Proposed Sections Before an agency may permanently adopt a new or amended section, or repeal an existing section, a proposal detailing the action must be published in the Texas Register at least 30 days before any action may be taken. The 30-day time period gives interested persons an opportunity to review and make oral or written comments on the section. Also, in the case of substantive sections, a public hearing must be granted if requested by at least 25 persons, a governmental subdivision or agency, or an association having at least 25 members. Symbology in proposed amendments. New language added to an existing section is indicated by the use of bold text. [Brackets] indicate deletion of existing material within a section. TITLE 7. BANKING AND SECURITIES Part VII. State Securities Board Chapter 109. Transactions Exempt from Registration 7 TAC sec.109.3 The State Securities Board proposes an amendment to sec.109.3, concerning sales to financial institutions and certain institutional investors under the Securities Act, sec.5.H, to expand the definition of "qualified institutional buyer" for purposes of the exemption. The referenced Securities and Exchange Commission release includes collective and master trusts used for the investment of employee benefit plan funds as well as separate accounts of an insurance company. Richard Latham, securities commissioner, has determined that for the first five-year period the section is in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the section. Mr. Latham also has determined that for each year of the first five years the section is in effect the public benefit anticipated as a result of enforcing the section will be continued uniformity with the Securities and Exchange Commission in regard to what is included within the exemption. There will be no effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the section as proposed. Comments on the proposal may be submitted to Denise Voigt Crawford, State Securities Board, P.O. Box 13167, Austin, Texas 78711-3167. The amendment is proposed under Texas Civil Statutes, Article 581, sec.28-1, which provide the Board with the authority to adopt rules and regulations governing registration statements and applications; classify securities, persons, and matters within its jurisdiction; and prescribe different requirements for different classes. sec.109.3. Sales to Financial Institutions and Certain Institutional Investors under the Securities Act, sec.5.H. (a)-(b) (No change.) (c) Sales to certain institutional investors. The State Securities Board, pursuant to the Securities Act, sec.5.T, exempts from the securities registration requirements of the Securities Act, sec.7, the offer and sale of any securities to any of the following purchases: (1) (No change.) (2) any "qualified institutional buyer" (as that term is defined in Rule 144A(2)(1) promulgated by the SEC under the 1933 Act, as made effective in SEC Release Number 33-6862[)], and amended in Release Number 33-6963). (3) (No change.) (d) (No change.) This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas, on February 1, 1993. TRD-9318453 Richard D. Latham Securities Commissioner State Securities Board Earliest possible date of adoption: March 12, 1993 For further information, please call: (512) 474-2233 Chapter 123. Open-End Investment Companies 7 TAC sec.123.3 The State Securities Board proposes an amendment to sec.123.3, concerning conditional exemption for money market funds to take into account current rules of the Securities and Exchange Commission (SEC) and the National Association of Securities Dealers (NASD) as they relate to the Securities Commissioner's designation of open-end investment companies as "money market funds" for purposes of reduced registration fees. Michael Northcutt, director, Securities Registration Division, has determined that for the first five-year period the section is in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the section. Mr. Northcutt also has determined that for each year of the first five years the section is in effect the public benefit anticipated as a result of enforcing the section will be a money market fund designation approach that takes into account current SEC and NASD rules. There will be no effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the section as proposed. Comments on the proposal may be submitted to Denise Voigt Crawford, State Securities Board, P.O. Box 13167, Austin, Texas 78711-3167. The amendment is proposed under Texas Civil Statutes, Article 581, sec.28-1, which provide the Board with the authority to adopt rules and regulations governing registration statements and applications; classify securities, persons, and matters within its jurisdiction; and prescribe different requirements for different classes. sec.123.3. Conditional Exemption for Money Market Funds. (a) (No change.) (b) Definition. In this section, a "no load
    money market fund" or "fund" is an open-end investment company which must meet all of the following conditions. (1) The fund must engage
      [engages] in a continuous offering of its securities.
        [, which] (2) The fund must not pay or charge
          [charges no] sales commissions or redemption fees except for a nominal exchange fee which may not be used for sales expenses or in lieu of an initial sales charge or redemption fee. (3) The fund must not pay or charge asset-based charges in lieu of an initial sales charge or redemption fee. (4) The fund must not pay or charge aggregate asset-based charges for sales promotion activities and/or the servicing of shareholder accounts in excess of .25% of average net assets per annum. (5) The fund's
            [and whose] only objectives must be
              [are] preservation of capital, liquidity, and generation of current income derived from a portfolio consisting exclusively of United States dollar denominated
                evidences of indebtedness of minimal risk
                  that generally may be described as money market investments such as , but not limited to, the following:
                    certificates of deposit, United States government securities, municipal obligations,
                      commercial paper or similar obligations .
                        [,] (6) Additional Portfolio Requirements. (A) The fund's average Portfolio maturity may not exceed 90 days. (B) The fund's instruments must have a remaining maturity of less than 397 calendar days, except that government securities may have a remaining maturity of 762 days.
                          [80% of whose principal amount must mature (may be redeemed or paid on demand) within one year from the date of issuance or settlement whichever is later; all of whose principal amount must mature (may be redeemed or paid on demand) within three years from the date of settlement.] (C) A fixed rate debt instrument
                            [For these purposes, an indebtedness] will be
                              [is] deemed to "mature" on the date noted on the face of the instrument as the date on which the principal amount must be paid. (D) [Or the case of] Variable or floating rate debt
                                instruments [with longer stated dates for principal payments, such instruments] will be
                                  [are] deemed to "mature" on the next stated interest rate adjustment date. (E) In connection with any investment subject to a put feature (which would give the fund the right to sell a specified underlying security or securities within a specified period of time and at a specific exercise price) the put feature may be sold, transferred, or assigned only with the underlying security or securities. (F) Repurchase agreements must be fully collateralized by United States government securities and be held in the name of the fund or the fund's custodian. (G) Except for mergers, consolidations, or acquisitions of assets, the fund's investments in other investment companies must be limited to 10% of average annual net assets. The investment companies must have identical objectives and similar investments to those of the fund. No management or advisory fees may be charged by the fund's manager or adviser for such investments. (c) Request for Determination. (1) At the time an applicant applies for registration of securities issued by an open-end investment company under the Act, sec.7, or at any time thereafter [when such a registration application is pending or registration is effective], the applicant may request that the Commissioner determine the issuer to be a money market fund as defined in this Rule. The request shall be made in writing on a Form proposed for adoption in sec.133.26 of this title (relating to Request for Determination as a Money Market Fund)
                                    [in such form and content as prescribed by the Commissioner]. The Commissioner shall review such
                                      [a] request and any other information deemed relevant by the Commissioner
                                        [him] and shall determine whether or not
                                          the issuer is a money market fund for purposes of this section. (2) If the request is made subsequent to the issuance of the fund's original permit, an amendment fee of $10 will be required. Also, additional sales information will be required since only the securities registered and sold after the date the Commissioner determines that the issuer is a money market fund will be subject to the reduced registration fees under subsection (d) of this section. (d)-(f) (No change.) (g) Year-End Reports. All funds must file a Year-End Report of Sales on a Form proposed for adoption in sec.133.27 of this title (relating to Year-End Report of Sales by a Money Market Fund)
                                            in January of each year which reflects the amount of securities sold in the previous year, the balance of fees paid for registration of any unsold balance in the previous year and the recalculated balance of authorized securities at the beginning of the current year. In calculating fees applied to sales during the previous year, fees are first applied at the higher rates in the subsection (d)(5) of this section scale, and then at more reduced rates as sales volume increases, and not vice versa. Funds should consult the examples contained in the form for Year-End Report of Sales in determining how to compute fees. (h)-(j) (No change.) This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas, on February 1, 1993. TRD-9318454 Richard D. Latham Securities Commissioner State Securities Board Earliest possible date of adoption: March 12, 1993 For further information, please call: (512) 474-2233 Chapter 124. Guidelines for Registration of Periodic Payment Plans 7 TAC sec.sec.124.1-124.6 The State Securities Board proposes new sec.sec.124.1-124.6, concerning guidelines for registration of periodic payment plans. The sections relate to installment plans for investing in mutual funds. The sections reflect the guidelines adopted by the North American Securities Administrators Association, Inc. (NASAA). Michael Northcutt, director, Securities Registration Division, has determined that for the first five-year period the sections are in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the sections. Mr. Northcutt also has determined that for each year of the first five years the sections are in effect the public benefit anticipated as a result of enforcing the sections will be uniformity with other states in the requirements for registration of periodic payment plans for investing in mutual funds. There will be no effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the sections as proposed. Comments on the proposal may be submitted to Denise Voigt Crawford, State Securities Board, P.O. Box 13167, Austin, Texas 78711-3167. The new sections are proposed under Texas Civil Statutes, Article 581, sec.28- 1, which provide the Board with the authority to adopt rules and regulations governing registration statements and applications; classify securities, persons, and matters within its jurisdiction; and prescribe different requirements for different classes. sec.124.1. Introduction. (a) Application. (1) These guidelines apply to the registration and qualification of periodic payment plans (sometimes referred to as "contractual plans"). (2) Applications not conforming to the standards contained in these guidelines shall be looked upon with disfavor. However, where good cause is shown, certain guidelines may be modified or waived by the Securities Commissioner. (b) Definitions. The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise. (1) Administrator-Referred to as "Securities Commissioner" throughout these guidelines. (2) Current account-Any account in a periodic payment plan: (A) which has not been liquidated: and (i) which is no more than six payments in arrears; or (ii) in which a payment has been made in the past six months; or (B) in which the total amount deducted from all payments for sales charges or commissions is 9.0% or less of the total amount of payments made. (3) Periodic payment plan-A plan which issues any certificate, investment contract, or other security providing for a series of periodic payments by the holder, and representing an undivided interest in certain specific securities or in a unit or fund of securities purchased wholly or partly with the proceeds of such payment. (4) Persistency rate-The percentage of the total number of accounts in a periodic payment plan which are current accounts. For purposes hereof, the computation of the persistency rate shall not include any account which has been canceled in accordance with the cancellation right contained in the Investment Company Act of 1940, sec.27(f), as amended. sec.124.2. Suitability Standards. (a) No periodic payment plan may be sold unless a principal of the selling dealer has determined that the plan is suitable for the purchasing investor. Such determination shall include, but not be limited to, consideration of the following factors: (1) the investor's age, marital status, and number of dependents; (2) the investor's major investment goals and the time frame for achieving those goals; (3) the investor's current and anticipated future financial status including income, and reasonably anticipated short- and long-term liabilities or other obligations; (4) the reasonable likelihood of the investor's continued income; (5) the investor's ability to address potentially burdensome financial situations (e.g., the death of a family member) through the use of insurance, savings, or other assets; and (6) the investor's understanding of the risks inherent in investing in securities and the proper use of savings instruments or accounts for shorter term needs. (b) The selling dealer shall retain for at least five years the documents disclosing the basis upon which the determination was reached as to each purchasing investor. sec.124.3. Limitation on Commissions. (a) In addition to the refund rights available to an investor in a periodic payment plan pursuant to the Investment Company Act of 1940, sec.27(d) and sec.27(f), as amended, in the event that an investor in a periodic payment plan shall withdraw from the plan within 28 months of the investor's initial payment, the investor shall receive the sum of: (1) the value of his or her account; and (2) the amount by which all sales charges, commissions, or other selling or redemption fees deducted from the investor's account exceed 15% of the gross payments made by the investor. (b) For purposes of subsection (a) of this section, each investor shall be provided a notice setting forth his or her cancellation rights. This notice, in the form provided in s124.4 of this title (relating to Disclosure), shall be sent not less than 30 days and not more than 60 days prior to the expiration of the investor's cancellation rights. Neither the sponsor nor its agent(s) shall advise the investor against exercising his or her right to cancel the plan without first determining that such advice is suitable for the particular investor. Such determination shall include, but not be limited to, consideration of the factors set forth in sec.124.2 of this title (relating to Suitability Standards), as well as of other factors indicating the likelihood that the investor will complete the plan. sec.124.4. Disclosure. Each investor in a periodic payment plan shall be provided with disclosure in the form which follows. This disclosure shall be executed by the investor and by the selling dealer. The investor shall be provided with an executed copy. The dealer shall retain an executed copy for a period of at least five years. [graphic] sec.124.5. Persistency Rate and Reports. (a) For all fiscal years beginning on or after January 1, 1993, the issuer of securities under a periodic payment plan shall file with the Securities Commissioner within 60 days of the end of the plan's fiscal year a report disclosing the plans persistency rate for all accounts opened in the jurisdiction no less than one year nor more than five years before the last day of the fiscal year. (b) An issuer who fails to maintain a persistency rate of 70% or higher within the jurisdiction shall furnish a report setting forth an explanation for such failure. Failure to furnish such a report or failure to provide an explanation satisfactory to the Securities Commissioner shall be grounds for the Securities Commissioner to deny, suspend, or revoke registration of the periodic payment plan. In making this determination, the Securities Commissioner may consider all relevant factors, including but not limited to, national persistency rates, market conditions, the number of investors in that jurisdiction, the period of time the plan has been selling in that jurisdiction, legislative and regulatory development, and any other unusual or unique circumstances. (c) The Securities Commissioner may deny the registration of a periodic payment plan based upon low persistency rates in one or more other jurisdictions. This provision shall not apply to the renewal of the registration of any plan currently registered in the jurisdiction. sec.124.6. Investment Objective.
                                              The stated investment objective of a periodic payment plan shall be a fundamental policy of the plan as defined in the Investment Company Act of 1940, sec.8(b), and shall be consistent with the goal of providing a long-term investment opportunity suitable for persons of relatively modest means. If a fund's investment objective is not currently a fundamental policy, it shall be made one at the next meeting of shareholders. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas, on February 1, 1993. TRD-9318455 Richard D. Latham Securities Commissioner State Securities Board Earliest possible date of adoption: March 12, 1993 For further information, please call: (512) 474-2233 Chapter 133. Forms 7 TAC sec.133.26 The State Securities Board proposes new sec.133.26, concerning the request for determination as a money market fund, which would be a new Board form. Michael Northcutt, director, Securities Registration Division, has determined that for the first five-year period the section is in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the section. Mr. Northcutt also has determined that for each year of the first five years the section is in effect the public benefit anticipated as a result of enforcing the section will be the creation of a new form to make it easier to request money market status determination from the Securities Commissioner. There will be no effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the section as proposed. Comments on the proposal may be submitted to Denise Voigt Crawford, State Securities Board, P.O. Box 13167, Austin, Texas 78711-3167. The new section is proposed under Texas Civil Statutes, Article 581, sec.28-1, which provide the Board with the authority to adopt rules and regulations governing registration statements and applications; classify securities, persons, and matters within its jurisdiction; and prescribe different requirements for different classes. sec.133.26. Request for Determination as a Money Market Fund. The State Securities Board adopts by reference the request for determination as a money market fund. This form is available from the State Securities Board, P.O. Box 13167, Austin, Texas 78711. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas, on February 1, 1993. TRD-9318456 Richard D. Latham Securities Commissioner State Securities Board Earliest possible date of adoption: March 12, 1993 For further information, please call: (512) 474-2233 7 TAC sec.133.27 The State Securities Board proposes new sec.133.27, concerning the year-end report of sales by a money market fund, which would replace sec.133.28 of this title relating to year-end report of sales of money market funds which is being proposed for repeal. Micheal Northcutt, director, Securities Registration Division, has determined that for the first five-year period the section is in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the section. Mr. Northcutt also has determined that for each year of the first five years the section as proposed is in effect the public benefit anticipated as a result of enforcing the section will be the creation of a new form for year-end reports of sales by money market funds that is simpler for filers to complete than is the current form being proposed for repeal. There will be no effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the section as proposed. Comments on the proposal may be submitted to Denise Voigt Crawford, State Securities Board, P.O. Box 13167, Austin, Texas 78711-3167. The new section is proposed under Texas Civil Statutes, Article 581, sec.28-1, which provide the Board with the authority to adopt rules and regulations governing registration statements and applications; classify securities, persons, and matters within its jurisdiction; and prescribe different requirements for different classes. sec.133.27. Year-End Report of Sales by a Money Market Fund. The State Securities Board adopts by reference the year-end report of sales by a money market fund. This form is available from the State Securities Board, P.O. Box 13167, Austin, Texas 78711. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas, on February 1, 1993. TRD-9318457 Richard D. Latham Securities Commissioner State Securities Board Earliest possible date of adoption: March 12, 1993 For further information, please call: (512) 474-2233 Chapter 133. Forms 7 TAC sec.133.28 (Editor's note: The text of the following section proposed for repeal will not be published. The section may be examined in the offices of the State Securities Board or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.) The State Securities Board proposes the repeal of sec.133.28, concerning the year-end report of sales of money market funds, a State Securities Board form that would be replaced by the form set forth in proposed sec.133.27. Micheal Northcutt, director, Securities Registration Division, has determined that for the first five-year period the repeal is in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the repeal. Mr. Northcutt also has determined that for each year of the first five years the repeal as proposed is in effect the public benefit anticipated as a result of enforcing the repeal will be the elimination of an unnecessary form. There will be no effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the repeal as proposed. Comments on the proposal may be submitted to Denise Voigt Crawford, State Securities Board, P.O. Box 13167, Austin, Texas 78711-3167. The repeal is proposed under Texas Civil Statutes, Article 581, sec.28-1, which provide the Board with the authority to adopt rules and regulations governing registration statements and applications; classify securities, persons, and matters within its jurisdiction; and prescribe different requirements for different classes. sec.133.28. Year-End Report of Sales of Money Market Funds. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas, on February 1, 1993. TRD-9318458 Richard D. Latham Securities Commissioner State Securities Board Earliest possible date of adoption: March 12, 1993 For further information, please call: (512) 474-2233 Chapter 139. Exemptions by Rule or Order 7 TAC sec.139.4 The State Securities Board proposes new sec.139.4, concerning Mexican securities. The section would be an exemption from securities registration for certain Mexican securities. The exemption would be created pursuant to the Securities Act, sec.5.T. Michael Northcutt, director, Securities Registration Division, has determined that for the first five-year period the section is in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the section. Mr. Northcutt also has determined that for each year of the first five years the section is in effect the public benefit anticipated as a result of enforcing the section will be an exemption from securities registration for securities either issued or guaranteed by the federal government of Mexico. There will be no effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the section as proposed. Comments on the proposal may be submitted to Denise Voigt Crawford, State Securities Board, P.O. Box 13167, Austin, Texas 78711-3167. The new section is proposed under Texas Civil Statutes, Article 581, sec.28-1, which provide the Board with the authority to adopt rules and regulations governing registration statements and applications; classify securities, persons, and matters within its jurisdiction; and prescribe different requirements for different classes. sec.139.4. Mexican Securities.
