ADOPTED RULES An agency may take final action on a section 30 days after a proposal has been published in the Texas Register. The section becomes effective 20 days after the agency files the correct document with the Texas Register, unless a later date is specified or unless a federal statute or regulation requires implementation of the action on shorter notice. If an agency adopts the section without any changes to the proposed text, only the preamble of the notice and statement of legal authority will be published. If an agency adopts the section with changes to the proposed text, the proposal will be republished with the changes. TITLE 16. ECONOMIC REGULATION Part I. Railroad Commission of Texas Chapter 3. Oil and Gas Division Conservation Rules and Regulation 16 TAC sec.sec.3.26, 3.52, 3.66 The Railroad Commission of Texas adopts amendments to sec. sec.3.26, 3.52, and 3.66 (Statewide Rules 26, 52 and 71) with changes to the proposed text as published in the August 20, 1993, issue of the Texas Register (18 TexReg 5545). Adoption of the proposed amendments will eliminate the need for obtaining exceptions to sec.3.26 and sec.3.66 in order to use lease automated custody transfer (LACT) equipment and other devices to effect custody transfer of oil and condensate. The use of LACT equipment insures more accurate volume determination before moving oil or condensate off-lease. Two commenters suggested incorporating Chapter 6.1 of API's Manual of Petroleum Measurement Standards (MPMS) in place of API Standard 11N in the amended sec.3.66 and sec.3.6. The commission finds that such substitution should be made in that the Manual is better supported than the Specification and includes Specification 11N by reference. Exxon Pipeline, OXY USA, Inc. and Texas Mid-Continent Oil & Gas Association generally support these amendments. There were no comments opposing the proposed amendments. The rules as adopted do not affect any other rules or statutes. The amendments are adopted pursuant to the Texas Natural Resources Code, Title 3, Chapters 81 and 85, which provides the Railroad Commission with authority to regulate the measurement of oil and condensate. sec.3.26. Separating Devices and Tanks. (a) Where oil and gas are found in the same stratum and it is impossible to separate one from the other, or when a well has been classified as a gas well and such gas well is not connected to a cycling plant and such well is being produced on a lease and the gas is utilized under Texas Natural Resources Code, sec.sec.86.181-86.185, the operator shall install a separating device of approved type and sufficient capacity to separate the oil and liquid hydrocarbons from the gas, which separating device shall be kept in place as long as a necessity therefore exists, and, after being installed, such device shall not be removed nor the use thereof discontinued without the consent of the commission. All oil and any other liquid hydrocarbons as and when produced shall be adequately measured according to the pipeline rules and regulations of the commission before the same leaves the lease from which they are produced. Sufficient tankage and separator capacity shall be provided by the producer to adequately take daily gauges of all oil or any other liquid hydrocarbons unless LACT equipment, installed and operated in accordance with the latest revision of American Petroleum Institute (API) Manual of Petroleum Measurement Standards, Chapter 6.1 or another method approved by the commission or its delegate, is being used to effect custody transfer. (b)-(d) (No change.) sec.3.52. Oil Well Allowable Production. (a)-(b) (No change.) (c) All oil allowable volumes shall be measured in a manner consistent with Rule 71(9) (sec.3.66) of this title (relating to Measuring and Testing of Crude Oil Volumes Tendered to a Pipeline)). (d)-(f) (No change.) sec.3.66. Pipeline Tariffs. Every person owning, operating, or managing any pipeline, or any part of any pipeline, for the gathering, receiving, loading, transporting, storing, or delivering of crude petroleum as a common carrier shall be subject to and governed by the following provisions. Common carriers specified in this section shall be referred to as "pipelines," and the owners or shippers of crude petroleum by pipelines shall be referred to as "shippers." (1)-(8) (No change.) (9) Measuring, testing, and deductions (reference Special Order Number 20- 63,098, effective June 18, 1973). (A) Except as provided in subparagraph (B) of this paragraph, all crude oil tendered to a pipeline shall be gauged and tested by a representative of the pipeline prior to its receipt by the pipeline. The shipper may be present or represented at the gauging or testing. Quantities shall be computed from correctly compiled tank tables showing 100% of the full capacity of the tanks. (B) As an alternative to the method of measurement provided in subparagraph (A) of this paragraph, crude oil and condensate may be measured and tested, before transfer of custody to the initial transporter, by: (i) Lease Automatic Custody Transfer (LACT) equipment, provided such equipment is installed and operated in accordance with the latest revision of American Petroleum Institute (API) Manual of Petroleum Measurement Standards, Chapter 6.1, or; (ii) an device or method, approved by the commission or its delegate, which yields accurate measurements of crude oil or condensate. (C) Adjustments to the quantities determined by the methods described in subparagraphs (A) or (B) of this paragraph shall be made for temperature from the nearest whole number degree to the basis of 60 degrees Fahrenheit and to the nearest 5/10 API degree gravity in accordance with the volume correction Tables 5A and 6A contained in API Standard 2540, American Society for Testing Materials 01250, Institute of Petroleum 200, first edition, August 1980. A pipeline may deduct the basic sediment, water, and other impurities as shown by the centrifugal or other test agreed upon by the shipper and pipeline; and 1.0% for evaporation and loss during transportation. The net balance shall be the quantity deliverable by the pipeline. In allowing the deductions, it is not the intention of the commission to affect any tax or royalty obligations imposed by the laws of Texas on any producer or shipper of crude oil. (D) A transfer of custody of crude between transporters is subject to measurement as agreed upon by the transporters. (10)-(22) (No change.) This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 24, 1994. TRD-9435375 Mary Ross McDonald Assistant Director Texas Natural Resource Conservation Commission Effective date: February 18, 1994 Proposal publication date: August 20, 1993 For further information, please call: (512) 463-6802 TITLE 22. EXAMINING BOARDS Part VI. State Board of Registration for Professional Engineers Chapter 131. Practice and Procedure Board Rules 22 TAC sec.131.33 The State Board of Registration for Professional Engineers adopts an amendment to sec.131.33, concerning petition for adoption of rules, without changes to the proposed text as published in the November 16, 1993, issue of the Texas Register (18 TexReg 8443). The section specifies the information which must be submitted to petition the board to adopt, deleted, or amend a rule and also provides the correct definition for the suggested effective date of the proposal. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 3271a, sec.8(a), which provide the board with the authority to make and enforce all rules and regulations necessary for the performance of its duties. sec.131.33. Petition for Adoption of Rules. Any interested person can request the board to adopt, delete, or amend a rule by filing a petition with the executive director, accompanied by any fee required by statute or board rules. The petition must be filed with the executive director, at least 30 days and not more than 60 days prior to a regular board meeting at which board action will be taken. Such a petition will include, but need not be limited to, the following: (1) (No change.) (2) Reference. Reference to the rule which it is proposed to make, change or amend, or delete, so that it may be identified, prepared in a manner to indicate the word, phrase, or sentence to be added, changed, or deleted from the current text, if any. The proposed rule should be presented in the exact form in which it is to be published, adopted, or promulgated. (3) A suggested effective date. The desired effective date should be stated. (4)-(7) (No change.) This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 26, 1994. TRD-9435235 Charles E. Nemir, P.E. Executive Director Texas State Board of Registration for Professional Engineers Effective date: February 16, 1994 Proposal publication date: November 16, 1993 For further information, please call: (512) 440-7723 Part IX. Texas State Board of Medical Examiners Chapter 163. Licensure 22 TAC sec.sec.163.1-163.9 The Texas State Board of Medical Examiners adopts the repeal of sec.sec.163. 1-163.9, concerning licensure, without changes to the proposed text as published in the October 19, 1993, issue of the Texas Register (18 TexReg 7264). Changes mandated by the legislature through Senate Bill 1062 required extensive rewrite of the licensure rules. The section will function by omission. No comments were received regarding adoption of the repeals. The repeals are adopted under Texas Civil Statutes, Article 4495b, which provide the Texas State Board of Medical Examiners with the authority to make rules, regulations, and bylaws not inconsistent with this act as may be necessary for the governing of its own proceedings, the performance of its duties, the regulation of the practice of medicine in this state, and the enforcement of this act. Cross Index-Article 4495b, sec.sec.3.01, 3.03, 3.0305, 3.031, 3.04, 3.05, 3. 08, 5.035, 5.04 This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 28, 1994. TRD-9435328 Bruce A. Levy, M.D., J.D. Executive Director Texas State Board of Medical Examiners Effective date: February 18, 1994 Proposal publication date: October 19, 1993 For further information, please call: (512) 834-7728, Ext. 402 22 TAC sec.sec.163.1-163.15 The Texas State Board of Medical Examiners adopts new sec. sec.163.1-163.15, concerning licensure. Sections 163.1, 163.6, and 163.7 are adopted with changes to the proposed text as published in the December 17, 1993, issue of the Texas Register (18 TexReg 9663). Sections 163.2-163.5, and sec.sec.163. 8-163.15 are adopted without changes, and will not be republished. Justification for the section. Changes mandated by the 74th Legislature through Senate Bill 1062 required extensive rewrite of the licensure rules. The section will function by identifying procedures for licensing qualified physicians in an effective and efficient manner. Several comments were received from a medical school and the National Board of Osteopathic Medical Examiners which addressed the combinations of examinations accepted for licensure. These were noted and some were accepted by the Board, which are reflected in the adopted rules. One other comment was made by Texas Osteopathic Medical Association. This comment was contradictory to the language in Senate Bill 1062. The new sections are adopted under Texas Civil Statutes, Article 4495b, which provide the Texas State Board of Medical Examiners with the authority to make rules, regulations, and bylaws not inconsistent with this act as may be necessary for the governing of its own proceedings, the performance of its duties, the regulation of the practice of medicine in this state, and the enforcement of this act. Cross Index-Article 4495b, sec.sec.3.01, 3.03, 3.0305, 3.031, 3.04, 3.05, 3. 08, 5.035, 5.04. sec.163.1. Definitions. The following words and terms, when used in this chapter, shall have the following meanings, unless the contents clearly indicate otherwise. Ability to communicate in the English language -An applicant who has passed the Educational Council for Foreign Medical Graduates (ECFMG) English test within three attempts. The Executive Director will review on a case-by-case basis the application of any applicant who did not pass the ECFMG English test within three attempts and it will be at his discretion to evaluate the applicant's eligibility for licensure. Acceptable approved medical school-A medical school or college located in the United States or Canada that was approved by the Board at the time the degree was conferred. Acceptable unapproved medical school-A school or college located outside the United States or Canada that was not approved by the board at the time the degree was conferred but whose curriculum meets the requirements for an unapproved medical school as determined by a committee of experts selected by the Texas Higher Education Coordinating Board. Affiliated Hospital -Affiliation status of a hospital with a medical school as defined by the Liaison Committee on Medical Education and documented by the medical school in its application for accreditation. Applicant-One who files an application as defined in this section. Application-An application is all documents and information necessary to complete an applicant's request for licensure including the following: (A) forms furnished by the board, completed by the applicant. (i) All forms and addenda requiring a written response must be printed in ink. (ii) Photographs must meet United States Government passport standards; (B) a fingerprint card, furnished by the board, completed by the applicant, that must be readable by the Texas Department of Public Safety; (C) all documents required under sec.163.7 of this title (relating to Licensure Documentation); and (D) the required fee, payable by check through a United States bank. Eligible for licensure in country of graduation-An applicant who has completed all requirements for licensure in the country in which the medical school is located except for any citizenship requirements. Equivalent registration -An applicant for licensure by endorsement must apply for licensure based upon