants good cause for noncooperation with the Texas Health Steps program if:

(1) a licensed physician documents that the participation would risk the child's health;

(2) the child's caretaker or parent represents to HHSC staff that participation would violate his or her religious beliefs; or

(3) the Texas Health Steps worker confirms that transportation was unavailable, medical providers were unavailable, or the health screening was not needed (because, for example, the child is on a modified immunization schedule).

(1) the teen parent has a child under 12 weeks of age; or

(2) no one in the home is willing and able to care for the child and child care is not available through the Texas Workforce Commission or the school district.

(d) Retaining employment. Good cause for quitting a job of 30 or more hours per week means being forced to quit due to circumstances beyond the control of the person. HHSC does not consider good cause for quitting to include resigning a job in order to accept another job that:

(1) does not materialize;

(2) results in employment of less than 30 hours a week; or

(3) results in employment with weekly earnings of less than federal minimum hourly wage multiplied by 30.

(e) Activities toward becoming self-sufficient. The Texas Workforce Commission determines whether a person has good cause for failing to cooperate with the Choices program.

(f) Parenting skills training. HHSC grants good cause for failure to comply with parenting skills training if:

(1) HHSC verifies that there are no classes in the area;

(2) the person provides a statement from the provider that classes were full;

(3) the person submits a doctor's statement or medical records verifying that the person was ill; or

(4) the person fails to attend a class due to circumstances beyond the person's control, as determined by HHSC, and the person submits verification satisfactory to HHSC.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901860

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 3. FINGER IMAGING

1 TAC §§372.1201 - 372.1204

Statutory Authority

The new sections affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.1201.Legal Basis and Purpose.

(a) The Texas Health and Human Services Commission (HHSC) takes and keeps on file an electronic copy of a person's fingerprints, as required by Texas Human Resources Code, §31.0325.

(b) Finger imaging allows HHSC to verify the identity of a person to help prevent fraud.

§372.1202.Finger-imaging Requirement.

(a) TANF and SNAP household members must comply with the finger-imaging requirement in this section as a condition of eligibility for benefits.

(b) If the Texas Health and Human Services Commission (HHSC) does not already have fingerprints on file at the time of an eligibility interview and if the person is not exempt under §372.1203 of this division (relating to Finger-imaging Exemption), HHSC requires finger imaging of:

(1) TANF adults and minor parents of children, including disqualified household members; and

(2) eligible adult SNAP household members and minors who are heads-of-household.

§372.1203.Finger-imaging Exemption.

(a) The Texas Health and Human Services Commission (HHSC) exempts the following TANF and SNAP household members from the finger-imaging requirement if HHSC determines the exemption applies:

(1) persons physically unable to provide the requested finger images;

(2) persons who attempt to comply but are unable through no fault of their own, such as equipment failure;

(3) elderly or disabled persons, if HHSC determines the requirement would cause an undue burden to the person because of the person's condition, in which case HHSC may require written verification of the person's condition from a medical professional; and

(4) persons temporarily unable to travel to the Lone Star Image System (LSIS) site to be finger imaged, if the person:

(A) has an injury or illness that prevents traveling to the LSIS site;

(B) resides at a battered women's shelter and is unable to safely travel to the LSIS site to be finger imaged;

(C) is out of the geographic area at the time of the interview or when the finger image is requested (not applicable to One-Time TANF (OTTANF));

(D) resides more than five miles from the closest LSIS site and does not have a vehicle or other reliable transportation to that location, or is unable to travel for reasons beyond the person's control, regardless of distance (not applicable to OTTANF); or

(E) has a work schedule that does not allow the person to travel to the LSIS site during HHSC office hours (not applicable to OTTANF).

(b) A person who meets any of the exemption criteria in subsection (a)(4)(A) - (E) of this section must comply with the finger-imaging requirement no later than the next TANF periodic review, or the next SNAP recertification or reapplication, unless the person is exempt for a different reason.

(c) If finger images were not previously provided, HHSC may request finger imaging each time HHSC redetermines a TANF or SNAP household's eligibility. An exemption granted by HHSC under subsection (a) of this section applies only to the finger-imaging request that prompted the exemption. If HHSC requests finger imaging of a person who was previously exempt under subsection (a) of this section, the person must either comply with the request or again request an exemption from the requirement.

§372.1204.Consequence for Noncompliance with Finger-imaging Requirement.

If a member of a TANF or SNAP household who is required to comply with the finger-imaging requirement fails to comply, the Texas Health and Human Services Commission denies benefits to the household.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901861

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 4. TANF WORKFORCE ORIENTATION

1 TAC §§372.1251 - 372.1253

Statutory Authority

The new sections affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapter 31. No other statutes, articles, or codes are affected by this proposal.

§372.1251.TANF Workforce Orientation Requirement.

(a) A person described in subsection (b) of this section must attend an orientation presented by a local workforce development board as a condition of TANF eligibility, unless the person is exempt under §372.1252(b) of this division (relating to TANF Workforce Orientation Exemption).

(b) The following must comply with the workforce orientation requirement:

(1) a person applying for TANF as a caretaker; and

(2) a person who has reached the 60th month of TANF assistance and is applying for an extension of TANF benefits on the basis of hardship, as explained in §372.452 of this chapter (relating to TANF Time Limit Exemptions).