                                                Any security either issued or guaranteed by the federal government of Mexico shall be exempt from the securities registration requirements of the Act when offered for sale, sold, or dealt in by a registered dealer. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas, on February 1, 1993. TRD-9318459 Richard D. Latham Securities Commissioner State Securities Board Earliest possible date of adoption: March 12, 1993 For further information, please call: (512) 474-2233 TITLE 16. ECONOMIC REGULATION Part IV. Texas Department of Licensing and Regulation Chapter 60. Texas Commission of Licensing and Regulation Subchapter C. Fees 16 TAC sec.60.67 The Texas Department of Licensing and Regulation proposes an amendment to sec.60.67, concerning the auctioneer exam fee. The department proposes to raise the fee from $25 to $50 to recover the costs of development and administration of the exam. James D. Brush II, Director, Policies and Standards, has determined that for the first five-year period the section is in effect there will be fiscal implications for state government as a result of enforcing or administering the section. The effect on state government for the first five-year period the section is in effect will be an estimated increase in revenue of $8,000, for fiscal years 1993-1997. There will be no effect on local government. Mr. Brush II also has determined that for each year of the first five years the section is in effect the public benefit anticipated as a result of enforcing the section will be that a more valid and secure exam will result in more qualified license holders to serve the public. The effect on small businesses will be a one-time increase of $25. The cost is the same for small and large businesses, as only one license is required for the business. The anticipated economic cost to persons who are required to comply with the section as proposed will be: $25 for each person for fiscal years 1993-1997. Comments on the proposal may be submitted to James D. Brush II, Director of Policies and Standards, Texas Department of Licensing and Regulation, P.O. Box 12157, Austin, Texas 78711. The amendment is proposed under Texas Civil Statutes, Article 9100, which provide the Texas Department of Licensing and Regulation with the authority to set fees to cover the cost of administering programs regulated by the department. sec.60.67. Auctioneer Fees. (a)-(c) (No change.) (d) Examination fees. A $50
                                                  [$25] fee will be charged for each examination. This fee is not refundable. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas, on January 28, 1993. TRD-9318388 Jack W. Garison Executive Director Texas Department of Licensing and Regulation Earliest possible date of adoption: March 12, 1993 For further information, please call: (512) 463-3127 Chapter 67. Auctioneers 16 TAC sec.67.83 The Texas Department of Licensing and Regulation proposes an amendment to sec.67.83, concerning the auctioneer exam fee. The department proposes to raise the fee from $25 to $50 to recover the costs of development and administration of the exam. James D. Brush II, Director, Policies and Standards Division, has determined that for the first five-year period the section is in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the section. The effect on state government for the first five- year period the section is in effect will an estimated increase in revenue of $8,000 for fiscal years 1993-1997. There will be no effect on local government. Mr. Brush II also has determined that for each year of the first five years the section is in effect the public benefit anticipated as a result of enforcing the section will be that a more valid and secure exam will result in more qualified license holders to serve the public. The effect on small businesses will be a one-time increase of $25. The cost is the same for small and large businesses, as only one license is required for the business. The anticipated economic cost to persons who are required to comply with the section as proposed will be $25 for each person for fiscal years 1993-1997. Comments on the proposal may be submitted to James D. Brush II, Director of Policies and Standards, Texas Department of Licensing and Regulation, P.O. Box 12157, Austin, Texas 78711. The amendment is proposed under Texas Civil Statutes, Article 8700, which provide the Texas Department of Licensing and Regulation with the authority to promulgate and enforce a code of rules to assure compliance with the Act. sec.67.83. Fees-Examination. (a) A $50
                                                    [$25] fee will be charged for each examination. (b) (No change.) This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas, on January 27, 1992. TRD-9318389 Jack W. Garison Executive Director Texas Department of Licensing and Regulation Earliest possible date of adoption: March 12, 1993 For further information, please call: (512) 463-3127 TITLE 22. EXAMINING BOARDS Part XXII. Texas State Board of Public Accountancy Chapter 501. Professional Conduct Other Responsibilities and Practices 22 TAC sec.501.46 The Texas State Board of Public Accountancy proposes an amendment to sec.501.46, concerning form of practice. The amendment to the rule tracks the language of the Public Accountancy Act regarding the definition of "corporation". William Treacy, executive director, has determined that for the first five-year period the section is in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the section. Mr. Treacy also has determined that for each year of the first five years the section is in effect the public benefit anticipated as a result of enforcing the section will be that the rule is clear and unambiguous regarding the forms of entities which may practice public accountancy. There will be no effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the section as proposed. Comments on the proposal may be submitted to J. Randel (Jerry) Hill, General Counsel, 1033 La Posada, Suite 340, Austin, Texas 78752-3892. The amendment is proposed under Texas Civil Statutes, Article 41a-1, sec.6(a) , which provide the Texas State Board of Public Accountancy with the authority to promulgate rules relating to form of practice. sec.501.46. Form of Practice. A certificate or registration holder may practice public accountancy only in a proprietorship, a partnership, a limited liability company, a registered limited liability partnership, [or] a professional corporation organized under the Texas Professional Corporation Act, as amended Texas Civil Statutes, Article 1528e, or other corporation authorized by applicable statutes, or an equivalent law of another state, territory, or foreign country,
                                                      [organized in accordance with the Texas Professional Corporation Act] or as an employee of one of these entities. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas, on February 2, 1993. TRD-9318442 William Treacy Executive Director Texas State Board of Public Accountancy Earliest possible date of adoption: March 12, 1993 For further information, please call: (512) 450-7066 TITLE 28. INSURANCE Part I. Texas Department of Insurance Chapter 1. General Administration Subchapter A. Rules of Practice and Procedure 28 TAC sec.sec.1.82-1.86 The State Board of Insurance of the Texas Department of Insurance proposes new sec.sec.1.82-1.86, concerning forms and scope of discovery in contested cases. Discovery rules for contested cases are required for the orderly and efficient disposition of matters before the Commissioner and the State Board of Insurance of the Texas Department of Insurance. Proposed sec.sec.1.82-1.86 define the forms and scope of discovery in contested cases, which expand available discovery under Texas Civil Statutes, Article 6252-13a, and existing rules of practice and procedure. Proposed sec.1.82 defines permissible forms of discovery by parties in contested cases and the scope of discovery. Scope of discovery is essentially the same as collectively provided by the Texas Rules of Civil Procedure, 28 TAC sec.1.33, and Texas Civil Statutes, Article 6252-13a, sec.14 and sec.14a. Proposed sec.1.83 outlines service and filing of discovery requests and responses. Proposed sec.1.84 outlines deadlines for responses to discovery requests, unless modified by agreement of the party seeking discovery. Proposed sec.1.85 outlines requirements concerning requests for admission. Also, proposed sec.1.86 provides for discovery orders, sanctions, and appellate review. Proposed sec.sec.1.82-1.86 are designed to supplement existing discovery rules to ascertain or seek the truth, to avoid surprise, to promote settlements, to preserve evidence, and to increase the efficient administration of contested cases. Proposed ssec.1.82-1.86 do not apply to Article 5.101 benchmark rate proceedings brought before the Board, even upon assignment of the proceeding to a Hearings Officer. Kimberly L. Kiplin, Director of Legal Services, Texas Department of Insurance, has determined that for the first five-year period the sections are in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the sections. Ms. Kiplin also has determined that for each year of the first five years the sections are in effect the public benefit anticipated as a result of enforcing the sections will be increased administrative efficiency. All parties involved in contested cases should benefit from streamlined issues, reduced litigation, and the promotion of settlement, which will benefit the public by providing uniformity of case administration, reduction of docket congestion, and the reduction of costs normally associated with protracted litigation. There will be no effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the sections as proposed. Comments on the proposal must be submitted in writing within 30 days after the publication of the proposed rule in the Texas Register to Linda K. Von Quintus- Dorn, Chief Clerk, P.O. Box 149104, MC-113-2A, Austin, Texas 78714-9104. An additional copy of the comment should be submitted to Stephen Jon Moss, Staff Attorney, Legal Services, P.O. Box 149104, MC-110-1A, Austin, Texas 78714-9104. Any request for a public hearing on the proposal should be submitted separately to the Chief Clerk's Office. The new sections are proposed under the Texas Insurance Code, Article 1. 04(b), and Texas Civil Statutes, Article 6252-13a, sec.4 and sec.5. Article 1. 