Adopted Sections An agency may take final action on a section 30 days after a proposal has been published in the Texas Register. The section becomes effective 20 days after the agency files the correct document with the Texas Register, unless a later date is specified or unless a federal statute or regulation requires implementation of the action on shorter notice. If an agency adopts the section without any changes to the proposed text, only the preamble of the notice and statement of legal authority will be published. If an agency adopts the section with changes to the proposed text, the proposal will be republished with the changes. TITLE 1. ADMINISTRATION Part IV. Office of the Secretary of State Chapter 73. Statutory Documents Statement of Officer Forms 1 TAC sec.73.43, sec.73.44 The Office of the Secretary of State adopts new sec.73.43 and sec.73.44, concerning facsimile transmission of a statement of officer forms and statement of officer forms, without changes to the proposed text as published in the June 9, 1992, issue of the Texas Register (17 TexReg 4153). Adoption of the new rules will provide elected and appointed officials with a clarification of the procedure for facsimile filing of statement of officer forms with the secretary of state as well as sanctioning the proper form to be used for the filing. No comments were received regarding adoption of the new sections. The new sections are adopted under Texas Civil Statutes, Article 6252-13a, sec.4(a)(1), which provide the secretary of state with the authority to prescribe and adopt rules. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 2, 1992. TRD-9209265 Audrey Selden Assistant Secretary of State Office of the Secretary of State Effective date: July 24, 1992 Proposal publication date: June 9, 1992 For further information, please call: (512) 463-5558 TITLE 22. EXAMINING BOARDS Part V. Texas State Board of Dental Examiners Chapter 107. Dental Board Procedures Procedures Governing Grievances, Hearings, and Appeals 22 TAC sec.107.22 The Texas State Board of Dental Examiners adopts the repeal of sec.107.22, concerning classification of pleadings, without changes to the proposed text as published in the May 29, 1992, issue of the Texas Register (17 TexReg 3888). The board adopts the repeal of this rule to achieve consistency and uniformity with the Administrative Procedure and Texas Register Act and to achieve uniformity in standard civil practices. The repeal will help to achieve consistency and uniformity. No comments were received regarding adoption of the repeal. The repeal is adopted under Texas Civil Statutes, Articles 4551d, which provide the Texas State Board of Dental Examiners with the authority to adopt and enforce such rules and regulations not inconsistent with the laws of the state as may be necessary for the performance of its duties and/or to ensure compliance with the state laws relating to the practice of dentistry to protect the public health and safety. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 2, 1992. TRD-9209251 C. Thomas Camp Executive Director Texas State Board Dental Examiners Effective date: July 24, 1992 Proposal publication date: May 29, 1992 For further information, please call: (512) 477-2985 22 TAC sec.107.25 The Texas State Board of Dental Examiners adopts the repeal of sec.107.25, concerning motions, without changes to the proposed text as published in the May 29, 1992, issue of the Texas Register (17 TexReg 3889). The board adopts the repeal of this rule to achieve consistency and uniformity with the Administrative Procedure and Texas Register Act. Also to achieve uniformity in standard civil practices. The repeal will help to achieve consistency and uniformity. No comments were received regarding adoption of the repeal. The repeal is adopted under Texas Civil Statutes, Article 4551d, which provide the Texas State Board of Dental Examiners with the authority to adopt and enforce such rules and regulations not inconsistent with the laws of the states as may be necessary for the performance of its duties and/or to ensure compliance with the state laws relating to the practice of dentistry to protect the public health and safety. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 2, 1992. TRD-9209250 C. Thomas Camp Executive Director Texas State Board of Dental Examiners Effective date: July 24, 1992 Proposal publication date: May 29, 1992 For further information, please call: (512) 477-2985 22 TAC sec.107.26 The Texas State Board of Dental Examiners adopts the repeal of sec.107.26, concerning amendments, without changes to the proposed text as published in the May 29, 1992, issue of the Texas Register (17 TexReg 3889). The board adopts the repeal of this rule to achieve consistency and uniformity with the Administrative Procedure and Texas Register Act. Also, to achieve uniformity in standard civil practices. The repeal will help to achieve consistency and uniformity. No comments were received regarding adoption of the repeal. The repeal is adopted under Texas Civil Statutes, Article 4551d, which provide the Texas State Board of Dental Examiners with the authority to adopt and enforce such rules and regulations not inconsistent with the laws of the state as may be necessary for the performance of its duties and/or to ensure compliance with the state laws relating to the practice of dentistry to protect the public health and safety. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 2, 1992. TRD-9209252 C. Thomas Camp Executive Director Texas State Board of Dental Examiners Effective date: July 24, 1992 Proposal publication date: May 29, 1992 For further information, please call: (512) 477-2985 22 TAC sec.107.48 The Texas State Board of Dental Examiners adopts the an amendment to sec.107.48, concerning subpoenas, with changes to the proposed text as published in the May 29, 1992, issue of the Texas Register (17 TexReg 3889). The board adopts this amendment to achieve consistency and uniformity with the Administrative Procedure and Texas Register Act, and to achieve uniformity in standard civil practices. This section outlines procedures for issuing subpoenas, motions for subpoenas, fees to witness, or deponent who is subpoenaed. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 4551d, which provide the Texas State Board of Dental Examiners with the authority to adopt and enforce such rules and regulations not inconsistent with the laws of the state as may be necessary for the performance of its duties and/or to ensure compliance with the state laws relating to the practice of dentistry to protect the public health and safety. sec.107.48. Subpoenas. Following written request by a party or on its own motion. (1) Subpoenas for the attendance of a witness from any place in the State of Texas at a hearing in a pending proceeding, may be issued at any time by the agency through the executive director, or by a hearing officer. (2) Motions for subpoenas to compel the production of books, papers, accounts documents, or other tangible items shall be addressed to the agency, and shall specify as nearly as may be the books, papers, accounts, documents, or other tangible items desired. If the matter sought is relevant material and necessary and will not result in harassment, imposition, or undue inconvenience or expense to the party to be required to produce the same, the agency, through the executive director, or a hearing officer may issue a subpoena, compelling production of books, papers, accounts, documents, or other tangible items as deemed necessary. (3) Such subpoenas shall be issued only after a showing of good cause and deposit of sums with the agency sufficient to insure payment of expenses incident to the subpoenas, the attendance of witnesses or deponents or both. (4) A witness or deponent who is not a party and who is subpoenaed compelled or requested to attend any hearing or proceeding to testify or to give a deposition or to produce books, records, papers, or other objects that may be necessary and proper for the purposes of the proceeding under the authority of this section is entitled to receive: (A) Mileage of 18 cents a mile if by private car, actual train or bus fare, or economy air fare, for going to, and returning from the place of the hearing or the place where the deposition is taken if the place is outside the city, town, village, or area of such person's residence. (B) A fee of $25 a day for each day or part of a day the person is necessarily present as a witness or deponent; meal expense not to exceed $15 per day; further, such person is entitled to be paid an additional fee of not to exceed $50 for required overnight lodging. (C) Fees to which a witness or deponent is entitled under this section shall be paid by the agency from the funds deposited by the party or agency at whose request the witness appears or the deposition is taken, on presentation of proper vouchers sworn by the witness and approved by the agency. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 2, 1992. TRD-9209255 C. Thomas Camp Executive Director Texas State Board of Dental Examiners Effective date: July 24, 1992 Proposal publication date: May 29, 1992 For further information, please call: (512) 477-2985 22 TAC sec.107.51 The Texas State Board of Dental Examiners adopts the repeal of sec.107.51, concerning form and content of briefs, exceptions, and replies without changes to the proposed text as published in the May 29, 1992, issue of the Texas Register (17 TexReg 3890). The board adopts the repeal of this rule to achieve consistency and uniformity with the Administrative Procedure and Texas Register Act, and to achieve uniformity in standard civil practices. The repeal will help to achieve consistency and uniformity. No comments were received regarding adoption of the repeal. The repeal is adopted under Texas Civil Statutes, Article 4551d, which provide the Texas State Board of Dental Examiners with the authority to adopt and enforce such rules and regulations not inconsistent with the laws of the state as may be necessary for the performance of its duties and/or to ensure compliance with the state laws relating to the practice of dentistry to protect the public health and safety. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 2, 1992. TRD-9209253 C. Thomas Camp Executive Director Texas State Board of Dental Examiners Effective date: July 24, 1992 Proposal publication date: May 29, 1992 For further information, please call: (512) 477-2985 22 TAC sec.107.53 The Texas State Board of Dental Examiners adopts an amendment to sec.107. 53, concerning final decisions and orders, without changes to the proposed text as published in the May 29, 1992, issue of the Texas Register (17 TexReg 3890). The board adopts the amendment to this rule to achieve consistency and uniformity with the Administrative Procedure and Texas Register Act and also, to achieve uniformity in standard civil practices. This section, outlines procedures for final decisions and orders, stating that all final decisions and order(s) of the agency shall be in writing and shall be signed by the President or other presiding member and Secretary. That a final decision shall include findings of fact and conclusions of law. That parties shall be notified either personally or by mail of any decision or order. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 4551d, which provide the Texas State Board of Dental Examiners with the authority to adopt and enforce such rules and regulations not inconsistent with the laws of the states as may be necessary for the performance of its duties and/or to ensure compliance with the state laws relating to the practice of dentistry to protect the public health and safety. Issued in Austin, Texas, on July 2, 1992. TRD-9209249 C. Thomas Camp Executive Director Texas State Board of Dental Examiners Effective date: July 24, 1992 Proposal publication date: May 29, 1992 For further information, please call: (512) 477-2985 22 TAC sec.107.56 The Texas State Board of Dental Examiners adopts the repeal of sec.107.56, concerning rendering of final decision or order, without changes to the proposed text as published in the May 29, 1992, issue of the Texas Register (17 TexReg 3890). The board adopts the repeal of this rule to achieve consistency and uniformity with the Administrative Procedure and Texas Register Act and also to achieve uniformity in standard civil practices. The repeal will help to achieve consistency and uniformity. No comments were received regarding adoption of the repeal. The repeal is adopted under Texas Civil Statutes, Article 4551d, which provide the Texas State Board of Dental Examiners with the authority to adopt and enforce such rules and regulations not inconsistent with the laws of the states as may be necessary for the performance of its duties and/or to ensure compliance with the state laws relating to the practice of dentistry to protect the public health and safety. Issued in Austin, Texas, on July 2, 1992. TRD-9209254 C. Thomas Camp Executive Director Texas State Board of Dental Examiners Effective date: July 24, 1992 Proposal publication date: May 29, 1992 For further information, please call: (512) 477-2985 TITLE 28. INSURANCE. Part I. Texas Department of Insurance Chapter 3. Life, Accident, and Health Insurance and Annuities Subchapter T. Minimum Standards for Medicare Supplement 28 TAC sec.3.3311 The State Board of Insurance of the Texas Department of Insurance adopts the repeal of sec.3.3311, concerning the consumer hotline for medicare supplement insurance information, without changes to the proposed text as published in the January 17, 1992, issue of the Texas Register (17 TexReg 379). The board is adopting the repeal of this section to eliminate duplication of information which is required in sec.1.601 of this title (relating to Notice of Toll-Free Telephone Numbers and Information and Complaint Procedures). The adoption of the repeal will eliminate requiring an insurer to include duplicate notices with Medicare supplement policies. The notices inform the policyholder to call the Texas Department of Insurance for information about Medicare supplement insurance laws, rules, and regulations. No comments were received regarding adoption of the repeal. The repeal is adopted under the Insurance Code, Article 1.04, which provides the Texas Department of Insurance with the authority to determine policy and rules in accordance with the laws of this state; and under the Insurance Code, Articles 1.35 and 1.35D, which requires the board to promulgate the proper wording for a notice of complaint procedure and requires the department to maintain a toll-free telephone number to provide information and take complaints. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 3, 1992. TRD-9209225 Linda K. von Quintus-Dorn Chief Clerk Texas Department of Insurance Effective date: July 24, 1992 Proposal publication date: January 17, 1992 For further information, please call: (512) 463-6327 Part II. Texas Workers' Compensation Commission Chapter 134. Guidelines for Medical Services, Charges, and Payments Subchapter C. Medical Fee Guidelines 28 TAC sec.134.400 The Texas Workers' Compensation Commission adopts new sec.134.400, concerning Acute Care Inpatient Hospital Fee Guideline, with changes to the proposed text as published in the March 27, 1992, issue of the Texas Register (17 TexReg 2247). The changes include removal of subsection (a), which described part of what was covered by the guideline being adopted by reference. To avoid potential problems in the future that might result from changes to this section without a change in the guideline, or vice-versa, the commission elected to remove it from this section. Changes in subsection (b) were made to conform the language to the language of other sections which adopt guidelines by reference, and to remove the reference to a May 1, 1992 effective date. The commission is required by law to adopt rules to establish guidelines for fees charged or paid for medical services. This section adopts by reference the "Acute Care Inpatient Hospital Fee Guideline" and establishes a per diem method of payment for services provided by certain hospitals for acute care. The only public comments regarding this section concerned the effective date listed as May 1, 1992 and the inconsistency between the section and the guideline. The commission agreed with the comments and adopts with changes to remove the May 1, 1992 effective date and to make this section consistent with the guideline as well as with other sections performing similar functions. Considerable comment was received on the fee guideline and summaries of those comments and the commission responses follow. Opposed to the per diem system or to payment levels established thereby. The commission disagrees. The per diem model was developed after consulting with the Texas Hospital Association (THA) and was based on THA provided billing data for approximately 6,000 workers' compensation hospital admissions. The proposed payment levels were derived from actual workers' compensation data collected from all areas of the state and from all types of hospitals. The data also represented various lengths of stay, as well as various types and severity of injury/illness. Original payment levels were then adjusted to reflect an 8.5% cost containment factor. The specific payment levels proposed were recommended by the Medical Advisory Committee, after review of possible models prepared by staff. Opposed to the reimbursement system for implantables (submission of an invoice to establish unit cost plus 10% results in administrative burden). Alternatives proposed included: reimbursement at wholesale plus 10%; and increasing the reimbursement for implantables. The commission disagrees. This element of the proposed rule was recommended by the Medical Advisory Committee to assure a reasonable return for the hospitals (10%) while establishing a realistic method for auditing costs. This measure does not require the precise invoice for a specific item, it requires a recent invoice (date of purchase within 12 months of use) which can be used to determine a unit cost for the item in question. Opposed to a single statewide per diem system. Recommend making the per diem rates hospital specific or using multiple per diem rates. The commission disagrees. Actual data does not indicate a need for a reimbursement adjustment based on such factors as geographic location or type of hospital. Additionally, a hospital specific or multiple per diem system would be insupportably cumbersome to administer. Based on it's experience, Medicare also now supports the use of statewide rates. Recommend discount ratio system proposed by THA and Methodist Hospital of Dallas with addition of proper mechanics. The commission disagrees. The fee ratio system promulgated by Methodist Hospital of Dallas holds serious structural flaws. It encourages inflation of billed charges, asks the workers' compensation system to subsidize hospitals' capital depreciation, and would have the effect of using workers' compensation to offset discounts offered to other payers (e.g., HMOs, PPOs, Medicare). In addition, such a system would be virtually impossible to administer. Recommend alternative definition of small/rural hospitals; omit 50-mile restriction. The commission agrees. Definition of small/rural hospital will be changed to read as follows: "An acute care hospital having less than 100 beds and less than one million dollars ($1,000,000) total gross revenue, as determined by an audited financial statement from the prior fiscal year." Opposed to using the per diem levels for small/rural hospitals. The commission agrees. Small/rural hospitals as redefined, will be paid fair and reasonable, not by per diem system. Recommend reimbursement of small/rural hospitals follow Medicare system plus 10%. The commission disagrees with this proposed methodology. The Texas Workers' Compensation Commission's proposed system is not a diagnosis related group (DRG) based system as is Medicare. Accordingly, it would not be feasible to generate a reimbursement guide on a DRG plus 10%. The $50,000 stop loss threshold and 20% discount paid after stop-lost threshold reached are both inadequate. One recommendation was to adopt a stop-loss threshold not based on dollar amount. The commission disagrees. The Medical Advisory Committee recommended a stop- loss reimbursement method for outlier cases. A review of the Texas Department of Insurance historical data for workers' compensation patients indicated that most cases involve total cost less than $50,000; that amount was established as the stop-loss threshold. A review of all the workers' compensation hospital bills in the COMPASS system revealed a payment to charge ratio of approximately 87%, which establishes payment levels to hospitals (cost to the system). When the recommended cost containment target of 8.5% is applied to the resulting figures, an effective reduction of 20% from billed charges results. Since this method and these levels appear to appropriately address the issue, no further consideration will be given to the proposal to develop a stop-loss threshold not based on dollar amount, at this time. Recommend consistency in wording of stop-loss payments as a "replacement" instead of as an "addition" to per diem payments. Also recommend clarification of "that specific factor" from II.E.1. The commission agrees to wording consistency in references to stop-loss payments. Wording of revised II.B.4. will be changed to: "The PPS allows for independent reimbursement on a case-by-case basis if the particular case exceeds the stop-loss threshold as described in Section II.E." Definition I.B. 9. will be changed from "addition" to "independent." In addition, II.E.1.d. will be clarified and read as follows: "The stop-loss reimbursement factor is multiplied by the total audited charges to determine the Workers' Compensation reimbursement amount (WCRA) for the admission." The stop-loss method will encourage hospitals to increase length of stay to exceed stop-loss threshold. Recommend calculation of $50,000 stop-loss threshold be based on per diem amount, then 80% reimbursement effective from that point on through length of stay. The commission disagrees. Providers are subject to utilization review, which counters the concern that hospitals will artificially increase lengths of stay. Accordingly, changing the stop-loss calculation is unnecessary. For MRIs and CAT Scans, reimbursement according to MFG is unfair. The commission disagrees. The commission has determined the Medical Fee Guideline to be fair and reasonable reimbursement for health care providers. On recommendation of the Medical Advisory Committee, the additional reimbursement for these services was implemented. The separate billing for MRIs and CAT Scans on inpatients is in addition to the per diem level for that admission. Question billing for professional component. Though not a comment in opposition or support, this question is one the commission determined should be communicated to the public in this forum. The reason for including technical and professional components separately is that hospitals will bill for the technical component only, unless radiologist is salaried hospital staff. Recommend that additional reimbursement be paid for inpatient MRIs and CAT Scans over outpatient reimbursement, because the proposed reimbursement is not compensably fair and reasonable and should be more closely tied to hospital costs. The commission disagrees. Reimbursement for MRIs and CAT Scans are in addition to the per diem payments and adequately compensate for delivery of services to either inpatients or outpatients. The proposed per diem levels were developed in the absence of good data; without empirical data to justify per diem levels as proposed; and with out-of- date data. The commission disagrees. While there could be arguments about what constitutes "good data," the commission accepted the information provided by the hospitals as "good" since it reflected actual billing data. Webster's definition of empirical is, "originating in or based on observation or experience." The proposed per diem levels were based on analysis of actual workers' compensation admission/billing data (approximately 6,000 admissions obtained through the Texas Hospital Association (THA)), as well as the judgement (experience) of the Medical Advisory Committee. The commenter's assertion that data is out-of-date reflects his or her position that baseline data was not inflated sufficiently to adjust for the passage of time. Inasmuch as THA had inflated the charges in their baseline data by 14.3%, the actual fiscal year 1992 market basket increase was 4.4%. The data clearly has been sufficiently adjusted to remain descriptive. Recommend adding category classification to cover low acuity patients (e.g., rehabilitation) at $400 per diem (four categories in lieu of three). The commission disagrees. Rehabilitation services are not covered under sec.134.400. Low acuity medical patients would continue under medical per diem for duration of stay. Reimbursement would continue as established until stop- loss threshold is reached. Having only three payment rates is too restrictive and payments need to be related to diagnosis. The commission disagrees. Three payment categories were established after review and analysis of other per diem reimbursement systems and upon recommendations of the Medical Advisory Committee. Staff compared per diem to diagnosis related group and found the per diem system to be more accurate and allow minimal under and over payment. Recommend differences in accommodations be considered as