§372.1252.TANF Workforce Orientation Exemption.

(a) A person is not exempt from the workforce orientation requirement even if extraordinary circumstances prevent the person from attending a regularly scheduled orientation within the time frame of the Texas Health and Human Services Commission's (HHSC's) processing of the TANF application. Instead, the person must attend an alternative workforce orientation by a local workforce development board, such as through an individually scheduled appointment or through participating by telephone.

(b) If a person is prevented from attending a regularly scheduled orientation due to extraordinary circumstances, and the person attempts to attend an alternative orientation within the time frame of HHSC's processing of the TANF application but no alternative orientation is provided, HHSC may consider the person to have met the workforce orientation requirement due to the person's attempts to cooperate.

§372.1253.Consequence for Noncompliance With TANF Workforce Orientation Requirements.

If a person who is required to comply with the TANF workforce orientation requirement fails to comply, the Texas Health and Human Services Commission may deny TANF benefits to the household.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901862

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 5. THIRD-PARTY RESOURCES

1 TAC §§372.1301 - 372.1303

Statutory Authority

The new sections affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.1301.Overview of Third-party Resources.

(a) A third-party resource is a source of payment for medical expenses other than Medicaid. Third-party resources include payments from private and public health insurance and from other liable third parties that can be applied toward the recipient's medical expenses.

(b) Members of a certified group who receive Medicaid must comply with third-party resources requirements, as described in §372.1302 of this division (relating to Third-party Resource Requirements).

§372.1302.Third-party Resource Requirements.

TANF recipients who receive Medicaid must:

(1) cooperate in identifying and pursuing any third party who may be liable for medical expenses; and

(2) reimburse the State for medical expenses paid by Medicaid that should have been paid from a third-party resource.

§372.1303.Consequence for Noncompliance with Third-party Resource Requirements.

If a person who must comply with third-party resource requirements fails to comply, the Texas Health and Human Services Commission may disqualify the person from receiving TANF benefits.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901863

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 6. WORK

1 TAC §§372.1351 - 372.1353

Statutory Authority

The new sections affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.1351.SNAP Work Requirements.

In SNAP, the Texas Health and Human Services Commission follows 7 CFR §273.7 and requires non-exempt household members to:

(1) register for work;

(2) not voluntarily quit a job or reduce work hours to less than 30 per week, without good cause to do so;

(3) participate in a SNAP Employment and Training Program;

(4) participate in a workfare program;

(5) report to an employer; and

(6) accept a bona fide offer of suitable employment.

§372.1352.Consequence for Noncompliance with SNAP Work Requirements.

(a) If a non-exempt household member fails to comply with SNAP work requirements and does not demonstrate good cause for the failure to comply, the Texas Health and Human Services Commission:

(1) denies benefits to the household if the primary wage earner failed to comply; or

(2) disqualifies only the person who failed to comply if the person is not the household's primary wage earner.

(b) The length of the period of denial or disqualification under subsection (a) of this section is as follows or until the person complies, whichever is longer:

(1) one month, if it is the first noncompliance;

(2) three months, if it is the second noncompliance; and

(3) six months, if it is the third or any subsequent noncompliance.

§372.1353.Consequence for a TANF Parent on Strike.

The Texas Health and Human Services Commission denies TANF benefits to the household for any month in which a parent participates in a strike.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901864

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 7. REPORTING CHANGES

1 TAC §§372.1401 - 372.1404

Statutory Authority

The new sections affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.1401.Changes a TANF Household Must Report.

A TANF household must report a change in:

(1) income, including the source of income and the amount of countable income;

(2) resources, including the amount of countable resources, changes in vehicle ownership, and the receipt of a lump sum payment or settlement;

(3) household composition, including new household members and household members who leave the home;

(4) residence;

(5) medical insurance;

(6) information relating to an absent parent (such as a new job or residence address); and

(7) circumstances, other than employment, that affect the amount of benefits or an exemption from participation in the Choices work requirement, as described in §372.1154(g) of this subchapter (relating to Cooperating with Personal Responsibility Agreement Requirements).

§372.1402.Changes a SNAP Household Must Report.

(a) A SNAP household must report changes as explained in 7 CFR §273.12, except:

(1) households are not required to report changes in shelter costs; and

(2) all households must report changes in their resident address.

(b) This section does not apply to a participant in the SNAP-Combined Application Project (SNAP-CAP), as explained in §372.655 of this chapter (relating to Reporting Changes).

§372.1403.Time Frame to Report a Change.

TANF and SNAP households must report a change described in §372.1402 of this division (relating to Changes a SNAP Household Must Report) within 10 days after the household learns of the change, as described in 7 CFR §273.12(a)(3).

§372.1404.Time Frame for Action on a Reported Change.

(a) The Texas Health and Human Services Commission (HHSC) takes action on a reported change promptly as required by 7 CFR §273.12.

(b) For situations in which verification is required, HHSC requires verification of a reported change that would increase benefits before action is taken to increase benefits, as described in 7 CFR §273.12(c)(1)(iii). The effective date of the benefit increase is dependent on whether verification is provided timely as described in 7 CFR §273.12(c)(1)(iii).