04(b) provides the Board with authority to determine rules in accordance with the laws of this state. Texas Civil Statutes, Article 6252-13a, sec.4 and s5 authorize and require each state agency to adopt rules of practice setting forth the nature and requirements of available procedures and prescribe the procedures for adoption of rules by a state administrative agency. sec.1.82. Forms and Scope of Discovery in Contested Cases. (a) Permissible forms of discovery by parties are: (1) oral depositions of a party or a nonparty; (2) written interrogatories to a party; (3) requests of a party for admission of facts or the genuineness or identity of documents or things; (4) requests of a party for production of documents and things for examination and copying or photographing; and (5) requests of a party for entry upon and examination of real or personal property, or both. (b) The scope of discovery shall be the same as provided by the Texas Rules of Civil Procedure and shall be subject to the constraints provided therein for privileges, objections, protective orders and duty to supplement, as well as sec.1.33 of this title (relating to Depositions; Entry on Property; use of Reports and Statements) and the proceedings provided in Texas Civil Statutes, Article 6252-13a, sec.14 and sec.14a. All discovery may commence upon the filing of an action or proceeding. No discovery may be initiated by a party seeking discovery after the initial hearing date, unless allowed by the Hearings Officer upon a showing of good cause. (c) This sections and sec.sec.1.83-1.86 of this title (relating to Service and Filing of Discovery Requests and Responses; Deadlines for Responses to Discovery; Requests for Admission; and Discovery Orders) shall not apply to Article 5.101 benchmark rate proceedings brought before the Board, even upon assignment of such proceeding to a Hearings Officer or a contested case docket. sec.1.83. Service and Filing of Discovery Requests and Responses. Requests for discovery and responses thereto shall be served in the manner provided by sec.1.28(d) of this title (relating to Service in Contested Cases) and should not be filed with the Hearings Division or Office of Administrative Hearings. Requests for issuance of a Commission to take deposition shall be filed with the Hearings Officer with a proposed Commission to take deposition only if the parties disagree on the scheduling or scope of the deposition. Depositions shall be returned in the manner provided in Texas Civil Statutes, Article 6252-13a, sec.14. Except for good cause shown, all requests for discovery shall be timely made prior to the hearing. sec.1.84. Deadlines for Responses to Discovery Requests. Responses to discovery requests shall be made within a reasonable time period of not less than 14 days after receipt of service as directed by the party seeking discovery. The Hearings Officer may shorten or lengthen such time periods as the interest of justice requires. Nothing within this section shall prevent the party seeking discovery to extend response deadlines by agreement, but no such agreement shall be enforceable unless in writing and filed in the contested case that forms the basis for the discovery requests as provided in sec.1.31 of this title (relating to Agreements to be in Writing). sec.1.85. Requests for Admission. Except as otherwise provided, requests for admission shall be governed by the applicable provisions of the Texas Rules of Civil Procedure. Each matter for which an admission is requested shall be separately stated. The matter shall be deemed to be admitted without necessity for an order unless, within the prescribed time for responding, the party to whom the request is directed serves upon the requesting party a written answer or objection addressed to the matter. The Requests for Admission document must clearly set forth this provision for deemed admissions, in bold print or by underlining, in a conspicuous location calculated to inform the opposing party of the consequences of a failure to respond within the prescribed time, as provided in sec.1.84 of this title (relating to Deadlines for Responses to Discovery Requests). The Hearings Officer or the Commissioner or Board may permit withdrawal or amendment of responses and deemed admissions upon a showing of good cause, if necessary in the interest of justice. sec.1.86. Discovery Orders. (a) Commission to take Deposition. The Hearings Officer is authorized to issue a Commission to take deposition, which shall authorize the issuance of any subpoenas necessary to require that the witness appear and produce, at the time the deposition is taken, books, records, papers, or other objects that may be necessary and proper for the purposes of the proceeding. (b) Other Discovery Orders. The Hearings Officer may issue protective orders and orders compelling discovery responses. Requests for orders compelling discovery shall contain a statement that, after due diligence, the desired information cannot be obtained through informal means, good faith efforts at negotiation have failed to produce the requested discovery and that good cause exists for requiring discovery. The Hearings Officer may conduct in camera inspections of materials when requested by a party or when necessary to determine facts required to issue appropriate discovery orders, including protective orders. The request for a discovery order may be denied if the request is untimely or unduly burdensome in light of the complexity of the proceeding, if the requesting party has failed to exercise due diligence, if the discovery would result in undue cost to the parties or unnecessary delay in the proceeding, or for other good cause in the interest of justice. (c) Sanctions. After notice and opportunity for hearing, an order imposing sanctions, as are just, may be issued by the Commissioner or the Hearings Officer for failure to comply with a discovery order, or subpoena issued pursuant to a Commission for deposition or production of books, records, papers, or other objects. The order imposing sanctions may: (1) disallow any further discovery of any kind or of a particular kind by the disobedient party; (2) require the party, the party's representative, or both to obey the discovery order; (3) require the party, the party's representative, or both to pay reasonable expenses, including attorney fees, incurred by reason of the party's noncompliance; (4) direct that the matters regarding which the discovery order was made shall be deemed established in accordance with the claim of the party obtaining the order; (5) refuse to allow the disobedient party to support or oppose designated claims or defenses or prohibit the party from introducing designated matters into evidence; (6) strike pleadings or parts thereof or abate further proceedings until the order is obeyed; or, if entered by the Commissioner; (7) dismiss the action or proceeding or any part thereof or render a decision by default against the disobedient party. (d) Appellate Review. Any discovery order or subpoena and any order imposing sanctions issued by the Hearings Officer is subject to review by an appeal to the Commissioner or the Board, according to the stage of the action or proceeding. The appeal shall be filed with the Commissioner or Board within five days of the action that is the subject of the appeal. The appeal may be carried with the underlying case provided the Commissioner does not act upon the appeal within 15 days after the appeal was filed. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas, on February 2, 1993. TRD-9318446 Linda von Quintus-Dorn Chief Clerk Texas Department of Insurance Earliest possible date of adoption: March 12, 1993 For further information, please call: (512) 463-6328 TITLE 31. NATURAL RESOURCES AND CONSERVATION Part IX. Texas Water Commission Chapter 305. Consolidated Permits Subchapter D. Amendments, Renewals, Transfers, Correction, Revocation and Suspension of Permits 31 TAC sec.305.69, sec.305.70 The Texas Water Commission (TWC) proposes an amendments to sec.305.69 and new sec.305.70, concerning solid waste permit modifications at the request of the permittee. The TWC is proposing the replacement of emergency sec.305.69 and sec.305.70, which were published on an emergency basis in the September 4, 1992, issue of the Texas Register (17 TexReg 6045). The amendment to sec.305. 69 and new sec.305.70 are proposed in order to allow certain changes to municipal solid waste permits to be handled administratively, without going through the formal hearing process. The proposed amendment to sec.305.69 simply clarifies the fact that the provisions of that section apply to industrial and hazardous waste permit modifications only, and that municipal solid waste permit modifications are covered by new sec.305.70. Proposed new sec.305.70 allows for the administrative approval of specifically delineated municipal solid waste permit modifications. The permit modifications delineated are minor in nature, and maintain or improve environmental protection standards. In addition, many facilities would like to begin complying with recently promulgated federal regulations that call for stricter operation and management standards for all municipal solid waste facilities. Under current TWC regulations, changes implemented in compliance with these stricter federal regulations require a permit amendment. Proposed new sec.305.70 allows many of these changes to be implemented more expeditiously. Stephen Minick, Division of Budget and Planning, has determined that for the first five years these sections are in effect there will be fiscal implications as a result of enforcement or will be a savings in costs related to processing certain permit amendments or modifications. Costs to applicants for modification of municipal solid waste permits will be reduced in those circumstances under these rules where formal hearing processes may be avoided. These applicants would include local governments and small businesses. The costs to be avoided are prospective and will vary on a case-by-case basis with each application affected. Actual cost savings cannot be estimated at this time. There are no increases in cost to affected party anticipated. Mr. Minick also has determined that for the first five years these sections will be in effect the public benefit anticipated as a result of enforcement of and compliance will be the sections will be improvements in the process of modification of permits for municipal solid waste facilities and more timely incorporation of stricter operation and management standards for such facilities. There are no known costs to individuals required to comply with these sections as proposed. Comments on the proposal may be submitted to Renea Ryland, Staff Attorney, Legal Division, Texas Water Commission, P.O. Box 13087, Austin, Texas 78711- 3087. Comments will be accepted for a period of 30 days following the date of this publication. The new and amended sections are proposed under the Texas Health and Safety Code, Chapter 361, which gives the commission all powers necessary and convenient under that chapter to carry out its responsibilities concerning the regulation and management of municipal solid waste. sec.305.69. Solid Waste Permit Modification at the Request of the Permittee. (a) This section applies only to modifications to industrial and hazardous solid waste permits. Modifications to municipal solid waste permits are covered in sec.305.70 of this title (relating to Municipal Solid Waste Class I Modifications). (b)