additional payment categories, e.g., (1) ICU services, (2) telemetry beds, intermediate to (3) medical services. The commission disagrees on need for further differentiation in payment categories within medical per diem. The per diem system is designed to provide reimbursement for all services inclusively at a particular level of care. The per diem method does not take into consideration increases in hospital charges in prior year. The commission disagrees. The per diem rates proposed for acute care hospital reimbursement included the appropriate market basket inflation rates. According to the Texas Workers' Compensation Act, sec.8.24, "fee guidelines shall be reviewed and revised at least every two years to reflect fair and reasonable charges ...." That is, proposed rates are current and will be adjusted, at a minimum of every two years. Recommend postponing implementation of proposed per diem system to conduct a more in-depth study and analysis of costs. The commission disagrees. This comment suggests that the analysis upon which proposed rates were based was not in-depth. In fact, the analysis employed approximately 6,000 cases of workers' compensation admissions data that represented all areas of the state, various types of hospitals, various lengths of stay and types of admissions, and various types of illness/injury. Given the statutory requirement to establish a hospital fee guideline (see Texas Workers' Compensation Act, sec.8.24), it is not reasonable to postpone implementation. Recommend clarification of "usual and customary" with regard to reimbursements of small/rural hospitals (Section II.A.1.). The commission agrees. "Usual and customary" was meant to establish that the hospitals would bill the same for workers' compensation as for other payers. Since the Texas Workers' Compensation Act, sec.8.21, provides that billing for workers' compensation cases must be fair and reasonable and may not exceed billing for like services to other payers, the words "usual and customary" will be replaced with the words "fair and reasonable" to make it consistent with the statute. Recommend including weight factors for higher costs earlier in admission and for trauma cases. The commission disagrees. Proposed per diem rates are based on data which represents various lengths of stay, as well as various types and severity of illness/injury. That is, front-loaded expense and severity are represented in the data and therefore in the reimbursement model. Recommend trauma cases (ICD.9 800.000-959.999) continue to be paid fair and reasonable. The commission disagrees. Analysis of actual workers' compensation admissions data included all types and severity of illness/injuries. Proposed reimbursement model incorporates trauma case data and is representative of all case types. Recommend the commission change the wording in Section II.B.(a) to: "inpatient services provided by a hospital for medical or surgical admissions will be reimbursed using ...." The commission agrees. Change Section II.B.3. to delete reference to "ICU/CCU Admission Day." The commission agrees. Wording to be changed to read "ICU/CCU Day," and delete the word "admission." Recommend expansion of Section II.C. for clarification. The commission agrees. Section II. is being expanded for clarification. Recommend stating in guideline how inpatient services for non-medical/surgical admission will be reimbursed. The commission disagrees. Services other than acute care inpatient medical/surgical will be reimbursed according to statutory fair and reasonable until such time as specific guidelines are developed for reimbursement of these services. Recommend inclusion of "acute care" definition in guideline or the covered "acute care services." The commission agrees. Inclusion of definition for "acute care" will be placed in Section I.B. of the guideline, and will read: "Acute Care-health care delivered to patients experiencing acute illness or trauma, generally provided in a hospital or emergency room setting and is generally a short term pattern of care in contrast to chronic care, which is long term." Recommend changing definition of inpatient and adopt definition used by payers (e.g., based on patient's medical condition). The commission disagrees. To establish inpatient status according to medical condition would be consistent with a diagnosis related group based system, not a per diem based system. The per diem system allows carriers too much latitude in auditing of charges deemed medically necessary and appropriate by the physician. The commission disagrees. Carriers are allowed to audit necessity of treatment under any medical reimbursement system to which they are party. The per diem system limits the circumstances under which audits would be required; the effect is to give carriers less overall latitude in review of charges. Recommend inclusion of margin for required capital investment. The commission disagrees. Historical data indicates that workers' compensation reimbursement amounts for approximately 3.0.% of total hospital revenue. Therefore, this market will not be expected to underwrite a hospital's required capital investment. The per diem guidelines provide no incentive to monitor cost or length of stay. The commission disagrees. As a prospective payment system, the per diem method provides strong incentives to a hospital to control costs. In regard to length of stay, it is a medical necessity issue and remains subject to carrier review. Recommend reducing ICU rate from $1,600 to $1,300, increasing surgery rate from $1,100 to $1,300, and increasing medical rate from $600 to $800. The commission disagrees. The per diem rates are based on actual workers' compensation admissions/billing data, adjusted for inflation, and recommended by the Medical Advisory Committee. No substantive data have been provided that would justify reducing or increasing the proposed per diem rates. Recommend continuing with current discount system. The commission disagrees. No current "discount system" is in place; current reimbursement is fair and reasonable. Texas Workers' Compensation Commission is mandated in the Texas Workers' Compensation Act, sec.8.21, to establish a fee guideline for hospital services. Opposed to current system of fair and reasonable. The commission agrees. The per diem model for fair and reasonable reimbursement will replace the current system. Recommend excluding pharmaceutical from per diem system. The commission disagrees. The original analysis of workers' compensation inpatient services used to establish current per diem included the administration of all pharmaceutical services during the admissions. Recommend changing language in sec.134.400 to be consistent with language in Acute Care Inpatient Hospital Fee Guideline regarding reimbursement. The commission agrees. Language in sec.134.400 will be changed to be consistent with other rules that adopt guidelines by reference and with the fee guideline. Opposed to the 15% discount on outpatient, psychiatric, skilled nursing, and rehabilitation services. The commission acknowledges the concern but, since reimbursement for outpatient psychiatric, skilled nursing, and rehabilitation services are not addressed in sec.134.400, has no specific response to make. Recommend using hospital ratio as basis for outpatient payment. The commission again acknowledges the concern, but reimbursement for outpatient services are not addressed in this fee guideline. Opposes billing outpatient pharmaceutical according to National Drug Code itemization because it creates an administrative burden. The commission agrees. Reimbursement for outpatient pharmaceutical services are not covered under sec.134.400 and sections III.C.1. and III.C.3 will be deleted. The only comments specifically addressing sec.134.400 came from Methodist Hospitals of Dallas and the Texas Hospital Association. The first merely recommended changing the language to be consistent with the guideline, the second recommended making the section effective on a later date. Other comments were directed at the guideline and came from: American Medical International, Inc.; Arlington South Orthopedic; Baptist Memorial Hospital System; Dallas Specialty Hospital; East Texas Medical Center-Athens; Governmental Affairs, Limited; Harris County Hospital District; Harris Methodist; Health Benefits Management; Hendrick Medical Center; Hermann Hospital; Kemper National Services, Inc.; Medical Business Management Services; Medical Center Hospital; Mesquite Community Hospital; Methodist Hospital, Houston; Methodist Hospitals of Dallas; Mother Frances Hospital; National Medical Enterprises, Inc.; Physicians & Surgeons Hospital; Richardson Medical Center; Santa Rosa Health Care Corporation; Southwest Texas Methodist Hospital; St. Luke's Episcopal Hospital; Stamford Memorial Hospital; Texas Hospital Association; Texas Organization of Rural & Community Hospitals; Texoma Medical Center; The Institute for Rehabilitation & Research; Trinity Medical Center; Uvalde Memorial Hospital; and Valley Baptist Medical Center. The new section is adopted under Texas Civil Statutes, Articles 8308-8.01(a) , which mandate the commission to establish by rule medical policies and fee guidelines governing the provision and payment of medical services; 8308-8. 21(a) and (b)(1), which require the commission to adopt rules establishing guidelines relating to the fees charged or paid for medical services rendered to injured workers, 8308-10.08, which establish that overcharging by the health care provider can be an administrative as well as a criminal violation, and 8308-2.09(a), which authorize the commission to adopt rules necessary to administer the Texas Workers' Compensation Act. sec.134.400. Acute Care Inpatient Hospital Fee Guideline. The commission hereby adopts by reference the Acute Care Inpatient Hospital Fee guideline. This guideline establishes a per diem based payment system for medical services rendered to injured employees covered by workers' compensation insurance. This guideline shall be effective for all acute care inpatient medical services rendered after the effective date of this section. Copies of the guideline may be obtained from the Reprographics Department of the Texas Workers' Compensation Commission, 4000 South IH-35, Southfield Building, Austin, Texas 78704. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 3, 1992. TRD-9209231 Susan Cory General Counsel Texas Workers' Compensation Commission Effective date: September 1, 1992 Proposal publication date: March 27, 1992 For further information, please call: (512) 440-3592 TITLE 31. NATURAL RESOURCES AND CONSERVATION Part II. Texas Parks and Wildlife Department Chapter 65. Wildlife Subchapter A. Statewide Hunting and Fishing 31 TAC sec.sec.65.3, 65.13, 65.40, 65.62, 65.72, 65.78, 65.80 The Texas Parks and Wildlife Department adopts amendments to sec.sec.65.3, 65. 13, 65.40, 65.62, 65.72, 65.78, and new 65.80, concerning the statewide hunting and fishing proclamation. Sections 65.13, 65.40, 65.62, and 65.72 are adopted with changes to the proposed text as published in the April 17, 1992, issue of the Texas Register (17 TexReg 2675). Sections 65.3, 65.78, and 65.80 are adopted without changes and will not be republished. The changes to the new rule and amendments as proposed in the April 17, 1992, issue of the Texas Register are as follows: new proposed sec.65.28 as well as proposed amended text for sec.sec. 65.13, 65.40, and 65.62--all relating to muzzleloading was not adopted; and amend sec.65.72(d)(2)(C)(viii) to permit additional time for fishermen to pick up their saltwater trotlines. The adopted rules are based upon studies and investigations by the department to determine appropriate wildlife resource utilization. The rules as adopted have as their factual basis scientific studies and investigations which track trends in wildlife resource populations and assesses factors affecting those populations. The adopted rules are based upon the best available scientific information. The commission is responsible for administering a flexible law to deal effectively with changing conditions to prevent depletion or waste of wildlife resources and to provide equitable and reasonable privileges of ownership to pursue, take, possess, and kill wildlife resources. The commission met in public hearing March 26, 1992, to adopt the statewide hunting and fishing proclamation. At this hearing, the public made comments concerning the proposed amendments and proposals concerning rules not published in the Texas Register. The commission directed staff to initiate a second round of rulemaking including publishing proposed amendments in the Register and to hold 22 additional county hearings to receive public comments. The Texas Employment Commission on May 4, 1992, indicated in reply to departmental correspondence that the amendments