another state or provincial license that requires as part of its registration: (A) a form signed by the physician; (B) a fee; and (C) periodic registration of a physician's license. Examinations accepted by the board for licensure by endorsement- (A) United States Medical Licensing Examination (USMLE), passed within three attempts, with a score of 75 or better on each step, all steps must be passed within seven years; (B) Federation Licensing Examination (FLEX), after July 1985, passed within three attempts, passage of both components within seven years with a score of 75 or better on each component; (C) Federation Licensing Examination (FLEX), prior to June 1985, passed within three attempts, with a FLEX weighted average of 75 or better in one sitting; (D) National Board of Medical Examiners Examination (NBME); (E) National Board of Osteopathic Medical Examiners Examination (NBOME); (F) Medical Council of Canada Examination (LMCC); and (G) state board examination (with the exception of Florida, Virgin Islands, Guam, Tennessee Osteopathic Board or Puerto Rico after June 30, 1963) and Special Purpose Examination (SPEX); (H) one of the following examination combinations, passed within three attempts with a score of 75 or better on each part, component, or step, prior to 1998: (i) FLEX I plus USMLE 3; (ii) USMLE 1 and USMLE 2 plus FLEX II; (iii) NBME I and NBME II plus USMLE 3; (iv) NBME I or USMLE 1 plus NBME II or USMLE 2 plus NBME III or USMLE 3. Examinations administered by the board for licensure by examination-To be eligible for licensure by examination an applicant must sit for the required examination administered by the board and pass with a score of 75 or better on each part. All steps or components must be passed within seven years. The board shall administer Step 3 of the United States Medical Licensing Examination (USMLE) after December 31, 1993; the Federation Licensing Examination (FLEX), before January 1, 1994; and the Texas medical jurisprudence examination in writing at times and places as designated by the board. Full force-Applicants for licensure by endorsement must possess a license in another jurisdiction which is in full force and not restricted, canceled, suspended or revoked. A physician with a license in full force may include a physician who does not have a current, active, valid annual permit in another jurisdiction because: (A) that jurisdiction requires the physician to practice in the jurisdiction before the annual permit is current; or (B) that jurisdiction requires the physician, prior to practicing in that jurisdiction, to hold a current professional liability insurance policy before the annual permit is current. Good professional character-An applicant for licensure must not be in violation of or committed any act described in the Medical Practice Act, sec.3.08. Hardship-The practice of medicine in a Texas county with less than three active full time physicians in the entire county. One-year training program-Applicants who are graduates of acceptable approved medical schools must successfully complete one year of postgraduate training approved by the board that is: (A) accepted for certification by an American Specialty board that is a member of the American Board of Medical Specialties or the Advisory Board of Osteopathic Specialists; or (B) accredited by one of the following: (i) the Accreditation Council for Graduate Medical Education, or its predecessor; (ii) the American Osteopathic Association; (iii) the Committee on Accreditation of Preregistration Physician Training Programs, Federation of Provincial Medical Licensing Authorities of Canada; (iv) the Royal College of Physicians and Surgeons of Canada; or (v) the College of Family Physicians of Canada; or (C) a postresidency program, usually called fellowship, for additional training in a medical specialty or subspecialty in a program approved by the Texas State Board of Medical Examiners. Requisite qualifications -An endorsement applicant who is a graduate of an unapproved acceptable medical school who: (A) has for the preceding five years been a licensee of another state or a Canadian province; (B) is not the subject of a sanction imposed by or disciplinary matter pending in any state or Canadian province in which the applicant is licensed to practice medicine; and (C) is either specialty board certified by a board that is a member of the American Board of Medical Specialities or the Advisory Board for Osteopathic Specialists or successfully passes the Special Purpose Examination (SPEX). Sponsor-A licensed Texas physician who: (A) holds a current annual registration in this state that is current and in full force; (B) has no past, present or pending disciplinary matters in any jurisdiction; and (C) will be on site to supervise a physician who has been issued a temporary license for out-of-state practitioners under the Medical Practice Act, sec.3.0305. Substantially equivalent to a Texas medical school -A medical school or college located outside the United States or Canada must be an institution of higher learning designed to select and educate medical students; provide students with the opportunity to acquire a sound basic medical education through training in basic sciences and clinical sciences; to provide advancement of knowledge through research; to develop programs of graduate medical education to produce practitioners, teachers, and researchers; and to afford opportunity for postgraduate and continuing medical education. The school must provide resources, including faculty and facilities, sufficient to support a curriculum offered in an intellectual environment that enables the program to meet these standards. The faculty of the school shall actively contribute to the development and transmission of new knowledge. The medical school shall contribute to the advancement of knowledge and to the intellectual growth of its students and faculty through scholarly activity, including research. The medical school shall include, but not be limited to, the following characteristics. (A) The facilities for basic sciences and clinical training (i.e., laboratories, hospitals, library, etc.) shall be adequate to ensure opportunity for proper education. (B) The admissions standards shall be substantially equivalent to a Texas medical school. (C) The basic sciences curriculum shall include the contemporary content of those expanded disciplines that have been traditionally titled anatomy, biochemistry, physiology, microbiology and immunology, pathology, pharmacology and therapeutics, and preventive medicine, as defined by the Texas Higher Education Coordinating Board. (D) The fundamental clinical subjects, which shall be offered in the form of required patient-related clerkships, are internal medicine, obstetrics and gynecology, pediatrics, psychiatry, and surgery, as defined by the Texas Higher Education Coordinating Board. (E) The curriculum shall be of at least 130 weeks in duration. (F) All allopathic or osteopathic medical education instruction taught