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901865

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

SUBCHAPTER F. BENEFITS

DIVISION 1. BENEFITS IN GENERAL

1 TAC §§372.1501 - 372.1521

Statutory Authority

The new sections affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.1501.Definitions.

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

(1) Cash-back--The disbursement of funds from a TANF account transacted through a point-of-sale (POS) terminal.

(2) Client--A person authorized to receive benefits and perform transactions.

(3) Day--A calendar day unless otherwise specified.

(4) Electronic Benefit Transfer (EBT)--An electronic system that allows public assistance benefits to be issued to a client via an EBT card. The client authorizes transfer of benefits from the client's account to a retailer account to receive cash or pay for products.

(5) EBT card--A debit card used to access SNAP and TANF benefits for the purchase of food or allowable items, or to obtain cash.

(6) EBT contractor--A vendor that contracts with the Texas Health and Human Services Commission to provide EBT services in Texas.

(7) EBT program transactions--Benefit or account transactions involving:

(A) authorization;

(B) issuance;

(D) accounting;

(E) settlement;

(F) reconciliation; or

(G) inquiry.

(8) EBT system--An electronic payments system that uses electronic funds transfer, automated teller machines, and point-of-sale technology for the delivery of public assistance benefits. The major components of the Texas EBT system are call center, retailer management, application software, and central processing.

(9) Personal identification number (PIN)--A four-digit alphanumeric code selected by or assigned to a client. The PIN is used to verify the identity of a cardholder when performing an online EBT program transaction at an automated teller machine or point-of-sale terminal.

(10) Point-of-sale (POS) terminal--A range of electronic devices deployed at retailer locations and used to initiate the electronic debit of client accounts and credit retailer accounts as a purchase is made, or to initiate the electronic credit to the client account and debit to the retailer account for a return.

(11) Retailer--A merchant authorized by the U.S. Department of Agriculture, Food and Nutrition Service to accept SNAP benefits, or that chooses to accept TANF cash for purchases or chooses to provide TANF cash.

§372.1502.Maximum Benefit Amounts.

(a) In the TANF Program, there is no guarantee of a particular benefit amount. The Texas Health and Human Services Commission periodically determines benefit amounts based on funds appropriated by state law.

(b) In SNAP, the U.S. Department of Agriculture, Food and Nutrition Service annually determines the maximum benefit amounts. The current amounts may be found at the following Internet site: www.fns.usda.gov/fsp/applicant_recipients/fs_Res_Ben_Elig.htm.

§372.1503.Minimum Benefit Amounts.

(a) In the TANF Program, the minimum amount of monthly benefits is $10. A household must qualify for at least this amount in order to receive TANF benefits.

(b) In SNAP, the minimum amount of benefits in the first month is $10, and a household must qualify for at least this amount to receive SNAP benefits. For subsequent months, there is no minimum benefit amount.

§372.1504.SNAP Benefit Allotment Amounts.

Under a waiver granted Texas by the U.S. Department of Agriculture, Food and Nutrition Service, the Texas Health and Human Services Commission issues SNAP benefits in allotments of $1, $3, and $5 without rounding up as otherwise required by 7 CFR §274.2(f)(3).

§372.1505.Determining Monthly Benefits.

(a) In the TANF Program, the Texas Health and Human Services Commission (HHSC) determines the monthly amount of benefits by:

(1) totaling the household's countable income under §372.403 of this chapter (relating to Determining Whose Income Counts in TANF);

(2) subtracting applicable deductions explained in Subchapter B, Division 7, of this chapter (relating to Income); and

(3) subtracting the result from the maximum benefit amount the household is eligible to receive.

(b) In SNAP, HHSC follows 7 CFR §273.10 to determine the household's monthly amount of benefits.

§372.1506.Benefit Time Frames.

(a) In the TANF Program, benefits begin:

(1) on the date the Texas Health and Human Services Commission (HHSC) certifies the application; or

(2) on the 30th day after the application file date explained in §372.903 of this chapter (relating to Application File Date).

(b) In SNAP, HHSC:

(1) provides benefits by calendar month; and

(2) follows 7 CFR §273.10(a)(1), which provide that benefits begin in the month of application but may be prorated for that month depending on the date of application.

§372.1507.TANF Supplemental Grandparent Payment.

In addition to regular TANF benefits, the Texas Health and Human Services Commission pays a one-time payment to eligible grandparents who care for a TANF-certified grandchild as authorized by the Texas Human Resources Code, §31.0041.

§372.1508.Eligibility for Benefits if a Household Member Dies or Leaves the Home.

If a TANF or SNAP household member dies or leaves the home, the household is eligible for the benefit if the household was eligible on the first day of the month.

§372.1509.Appropriate Use of Benefits.