as proposed will have minimal fiscal and employment impacts upon the state. The rules are needed to manage freshwater mussel wildlife resource populations, provide additional hunting opportunity during the archery-only hunting season, clarify the rules relating to possessing firearms during the archery-only hunting seasons and possession of stone crabs, and permit adjustments in times when saltwater trotlines must be picked up based upon small craft advisories. The amendments will provide harvest opportunity of wildlife resources consistent with acknowledged fisheries and wildlife management tenets which are designed to prevent depletion or waste. No comments were received via the Texas Register. Comments by the public concerning the amendments proposed in the April 17, 1992, issue of the Texas Register were presented to the Parks and Wildlife Commission at the public hearing held May 21, 1992. The comments were summarized from: comments made at 45 county public hearings where 921 persons attended during the period of March 2-6, 1992; comments made at 22 county public hearings where 123 persons attended during the period of April 27-May 1, 1992; comments in the form of petitions, resolutions, department and citizen surveys, letters, and telephone calls; and comments made by the public attending the commission's public hearing May 21, 1992. At the county public hearings during the period April 27-May 1, 1992 and at the commission's public hearing May 21, 1992, the public made comments relating to the decline of deer populations and what to do about this decline. Additionally, specific comments concerned the reduction in the deer bag limit and/or the length of deer season. Several persons spoke in favor of reducing the antlerless deer bag limit to one doe or close the doe season altogether. Others who have an intensive wildlife management program on their lands (specifically Walker County) requested from the commission antlerless permits instead of the "doe days" harvest regime as the short time under this system leads to an undesirable harvest of buck fawns. One person stated if there was a decrease in the number of antlerless deer that may be harvested by each hunter then the logistics of securing additional hunters to achieve an adequate deer quota reduction would become more difficult. Several persons representing groups petitioned for the elimination of the "doe days" program as they felt this program is inappropriate in areas where there has been such a drastic decline in deer populations that the taking of any antlerless deer is unwarranted. Persons also spoke relating to the quality of deer habitat and stating that the habitat was of good quality to sustain a larger deer population. Many persons spoke in opposition to the proposed muzzleloading season during the mid-portion of the archery season, others spoke in favor of this season. Department analysis of the public hearings, departmental and public surveys, correspondence, and telephone calls indicated approximately 60% of the comments were in opposition to the muzzleloading season. The general public comments included statements relating to a general deer population decline over large areas attributed to various reasons: overharvest of doe deer, lack of control over antlerless deer harvest, and buck deer harvest regulated through issuance of permits by landowners, overharvest of buck deer, harvest of spike bucks, and the questioning of departmental data indicating the decline in suitable deer habitat. The public expressed opposition to either-sex deer hunting seasons, one buck bag limit, long deer season, opening date of deer season, length of doe season, "doe days," difficulty in securing an adequate antlerless harvest, and requesting an additional adjustment in times when saltwater trotlines may be left during the weekend when small craft warnings are issued. Persons at the county public hearings favored reduced deer bag limits, shortened deer season length, reduction of "doe days," keep buck bag limit at one, return to a deer bag limit of two bucks and no does, closed deer season for certain areas, deletion of the late antlerless deer season in south Texas, protect spike bucks, and an adjustment in times to pick up saltwater trotlines during inclement weather. Correspondence received at the department headquarters in the form of letters, petitions, surveys, resolutions, and telephone calls is as follows: comments primarily concerning opposition to or favoring a muzzleloading season during the archery-only season, white-tailed deer seasons, bag limits, decline of deer population, management options for differing harvest regimes, "doe days," protection of spike bucks, closure of doe season, closure of deer season, shortening deer season, reinstating antlerless deer permits, small landowners adjacent to large landowners overharvesting deer population, and delayed opening of deer season so majority of doe deer will be bred; comments concerning antlerless deer permits specifically to reinstate the antlerless deer permit system as this gives landowners additional control, and small landowners harvest more deer than produced on their land; and petitions from groups concerning elimination of the "doe days" experimental harvest program, and removal of the saltwater trotline ban on weekends. Comments were also received about the previously proposed flathead catfish limit and the possible impact of this predator on other fish populations. Comments made by the public at the county hearings concerned many of the proposed amendments but they also commented upon regulations not being proposed for amendments. The comments made by the public at the county hearings, by correspondence, or at the commission public hearings are available for public inspection at the Texas Parks and Wildlife Department Headquarters Complex, 4200 Smith School Road, Austin, Texas 78749, 1-800-792-1112, extension 4974 or 512-389-4974. A state senator, requested that antlerless deer be taken only by the use of antlerless deer permits for Cherokee and Nacogdoches Counties. A state representative representing the Walker County Wildlife Association, requested the use of antlerless deer permits for Walker County. A state representative, representing Nacogdoches, Panola, Shelby, Sabine, Angelina, and Houston Counties, requests that deer harvest be reduced as deer population is down. The Walker County judge, stated that deer are depleted and requests a deer permit system. Two individuals from Jackson and Victoria Counties, requested closing antlerless deer season for two-three years as there are no deer left. A representative from Temple-Inland, stated that a bag limit of one buck and one doe would make the logistics of getting more hunters more difficult. A representative from the Texas Wildlife Association, stated that there was a decline in deer numbers and that small landowners overharvest deer. Two individuals representing the Texas Sportsmen's Association, requested that the "doe days" experimental harvest system be eliminated. An individual from Cherokee County stated that the deer population is depleted. An individual representing the Cherokee County Farm Bureau requests a "swing tag" for either a buck or doe deer. A representative of the Doss Wildlife Management Area, requests that no muzzleloading season be permitted during the first part of November. A representative of the Bowhunters of Texas, requests separation of archers and muzzleloaders due to safety. An individual representing Finfish Producers of Texas commends commission for permitting adjustments to saltwater trotline regulations. The Texas Parks and Wildlife Commission disagreed with several comments received because they were judged not to be compatible with wildlife resource management. The commission must make findings of fact based upon the department's scientific surveys and investigations. Several of the comments were related to rules not proposed as amendments in the Texas Register and will not be discussed following. With respect to deer regulations, the department staff through studies formulates regulations designed to conserve and protect the white-tailed deer resource and its habitat. The staff has determined that the status of deer populations determined from scientific surveys and investigations of deer populations does not warrant the extent of concern expressed by the public in their comments. Reduced deer bag limits for east Texas are appropriate because this population has been brought closer to the carrying capacity of the habitat. The regulations for deer bag limit reduction in east Texas are believed by staff to be adequate to protect the resource. Most deer populations in the state remain near or above carrying capacity of the habitat even though numbers of deer may be down in some areas. Comments from the public concerning white-tailed deer bag limits centered around the belief that bag limits are too liberal and permit harvest of too many antlerless deer. The majority of persons who commented requested either a stop in the harvest of antlerless deer or to reinstate the antlerless deer permit system based upon landowner acreage. Additionally, several persons opposed the buck deer bag limit reduction to one buck as they believed this restriction was unnecessary. Staff reviewed those comments and the data upon which the bag limits were based. Staff believes that the proposed bag limits are appropriate to address stable or declining deer populations and additional restrictions are not appropriate to deer management at this time. The existing one buck bag limit is due to high hunting pressure on the buck segment of the herd. A reduced buck harvest is necessary to balance the sex ratio of the deer herd and to insure adequate breeding age males for high reproductive rates. Maintaining the deer herd within the habitat's carrying capacity prevents degradation of habitat and lessens stress within the herd. An experimental harvest regime commonly called "doe days" was implemented during the 1990 hunting season. This harvest approach has proven applicable and effective in much of the southeastern United States. Comments were received opposing this regulation for being too liberal and believe too many antlerless deer were harvested and that existing deer populations are too low to support this harvest. Staff has reviewed the public's comments, the biological basis for this experiment, and the results of the 1990-1991 harvest surveys. This regulation appears to be a reasonable method of providing for limited antlerless deer harvest without requiring issuance of antlerless deer permits. Staff believes that this regulation can be tailored or adapted, with experience gained from this study, for future deer harvest needs of large areas of Texas. Cherokee and Nacogdoches Counties were further reduced, to provide that antlerless deer may be taken only during the first two days and last two days of the hunting season. This downward adjustment is in response to public comments concerning a low deer population, heavy hunting pressure, and scattered habitat. Comments concerning "doe days" regulations were received from the public in several areas of northeast Texas. Staff reviewed the comments made by the public. There is cause for careful consideration and study in this region of Texas. Data indicates that the deer herd has declined from previous years in some areas. However, staff believes that the herd is at or near the carrying capacity of the habitat and harvest of antlerless deer is required. One person commented relating to strengthening the rules relating to freshwater mussel harvest. The staff at this time does not have sufficient cause to enact the more stringent rules proposed. With respect to saltwater trotlines, the staff has made a further adjustment to the time that trotlines may be left during the weekend to increase efficiency and safety in the trotline fishery. With respect to the concern about flathead catfish, the staff disagrees that these catfish are detrimental to other game fish populations. Studies on the population dynamics and food habits of flathead catfish indicate a positive rather than negative effect of this popular native fish. The commission after hearing and reviewing the public's testimony and staff's response to the testimony made the following changes: provided Cherokee and Nacogdoches Counties with an additional restriction to reduce antlerless deer harvest by adopting a reduction in the length of the "doe days" season; provided that antlerless deer in Walker County may be taken only by antlerless deer permit; provided an additional adjustment in times that saltwater trotlines may be left during the weekend when small craft warnings are issued; and withdrew the proposed muzzleloading season. The amendments and new section are proposed under the Texas Parks and Wildlife