                                                        [(a)] Class 1 modifications of solid waste permits. (1)-(3) (No change.) (c)
                                                          [(b)] Class 2 modifications of solid waste permits. (1)-(15) (No change.) (d)
                                                            [(c)] Class 3 modifications of solid waste permits. (1)-(6) (No change.) (e)
                                                              [(d)] Other modifications. (1)-(2) (No change.) (f)
                                                                [(e)] Temporary authorizations. (1)-(6) (No change.) (g)
                                                                  [(f)] Public notice and Appeals of Permit Modification Decisions. (1)-(2) (No change.) (h)
                                                                    [(g)] Newly regulated wastes and units. (1)-(2) (No change.) (i)
                                                                      [(h)] Appendix I. The following appendix will be used for the purposes of Subchapter D which relate to solid waste permit modification at the request of the permittee. [graphic] sec.305.70. Municipal Solid Waste Class I Modifications. (a) A permittee may put into effect a Class I modification to a Municipal Solid Waste (MSW) permit provided that the permittee has received prior written authorization for such Class I modification from the executive director. In order to receive prior written authorization, the permittee must submit a modification request to the executive director specifying the changes to be made to permit conditions or to supporting documents referenced by the permit, and explaining in detail why such changes are necessary. The permittee must submit two copies of the modification request in accordance with sec.305. 44 of this title (relating to Signatories to Applications). Failure to submit the modification request with complete information shall constitute grounds for returning the request to the permittee without further action. (b) The permittee must send notice of the modification request by first-class mail to all persons listed in sec.305.103(b) of this title (relating to Notice by Mail) if the Class I permit modification identified in subsection (g) of this section is marked by a superscript 1. This notification must be made no later than 30 calendar days after the executive director acts upon the request. If the permittee fails to give notice as required, approval of the modification request is automatically revoked. (c) No later that 60 calendar days after receipt of the modification request, the executive director must: (1) approve the modification request, with or without changes, and modify the permit accordingly; (2) deny the request; (3) request additional information concerning the request from the permittee; or (4) determine that the modification request does not qualify as a Class I permit modification, and that the requested change requires a permit amendment pursuant to sec.305.62 of this title (relating to Amendment). (d) If a request for a Class I permit modification is denied by the executive director, the permittee must comply with the original permit conditions. Any change in a term, condition or provision of a MSW permit that is not authorized by the executive director as a Class I permit modification requires a permit amendment pursuant to sec.305.62 of this title. (e) If after 60 days of receipt of a modification request that is specifically identified in subsection (g) of this section, the executive director fails to approve or deny the request or to notify the permittee that the requested modification requires a permit amendment pursuant to sec.305.62 of this title, the modification request shall be automatically approved. The executive director may extend this 60 day time period if necessary to review additional information submitted pursuant to subsection (c)(3) of this section. The length of the extension shall be equivalent to the amount of time necessary to review the additional information. (f) With the written consent of the permittee, the executive director may extend indefinitely or for a specified period the time periods set out in subsections (c) and (e) of this section. (g) The following is a list of possible Class I modifications to a MSW permit: (1) a change in the sequence of landfill development; (2) a change in the size and/or shape of a trench to obtain a 3:1 side slope, as long as there is no increase in capacity; (3) replacement of existing monitor wells that have been damaged or rendered inoperable, with no change, to location, design, or depth of the wells; (4) changes in the location of marker systems (i.e., grid markers); (5) improvements to a fire protection plan; (6) changes to interior road location in order to prevent traffic through the disposal area; (7) changes in interior road design and construction materials; (8) increases in sampling frequency (e.g., for ground water, methane, etc.); (9) changes in excavation details, except for increases in depth that would change the SLQCP or increase the site life; (10) corrections to the metes and bounds description of the permit boundaries that do not increase the size of the facility; (11) upgrade of landfill liner design, installation, or quality control testing to reflect the requirements of revised regulations which provide for greater environmental protection; (12) installation of a leachate collection system; (13) installation of a methane gas monitoring system; (14) installation of a methane gas collection system; (15) changes in closure or post-closure care requirements to reflect the requirements of revised regulations which provide for increased environmental protection; (16) the use of alternate daily cover on a trial basis not to exceed 6 months with one 6 month extension allowable; (17) changes regarding the use of alternate windblown waste control methods; (18) substitution of an equivalent financial assurance mechanism; (19) temporary changes in operating hours to address natural disaster situations or to accommodate special community events; (20) changes in the drainage control plan that improve internal stormwater runon/runoff handling without impacting offsite drainage; (21) changes in the entry gate location or site layout that relocate gatehouse, office or maintenance building locations, or add scales to the facility, so long as the changes do not alter access traffic patterns delineated in the site development plan and/or the permit; (22) changes to a site layout plan that add or delete a properly registered MSW facility-a used or scrap tire collection area, a recycling collection area, a sludge/grease/grit trap processing or stabilization facility, a petroleum contaminated soil stabilization area, a registered transfer station, a citizens collection area, a pesticide container collection area, a composting operation, or other activity properly registered with the Commission; (23) an increase in landfill height not to exceed 10 feet above the approved final elevations as long as one of the following conditions are met: (A) the facility either ceases the receipt of solid waste within 365 days of executive director approval of the height increase and initiates closure of the facility or unit, or has closed the facility; or (B) the facility has submitted a request for a major permit amendment pursuant to sec.305.62(c)(1) of this title (relating to Amendments) to increase the height of the landfill; or (C) the height increase is requested solely for the purpose of improving drainage from the filled area, and: (i) the waste disposal area is not expanded into the limits of the buffer zone or within easements that exist; and (ii) final contour elevations, including final cover, are no greater than 10 feet above the maximum final contour elevation of the contiguous landfilled area or phase of landfill development. (h) Authorization to increase the height of a landfill, in accordance with subsection (g)(23) of this section, may only be granted one time as a Class I modification. Subsequent requests for an increase in height require a permit amendment. (i) In case of a request for a Class I modification for a change in a term, condition or provision of a MSW permit not explicitly listed in subsection (g) of this section, the executive director shall make the determination as to whether the modification request may be processed as a Class I modification or whether the change requires a permit amendment pursuant to sec.305.62 of this title (relating to Amendment). In making this determination, the executive director shall consider the similarity of the requested change to those Class I modifications listed in subsection (g) of this section, as well as the following criteria: (1) Class I modifications apply to minor changes to the facility or its operation that are routine in nature; and (2) Class I modifications do not substantially alter the permit conditions or reduce the capacity of the facility to protect human health or the environment. (j) A temporary authorization may be granted by the executive director for a term of not more than 180 days for activities or events that will prevent disruption of solid waste management activities. The permittee must request a temporary authorization and must include in the request a specific description of the activities to be conducted and an explanation of why the temporary authorization is necessary, reasonable, and unavoidable. A temporary authorization may be reissued for an additional term of 180 days if the circumstances warrant additional time or if the permittee has applied for an amendment or modification to the permit. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas, on February 1, 1993. TRD-9318405 Mary Ruth Holder Director, Legal Division Texas Water Commission Earliest possible date of adoption: March 12, 1993 For further information, please call: (512) 463-8069 TITLE 37. PUBLIC SAFETY AND CORRECTIONS Part I. Texas Department of Public Safety Chapter 31. Standards for an Approved Motorcycle Operator Training Course 37 TAC sec.sec.31.1-31.8 (Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Texas Department of Public Safety or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.) The Texas Department of Public Safety proposes the repeal of sec.sec.31.1-31. 