(a) SNAP benefits. A recipient of SNAP benefits must purchase food with the benefits at any business or facility that the U.S. Department of Agriculture, Food and Nutrition Service authorizes as a SNAP retailer. The account can be used to purchase most food products, including seeds and plants to grow foods for personal consumption. A client must not use SNAP benefits to purchase:

(1) alcoholic beverages, cigarettes, or tobacco;

(2) any non-food item, such as pet food, soap, paper products, and household supplies;

(3) vitamins and medicines;

(4) food that will be eaten in the store; and

(5) hot foods or hot food products prepared for immediate consumption, except in certain situations, as explained in the definition of eligible foods at 7 CFR §271.2, and under the circumstances described in 7 CFR §274.10.

(b) TANF benefits. A recipient of TANF benefits must use the money to purchase goods and services necessary and essential to the welfare of the children, such as food, clothing, housing, furniture, transportation, laundry, medical supplies, household supplies, and recreation.

§372.1510.Issuance of and Access to Benefits.

(a) The Texas Health and Human Services Commission (HHSC) uses an EBT system to issue SNAP and TANF benefits.

(b) HHSC uses EBT contractors to maintain EBT accounts.

(c) Eligible TANF and SNAP households use an EBT card and a personal identification number (PIN) to access their benefits. HHSC may assign a PIN for a new cardholder or allow the cardholder to select a PIN.

(d) HHSC issues an EBT card to:

(1) a primary cardholder; or

(2) an authorized representative, as required by §372.1512 of this division (relating to Required Authorized Representative).

(e) If requested by the primary cardholder, HHSC may issue a second EBT card and PIN to a secondary cardholder. The secondary cardholder uses the EBT card and PIN to access the primary cardholder's EBT account.

§372.1511.Using an EBT Card.

(a) A TANF household uses its EBT card at participating retailers to:

(1) make purchases of its choice; or

(2) obtain cash.

(b) A SNAP household uses its EBT card to purchase eligible food at authorized retail food stores as defined in 7 CFR §271.2.

§372.1512.Required Authorized Representative.

The following households must have an authorized representative:

(1) TANF households with a protective payee or representative payee assigned by the Texas Health and Human Services Commission (HHSC); and

(2) SNAP households residing in an alcoholic or narcotic treatment center or group living arrangement, as required by 7 CFR §273.11(e) and (f).

§372.1513.Availability of Monthly Benefits.

After certifying a household for monthly benefits, the Texas Health and Human Services Commission makes the benefits available during the first 15 days of the month. The specific day is determined by the last digit in the case number as follows:

Figure: 1 TAC §372.1513

§372.1514.Cash Back from a SNAP Account Purchase.

A retailer deducts only payment amounts from the EBT SNAP account and does not return change to the cardholder.

§372.1515.Transaction Charges on a TANF Account.

(a) Participating retailers in Texas may charge $.50 per transaction for the third and subsequent cash-only or cash-back transactions over $50 in a month from a TANF account.

(b) Participating out-of-state businesses determine the amount they charge for cash-back transactions.

(c) A household must verify and accept the amount of a charge before initiating a transaction to withdraw cash at an out-of-state retailer or business.

§372.1516.Using Benefits after Moving from Texas.

(a) SNAP.

(1) A primary cardholder who moves from Texas, either permanently or temporarily, may use the EBT card to access SNAP benefits at a retailer in another state.

(2) If the cardholder cannot find a retailer in another state that accepts the EBT card, the cardholder must contact the Texas EBT call center's toll-free number. The EBT Help Desk helps find a retailer where the cardholder can use his or her benefits.

(b) TANF.

(1) A primary cardholder who moves from Texas, either permanently or temporarily, may use the EBT card to access TANF benefits at a retailer or business in another state.

(2) If the cardholder cannot find a retailer or business in another state that accepts the EBT card, the cardholder must contact the Texas EBT call center's toll-free number. The EBT Help Desk helps find a retailer or business where the cardholder can use his or her benefits.

(3) If the cardholder moved from Texas on or after the first of the month but before accessing that month's TANF benefits and cannot find a retailer that accepts the Texas EBT card, the Texas Health and Human Services Commission (HHSC) may mail a benefit conversion warrant (full month's benefit amount only) to the household's new address. A cardholder must contact a local HHSC eligibility determination office to request the conversion.

§372.1517.Alternate Benefit Issuance Methods during a Disaster.

(a) If TANF and SNAP benefits become unavailable for more than three days because of a natural disaster or other major emergency or crisis, the Texas Health and Human Services Commission (HHSC) may offer an alternate benefit issuance method.

(b) HHSC determines alternate benefit issuance methods for TANF, which may include:

(1) issuing money orders at specified locations; or

(2) issuing checks, either mailed or obtained at specified locations.

(c) Alternate benefit issuance methods for SNAP benefits must be approved by the United State Department of Agriculture, Food and Nutrition Service.

§372.1518.Reporting and Replacing a Lost or Stolen EBT Card.

(a) TANF and SNAP cardholders are responsible for protecting their EBT cards and personal identification numbers (PIN).

(b) Cardholders must contact the Texas EBT call center's toll-free number to report a lost or stolen card or compromised PIN.

(1) The call center EBT contractor immediately places a hold on the card access.

(2) The Texas Health and Human Services Commission applies the requirements of 7 CFR §274.12(f)(5) to both TANF and SNAP accounts.

§372.1519.Reporting and Replacing Lost or Stolen Benefits.