Code, Chapter, 61, Uniform Wildlife Regulatory Act (Wildlife Conservation Act of 1983), which provides the Texas Parks and Wildlife Commission with authority to establish wildlife resources regulations for this state and sec.66.206, which provides authority for the commission to make regulations for the safe use of trotlines. sec.65.13. Firearms. (a)-(b) (No change.) (c) It is unlawful to hunt with a broadhead hunting point while in possession of a firearm during the archery-only seasons. (d) It is unlawful to hunt game animals or game birds with automatic or fully automatic firearm or any firearm equipped with a silencer or sound suppressing device. sec.65.40. Deer: White-tailed and Mule Deer. No person may take more than the aggregate total of five deer per license year, of which no more than two may be mule deer, only one of which may be a buck mule deer; no more than two white- tailed buck deer, or no more than five antlerless deer, both species combined. (1) (No change.) (2) White-tailed deer: archery only open seasons, bag, and possession limits shall be as follows. (A) In Aransas, Atascosa, Bandera, Bee, Bell, Bexar, Blanco, Bosque, Brewster, Brooks, Brown, Burnet, Calhoun, Cameron, Coke, Coleman, Comal, Concho, Coryell, Crockett, Culberson, Dimmit, Duval, Edwards, Frio, Gillespie, Glasscock, Goliad, Hamilton, Hays, Hidalgo, Irion, Jackson, Jeff Davis, Jim Hogg, Jim Wells, Kendall, Kenedy, Kerr, Kimble, Kinney, Kleberg, Lampasas, LaSalle, Live Oak, Llano, McCulloch, McMullen, Mason, Matagorda, Maverick, Medina, Menard, Mills, Mitchell, Nolan, Nueces, Pecos, Presidio, Reagan, Real, Reeves, Refugio, Runnels, San Patricio, San Saba, Schleicher, Starr, Sterling, Sutton, Terrell, Tom Green, Travis, Uvalde, Val Verde, Victoria, Webb, Wharton, Willacy, Williamson, Zapata, and Zavala Counties, there is an open season during which white-tailed deer may be taken only with longbow and arrows. (i) Open season: October 1-November 1, 1992. (ii) (No change.) (B) No person may take or possess more than one white-tailed buck deer per license year from counties, in the aggregate, listed within this subparagraph. (i) In Anderson, Angelina, Austin, Borden, Bowie, Brazoria, Brazos, Burleson, Callahan, Camp, Cass, Chambers, Cherokee, Colorado, Comanche, Delta, DeWitt, Eastland, Erath, Falls, Fayette, Fisher, Fort Bend, Franklin, Freestone, Gonzales, Gray, Grayson (only on the Hagerman National Wildlife Refuge), Gregg, Grimes, Guadalupe, Hardin, Harris, Harrison, Haskell, Hemphill, Henderson, Hood, Hopkins, Houston, Howard, Hutchinson, Jack, Jasper, Jefferson, Karnes, Kent, Lamar, Lavaca, Lee, Leon, Liberty, Limestone, McLennan, Madison, Marion, Milam, Morris, Montgomery, Nacogdoches, Navarro, Newton, Orange, Palo Pinto, Panola, Parker, Polk, Red River, Roberts, Robertson, Rusk, Sabine, San Augustine, San Jacinto, Scurry, Shackelford, Shelby, Smith, Somervell, Stephens, Taylor, Throckmorton, Titus, Trinity, Tyler, Upshur, Upton, Van Zandt, Walker, Wheeler, Wilson, Wise, Wood, and Young Counties, there is an open season during which white-tailed deer may be taken only with longbow and arrows. (I) Open season: October 1-November 1, 1992. (II) (No change.) (ii) In Archer, Armstrong, Bastrop, Baylor, Briscoe, Caldwell, Carson, Childress, Clay, Collingsworth, Cooke, Cottle, Crane, Crosby, Denton, Dickens, Donley, Ector, Ellis, Fannin, Floyd, Foard, Garza, Grayson (except on Hagerman National Wildlife Refuge), Hall, Hardeman, Hartley, Hill, Hunt, Johnson, Jones, Kaufman, King, Knox, Lipscomb, Loving, Midland, Montague, Moore, Motley, Ochiltree, Oldham, Potter, Rains, Randall, Stonewall, Swisher, Tarrant, Waller, Ward, Washington, Wichita, and Wilbarger Counties, there is an open season during which white-tailed buck deer may be taken only with longbow and arrows. (I) Open season: October 1-November 1, 1992. (II) (No change.) (C)-(D) (No change.) (3) (No change.) (4) Mule deer: archery only open seasons, bag, and possession limits shall be as follows: (A) In Armstrong, Borden, Briscoe, Carson, Childress, Cottle, Crane, Crockett, Crosby, Dallam, Deaf Smith, Dickens, Donley, Ector, El Paso, Fisher, Floyd, Garza, Gray, Hall, Hartley, Hemphill, Hutchinson, Jeff Davis, Kent, King, Loving, Midland, Moore, Motley, Ochiltree, Oldham, Potter, Randall, Reagan, Reeves, Roberts, Scurry, Stonewall, Swisher, Upton, Val Verde, Ward, and Winkler Counties, there is an open season during which mule deer may be taken only with longbow and arrows. (i) Open season: October 1-November 1, 1992. (ii) (No change.) (B) In Brewster, Culberson, Hudspeth, Pecos, Presidio, and Terrell Counties, there is an open season during which mule deer may be taken only with longbow and arrows. (i) Open season: October 1-November 1, 1992. (ii) (No change.) (C)-(D) (No change.) (5) (No change.) sec.65.62. Turkey. (a) (No change.) (b) General open season, archery only season, and bag limit. In Archer, Bandera, Bell, Bexar, Blanco, Bosque, Burnet, Calhoun, Clay, Comal, Comanche, Coryell, Erath, Gillespie, Goliad, Gonzales, Hamilton, Hays, Hood, Jack, Karnes, Kendall, Kerr, Kinney (only north of U.S. Highway 90), Lampasas, Llano, McLennan, Medina (only north of U.S. Highway 90), Montague, Palo Pinto, Parker, Real, Somervell, Stephens, Travis, Uvalde (only north of U.S. Highway 90), Wichita, Williamson, Wilson, and Young Counties, there are open seasons for turkey. (1) Open seasons. (A) (No change.) (B) Archery only season: October 1- November 1, 1992, during which turkeys may be taken only with longbow and arrows. (2) (No change.) (c) General (South Texas) open season, archery only season, and bag limit. In Aransas, Atascosa, Bee, Brooks, Dimmit, Duval, Frio, Jim Hogg, Jim Wells, Kenedy, Kinney (only south of U.S. Highway 90), Kleberg, LaSalle, Live Oak, McMullen, Maverick, Medina (only south of U.S. Highway 90), Nueces, Refugio, San Patricio, Uvalde (only south of U.S. Highway 90), Webb, Willacy, and Zavala Counties, there are open seasons for turkey. (1) Open seasons. (A) (No change.) (B) Archery only season: October 1-November 1, 1992, during which turkeys may be taken only with longbow and arrows. (2) (No change.) (d) Exceptions to general open season, archery only season, or bag limits. (1) (No change.) (2) In Armstrong, Baylor, Borden, Briscoe, Brown, Callahan, Carson, Childress, Coke, Coleman, Collinsworth, Concho, Cottle, Crane, Crockett, Crosby, Dawson, Dickens, Donley, Eastland, Ector, Edwards, Fisher, Floyd, Foard, Garza, Glasscock, Gray, Hall, Hardeman, Hartley, Haskell, Hemphill, Howard, Hutchinson, Irion, Jones, Kent, Kimble, King, Knox, Lipscomb, Lynn, McCulloch, Martin, Mason, Menard, Midland, Mills, Mitchell, Moore, Motley, Nolan, Ochiltree, Oldham, Pecos, Potter, Randall, Reagan, Roberts, Runnels, San Saba, Schleicher, Scurry, Shackelford, Sterling, Stonewall, Sutton, Swisher, Taylor, Terrell, Throckmorton, Tom Green, Upton, Val Verde, Ward, Wheeler, and Wilbarger Counties, there are open seasons for turkey. (A) Open seasons: (i) (No change.) (ii) Archery only season: October 1-November 1, 1992, during which turkeys may be taken only with longbow and arrows. (B) (No change.) (e) (No change.) sec.65.72. Fish. (a)-(c) (No change.) (d) Saltwater devices, means, and methods. (1) (No change.) (2) Only the following means and methods may be used for taking fish. (A)-(B) (No change.) (C) Trotlines. (i)-(vii) (No change.) (viii) No trotline or trotline components, including lines and hooks, but excluding poles, may be left in or on coastal waters between the hours of 1 p.m. on Friday through 1 p.m. on Sunday of each week, except that attended sail lines are excluded from the restrictions imposed by this clause. Under the authority of the Texas Parks and Wildlife Code, sec.66.206(b), in the event small craft warnings or higher marine weather advisories issued by the National Weather Service are in place at 8 a.m. on Friday, trotlines may remain in the water until 6 p.m. on Friday. If small craft warnings are in place at 1 p.m. on Friday, trotlines may remain in the water until Saturday. When small craft warnings are lifted by 8 a.m. on Saturday, trotlines must be removed by 1 p.m. on Saturday. When small craft warnings are lifted by 1 p.m. on Saturday, trotlines must be removed by 6 p.m. on Saturday. When small craft warnings or higher marine weather advisories are still in place at 1 p.m. on Saturday, trotlines may remain in the water through 1 p.m. on Sunday. It is a violation to tend, bait, or harvest fish or any other aquatic life from trotlines during the period that trotline removal requirements are suspended under this provision for adverse weather conditions. For purposes of enforcement, the geographic area customarily covered by marine weather advisories notices will be delineated by department policy. (ix)-(xiv) (No change.) (D) (No change.) (e) (No change.) This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 2, 1992. TRD-9209152 Paul M. Shinkawa Director, Legal Services Texas Parks and Wildlife Department Effective date: September 1, 1992 Proposal publication date: April 17, 1992 For further information, please call: 1 (800) 792-1112 ext. 4433 or (512) 389- 4433 TITLE 34. PUBLIC FINANCE Part I. Comptroller of Public Accounts Chapter 3. Tax Administration Subchapter O. State Sales and Use Tax 34 TAC sec.3.291 The Comptroller of Public Accounts adopts an amendment to sec.3.291, concerning contractors, with changes to the proposed text as published in the April 17, 1992, issue of the Texas Register (17 TexReg 2728). The amendment is necessary because of changes to the Tax Code, sec.151.311, adopted by the 72nd Legislature, 1991, that were effective October 1, 1991. The October 1, 1991, change limits the organizations exempted under the Tax Code, sec.151.311, to school districts and nonprofit and public hospitals. Contractors improving realty for the state, city, county, the federal government, and other entities formerly allowed to claim an exemption under the Tax Code, sec.151.311, may now claim exemptions only under certain circumstances outlined in this section. Additional amendments, unrelated to action by the 72nd Legislature, 1991, redefine the term "contractor," add references to 34 TAC sec.3.356, concerning real property service, and 34 TAC sec.3.357, concerning real property repair and remodeling, and state the comptroller's policy on use tax and resale certificates. Subsections are added on bids, contracts, change orders, and contractors and subcontractors with different types of contracts. Comments were received regarding adoption of the amendment. The Associated General Contractors of Texas, Highway, Heavy, Utilities, & Industrial Branch of Austin, made numerous suggestions for wording changes throughout the section. The association felt that their suggested changes would clarify the intent of the various subsections. The comptroller adopted their suggestions, which are too numerous to list. In addition to changes in wording, the association asked that the comptroller add a statement about the taxability of equipment storage time. The comptroller complied by adding subsection (d)(9)(C). A comment from an attorney with the Lower Colorado River Authority suggested that a paragraph be added to subsection (e) allowing contractors to rent equipment tax free as re-rentals to their exempt customers. The comptroller declined to accept this suggestion, stating that one of the results of the change to the Tax Code, sec.151.311, was to make a contractor's equipment rentals taxable. The attorney asked that the taxability of change orders be addressed. The comptroller pointed out that the taxability of change orders was covered in subsection (b)(5). A certified public accountant in Houston also made suggestions for wording changes to various parts of the section. The comptroller added subsection (b)(4)(E) covering when contractors could issue resale certificate for taxable services. The amendment is adopted under the Tax Code, sec.111.002, which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of the Tax Code, Title 2. sec.3.291. Contractors. (a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise. (1) Agreed contract price of materials incorporated into the realty-The price specified in the contract for the incorporated materials, i.e., tangible personal property that becomes a part of the real property, plus any additional charges directly attributable to the incorporated materials. For example, profit calculated as a percentage of the cost of materials, cost of transporting the materials, markup, or handling charges related directly to the materials charge are includable in the agreed contract price. A charge calculated as a percentage of the total contract cost will not be considered a part of the material's selling price. The agreed contract price of incorporated materials cannot be less than the price the contractor paid for