8, concerning standards for an approved motorcycle operator training course. The department is proposing repeal of these sections due to substantive amendments and additional sections. This action is being filed simultaneously with a proposal for new sections concerning standards for an approved motorcycle operator training course. These sections contain provisions for student and teacher qualification and certification, course records and requirements, and suspension. Melvin C. Peeples, Assistant Chief of Fiscal Affairs, has determined that for the first five-year period the repeals are in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the repeals. Henry Palma, Sr., Manager, Motorcycle Safety Bureau, has determined that for each year of the first five years the repeals are in effect the public benefit anticipated as a result of enforcing the repeals will be that the department is repealing existing standards for an approved motorcycle operator training course to change language in order to comply with existing statutory requirements. There will be no effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the repeals as proposed. Comments on the proposal may be submitted to John C. West, Jr., Texas Department of Public Safety, Box 4087, Austin, Texas 78773-0001, (512) 465-2000. The repeals are proposed under Texas Civil Statutes, Article 6701c-4, which provide the Texas Department of Public Safety with the authority to adopt rules that it determines are necessary to administer this article effectively. sec.31.1. Program Sponsor. sec.31.2. Motorcycle Instructor. sec.31.3. Student Admission Requirements. sec.31.4. Verification of Course Completion by a Minor. sec.31.5. Approved Motorcycle Training Courses. sec.31.6. Motorcycle Requirements. sec.31.7. Notice of Hearing Requirements. sec.31.8. Suspension. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas, on January 27, 1993. TRD-9318493 James R. Wilson Director Texas Department of Public Safety Earliest possible date of adoption: March 12, 1993 For further information, please call: (512) 465-2000 37 TAC sec.sec.31.1-31.11 The Texas Department of Public Safety proposes new sec. s31.1-31.11, concerning standards for an approved motorcycle training course. The department is proposing new standards for an approved motorcycle operator training course due to substantive amendments and adding new sections. This action is filed simultaneously with a proposal for repeal of existing sections concerning standards for an approved motorcycle operator training course. The new sections promulgate standards for program sponsors, instructors, definitions, student admission requirements and verification of course completion by minors, approved motorcycle training courses, motorcycle training requirements, notice and hearing requirements, suspension, quality assurance visits, and notification of legal actions. Melvin C. Peeples, Assistant Chief of Fiscal Affairs, has determined that for the first five-year period the sections are in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the sections. Henry Palma, Sr., Manager, Motorcycle Safety Bureau, has determined that for each year of the first five years the sections are in effect the public benefit anticipated as a result of enforcing the sections will be an upgrading of standards to ensure the public of quality motorcycle operator training and expansion of the number of training facilities. There will be no effect on small businesses. The anticipated economic cost to persons who are required to comply with the sections as proposed will be $55 student tuition per course for fiscal years 1993-1997. Comments on the proposal may be submitted to John C. West, Jr., Texas Department of Public Safety, Box 4087, Austin, Texas 78773-0001, (512) 465-2000. The new sections are proposed under Texas Civil Statutes, Article 6701c-4, which provide the Texas Department of Public Safety with the authority to adopt rules that it determines are necessary to administer this article effectively. sec.31.1. Definitions. The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise. Advanced motorcycle operator training course-A course of instruction designed to provide experienced motorcyclists with additional skills and knowledge found to be lacking in accident-involved motorcyclists. Basic motorcycle operator training course-A course of instruction designed to teach new or inexperienced motorcyclists basic riding skills and defensive street riding strategies. Department-Texas Department of Public Safety. The department is the state agency designated by the governor to establish and administer the motorcycle operator training and safety program. Instructor-An individual certified and approved to teach the motorcycle operator training courses in Texas. This individual, unless directly employed by the Department as a motorcycle safety instructor, is not an agent, servant, or employee of the department or State of Texas. Mobile site sponsor-A public or private entity bound by a letter of agreement to advertise for and enroll students, pay for insurance, and provide a facility for the riding portion of the course. The department provides the remaining equipment, material, and instructional staff for the course. In its rule as a mobile site sponsor, this entity is not an agent, servant, or employee of the department or the State of Texas. Motorcycle operator training program-The motorcycle operator training and safety program provides information and courses in knowledge, skills, and safety relating to the operation of motorcycles to all motorcyclists in this state. It also provides information to the general public on sharing the roadway with motorcycles. Motorcycle Safety Bureau-An administrative bureau within the department assigned with the responsibility for establishing and administering the motorcycle operator training and safety program. Motorcycle Safety Foundation (MSF)-A national, nonprofit organization whose purpose is to improve the safety of motorcyclists on the nation's streets and highways. The MSF provides programs in rider education, licensing improvement, public information, and research. Permanent site sponsor-A public or private entity contracted by the department to provide motorcycle operator training on a regular basis. In its role as a permanent site sponsor, this entity is not an agent, servant, or employee of the department or the State of Texas. sec.31.2. Program Sponsor. (a) No individual, association, partnership, corporation, or educational or governmental agency may sponsor or offer training in motorcycle operation to the public for tuition, consideration, or fee without authorization from the department. To qualify for authorization, a sponsor must be approved by the department through a current contract for a permanent site sponsor or letter of agreement for a mobile site sponsor. Approval will be denied unless a sponsor applicant meets the following requirements. The applicant must demonstrate the capacity to register students, collect and account for tuition and state reimbursements as appropriate, arrange public notice of courses, provide required insurance coverage and make all necessary insurance premium payments, submit and maintain all required records, and contract with, schedule, and compensate authorized instructors as appropriate. All applicants: (1) must have access to a riding area for on-cycle training that is: (A) a paved surface, including asphalt, concrete, or other all weather surface of suitable traction; and (B) large enough to safely accommodate any motorcycle training range approved by the department, as flat as possible, secure from vehicular and pedestrian traffic, and free of surface hazards and obstacles; (2) for permanent site contract must also have access to: (A) a secure storage area to physically and environmentally protect training motorcycles and other course equipment; (B) a classroom, not located in a private residence, that is large enough to seat all students and instructors comfortably and that contains at least one adequate desk or equivalent seating and writing surface for each student, and at least one instructor's desk, table, or podium; (C) audiovisual presentation equipment for the classroom, including a chalkboard or equivalent; and (D) a first aid kit and at least one five-pound Class ABC fire extinguisher, or equivalent, for the riding area. (b) Approval as a sponsor may be suspended if the sponsor, an instructor under contract with the sponsor, or a member of the sponsoring organization with supervisory or executive duties involving the training program: (1) fails to continue to meet the requirements of subsection (a) of this section; (2) has been convicted or placed on probation for: (A) any felony; (B) any offense involving moral turpitude within the previous 10 years from the date of approval or renewal except as provided hereinafter; or (C) any offense involving tampering with a government record, or any of the following offenses involving the operation of a motor vehicle within the previous five years: (i) criminally negligent homicide; (ii) driving while intoxicated; or (iii) driving under the influence of drugs; (3) cannot provide sufficient information and documentation to enable the department to evaluate or reevaluate the applicant's request for approval; (4) knowingly presents or allows to be presented to the department any false or misleading information relating to a request for approval; (5) permits or engages in any fraud or fraudulent practice concerning an application or, in any action between the applicant or licensee and the public, induces or countenances any fraud or fraudulent practice on the part of an applicant for a driver's license or permit; (6) knowingly or recklessly disregards or fails to comply with any departmental rule, written policy, or written procedure regarding the motorcycle operator training program; or (7) knowingly allows an instructor to give, or a student to receive, classroom or riding instruction if either exhibits any evidence of or effects from an alcoholic beverage, controlled substance, or drug as defined in Texas Civil Statutes, Article 67011-1. (c) The department may construe any probation or conviction which is for a criminal offense arising from a penal provision from another state, federal, military, or foreign jurisdiction to be its closest equivalent under the penal provisions of this state. (d) Approval may be cancelled if: (1) it was based on false or incorrect information or mistake, such as clerical or other nonsubstantive errors by either party; or (2) if the discrepancy causing the suspension under these administrative rules has not been corrected within the time limit prescribed by a suspension. (e) Each sponsor must designate a chief school official to be responsible for signing contracts with the department, instructors, or students and for signing any forms required of the sponsor. The chief school official must also be designated by the sponsor to be the custodian of all records, which shall be kept for a period of at least three years from the date of the final performance report under the contract. (f) If the sponsor is an organization, that organization shall designate one of its members as the chief school official. If the sponsor is an individual, that person shall also be the chief