(a) The Texas Health and Human Services Commission (HHSC) replaces benefits removed without authorization after the household or authorized representative reports a lost or stolen EBT card or compromised personal identification number to the EBT call center.

(b) HHSC does not replace benefits, except as provided in subsection (a) of this section.

§372.1520.Action Taken on Non-accessed Benefits.

(a) If a household does not access the TANF account for three consecutive months or the SNAP account for three consecutive months (or six consecutive months when the last month's issuance is less than $20), the EBT contractor notifies the Texas Health and Human Services Commission (HHSC).

(b) If a TANF household does not access a benefit for one year, HHSC cancels and removes the benefits from the TANF account.

(c) If a SNAP household does not access a benefit for one year, HHSC cancels and removes the benefit from the SNAP account. See 7 CFR §274.12(f)(7).

(d) If a one-person SNAP household is denied due to the death of the client, HHSC cancels and removes all benefits from the SNAP account.

§372.1521.Account Balance and Transaction Errors.

(a) TANF and SNAP households contact the Electronic Benefit Transfer (EBT) call center's toll-free number to report an EBT account balance error or an EBT transaction error for resolution by the retailer management EBT contractor.

(b) After receiving written notice of the retailer management EBT contractor's decision, the client may contact the Texas Health and Human Services Commission (HHSC) Lone Star Business Services for a second review.

(c) If a TANF or SNAP household is dissatisfied with HHSC Lone Star Business Services' decision, the household may request a fair hearing as provided in HHSC's fair hearing rules in Chapter 357 of this title (relating to 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 May 11, 2009.

TRD-200901866

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 2. OVERPAYMENTS

1 TAC §372.1551, §372.1552

Statutory Authority

The new sections affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.1551.TANF Overpayments.

(a) A TANF overpayment may occur because of:

(1) a Texas Health and Human Services Commission (HHSC) error;

(2) a household error; or

(3) an intentional program violation.

(b) TANF households must repay any benefits they were not entitled to receive.

(c) For overpayments resulting from a change in circumstances in an active case, the first month of overpayment is the first month in which a change would have been effective had it been reported and processed in a timely manner. This can be no later than two months after the month the change occurred.

(d) HHSC collects overpayments from TANF households:

(1) by check or money order; or

(2) by withholding a portion of benefits the household would otherwise receive.

§372.1552.SNAP Overpayments.

A household must repay overpayment of SNAP benefits as explained in 7 CFR §273.18.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901867

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

DIVISION 3. RESTORATION

1 TAC §372.1601

Statutory Authority

The new section affects Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.1601.Restoring TANF and SNAP Benefits.

The Texas Health and Human Services Commission restores TANF and SNAP benefits to households as specified in 7 CFR §273.17, except TANF households that do not receive benefits for the month of application due to proration are not eligible for restoration of benefits back to the application date.

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901868

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900

SUBCHAPTER G. RETAILER REQUIREMENTS

1 TAC §§372.1701 - 372.1716

Statutory Authority

The new sections affect Texas Government Code, Chapter 531; and Texas Human Resources Code, Chapters 31 and 33. No other statutes, articles, or codes are affected by this proposal.

§372.1701.Definitions.

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

(1) Automated Clearing House Network (ACH)--A secure payment system of the U.S. Federal Reserve Bank that provides electronic funds transfer between banks.

(2) Advice--An electronic message a retailer sends to receive reimbursement for a transaction. The Electronic Benefit Transfer (EBT) system acknowledges receipt of the Advice, but does not send another approval. The Advice may be declined if it does not match the record of information associated with the original transaction authorized by the call center.

(3) Banking business day--A calendar day (begins at midnight and ends the following midnight), not including a Saturday, Sunday, or a holiday when banks are closed.

(4) Cash-back--The disbursement of funds from a TANF account transacted through a point-of-sale (POS) terminal.

(5) Chargeback--An account adjustment entry against the respondent's settlement account. The adjustment is made as a result of the resolution of the dispute in favor of the initiator.

(6) Client--A person authorized to receive benefits and perform transactions.

(7) Day--A calendar day unless otherwise specified.

(8) Electronic Benefit Transfer (EBT)--An electronic system that allows public assistance benefits to be issued to a client via a debit card. The client authorizes transfer of benefits from the client's account to a retailer account to receive cash or pay for products.

(9) EBT contractor--A vendor that contracts with the Texas Health and Human Services Commission (HHSC) to provide EBT services in Texas.

(10) EBT program transaction--Benefit or account transaction involving:

(A) authorization;

(B) issuance;

(D) accounting;

(E) settlement;

(F) reconciliation; or

(G) inquiry.

(11) EBT system--An electronic payments system that uses electronic funds transfer, automated teller machines, and point-of-sale technology for the delivery of public assistance benefits. The major components of the Texas EBT system are call center, retailer management, application software, and central processing.

(12) Entertainment--The sale of alcoholic beverages, legalized games of chance, sexually oriented material, coin-operated amusement machines, or amusement services as defined by the Comptroller of Public Accounts for tax purposes in 34 TAC §3.298 (relating to Amusement Services).