in the United States must be accredited by an accrediting body officially recognized by the United States Department of Education and the Council on Postsecondary Accreditation as the accrediting body for medical education leading to the doctor of medicine degree or the doctor of osteopathy degree in the United States. Three-year training program-Applicants who are graduates of unapproved medical schools must successfully complete three years of postgraduate training in the United States or Canada: (A) accredited by one of the following: (i) the Accreditation Council for Graduate Medical Education; (ii) the American Osteopathic Association; (iii) the Committee on Accreditation of Preregistration Physician Training Programs, Federation of Provincial Medical Licensing Authorities of Canada; (iv) the Royal College of Physicians and Surgeons of Canada; (v) the College of Family Physicians of Canada; and (vi) all programs approved by the board after August 25, 1984; or (B) a board-approved program for which a Faculty Temporary License was issued; or (C) a postresidency program, usually called fellowship, for additional training in a medical specialty or subspecialty in a program approved by the Texas State Board of Medical Examiners. Unapproved medical school-A school or college located outside the United States or Canada that was not approved by the board at the time the degree was conferred. sec.163.6. Procedural Rules for Licensure Applicants. (a) Applicants for licensure: (1) whose documentation indicates any name other than the name under which the applicant has applied must furnish proof of the name change; (2) whose application for licensure which has been filed with the board office and which is in excess of two years old from the date of receipt, shall be considered inactive. Any fee previously submitted with that application shall be forfeited. Any further application procedure for licensure will require submission of a new application and inclusion of the current licensure fee. All examination fees will be forfeited if the applicant fails to complete the application 60 days prior to the applicant's scheduled examination date or if the applicant fails to appear for the scheduled examination; (3) will be allowed to sit for the Texas medical jurisprudence examination only three times. After the third failure of the Texas medical jurisprudence examination, and after each subsequent failure, an applicant for licensure shall be required to appear before a committee of the board to address the applicant's inability to pass the Texas medical jurisprudence examination and to re-evaluate the applicant's eligibility for licensure; (4) who in any way falsify the application may be required to appear before the board. It will be at the discretion of the board whether or not the applicant will be allowed to sit for the examination or be issued a Texas license; (5) on whom adverse information is received by the board may be required to appear before the board. It will be at the discretion of the board whether or not the applicant will be allowed to sit for the examination or be issued a Texas license; (6) shall be required to comply with the board's rules and regulations which are in effect at the time the completed application and fee are filed with the board; (7) may be required to sit for additional oral or written examinations that, in the opinion of the board, are necessary to determine competency of the applicant; (8) must have the application for licensure complete in every detail 60 days prior to the board meeting in which they are considered for licensure. Applicants may qualify for a Temporary License prior to being considered by the board for licensure, as required by sec.163.9 of this title (relating to Temporary Licensure-Regular); and (9) who previously held a Texas medical license may be required to complete additional forms as required. (b) Applicants for licensure by examination: (1) who are graduates of acceptable approved medical schools, may sit for the examination prior to complying with the one year graduate training requirement; (2) who are graduates of unapproved medical schools, may sit for the examination after the completion of their 36th month of approved graduate training; (3) must apply for and sit the required examination in this state. The examination may be taken for a total of three attempts; (4) whose application is received by the board between August 1 and January 31 will be scheduled to sit for the following June examination. Applications for licensure by examination received by the board between February 1 and July 31 will be scheduled to sit for the following December examination. Applications must be complete in every detail 60 days prior to the examination before an applicant will be admitted to the examination; and (5) who wish to request reasonable accommodations, due to a disability, must submit the request upon filing the application. (c) Applicants for licensure by endorsement: (1) are required to complete an oath swearing that: (A) the license certificate under which the applicant has most recently practiced medicine in the state or Canadian province from which the applicant is transferring to this state or in the uniformed service in which the applicant served is in full force and not restricted, canceled, suspended or revoked; (B) the applicant is the identical person to the certificate or diploma was issued; (C) no proceedings have been instituted against the applicant for the restriction, cancellation, suspension, or revocation of the certificate, license, or authority to practice medicine in the state, Canadian province, or uniformed service of the United States in which it was issued; and (D) no prosecution is pending against the applicant in any state, federal, or Canadian court for any offense that under the laws of this state is a felony; (2) who have not been examined for licensure in a ten-year period prior to the filing date of the application must have passed Day III or Component II of the FLEX prior to June 1988, or SPEX, unless the applicant has obtained: (A) specialty certification, recertification or an examination of continued demonstration of qualifications by a board that is a member of the American Board of Medical Specialties or the Advisory Board for Osteopathic Specialists within the preceding ten years; or (B) through extraordinary circumstances, unique training equal to the training required for specialty certification as determined by a committee of the board and approved by the board; (3) who are required to sit for a SPEX exam, will be scheduled for the examination, unless otherwise notified, based on the date the board receives their application. Applications must be complete in every detail 60 days prior to the examination before an applicant will be admitted to the examination. [graphic] sec.163.7. Licensure Documentation. (a) An applicant must appear for a personal interview at the board offices and present original documents to a representative of the board for