school official. (g) The control of the sponsor is considered to have changed: (1) in the case of sole proprietorship, when more than 50% of the controlling interest has been sold or transferred; (2) in the case of a partnership or a corporation, when more than 50% of the controlling interest has been sold or transferred; or (3) when the board of directors, officers, share holders, or similar governing body has been changed to such an extent as to significantly alter the management and control of the sponsor. (h) When control of the sponsor has changed, as outlined in subsection (g) of this section, the contract will be cancelled and renegotiated through the appropriate rules and regulations. sec.31.3. Motorcycle Instructor. (a) No individual may instruct or offer instruction in motorcycle operation to the public for tuition, consideration, or fee without authorization from the department. To qualify for authorization, an instructor must be approved by the department. Approval will be denied unless an instructor applicant meets the following requirements. The applicant must agree to teach the training courses in accordance with the department's rules, policies, procedures, and approved curricula and must: (1) hold a current National Certification from the Motorcycle Safety Foundation (MSF); (2) be a high school graduate or possess a valid GED; (3) possess a current, valid Texas motorcycle license; (4) be a licensed driver for at least five years; (5) meet the current driving record evaluation standards established by the Texas Education Agency for school bus drivers pursuant to Texas Civil Statutes, Article 6687b, sec.5(a); (6) be free from addiction to alcoholic beverages or drugs; and (7) be physically competent to conduct classroom and on-cycle instruction, including technically correct riding demonstrations. (b) An applicant for approval to instruct an advanced motorcycle operator training course must meet all the requirements to instruct as identified in subsection (a) of this section, plus attend a department-approved curriculum update, and be able to perform technically correct riding demonstrations on his or her personal motorcycle. (c) Approval as an instructor may be suspended if the instructor fails to continue to meet the requirements of subsections (a) and (b) of this section or if the instructor, as an individual, fails to meet or continue to meet the requirements of sec.31.2(b) of this title (relating to Program Sponsor) . (d) Approval may be cancelled if: (1) it was based on false or incorrect information or mistake; or (2) the discrepancy causing the suspension under sec.31.2 of this title (relating to Program Sponsor), sec.31.3 of this title (relating to Motorcycle Instructor), sec.31.4 of this title (relating to Student Admission Requirements), sec.31.5 of this title (relating to Verification of Course Completion by a Minor), sec.31.6 of this title (relating to Approved Motorcycle Training Courses), and sec.31.7 of this title (relating to Motorcycle Requirements) has not been corrected within the time limit prescribed by a suspension. (e) A motorcycle instructor approved by the department may teach both the classroom and on-cycle phases of the courses for which the approval was granted. (f) Motorcycle instructors approved by the department may not: (1) give instructions or allow a student to receive instruction in motorcycle safety if either the instructor or student is using or exhibits any evidence of effect from an alcoholic beverage, controlled substance, or drug as defined in Texas Civil Statutes, Article 67011-1; or (2) complete, issue, or validate a certificate of course completion to a person who has not successfully completed the course. A period of absence for any portion of scheduled course instruction will require that student repeat that portion of instruction prior to issuance of the certificate of completion. sec.31.4. Student Admission Requirements. (a) Basic motorcycle operator training courses are open to any person who is: (1) physically and mentally capable of being licensed in Texas as a motorcycle operator; and (2) at least 15 years old on the day the course begins. (b) A person who is 15 years old but less than 18 years old may not be admitted to a basic motorcycle operator training course before successful completion of the 32-hour classroom phase of the driver education course as required by the Texas Education Agency. (c) The advanced motorcycle operator training course is restricted to individuals with a current motorcycle (Class M) driver's license. Each student must provide his or her own motorcycle that meets the requirements of sec.31.7 of this title (relating to Motorcycle Requirements). sec.31.5. Verification of Course Completion by a Minor. (a) The sponsor will issue a Texas Driver Education Certificate (Form DL-41A) to a student who is 15 years old but less than 18 years old and who has successfully completed the approved basic motorcycle operator training course. The DL-41A is issued to verify that the student has met the educational and training requirements for a motorcycle operator's license. A Department of Public Safety serialized completion card will be issued by the course sponsor to every student completing the approved advanced motorcycle operator training course. (b) The department will accept an original signature or the written, stamped, or typed name or signature of the chief school official on Form DL-41A. The signature of the instructor on the form must be an original signature. If the chief school official is also the instructor, that person must sign both spaces on the form. sec.31.6. Approved Motorcycle Training Courses. (a) Except as modified by subsection (c) of this section, the department adopts the educational, safety, and instructor standards, by reference, of the most current versions of the following Motorcycle Safety Foundation (MSF) courses: (1) the approved basic motorcycle operator training course is the Motorcycle RiderCourse: Riding and Street Skills (MRC:RSS), Modules 1 through 15, Exercise 22, and Module 18; (2) the approved advanced motorcycle operator training courses are the Experienced RiderCourse (ERC) and the Optional Experienced RiderCourse. The choice of curricula is determined by the size of the riding area. The skill and knowledge tests for either curricula are not required but may be used at the sponsor's discretion; and (3) the approved instructor preparation course is MSF instructor preparation course curriculum. (b) Approved course curricula are available for inspection at the department's Austin headquarters. (c) In addition to these curricula requirements, the minimum standards for motorcycle operator training courses include the following. (1) The student to instructor ratio for the basic and advanced course classroom instruction may not exceed 24 students per instructor. (2) The student to instructor ratio for on-cycle instruction may not exceed six students per instructor until the instructor has taught more than six courses. Once this has occurred and the instructor has requested and received written permission from the department, they may teach up to eight students. In no case will there be more than 12 students on the range at any given time. (3) The department may change these ratios on a case-by-case basis when such change is justified after considering the available facilities, the safety of the students and instructor(s), and the efficient conduct of the course. (4) A separate motorcycle must be available for each individual student during an entire module of on-cycle instruction. (d) All participants and instructors must wear protective gear when riding during the course. The minimum protective gear is as follows: (1) a motorcycle helmet that meets Department of Transportation standards; (2) eye protection; (3) over-the-ankle, sturdy footwear (not cloth, canvas, etc.); (4) long-sleeved shirt or jacket; (5) long, nonflare denim pants or equivalent; and (6) full-fingered gloves, preferably leather. sec.31.7. Motorcycle Requirements. (a) A motorcycle must be rejected for use by the lead course instructor if it fails to meet the requirements of this section or if, in the discretion of the instructor, the motorcycle is unsafe for the rider, an instructor, another student, or any other person permitted in the riding area. A motorcycle may be deemed unsafe because of modification, damage, lack of maintenance, nonstandard configuration, or any other substantial safety reason. (b) Any student-owned motorcycle must: (1) meet all the requirements for operation on public highways; (2) have proof of adequate insurance coverage available for inspection by the lead course instructor; and (3) meet requirements of this section. (c) A student may use a borrowed motorcycle if the student can show written permission from the owner to use the motorcycle in the course and if it meets all other requirements of this section. (d) A moped, no-ped, motor scooter, motor-assisted bicycle, or a motorcycle with an engine displacement of over 350cc: (1) may not be used in the basic course; and (2) may be used in the advanced course only if it meets all other requirements of this section. (e) No sponsor may provide a motorcycle to a student for use in the advanced course. If a sponsor provides a motorcycle to a student for use in the basic course, the motorcycle: (1) must meet the safety requirements of subsection (a) of this section; (2) must not be prohibited by subsection (d) of this section; and (3) may, but is not required to, be registered, inspected, or insured for operation on public highways. sec.31.8. Notice and Hearing Requirements. If the department intends to deny, suspend, or cancel approval of a program sponsor or instructor, notice and opportunity for hearing must be given as provided by Texas Civil Statutes, Article 6252-13a, Article 6252-13c, and Article 6252-13d, sec. s2-5. sec.31.9. Suspension. The term of suspension under sec.31.2 of this title (relating to Program Sponsor) and sec.31.3 of this title (relating to Motorcycle Instructor) may not exceed one year. The term of suspension may be reduced by the manager of the Motorcycle Safety Bureau on the recommendation of the program director for Motorcycle Operator Training if corrective actions have been taken and the reason for suspension no longer exists. If the reason for suspension still exists at the end of the suspension period, the suspension automatically elevates to disapproval. To again become approved, a disapproved sponsor or instructor must reapply and meet all current requirements for approval. sec.31.10. Quality Assurance Visits. (a) Quality Assurance Visits (QAVs) will be scheduled and conducted at each of the contracted permanent motorcycle operator training program sites. During the QAV, the focus will be on the adherence to requirements outlined in sec.31.2 of this title (relating to Program Sponsor), sec.31.3 of this