(13) Equipment--The hardware, including POS terminals, personal identification number (PIN) pads, cables, connectors, and power cords, the retailer management EBT contractor provides to state-supported retailers on behalf of HHSC.

(14) Food and Nutrition Service (FNS)--The division of the U.S. Department of Agriculture responsible for administering SNAP at the federal level.

(15) Initiator--The party initiating the process to resolve a disputed EBT account discrepancy with the respondent.

(16) Personal identification number (PIN)--A four-digit alphanumeric code selected by or assigned to a client. A PIN is used to verify the identity of a cardholder when performing an online EBT program transaction at an automatic teller machine or POS terminal.

(17) Point-of-sale (POS) terminal--A range of electronic devices deployed at retailer locations and used to initiate the electronic debit of client accounts and credit retailer accounts as a purchase is made, or to initiate the electronic credit to the client account and debit to the retailer account for a return.

(18) Respondent--The second party to a disputed EBT account discrepancy identified by the initiator.

(19) Retailer--A merchant authorized by the U.S. Department of Agriculture, Food and Nutrition Service to accept SNAP benefits, or that chooses to accept TANF cash for purchases or chooses to provide TANF cash.

(20) Retailer management EBT contractor--The vendor that contracts with HHSC and is responsible for retailer services, including settlement and reconciliation; dispute resolution; retailer agreement; retailer operating rules; and training, managing, and supplying equipment and help desk services for state-supported retailers.

(21) Settlement--The exchange of information that results in the transfer of funds from one entity to another to complete a financial transaction.

(22) Settlement date--The date on which settlement occurs.

(23) Software--The EBT applications program operated on or in connection with the equipment.

(24) State-supported retailer--A retailer that chooses to operate POS terminals supplied by the retailer management EBT contractor on behalf of HHSC.

(25) Switch provider--An entity that records, tracks, and accounts for EBT transaction activity and relays Texas EBT program transactions between the central processing system and the proper third-party processor or retailer.

(26) Third-party processor (TPP)--An entity that relays EBT program transactions through its own host system to the Texas EBT central processing system for authorization. The entity may be:

(A) a financial institution;

(B) a cardholder authorization processor other than a Texas EBT contractor; or

§372.1702.EBT System Participation Requirements.

(a) To participate in the EBT system, a retailer must be:

(1) currently authorized by the U.S. Department of Agriculture to participate in SNAP; or

(2) a nonfood (not Food and Nutrition Service-authorized) retailer that provides TANF cash-back, and receives no more than 10% of its gross revenue from entertainment.

(b) A retailer must represent and warrant that the facility in which a point-of-sale terminal is or will be located complies with all applicable building and zoning codes and ordinances.

(1) must represent and warrant that it validly exists and is in good standing under the laws of the jurisdiction of its organization and the State of Texas;

(2) must not have been debarred from contracting by any unit of the federal government or any unit of a state government; and

(3) must not be delinquent in making State of Texas franchise tax payments, if the retailer or third-party processor is a for-profit corporation.

(d) A retailer must comply with all applicable regulations in 7 CFR Parts 274 and 278, and this chapter.

(e) A retailer or third-party processor and the retailer management EBT contractor must execute a written agreement with HHSC adopted in compliance with 7 CFR §274.12(g)(6).

(f) Retailer participation in the EBT system is voluntary. A Food and Nutrition Service-authorized retailer must notify the retailer management EBT contractor in writing that it wishes to decline participation in the EBT system.

(g) A retailer that is suspended or terminated as a redeemer of SNAP benefits, for any reason, must:

(1) immediately notify the retailer management EBT contractor, whereupon the retailer management EBT contractor will discontinue connection to the retailer; and

(2) stop using the EBT system to redeem SNAP benefits.

(h) The retailer management EBT contractor provides a retailer's employees with training, in person, by phone, or by mail, in the processing of EBT program transactions, including operation of the equipment if the retailer management EBT contractor supplies the equipment. Employee training is completed before the retailer accepts EBT program transactions. If the retail management EBT contractor is providing in-person training, the retailer management EBT contractor notifies the retailer in advance of the scheduled time for in-person training.

(i) Access to the EBT system is granted:

(1) after the training in subsection (h) of this section has been completed; and

(2) when system testing has been approved.

(j) A retailer must not subject a client, employee, or applicant to actions that are discriminatory in nature or refuse to process a client's EBT program transaction on the grounds of race, color, national origin, age, sex, disability, religious belief, or political belief.

(k) A retailer redeeming TANF benefits by providing cash-back on a no-purchase-required basis must maintain a sufficient amount of cash on hand to accommodate cash-back transaction volumes.

(l) A retailer must not ask a client to reveal the client's personal identification number.

§372.1703.Point-of-Sale Terminal Requirements.

(a) Equipment. As specified in 7 CFR §274.12(g)(2), a retailer may, but is not required to, obtain equipment from the retailer management EBT contractor.

(b) Site survey. If a retailer obtains equipment from the retailer management EBT contractor, the retailer must permit the retailer management EBT contractor to:

(1) conduct necessary site surveys at all locations of a retailer participating in the EBT program; and

(2) during the course of the site survey, the retailer management EBT contractor determines the equipment needs for each qualified location to comply with the applicable point-of-sale (POS) terminal deployment, as provided by §372.1704 of this chapter (relating to Point-of-Sale Terminal Requirements to Redeem SNAP Benefits).