materials. (2) Consumable items-Tangible personal property, other than machinery and equipment, that is not physically incorporated into the property of a customer and that, after being used for its intended purpose, is substantially used up, or is not retained or reusable by the contractor. (3) Contractor-Any person who builds new improvements to real property or repairs, restores, or remodels residential real property, and who, in making the improvement, incorporates tangible personal property into the property being improved. The term includes subcontractors but does not include material men and suppliers. Persons who repair, restore, or remodel nonresidential real property are providing taxable services under sec.3.357 of this title (relating to Real Property Repair and Remodeling). (4) Improvements to realty-See sec.3.347 of this title (relating to Improvements to Realty). (5) Lump-sum contract-A contract in which the agreed contract price is one lump-sum amount and in which the charges for incorporated materials are not separate from the charges for skill and labor. Separated invoices issued to the customer will not change a lump-sum contract into a separated contract unless the terms of the contract require separated invoices. (6) Separated contract-A contract in which the agreed contract price is divided into a separately stated agreed contract price for incorporated materials and a separately stated agreed contract price for skill and labor. If prices of incorporated materials and labor are separately stated, the fact that the charges are added together and a sum total given is irrelevant. Cost-plus contracts are generally regarded as separated contracts. (7) Tangible personal property-See the Tax Code, sec.151.009. (b) Tax responsibilities of contractors improving real property belonging to nonexempt customers. (1) Equipment. Tax must be paid by a contractor at the time of purchase on tools, machinery, and equipment used to perform a contract. A contractor must accrue and remit use tax on machinery, tools, and equipment purchased from an out-of-state seller unless Texas use tax was collected by the out-of-state seller. (2) Consumable items. Except as provided by subparagraph (B) of this paragraph, tax must be paid by a contractor at the time of purchase on items used to perform a contract which are not physically incorporated into the property of the customer. (A) A contractor may not collect tax from the customer on a charge for consumable items except as provided by subparagraph (B) of this paragraph. (B) A contractor may issue a resale certificate to suppliers in lieu of tax for consumable items, if title to the consumable items transfers to the contractor's customer at the time the contractor takes possession or before, and the consumable items are immediately marked, labeled, or otherwise physically identified as the customer's property, where practicable. The contractor must separately state the charge for these consumable items to the customer and must collect sales tax from the customer unless the customer qualifies for exemption under the Tax Code, sec.151.309 or sec.151.310. (3) Lump-sum contracts. (A) Contractors performing lump-sum contracts are consumers of all materials, consumable items, and equipment used or incorporated into a customer's property. As a consumer, a contractor must pay tax to suppliers at the time the materials are purchased. If the materials are purchased from an out-of-state seller, a contractor must accrue and remit use tax on the materials unless Texas use tax was collected by the out-of-state seller. A contractor shall not collect tax from a customer on a lump-sum charge or on any portion of the charge. (B) Contractors who, in addition to performing lump-sum contracts, sell taxable items over the counter or who also perform separated contracts, may maintain a tax-free inventory of items held for resale. Items purchased exclusively for resale may be purchased tax free by issuing a resale certificate to suppliers in lieu of tax. A contractor must hold a sales tax permit to issue a resale certificate, and must collect, report, and remit tax to the comptroller as required by sec.3. 286 of this title (relating to Seller's and Purchaser's Responsibilities) when items purchased for resale are sold. (C) Persons who resell taxable items as part of taxable services under sec.3.357 of this title (relating to Real Property Repair and Remodeling) may maintain a tax-free inventory of items held for resale. (D) If the contractor incorporates materials from the resale inventory into a lump-sum contract, the contractor must accrue and remit tax based on the purchase price of the materials. The tax should be remitted to the comptroller for the reporting period in which the materials were used. A contractor purchasing items specifically for use in a lump-sum contract may not issue resale certificates in lieu of tax for such items. (E) Contractors performing lump-sum contracts for persons having direct payment permits may not accept a direct payment exemption certificate from those persons. When performing lump-sum contracts for a direct payment permit holder, the contractor must pay sales tax to the supplier or accrue and remit sales tax on incorporated materials removed from a tax-free inventory for incorporation into the direct payment permit holder's realty. Direct payment permit holders cannot authorize the contractor or any other person to purchase any taxable item using their permit. See sec.3.288 of this title (relating to Direct Payment Procedures and Qualifications). (4) Separated contracts. (A) Except as otherwise provided in this section, contractors performing separated contracts are considered retailers of all materials physically incorporated into the realty being improved. As a retailer, a contractor must collect tax from the customer based upon the agreed contract price of the incorporated materials. (B) Contractors performing separated contracts must hold sales tax permits and collect, report, and remit the tax as required by sec.3.286 of this title. Contractors purchasing materials specifically for incorporation into realty under separated contracts may issue suppliers a resale certificate in lieu of tax. See sec.3.285 of this title (relating to Resale Certificate; Sales for Resale). The purchase, rental, or lease of equipment for use in performing a nonexempt contract is subject to tax. Also see paragraph (2)(B) of this subsection. (C) A contractor may maintain an inventory of materials upon which tax was paid to suppliers at the time of purchase. If these materials are incorporated into realty under a separated contract or are sold over the counter, the contractor shall collect tax from the customer based upon the agreed contract price of the materials. Tax is due and must be remitted to the comptroller on any difference between the price paid by the customer and the price paid by the contractor. See sec.3.338 of this title (relating to Allowance of Credit for Tax Paid to Suppliers). (D) Contractors performing separated contracts for persons having direct payment permits may accept a direct payment exemption certificate from those persons in lieu of tax for all tangible personal property incorporated into customer's realty. A direct payment exemption certificate may not be accepted for tax liability incurred by the contractor on machinery or equipment rented or leased by the contractor and used in the performance of the contract. See sec.3.288 of this title. Contractors may not accept direct payment exemption certificates in lieu of tax for consumable supplies unless the provisions of paragraph (2)(B) of this subsection are met. (E) Contractors performing separated contracts may issue suppliers resale certificates in lieu of tax for taxable services that are resold to the contractor's customer. Examples of taxable services that may be resold are landscaping, surveying, and the final clean-up (janitorial services) of the construction site. Contractors may not issue resale certificates for taxable service that the contractor uses or consumes, such as security services, telecommunication services, and daily janitorial services. (5) Contracts versus bids and change orders. For tax purposes, the terms of a contract control over the terms of a bid. For example, if the bid is lump-sum, but the terms of the contract are separated, the contract determines the tax responsibilities of the parties, and the customer is liable for tax on incorporated materials. The terms of a contract also control change orders. If the contract is lump-sum, change orders will be treated as lump-sum even if the change orders show charges for incorporated materials separate from other charges. If the contract is a separated contract, and change orders are for lump-sum amounts, the lump-sum amounts will be treated as though for incorporated materials only unless the contractor can show the portion attributable to labor. (6) Different types of contracts between contractors and subcontractors. For tax purposes, it is not required that all subcontractors use the same type of contract as the general contractor. For example, a general or prime contract may be lump-sum, while some or all subcontracts may be separated. Each subcontractor's individual contract governs the subcontractor's tax responsibilities. In the example given, the separated subcontractors would collect sales tax from the general contractor. The general contractor would not collect any tax from the general contractor's customer. In the alternative, if the general or prime contract were a separated contract, while some of the subcontracts were lump-sum, the prime or general contractor would not collect tax from the prime contractor's customer on those charges from lump-sum subcontractors. (7) Materials provided by customers. A contract may specify that a customer will provide materials and the person performing improvements will provide the skill and labor necessary to perform the contract. Under this type of contract, the person providing the skill and labor will not incur tax liability on the materials. The customer is liable for the tax on the materials. The tax should be paid to the supplier when the materials are purchased. (8) Noninstalled items. A person who manufactures an item for sale but does not install the item as an improvement to realty is a manufacturer subject to provisions of sec.3.300 of this title (relating to Manufacturing; Custom Manufacturing; Fabricating; Processing). Example: cabinet makers or drapery makers who do not affix the cabinets or draperies to realty as a part of a construction contract. (9) Local tax. A contractor's responsibility for local sales and use taxes depends on the type of contract used. See sec.3. 379 of this title (relating to Contractors) and sec.3.329 of this title (relating to Enterprise Projects). (c) Tax responsibilities of contractors improving real property for school districts and nonprofit and public hospitals. For the purposes of this section, school districts are those defined by the Education Code, sec.19.001. Nonprofit hospitals are hospitals licensed under the Health and Safety Code, Chapter 241 or 577. (1) Contractors improving realty for school districts or nonprofit and public hospitals, should obtain a properly completed exemption certificate to substantiate the exemption. If the validity of the exemption is not clear, a contractor cannot accept the exemption certificate in good faith and should request additional evidence of the exempt status of the organization. A sales tax letter of exemption from the comptroller addressed to an organization is evidence of its exempt status and will relieve a contractor from further inquiry, except under the circumstances set out in paragraph (2) of this subsection. If a contractor claims an exemption in lieu of paying tax on a purchase by reason of performing a contract with a school district or a nonprofit or public hospital and the comptroller subsequently determines the organization is not exempt, the contractor will be liable for all taxes, penalties, and interest accruing upon such purchase unless the contractor accepted in good faith a properly completed exemption certificate at the time the contract was entered into. See sec.3.287 of this title (relating to Exemption Certificates). (2) A prime contract with a private party to improve real property belonging to an exempt entity, other than those listed in paragraph (1) of this subsection, for the primary use and benefit of the private party or that would benefit the exempt entity is not exempt from sales or use tax. Materials to be incorporated into the realty may be purchased tax free under a separated contract (or under a lump-sum contract with exempt entities listed in paragraph (1) of this subsection) when a prime contractor has a contract with an exempt entity