title (relating to Motorcycle Instructor), sec.31.4 of this title (relating to Student Admission Requirements), sec.31.5 of this title (relating to Verification of Course Completion by a Minor), sec.31.6 of this title (relating to Approved Motorcycle Training Courses), and sec.31.7 of this title (relating to Motorcycle Requirements). (b) The QAVs will be conducted by department personnel or by persons contracted by the department to perform them. (c) While conducting the QAV, the evaluator will utilize the same pass/fail criteria as is utilized to evaluate the student teaching portion of the approved motorcycle safety instructor training course. Instructor(s) not meeting the approved criteria will be suspended as outlined in sec.31.3 of this title (relating to Motorcycle Instructor). Remedial actions necessary to remove the suspension will be determined by the manager of the Motorcycle Safety Bureau on the recommendation of the program director for Motorcycle Operator Training and may include, but are not limited to: (1) attending a department-sponsored instructor curriculum refresher course; (2) attending all or portions of a department-sponsored instructor training course; or (3) teaching an entire course under the supervision of a Motorcycle Safety Bureau staff member, an approved chief instructor, or other individual expressly designated by the department to perform such duties. sec.31.11. Notification of Legal Acting. All sponsors shall notify the Motorcycle Safety Bureau with the details of any legal action which has been filed against the sponsor, its officers, or its contracted instructors within 30 days of such action. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas, on January 27, 1993. TRD-9318494 James R. Wilson Director Texas Department of Public Safety Earliest possible date of adoption: March 12, 1993 For further information, please call: (512) 465-2000 TITLE 43. TRANSPORTATION Part I. Texas Department of Transportation Chapter 1. Administration Conditional Grant Program 43 TAC sec.1.409 (Editor's note: The text of the following section proposed for repeal will not be published. The section may be examined in the offices of the Texas Department of Transportation or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.) The Texas Department of Transportation proposes the repeal not sec.1.409 concerning repayment of the department's conditional grant program. Repeal of this section is necessary because of the contemporaneous proposed adoption of new sec.1.409, which incorporates the provisions of the repealed section as rewritten and expanded to further clarify the scholarship repayment schedule for a student who is declared in default. The Education Code, Chapter 56, Subchapter H, requires the department to establish and administer a conditional grant program to provide financial assistance to minority students who exhibited in the student's secondary school performance an aptitude for engineering and who intend to become civil engineers and work for the department for two years following graduation. Charles H. Bailey, director, division of civil rights, has determined that there will be no fiscal implications as a result of enforcing or administering the repeal. Mr. Bailey has certified that there will be no significant impact on local economies or overall employment as a result of enforcing or administering the repeal. Mr. Bailey also has determined that for each of the first five years the repeal as proposed is in effect, the public benefit anticipated as a result of enforcing the repeal will be a more fair, equitable, and uniform repayment schedule for students. There will be no effect on small businesses, and no anticipated economic cost to person who are required to comply with the proposed repeal. Pursuant to the Administrative Procedure and Texas Register Act, Texas Civil Statutes, Article 6252-13a, sec.5, the Texas Department of Transportation will conduct a public hearing to receive comments concerning the proposed repeal and new section. The public hearing will be held at 9 a.m. on Wednesday, February 24, 1993, in the first floor hearing room of the Dewitt C. Greer State Highway Building, 125 East 11th Street, Austin. Those desiring to make comments or presentations may register starting at 8: 30 a.m. Any interested person may appear and offer oral or written comments, however, questioning of those making presentations will be reserved exclusively to the presiding officer as may be necessary to ensure a complete record. While any person with pertinent comments will be granted an opportunity to present them during the course of the hearing, the presiding officer reserves the right to restrict testimony in terms of time and repetitive content. Organizations, associations, or groups are encouraged to present their commonly held views, and same or similar comments, through a representative member where possible. Comments on the proposed text should include appropriate citations to sections, subsections, paragraphs, etc., for proper reference. Any suggestions or requests for alternative language or other revisions in the proposed text should be submitted in written form. Written comments on the proposed rule may be submitted to Charles H. Bailey, director, division of civil rights, Texas Department of Transportation, 125 East 11th Street, Austin, Texas 78701-2483. All comments should be submitted no later than 5 p.m. on March 12, 1993. The repeal is proposed under Texas Civil Statutes, Article 6666, which provide the Texas Transportation Commission with the authority to promulgate rules for the conduct of the work of the Texas Department of Transportation, and Chapter 56, Subchapter H of the Education Code which requires the department to adopt rules implementing a conditional grant program. sec.1.409. Repayment. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas, on February 3, 1993. TRD-9318516 Diane L. Northam Legal Administrative Assistant Texas Department of Transportation Earliest possible date of adoption: March 12, 1993 For further information, please call: (512) 463-8630 The Texas Department of Transportation proposes new sec.1.409 concerning repayment of the department's conditional grant program. The new section replaces existing sec.1.409 which is simultaneously being repealed. The Education Code, Chapter 56, Subchapter H, requires the department to establish and administer a conditional grant program to provide financial assistance to minority student who exhibited in the student's secondary school performance an aptitude for engineering and who intend to become civil engineers and work for the department for two years following graduation. Section 1.409 establishes a new plan for repayment of the scholarship by a student who is declared in default by providing for a schedule of 120 monthly installment payments, a six month grant period, and a temporary reduction or deferral of payments and/or extension of the payment period in the case of catastrophic illness or family emergency. Charles H. Bailey, director, division of civil rights, has determined that there will be no fiscal implications as a result of enforcing or administering the section. Mr. Bailey has certified that there will be no significant impact on local economies or overall employment as a result of enforcing or administering the section. Mr. Bailey also has determined that for each of the first five years the section as proposed is in effect, the public benefit anticipated as a result of enforcing the section will be a more fair, equitable, and uniform repayment schedule for students. There will be no effect on small businesses, and no anticipated economic cost to person who are required to comply with the proposed new section. Pursuant to the Administrative Procedure and Texas Register Act, Texas Civil Statutes, Article 6252-13a, sec.5, the Texas Department of Transportation will conduct a public hearing to receive comments concerning the proposed repeal and new section. The public hearing will be held at 9 a.m. on Wednesday, February 24, 1993, in the first floor hearing room of the Dewitt C. Greer State Highway Building, 125 East 11th Street, Austin. Those desiring to make comments or presentations may register starting at 8 a.m. Any interested person may appear and offer oral or written comments, however, questioning of those making presentations will be reserved exclusively to the presiding officer as may be necessary to ensure a complete record. While any person with pertinent comments will be granted an opportunity to present them during the course of the hearing, the presiding officer reserves the right to restrict testimony in terms of time and repetitive content. Organizations, associations, or groups are encouraged to present their commonly held views, and same or similar comments, through a representative member where possible. Comments on the proposed text should include appropriate citations to sections, subsections, paragraphs, etc., for proper reference. Any suggestions or requests for alternative language or other revisions in the proposed text should be submitted in written form. Written comments on the proposed rule may be submitted to Charles H. Bailey, director, division of civil rights, Texas Department of Transportation, 125 East 11th Street, Austin, Texas 78701-2483. All comments should be submitted no later than 5 p.m. on March 12, 1993. The section is proposed under Texas Civil Statutes, Article 6666, which provide the Texas Transportation Commission with the authority to promulgate rules for the conduct of the work of the Texas Department of Transportation, and Chapter 56, Subchapter H of the Education Code which requires the department to adopt rules implementing a conditional grant program. sec.1.409. Repayment. (a) Installments. If a student is required to repay funds pursuant to sec.1.408 of this title (relating to Default), the department will establish a repayment schedule of 120 equal monthly installments; provided, however, that the minimum installment shall be $20, and further provided that, at the option of the student, repayments may be made in fewer than 120 installments. (b) Grace period. A student will not be required to begin payments until six months subsequent to the determination of default. (c) Exception. The department may temporarily reduce or defer the required payments and/or extend the prescribed repayment period, upon approval of the executive director, if a student demonstrates his or her inability to pay due to catastrophic illness or family emergency. Any reduction, deferral, or extension will not relieve a student of his or her responsibility to repay all funds. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas, on February 3, 1993. TRD-9318517 Diane L. Northam Legal Administrative Assistant Texas Department of Transportation Earliest possible date of adoption: March 12, 1993 For further information, please call: (512) 463-8630