inspection. Original documents may include, but are not limited to, those listed in subsections (b)-(d) of this section. (b) Documentation required of all applicants for licensure. (1) Birth Certificate/Proof of Age. Each applicant for licensure must provide a copy of either a birth certificate and translation if necessary to prove that the applicant is at least 21 years of age. In instances where a birth certificate is not available the applicant must provide copies of a passport or other suitable alternate documentation. (2) Name Change. Any applicant who submits documentation showing a name other than the name under which the applicant has applied must present copies of marriage licenses, divorce decrees, or court orders stating the name change. In cases where the applicant's name has been changed by naturalization, the applicant should send the original naturalization certificate by certified mail to the board office for inspection. (3) Examination Scores. Each applicant for licensure must have a certified transcript of grades submitted directly from the appropriate testing service to this board for all examinations used in Texas or another state for licensure. (4) Dean's Certification. Each applicant for licensure must have a certificate of graduation submitted directly from the medical school on a form provided by the board. The applicant shall attach a recent photograph, meeting United States Government passport standards, to the form before submitting to the medical school. The school shall have the Dean of the medical school or designated appointee sign the form attesting to the information on the form and placing the school seal over the photograph. (5) Medical Diploma. All applicants for licensure must submit a copy of their medical diploma. (6) Evaluations. All applicants must provide evaluations, on a form provided by the board, of their professional affiliations for the past ten years or since graduation from medical school, whichever if the shorter period. (7) Premedical School Transcript. Each applicant must submit a copy of the record of their undergraduate education. Transcripts must show courses taken and grades obtained. If determined that the documentation submitted by the applicant is not sufficient to show proof of the completion of 60 semester hours of college courses other than in medical school, which courses would be acceptable, at the time of completion, to The University of Texas at Austin for credit on a bachelor of arts degree or a bachelor of science degree, the applicant may be requested to contact the Office of Admissions at The University of Texas at Austin for course work verification. (8) Medical School Transcript. Each applicant must have his or her medical school submit a transcript of courses taken and grades obtained. (9) National Practitioner Data Bank (NPDB). Each applicant must contact the NPDB and have a report of action submitted directly to the board on the applicant's behalf. (10) Federation of State Medical Boards History Report. Each applicant must contact the Federation of State Medical Boards and have a history report submitted directly to the board on the applicant's behalf. (11) Physician's Profile. Each applicant must have a "Physician's Profile" report submitted directly to the board on the applicant's behalf from: (A) American Medical Association; or (B) American Osteopathic Association. (12) National Credentials Verification Service (NCVS). Each applicant that has contracted with NCVS to provide verification of documents may request that a copy of the NCVS file be submitted directly to the board. (13) Fingerprint Card. Each applicant must complete a fingerprint card and return to the board as part of the application. (14) Graduate Training Verification-each applicant must submit a certificate showing successful completion of required training. The certificate must show the beginning and ending dates of the program and state that the program was successfully completed. An applicant may have the Program Director of the program in which the applicant trained submit a letter, addressed to this board, submitted directly to this board stating the beginning and ending dates of the program and attesting to successful completion. (15) Temporary License Affidavit. Each applicant must submit a completed form, furnished by the board, titled "Temporary License Affidavit" prior to the issuance of a temporary license. (16) Additional Photograph. Applicants required to sit for the FLEX, USMLE, or SPEX examinations must submit a recent photograph that meets United States Government passport standards. (c) Applicants for licensure by endorsement must satisfy the appropriate requirements listed in subsections (a) and (b) of this section and the following. (1) Endorsement. Each applicant for licensure by endorsement must have a state or province endorse him or her to this board. The endorsement must indicate that the license is current and in full force and that it has not been restricted, canceled, suspended, or revoked. Each endorsement must indicate the basis of licensure (by endorsement or examination) or the applicant must request that the endorsing state submit a letter to this board stating the basis of licensure. The endorsing board should include a description of any sanctions imposed by or disciplinary matters pending in the state or Canadian province. (2) State License Registration. Each applicant must submit a copy of a certificate issued by the state which is endorsing him or her to this board. The certificate must show the license number and date of expiration of the current registration. (3) Specialty Board Certification. Each applicant that has obtained certification by a board that is a member of the American Board of Medical Specialties or the American Osteopathic Association must submit a copy of the certificate issued by the member showing board certification. (4) Continuing Medical Education (CME). Each applicant must provide copies of certificates showing completion of at least equal to the number of CME hours required by the endorsing state. (5) Medical License Verifications. Each applicant will have every state, excluding the state that is endorsing him or her to this board, in which he or she has ever been licensed, regardless of the current status of the license, submit on his or her behalf, directly to this board a letter verifying the status of the license and any a description of any sanctions or pending disciplinary matters. (d) Applicants for licensure by examination who are graduates of unapproved foreign medical schools must furnish all appropriate documentation listed in this subsection, as well as that listed in subsections (a) and (b) of this section. Applicants for licensure by endorsement who are graduates of unapproved foreign medical schools must furnish all appropriate documentation listed in this subsection, as well as that listed in subsections (a)-(c) of this section. The required documents are as follows. (1) Educational Commission for Foreign Medical Graduates (ECFMG) certificate. Applicants must submit a copy of a valid ECFMG certificate unless they have completed a Fifth Pathway program; (2) Educational Commission for Foreign Medical Graduates (ECFMG) interim certificate. Each applicant that has completed a Fifth Pathway program must submit a copy of his or her ECFMG interim certificate. (3) Educational Commission for Foreign Medical Graduates (ECFMG) Examination History Report. Each applicant must request that ECFMG furnish directly to this board a report of the number of examinations taken by the applicant leading to ECFMG certification, the result of each examination, and the type of examination taken. (4) Unique Documentation. The board may request documentation unique to an individual unapproved medical school and additional documentation as needed to verify completion of medical education. (5) Certificate of Registration. Each applicant must provide a copy of his or her certificate to practice in the country in which his or her medical school is located. If a certificate is unavailable, a letter, submitted directly to this board, from the body governing licensure of physicians in the country in which the school is located, will be accepted. The letter must state that the applicant has met all the requirements for licensure in the country in which the school is located. If an applicant is not licensed in the country of graduation due to a citizenship requirement, a letter attesting to this, submitted directly to this board, will be required. (6) Clinical Clerkship Affidavit. A form, supplied by the board, to be completed by the applicant, is required listing each clinical clerkship that was completed as part of an applicant's medical education. The form will require the name of the clerkship, where the clerkship was located (name of hospital and location of hospital) and dates of the clerkship. (e) Applicants may be required to submit other documentation, which may include the following. (1) Translations. Any document that is in a language other than the English language will need to have a certified translation prepared and a copy of the translation will have to be submitted along with the translated document. (2) Arrest Records. If an applicant has ever been arrested a copy of the arrest and arrest disposition need to be requested from the arresting authority and said authority must submit copies directly to this board. (3) Malpractice. If an applicant has ever been named in a malpractice claim filed with any medical liability carrier or if an applicant has ever been named in a malpractice suit; the applicant must have the following submitted: (A) have each medical liability carrier complete a form furnished by this board regarding each claim filed against the applicant's insurance; (B) for each claim that becomes a malpractice suit have the attorney representing the applicant in each suit submit a letter directly to this board explaining the allegation, dates of the allegation, and current status of the suit. If the suit has been closed, the attorney must state the disposition of the suit, and if any money was paid, the amount of the settlement. If such letter is not available, the applicant will be required to furnish a notarized affidavit explaining why this letter cannot be provided; (C) a statement, composed by the applicant, explaining the circumstances pertaining to patient care in defense of the allegations. (4) Inpatient Treatment for Alcohol/Substance Abuse or Mental Illness. Each applicant that has been admitted to an inpatient facility within the last ten years for the treatment of alcohol/substance abuse or mental illness must submit the following: (A) an applicant's statement explaining the circumstances of the hospitalization; (B) an admitting summary and discharge summary, submitted directly from the inpatient facility; (C) a statement from the applicant's treating physician/psychotherapist as to diagnosis, prognosis, medications prescribed, and follow-up treatment recommended; (D) a copy of any contracts signed with any licensing authority or medical society or impaired physician's committee. (5) Outpatient Treatment for Alcohol/Substance Abuse or Mental Illness. Each applicant that has been treated on an outpatient basis within the last ten years for alcohol/substance abuse or mental illness must submit the following: (A) an applicant's statement explaining the circumstances of the outpatient treatment; (B) a statement from the applicant's treating physician/psychotherapist as to diagnosis, prognosis, medications prescribed, and follow-up treatment recommended; and (C) a copy of any contracts signed with any licensing authority or medical society or impaired physician's committee. (6) Additional documentation as is deemed necessary to facilitate the investigation of any application for medical licensure must be submitted. (7) A copy of the DD214 indicating separation from any branch of the United States military must be submitted. (f) The board may, in unusual circumstances, allow substitute documents where proof of exhaustive efforts on the applicant's part to secure the required documents is presented. These exceptions are reviewed by the board's executive director on a case-by-case basis. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 28, 1994. TRD-9435329 Bruce A. Levy, M.D., J.D. Executive Director Texas State Board of Medical Examiners Effective date: February 18, 1994 Proposal publication date: December 17, 1993 For further information, please call: (512) 834-7728, Ext. 402 Part XIV. Texas Optometry Board Chapter 273. General Rules 22 TAC sec.273.5, sec.273.6 The Texas Optometry Board adopts amendments to sec.273.5 and sec.273.6, without changes to the proposed text as published in the December 24, 1993, issue of the Texas Register (18 TexReg 9890). Section 273.5 is necessary to clarify the educational requirement for faculty members seeking limited licensure. The education, required of all licensee candidates, is that the candidate be a graduate of a college of optometry which has been accredited by the Council on Optometric Education of the American Optometric Association. Section 273.6 is necessary to clarify the educational requirement for provisional licensure. Because a provisional licensee is required to take and pass the licensure examination for therapeutic optometry, the licensee must meet the same criteria of education as other therapeutic optometry licensees. The rule clarifies that the applicant must have satisfied the therapeutic education required for graduates of accredited colleges of optometry after January 1, 1991. No comments were received regarding adoption of the amendments. The amended sections are adopted under the provisions of Texas Civil Statutes, Article 4552, sec.2.14, which provide the Texas Optometry Board with the authority to promulgate procedural and substantive rules. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 21, 1994. TRD-9435290 Lois Ewald Executive Director Texas Optometry Board Effective date: February 18, 1994 Proposal publication date: December 24, 1993 For further information, please call: (512) 835-1938 Part XXII. Texas State Board of Public Accountancy Chapter 501. Professional Conduct General Provisions 22 TAC sec.501.2 The Texas State Board of Public Accountancy adopts an amendment to sec.501. 2, concerning Professional Conduct without changes to the proposed text as published in the December 3, 1993, issue of the Texas Register (18 TexReg 8843). The change is the deletion of the definition of the practice of public accountancy. The amendment redefines advertising to comply with Edenfield et al. v. Fane, 113 S. Ct. 1792 (1993). The new rule will be a rule in conformity with a United States Supreme Court opinion. Commenter one was pleased with the last two sentences but wondered if they conflicted with proposed sec.501.44(c). In response to this comment, the proposed amendment to sec.501.44(c) is being withdrawn, and existing sec.501.44 is being repealed. Commenter two said he had no problem with the proposed changes but felt the 36- month retention period would be costly to CPAs and suggested it be deleted. In response, a committee of the board considered but rejected a shorter retention period. Commenters three, four and six supported the proposed amendment. Commenter five objected to the use of "informative and objective" because all messages are informative and objective. In response, not all advertising is informative and objective. Informative and objective advertising is permitted; it is not required. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary to carry in effect the purposes of the law, and sec.21, which states the reasons for disciplinary action by the board. sec.501.2. Definitions. The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise. Advertisement-A message which is transmitted to multiple persons by, or at the direction of, a certificate or registration holder and which has reference to the availability of the certificate or license holder to perform professional services. If messages are transmitted orally or by any written or electronic medium, they must be recorded, transcribed, or otherwise retained for a period of at least 36 months from the date of the last transmission or use. Advertising that is informative and objective is permitted. Such advertising shall be in good taste and be professionally dignified. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 20, 1994. TRD-9435316 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: February 18, 1994 Proposal publication date: December 3, 1993 For further information, please call: (512) 505-7066 Other Responsibilities and Practices 22 TAC sec.501.38 The Texas State Board of Public Accountancy adopts new sec.501.38, concerning Professional Conduct, with changes to the proposed text as published in the October 15, 1993, issue of the Texas Register (18 TexReg 7089). The changes are the deletion of the last sentence, which was then re-written and incorporated into the penultimate sentence. The new rule allows licensees to have a passive interest in a business that is not registered with the Board and is providing accounting services. The section will function by clarifying as to when a licensee may own an interest in a non- registered entity providing accounting services and extent of that ownership. One comment was received concerning adoption of the rule. The comment was received from Stephen Braunstein of Peterson Consulting. Mr. Braunstein has no objection to CPAs having passive investments in firms providing public accounting services. His objections were that the proposed rule was unnecessarily vague, was subject to abuse by selective enforcement and that the proposed rule could be subject to a legal challenge which might be costly for the Board to defend. Mr. Braunstein felt the lack of definition of "material" would lead to selective enforcement and was vague. He suggested using the Securities and Exchange Commission's definition of "material," which is 5.0% of the equity interest in a public entity. Mr. Braunstein thought the definition of "passive interest" was vague, and wondered what "significant influence on the management of the entity" meant. He asked why there was a management restriction when there was an ownership restriction. Board staff recommended the issue of "material" be examined and considered based on the facts and circumstances surrounding each case to allow flexibility. Further "material" and "significant" are concepts familiar to CPAs' and these terms are used by the American Institute of Certified Public Accountant's Generally Accepted Auditing Standards, Generally Accepted Accounting Principles, and other authoritative pronouncements. In some situations a certificate or registered holder may own an interest that is not material but the certificate or registration holder may have a significant influence on management which would override his less than material ownership interest. The Board has no control over litigation brought by others. Consequently, no change has been made to the rule based on these comments. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary to carry in effect the purposes of the law, sec.2, regarding the definition of public accountancy, and sec.15B, requiring the Board to register practice units. sec.501.38. Ownership in a Passive Interest. A certificate or registration holder is permitted to own a passive interest in an entity not registered with the Board, even though the entity provides accounting services to the public, when the entity is publicly held (registered under the Securities Act 1993), or the interest of the certificate or registration holder is not material in relation to the net worth of the entity. A passive interest does not exist when the certificate or registration holder has a significant influence on the management of the entity. It is presumed not to be a passive interest when any owner or manager of the entity is a close relative as defined in sec.501.11(e) (relating to independence) of these rules or someone in the same household as the certificate or registration holder. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 28, 1994. TRD-9435296 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: February 18, 1994 Proposal publication date: October 15, 1993 For further information, please call: (512) 505-7066 22 TAC sec.501.43 The Texas State Board of Public Accountancy adopts an amendment to sec.501. 43, concerning Professional Conduct, with changes to the proposed text as published in the December 3, 1993, issue of the Texas Register (18 TexReg 8844). The changes are adding "improperly or due to some special relations" at the end of subsection (b)(7); adding "untrue" to subsection (b) (9), which should now read "makes untrue comparisons"; adding "that are not based upon verifiable facts" to the end of subsection (b)(10); moving proposed sec.501.44(b) to this section and making it a new sec.501.43(c); replacing "solicited" and "solicitation" with "contacted" and "contact" in new sec.501. 