(c) Terminal software license. The retailer management EBT contractor provides software, under license, to state-supported retailers.

§372.1704.Point-of-Sale Terminal Requirements to Redeem SNAP Benefits.

(a) General. Retailers must deploy point-of-sale (POS) terminals, as required by 7 CFR §274.12(g)(4)(ii), whether the terminals are provided by the retailer management EBT contractor or by a third-party processor.

(b) Optional terminals. A retailer may deploy a POS terminal within its respective store office, customer service area, or another location to enable clients who are not making a purchase to complete credit transactions and TANF cash transactions.

(1) $100 per month or more, receive equipment at no cost from the retailer management EBT contractor; or

(2) less than $100 per month, must:

(A) obtain the software and equipment at their own expense; or

(B) use the manual voucher transaction process, as described in §372.1705 of this subchapter (relating to Manual Voucher Transaction Requirements).

(d) Special checkout lanes. A retailer must not establish special checkout lanes that are only for EBT program transactions, as stated in 7 CFR §274.12(g)(4)(i).

§372.1705.Manual Voucher Transaction Requirements.

(a) Retailers that must provide manual voucher services are:

(1) stores that do not qualify for equipment because they do not average at least $100 a month in SNAP transactions; or

(2) do not have electricity or a phone line at the time of the purchase.

(b) A retailer with online transaction processing capabilities may provide manual voucher services if the third-party processor, the Texas EBT system, the POS terminal, or the personal identification (PIN) pad is inoperative.

(d) Retailers that delay telephone verification or obtain preliminary telephone verification may process manual TANF cash-back redemptions and SNAP redemptions when they are able to:

(1) contact the EBT call center by telephone; and

(2) obtain an authorization number for the amount of purchase before completing the sale.

(e) Retailers that delay telephone verification or obtain preliminary telephone verification must:

(1) complete the manual voucher properly and legibly;

(2) include the telephone authorization number;

(3) ensure that the voucher is signed by the client and initialed by the sales clerk; and

(4) submit the voucher to the retailer management EBT contractor within 15 calendar days after the date of purchase.

(f) The retailer management EBT contractor:

(1) processes a voucher within three banking business days after receipt; or

(2) if the voucher is incomplete or otherwise improperly prepared and submitted, returns the voucher to the retailer for correction or completion, or both, within four banking business days after the date the retailer management EBT contractor receives it.

§372.1706.Electronic Manual Voucher Transaction Requirements.

(a) Electronic voucher transaction. A retailer may enter a manual voucher into a point-of-sale terminal at the retailer location and submit it as an electronic voucher in the form of an Advice transaction.

(b) Electronic Benefit Transfer (EBT) electronic manual voucher procedures. If a retailer with electronic voucher capacity uses a manual voucher, the retailer or its third-party processor must complete the manual voucher as specified in §372.1705 of this subchapter (relating to Manual Voucher Transaction Requirements) and:

(1) obtain voice authorization from the EBT call center before completing the manual voucher transaction;

(2) enter the authorization code on the manual voucher and in the Advice; and

(3) submit the Advice transaction within 15 calendar days after the date of purchase.

(c) In a dispute, a retailer must submit the manual voucher to the Texas Health and Human Services Commission (HHSC) or the retailer management EBT contractor upon request by HHSC or the retailer management contractor.

§372.1707.Liability Implications for Manual Transactions.

(a) The Texas Health and Human Services Commission's (HHSC's) manual transactions liability is only for those manual transactions performed in accordance with the written agreement under 7 CFR §274.12(g)(6) and processing standards in 7 CFR §274.12(h).

(b) HHSC reimburses a retailer for manual transactions, as required by the terms and conditions of the retailer agreement, for which an insufficient amount of benefits remain in the client's account at the time the manual voucher is presented for processing and payment.

(c) If authorization cannot be obtained before or at the time of purchase, a retailer assumes the risk of insufficient benefits being available in the client's account.

(d) A retailer using voice authorization and electronic voucher is liable if the retailer management EBT contractor rejects its or its third-party processor's submission because of failure to follow the procedures in §372.1706 of this subchapter (relating to Electronic Manual Voucher Transaction Requirements).

(e) Neither the retailer management EBT contractor nor the retailer may re-present a manual voucher for payment if insufficient funds exist when the voucher is submitted for processing and payment.

§372.1708.Store-and-Forward as an Alternative to Manual Transaction.

In compliance with 7 CFR §274.12(m), a Texas EBT third-party processor may be certified for store-and-forward approvals as an alternative to manual voucher transactions. Store-and-forward is an electronic back-up for the retailer's online system. It is also known as stand-in processing.

(1) At the retailer's own choice and liability, a retailer may store transactions when the EBT central processing system cannot be accessed for any reason and then forward the transactions to the EBT central processing system after the system again becomes available.

(2) A retailer may forward the transaction to the EBT central processing system one time within 24 hours after the system again becomes available. If the 24-hour period crosses into the beginning of a new benefit issuance period, the retailer may draw against all available benefits in the account.