to improve realty for the exempt entity provided that if the exempt entity is listed under the Tax Code, sec.151.310(a) (1) or (2), the improvement must be related to the purpose of the organization. (3) Materials provided by exempt customers. A contract may specify that a customer that is a school district or a nonprofit or public hospital, will provide the materials and the contractor will provide the skill and labor necessary to perform the contract. Under this type of contract, the contractor will not incur tax liability on the materials. The customer may issue exemption certificates to suppliers in lieu of tax when purchasing the materials, unless the improvements are to be used in activities unrelated to the activity that qualifies the customer for exemption. If the improvements are to be used in activities unrelated to the activity that qualifies the customer for exemption, the exempt customer must pay tax to suppliers at the time the materials are purchased. See also sec.3.322 of this title (relating to Exempt Organizations). (4) Transactions exempt from sales and use taxes include the purchase, rental, or lease by a contractor of all materials, consumable items, equipment, or other taxable items incorporated into the property being improved or used in the performance of the contract with a school district or nonprofit or public hospital. (5) (No change.) (d) Uses of equipment; tax due; method of computation. (1) Purchase of equipment. Contractors improving realty for school districts or nonprofit or public hospitals may purchase equipment from suppliers tax free by issuing an exemption certificate as described in subsection (c)(5) of this section in lieu of paying sales or use tax. When equipment is used on a job other than as described in subsection (c)(4) of this section, tax should be computed using either the specific identification method or the aggregate method described in paragraphs (9) and (10) of this subsection. (2) Refund or credit for tax paid. A contractor purchasing equipment for use in the performance of a contract with a customer other than a school district or a nonprofit or public hospital must pay sales or use tax to the supplier at the time of purchase or, in the case of a direct payment permit holder, accrue the tax on the direct payment return. If at a later date the equipment is used on a job as described in subsection (c)(4) of this section, the contractor may obtain a refund or credit for sales tax directly from the state only by obtaining a written assignment of the right to the refund from the supplier to whom the tax was paid. Direct payment permit holders may take credit on subsequent returns. (3) (No change.) (4) Consumable items and supplies. If a contractor purchases, rents, or leases materials or supplies tax free for use in performing a contract with a school district or a nonprofit or public hospital and uses the items in some manner or for some purpose other than as described in subsection (c)(4) of this section, the contractor is, at the time of the nonexempt use, liable for tax based upon the purchase price of the items. The tax should be reported and remitted to the comptroller for the reporting period in which the taxable use occurred. For local tax responsibilities, see sec.3.377 and sec.3.427 of this title (relating to Divergent Use of a Direct Payment, Resale, or Exemption Certificate; Divergent Use of a Direct Payment, Resale, or Exemption Certificate). (5)-(7) (No change.) (8) Repairs to equipment. (A) Repair, replacement parts, and third-party repair labor which are capitalized and depreciated for federal income tax purposes must be handled in the same manner as the equipment on which they are placed. The capitalized repair, replacement parts, and third-party labor may be treated as if it were a separate piece of equipment and depreciated over its own four-year period. A shorter period may be used if the item's useful life is less than four years. (B) Repair, replacement parts, and third-party labor which are expensed are not depreciated. Tax is due at the time of purchase if the third-party labor and parts are purchased while the equipment is on a nonexempt job. Tax is not due if the parts and labor are purchased while the equipment is on an exempt job. In situations where the contractor takes equipment off the job to repair it before sending it to another job, the contractor may attribute the repairs to the job from which the equipment came or to the job to which the equipment is going. The contractor must treat these repairs consistently. (9) Specific identification method of reporting tax due or obtaining credit for tax paid. (A)-(B) (No change.) (C) The time equipment is in storage is calculated as taxable or exempt use in the same proportion that the equipment is used on taxable and exempt jobs. Storage time for equipment that is only used on exempt jobs is treated as an exempt use. (10) (No change.) (e) Tax responsibilities of contractors and subcontractors improving real property for organizations listed under the Tax Code, sec.151.309 and sec.151.310, other than school districts and nonprofit hospitals. (1) Consumable items and equipment. See subsection (b)(1) and (2) of this section. (2) Materials incorporated into the property of the customer by lump-sum contractors and subcontractors. See subsection (b)(2)(A) of this section. A lump-sum contractor may not issue exemption certificates to suppliers nor accept an exemption certificate in lieu of tax from organizations listed under the Tax Code, sec.151.309 or sec.151.310. (3) Material incorporated into the property of the customer by separated contractors and subcontractors. A resale certificate may be issued to suppliers by separated contractors and subcontractors for those items incorporated into the property being improved. The contractor may then accept an exemption certificate in lieu of tax for those incorporated materials sold under separated contracts to organizations listed under the Tax Code, sec.151. 310. Contractors performing separated contracts for organizations listed under the Tax Code, sec.151.309, must have signed contracts with the government agency, official government purchase vouchers, or an exemption certificate signed by the government agency. (4) Separated contracts that benefit private parties. See subsection (c)(2) of this section. (5) Materials provided by organizations listed under the Tax Code, sec.151.309 or sec.151.310. See subsection (c)(3) of this section. (f) Development work. For the purposes of this subsection, development work means improving real property for a private party that will ultimately be dedicated to and accepted by a governmental entity. Sales tax is due on all tangible personal property used to improve real property belonging to a private party that has been dedicated to and will be accepted by a governmental entity unless: (1) the contract between the contractor and the private party is a separated contract. See subsection (b) of this section for a discussion of lump-sum and separated contracts; (2) the contract provides that title to the materials used to perform the contract passes to the private party at the time the materials are delivered to the jobsite and before they are incorporated into the realty or used by either the contractor or the private party; and (3) the contract provides that the private party intends to donate the property to the governmental entity before it is incorporated into the realty or used by the contractor. The private party must provide the contractor with a letter of intent or other document from the governmental entity stating its intent to accept the property. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 2, 1992. TRD-9209182 Martin Cherry Chief, General Law Section Comptroller of Public Accounts Effective date: July 23, 1992 Proposal publication date: April 17, 1992 For further information, please call: (512) 463-4028 Subchapter O. State Sales and Use Tax 34 TAC sec.3.314 The Comptroller of Public Accounts adopts new sec.3.314, concerning wrapping, packing, packaging supplies, containers, labels, tags, and export packers, with changes to the proposed text as published in the April 3, 1992, issue of the Texas Register (17 TexReg 2386). The new section provides notice to affected persons about significant changes to the Tax Code that were effective October 1, 1991. The 72nd Legislature, 1991, First Called Session, repealed the Tax Code, sec.151.321, and amendments were made to other provisions of the Tax Code regarding wrapping and packaging materials. The new section makes distinctions between wrapping and packaging supplies purchased for use during the manufacturing process, wrapping and packaging supplies used after the manufacturing process is complete, and wrapping and packaging supplies, including gift wrapping, used by persons other than manufacturers in delivering or otherwise furthering the sales of taxable items. Because of extensive changes to the section, the old 34 TAC sec.3.314 was repealed. The change was in subsection (i)(2). The proposed version referenced subsection (a)(3) when the correct reference should have been (a)(4), which listed crating and packaging supplies. A comment was received from the Texas Retailers Association in Austin, on subsection (d) of the new section. The association saw no basis for requiring a retailer to pay sales tax on the purchase price of supplies used for gift wrapping while requiring the same retailer to collect sales tax on the charge to customers for the gift wrapping service. The association pointed out that the comptroller did not require a person providing a gift wrapping service alone (without selling the item being wrapped) to collect sales tax on the gift wrapping charge. The association felt that since items were purchased in one part of the store and "title" to the items transferred there, customers should be able to take their purchases to another part of the store and have the items gift wrapped tax free. It was the position of the association that retailers selling items and providing gift wrapping for the convenience of customers should not be at a competitive disadvantage with persons selling gift wrapping services alone. The comptroller declined to make the changes requested by the association. It is the position of the comptroller that persons selling tangible personal property and providing gift wrapping services are required by the Tax Code, sec.151.007(a)(2), to include the charge for the service in the sales price of the product upon which sales tax is computed. This section of the Tax Code requires the "sales price" or "receipts" of the retailer to include all services connected to the sale. There is no exception in sec.151.007(a)(2) for instances when title to tangible personal property transfers at a location different from the location of the additional service. If a customer purchased an item from a retailer and requested that the retailer deliver the item to another location, sales tax would be due on any charge the retailer made for delivery. If the same customer took possession of the item at the retailer's place of business and then took the item to a freight company for delivery to a location, the comptroller would not require the freight company to collect sales tax on the delivery charge. The retailer made a charge for a service connected to a sale of a taxable item; the freight company did not. The same reasoning holds true for persons providing gift wrapping services alone. A second comment was received from Ira Blackburn & Associates, Inc., of Dallas. The firm asked that the section not be adopted since the rule would place Texas businesses at a competitive disadvantage with out-of-state sellers. The comptroller responded that the basis for the proposed section was a change in the Tax Code. The proposed section only follows the change in the Tax Code that became effective October 1, 1991. The comptroller pointed out that the Tax Code could only be amended by the Texas Legislature. The new section is adopted under the Tax Code, sec.111.002, which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of the Tax Code, Title 2. sec.3.314. Wrapping, Packing, Packaging Supplies, Containers, Labels, Tags, and Export Packers. (a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise. (1) Containers-Glass, plastic, or metal bottles, cans, barrels, and cylinders. (2) Manufacturers-Those persons covered by the provisions of sec.3.300 of this title (relating to Manufacturing; Custom Manufacturing; Fabricating; Processing). (3) Nonreturnable container-A container other than a returnable container. (4) Packaging supplies-All internal and external wrapping, packing, and packaging supplies including wrapping paper, wrapping twine, bags, boxes, cartons, crates, crating material, pallets, tape, rope, rubber bands, metal