§372.1709.Liability Implications for Store-and-Forward Transactions.

If there are insufficient funds to authorize the full amount of an otherwise approvable store-and-forward transaction, the balance remaining in the client's account is paid to the retailer in accordance with the following:

(1) The EBT central processing system approves a partial amount of the store-and-forward transaction, crediting the retailer with the balance remaining in the client's account through a one-step process.

(2) The transaction must be in accordance with the standard message format requirements for store-and-forward transactions.

(3) The retailer must not obtain the uncollected balance from a client's current or future month's benefits.

§372.1710.Third-Party Processor Requirements.

(a) Retailers entering the EBT system that choose to use an authorized third-party processor must choose one that is certified to the Texas EBT system.

(b) A third-party processor must:

(1) comply with performance and technical standards set forth in 7 CFR §274.12(h);

(2) execute a written agreement adopted in accordance with 7 CFR §274.12(g)(6) with the retailer management EBT contractor;

(3) meet the qualifications established in §372.1702 of this subchapter (relating to EBT System Requirements); and

(4) comply with applicable general conditions established in §372.1702 of this subchapter.

§372.1711.Reimbursement for Electronic Benefit Transfer Transactions.

(a) A retailer or third-party processor must have a bank account with a federally insured financial institution capable of accepting credits and debits in the Automated Clearing House Network (ACH) format.

(b) A retailer management EBT contractor transfers the reimbursement for Electronic Benefit Transfer transactions into the third-party processor's bank account for reimbursement to the retailer's bank account.

§372.1712.Account Discrepancies.

(a) If there is a discrepancy between the retailer management EBT contractor's settlement total and a retailer's or third-party processor's settlement total, the retailer or third party-processor must:

(1) notify the retailer management EBT contractor in writing within 10 banking business days after discovering the discrepancy; and

(2) submit all applicable documentation.

(b) The retailer management EBT contractor rejects discrepancies or adjustments reported more than 90 days after the settlement date.

§372.1713.Transaction Disputes.

(a) If a retailer or third-party processor does not receive or disagrees with the amount of an Electronic Benefit Transfer (EBT) to its bank account, the retailer or third-party processor must contact the retailer management EBT contractor to dispute the reimbursement or lack of reimbursement. (Participant or household-related disputes are resolved as required by §372.1521 of this chapter (relating to Account Balance and Transaction Errors).)

(b) A dispute may be initiated for any reason deemed valid by the initiator, including:

(1) processing errors, including duplicate processing; or

(2) incorrect manual vouchers.

(c) A dispute must be initiated with the respondent no later than 90 calendar days after the date the initiator knows or has reason to know of the dispute.

§372.1714.Transaction Dispute Resolution.

(a) The retailer management EBT contractor:

(1) investigates and resolves transaction disputes between a retailer and third-party processor; and

(2) requests information from the initiator and responder as needed.

(b) The retailer management EBT contractor responds in writing:

(1) within 10 banking business days after initiation, if the dispute is over system errors; and

(2) within 15 calendar days after initiation for all other disputes.

(d) A chargeback transaction may be used to resolve a disputed EBT program transaction. A chargeback may be issued against the:

(1) retailer management EBT contractor;

(2) retailer; or

(3) third-party processor's settlement account.

§372.1715.Appeal of Transaction Dispute Resolution.

(a) If a retailer or third-party processor disagrees with the resolution of a transaction dispute, the retailer or third-party processor:

(1) must first file a complaint in writing with the retailer management EBT contractor; and

(2) may send a written request for an informal review within 15 days after the official notice of action from the retailer management EBT contractor to the Texas Health and Human Services Commission, Lone Star Business Services, Electronic Benefit Transfer, P.O. Box 12688, Mail Code 2033, Austin, Texas 78751.

(b) If a retailer or third-party processor is dissatisfied with the results of an informal review, the retailer or third-party processor may send a written request for an administrative hearing to the Texas Health and Human Services Commission, Hearings Department, P.O. Box 149030, Mail Code W-613, Austin, Texas, 78714-9030. The administrative hearing is held in accordance with Chapter 357, Subchapter I of this title (relating to Hearings Under the Administrative Procedure Act).

§372.1716.Out-of-State Transactions of Texas-issued Benefits.

(a) Retailers outside of Texas may accept the Electronic Benefits Transfer (EBT) card and process transactions if they route those transactions through a third-party processor or transaction switch providers certified to the Texas EBT system.

(b) Third-party processors may accept and route transactions from retailers outside of Texas if they are certified to the Texas EBT system or if they route transactions through a switch provider certified to the Texas EBT system.

(1) provide their own equipment and arrange for their own training for electronic transaction processing; or

(2) obtain equipment and training from the state in which they are located.

(d) Retailers outside of Texas that route transactions through a switch provider must not use off-line (manual) vouchers.

(e) Disputes with out-of-state retailers involving transactions for Texas clients are resolved using the same procedures as for Texas retailers, as described in §372.1713 of this subchapter (relating to Transaction Disputes).

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

Filed with the Office of the Secretary of State on May 11, 2009.

TRD-200901869

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: June 21, 2009

For further information, please call: (512) 424-6900