bands, labels, staples, glue, mailing tubes, excelsior, straw, cardboard fillers, separators, shredded paper, ice, dry ice, cotton batting, shirt boards, and hay lath. (5) Returnable container-A container of a kind customarily returned for reuse by the buyer of the contents. (b) Manufacturers. (1) Sales or use tax is not due on containers or packaging supplies purchased by manufacturers for use as a part of the completion of the manufacturing process. For the purposes of this section, the manufacturing process is complete when the tangible personal property being produced has been packaged by the manufacturer as it will be sold. For example, toothpaste may be sold at retail in a tube enclosed in a box. Multiple units of the boxed toothpaste are placed in cardboard boxes by the manufacturer. A label is placed on the cardboard boxes identifying the product. The manufacturer then places these labelled boxes on a pallet and covers them with shrink-wrap for shipment, either to the manufacturer's distribution center, the manufacturer's warehouse, or to the manufacturer's customer. The toothpaste manufacturer may purchase the tubes, boxes, labels, pallets, and shrink-wrap tax free. Any additional packaging necessary to transfer the product from the manufacturer's distribution center, or from the manufacturer's warehouse to the manufacturer's customer would also be exempt from tax. (2) Packaging supplies do not include returnable containers. See subsection (g) of this section. (c) Sale of packaging supplies to persons other than manufacturers. Sales or use tax is due on the sale of packaging supplies, including gift wrapping supplies, to persons who repack tangible personal property prior to sale, produce shippers who are not original producers, wholesalers, retailers, and service providers for use in delivering, expediting, or furthering in any way: (1) the performance of a taxable or nontaxable service; (2) the rental of tangible personal property; or (3) the sale of tangible personal property. (d) Gift wrapping supplies. Sales tax is due on the purchase price of gift wrapping supplies used by persons providing gift wrapping services. (1) Tax must be paid on the cost of gift wrapping by the person providing the service whether or not the item being gift wrapped was sold by the person providing the service. (2) Tax must be collected on a charge for gift wrapping if the person providing the gift wrapping service sold the item being wrapped. (e) Combination businesses. A business that primarily manufactures tangible personal property for sale may also purchase tangible personal property for resale that was manufactured by another entity. If the business is primarily a manufacturer, all packaging supplies may be purchased tax free even though a portion of the packaging supplies are used in repackaging a product. For example: (1) fast-food restaurants are considered to be primarily processors of tangible personal property for sale. The restaurant may also sell tangible personal property without further processing, such as soft drinks, doughnuts, or candy. The fast-food restaurant may purchase all packaging supplies tax free even though a portion of the packaging supplies are used in packaging or serving a nonprocessed product; (2) a grocery store purchases tangible personal property for resale, but also processes food and food products. A grocery store's meat department or snack bar may be processing as well as re-packaging food and food products. If the packaging supplies used by the departments that process are clearly distinguishable from those packaging supplies used in the nonprocessing department, the processing department's packaging supplies may be purchased tax free. (f) Purchases for resale. Packaging supplies purchased for resale "as is," not as part of a packaged product, may be purchased tax free by issuing a resale certificate in lieu of tax. (g) Containers. Sales or use tax is not due on: (1) containers when sold with the contents, if sales or use tax is not due on the sales price of the contents; (2) nonreturnable containers when sold without the contents to persons who place the contents in the container and sell the contents together with the container. Throwaway glass bottles are examples of nonreturnable containers; (3) returnable containers when sold with the contents in connection with the retail sale of the contents or when resold for refilling. An example would be an oxygen cylinder. Sales or use tax is due when the oxygen cylinder is purchased initially by the person who will fill it prior to the sale of the contents. (h) Labels and tags. Sales or use tax is due on labels and tags unless they are used as discussed in subsection (b) of this section. (i) Export packers. (1) An export packer is a person who packages property to be exported outside the territorial limits of the United States. (2) Crating and packaging supplies as listed in subsection (a) (4) of this section, when purchased by an export packer to export personal property, are exempt under the export clause of the United States Constitution, and the Tax Code, sec.151.307, whether used to package the export packer's property, that of vendors shipping such property to their foreign customers, or that of purchasers who contract and pay for such services. (3) An export packer may give exemption certificates to suppliers on material purchases but must maintain records showing which materials were used for the exempt purpose of exporting tangible personal property. (4) The export packer need not obtain a sales or use tax permit if all crating and packing supplies are purchased for exporting tangible personal property. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 2, 1992. TRD-9209180 Martin Cherry Chief, General Law Section Comptroller of Public Accounts Effective date: July 23, 1992 Proposal publication date: April 3, 1992 For further information, please call: (512) 463-4028 TITLE 37. PUBLIC SAFETY AND CORRECTIONS Part I. Texas Department of Public Safety Chapter 3. Traffic Law Enforcement Enforcement Action 37 TAC sec.3.28 The Texas Department of Public Safety adopts an amendment to sec.3.28, concerning cash bond program, without changes to the proposed text as published in the May 19, 1992, issue of the Texas Register (17 TexReg 3714). The adoption of this amendment will allow the public the opportunity to waive immediate appearance before a magistrate by disposing of a fine through alternate methods, such as a money order, cashier's check, traveler's check, or cash money when the other options are not convenient. Language in this section is deleted to comply with Attorney General Opinion DM- 57 relating to preset bonds which requires a violator to be brought before a magistrate prior to setting a bond. The section is rewritten proposing a citation disposition receipt program which prescribes the procedure which may be used in these instances where an immediate appearance before a magistrate is not required by statute and a custody arrest is necessary to insure the violator's appearance in court. No comments were received regarding adoption of the amendment. The amendment is adopted under the Texas Government Code, sec.411.006(4), which provides the director with the authority to adopt rules, subject to commission approval, considered necessary for the control of the department. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on June 30, 1992. TRD-9209199 James R. Wilson Director Texas Department of Public Safety Effective date: July 24, 1992 Proposal publication date: May 19, 1992 For further information, please call: (512) 465-2000 Chapter 15. Drivers License Rules Application Requirements Original, Renewal, Duplicate, Identification Certificates 37 TAC sec.sec.15.25, 15.30, 15.31, 15.34, 15.38 The Texas Department of Public Safety adopts amendments to sec.sec.15.25, 15. 30, 15.31, 15.34, and 15.38, concerning application requirements original, renewal, duplicate, identification certificate, without changes to the proposed text as published in the May 19, 1992, issue of the Texas Register (17 TexReg 3715). The adoption of these sections are necessary to ensure the public is aware of the requirements for obtaining a driver's license or identification card. The amendments to sec.15.25 add new paragraph (3) which requires a mailing address to be listed on commercial driver's licenses (CDL) and renumbers remaining paragraphs. Language is added to paragraphs (2), (4), and (10) clarifying instruction for addresses. Amendments to sec.15.30 change the identification certificate fee to $10, except persons age 65 or older only have to pay $5.00. Amendments to sec.15.31 add new subsection (g) which provides that CDL holders cannot renew their licenses by mail. Amendments to sec.15.34 delete subsection (b)(1) and add new language which requires that applicants renewing a provisional license other than within 30 days of their 18th birthday must present a certificate of attendance and enrollment. Amendments to sec.15.38 add a new paragraph (4) which states CDL holders are not exempt from payment of fees. No comments were received regarding adoption of the amendments. The amendments are adopted under Texas Civil Statutes, Article 6687b, sec.1A, which provide the Texas Department of Public Safety with the authority to adopt rules necessary to effectively administer this Act. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on June 26, 1992. TRD-9209200 James R. Wilson Director Texas Department of Public Safety Effective date: July 24, 1992 Proposal publication date: May 19, 1992 For further information, please call: (512) 465-2000 Application Requirements Original, Renewal, Duplicate, Identification Certificates 37 TAC sec.15.39 The Texas Department of Public Safety adopts new sec.15.39, concerning verification of enrollment and attendance, without changes to the proposed text as published in the May 19, 1992, issue of the Texas Register (17 TexReg 3716). This section is adopted to promote a high school education and require verification of enrollment for high school students in order to retain a drivers license. This section requires applicants under the age of 18 who are applying for a license or instruction permit or renewing a license to present a verification of enrollment and attendance form. This form is issued by the applicant's school and is valid 90 days from the date issued, unless a new semester has begun. No comments were received regarding adoption of the new section. The new section is adopted under Texas Civil Statutes, Article 6687b, sec.1A, which provide the Texas Department of Public Safety with the authority to adopt rules necessary to effectively administer this Act. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on June 26, 1992. TRD-9209201 James R. Wilson Director Texas Department of Public Safety Effective date: July 24, 1992 Proposal publication date: May 19, 1992 For further information, please call: (512) 465-2000 Chapter 16. Commercial Drivers License Sanctions and Disqualifications 37 TAC sec.sec.16.91-16.101 The Texas Department of Public Safety adopts new sec. sec.16.91-16.101, concerning sanctions and disqualifications, without changes to the proposed text as published in the May 19, 1992, issue of the Texas Register (17 TexReg 3716). These sections are adopted to reduce or prevent commercial motor vehicle accidents, fatalities, and injuries by permitting only qualified individuals to hold licenses to drive these vehicles. These sections will conform with legislation that requires sanction actions to be taken against commercial motor vehicle (CMV) operators. These sections will explain the issuance of noncommercial drivers license (non-CDL) permits, the consequences of driving a CMV without a CDL, procedures concerning serious traffic violations, reporting and receipt of out-of-state convictions, administrative hearing notification, occupational license issuance relating to CMV operators, and CMV lifetime disqualification determination and the requirement for the reinstatement of CMV operating privileges. Proof of financial responsibility required under the Safety Responsibility Act will not be required on the basis of a CMV disqualification only. No comments were received regarding adoption of the new sections. The new sections are adopted under Texas Civil Statutes, Article 6687b, sec.29, which provide the Texas Department of Public Safety with the authority to adopt rules and regulations necessary to carry out provisions of the Texas Commercial Driver's License Act and the Federal Commercial Motor Vehicle Safety Act of 1986. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on June 30, 1992. TRD-9209202 James R. Wilson Director Texas Department of Public Safety Effective date: July 24, 1992 Proposal publication date: May 19, 1992 For further information, please call: (512) 465-2000