43(c); moving proposed sec.501.44(d) to this section and making it a new sec.501. 43(d); moving proposed sec.501.44(e) to this section and making it a new sec.501. 43(e); moving proposed sec.501.44(f) to this section and making it a new sec.501. 43(f); deleting "and (e)" and changing "do not" to "does not;" changing subsection (c) to new subsection (g); deleting proposed sec.501.43(c)(9); deleting proposed sec.501.43(c)(11); and the resulting redesignations of the new sec.501.43(g) caused by the two deletions mentioned. The proposed amendment to sec.501.44 is being withdrawn, and existing sec.501. 44 is being repealed on an emergency basis. Because elements of proposed sec.501.44 are being adopted as changes to sec.501.43, comments concerning sec.501.44 are being addressed here. The amendment expands the types of actions which are prohibited by this rule. The board received nine comments from individuals on the proposed amendment to sec.501.43. Commenter one favored the amendment but did not state his reasons. Commenter two said the amendment would allow clients to receive quality work at competitive prices. Commenter three opposed proposed amendments to subsections (b)(7) and (b)(8) as being unnecessary because they were already covered in subsections (b) (1) -(3). He also opposed subsections (b)(9) and (10) because they could hurt CPAs attempting to obtain new clients in non-traditional areas. Commenter four opposed subsection (b)(9) because comparisons to other CPAs could help the public select a CPA. He opposed subsection (b)(10) because endorsements could help the public select a CPA. He opposed subsections (b)(9) and (10) because they insulate poor CPAs, because they were an unnecessary restriction, and because they do not help protect the public. Commenter five neither opposed nor supported the amendment. He suggested sec.501.43 and sec.501.44 concerning Soliciting, be combined into one rule to be captioned Advertising and Soliciting. Commenter six opposed the amendments because they were too broad and suggested they be re-written more narrowly to address the board's specific concern. He gave an example of a CPA being interviewed on television on tax laws and said the current rule would require the CPA to control the content of the interview and to obtain and retain copies of the interview each time it is broadcast. Commenter seven opposed subsections (b)(9) and (10) because they were confusing and because they restrained trade. Commenter eight opposed subsection (c)(6) because of the vagueness of "harass" and "annoy." Commenter nine opposed the amendment stating he preferred the American Institute of Certified Public Accountants' rule 502 on Advertising and Soliciting because it is shorter and easier to understand and apply. In response to commenter three, subsections (b)(7) and (8) are more specific than subsections (b)(1)-(3) and are included to make it clearer as to the kind of conduct which is misleading or deceptive and thus prohibited. In response to commenters four, six, and seven, the board changed the text of subsection (b)(9) to prohibit only untrue comparisons and only testimonials or endorsements not based upon verifiable facts. These changes allow the public to compare and select CPAs based on valid information; narrows the rule to address the Board's specific concerns; removes any possible confusion about the rule; and avoids restraint of trade because the conduct prohibited is narrower and is of legitimate state interest. In response to commenter five, the board agrees and has merged the proposed rule revisions contained in sec.501.44 into sec.501.43 and titled the rule Advertising. In response to commenter six' hypothetical situation, under the current rule definition of advertising his concern would not exist. In response to commenter eight, the definitions of "harass" and "annoy" should not be so specific that, by omission, it might implicitly approve some harassing conduct merely because it is not specifically listed. At the same time, subsection (c) provides an example of prohibited harassing conduct. In response to commenter nine, the board feels both the public and the licensees would be better served by a rule more specific than the one referenced by the commenter. Since proposed sec.501.44(b), (d), (e) and (f) were relocated to sec.501.43 and adopted, it is appropriate to include the comments received on these former subsections of sec.501.44. Commenter one welcomed the overall changes to sec.501.44 but objected to the "should know" language of sec.501.44(b) because it required him to be a mind reader. Commenter two objected to the "should know" language of sec.501.44(b) because of its vagueness and suggested it be either removed or clarified. He also requested assurance the rule would comply with the Federal Trade Commission's (FTC) Cease and Desist Order, paragraph 4, in FTC v. American Institute of Certified Public Accountants, Cause Number 297, no date given. Commenter three said sec.501.44(e) was misplaced in the section dealing with Soliciting. He also gave the example of a television interview. Commenter four said sec.501.44 was overly strict and prevented legitimate marketing of CPAs. Commenter five objected to sec.501.44(f)(3), wondering how a CPA would know when the professional services are not being provided by another CPA. Commenter six objected to the "should know" language of sec.501.44(b), wondering how one could prove this unless a prospective client informed the CPA. Commenter seven suggested sec.501.44 should be reduced to only subsection (a) because the rest of the section restricts a prospective client from receiving improved service. Commenter eight said the board should adopt the AICPA's rule 502. Commenter nine said he wholeheartedly supported proposed sec.501.44. He felt clients would receive quality work at competitive prices. In response to commenters one, two and six' concerns about how a certificate or registration holder should have known of the prospective client's desire not to be solicited, the staff suggests that the circumstances, facts, conversations and communications surrounding the contact will be examined to ascertain what information was available at the time and whether the decision to re-contact was reasonable under the then existing circumstances. In response to commenter two's request for assurance that the rules comply with an FTC Order, all of the Board's rules are reviewed by its General Counsel; sec.501.43 and sec.501.44 were reviewed by the Office of the Attorney General; and the Board has an obligation to comply with all relevant and pertinent orders applicable to the Board. In response to commenter three's suggestion that sec.501.44(e) was misplaced, the subsection was moved to the new subsection 501.43(e). In response to commenters four and seven's objections that sec.501.44 was overly strict, prevented legitimate marketing and restricted a prospective client from receiving improved services, the Board withdrew proposed sec.501. 44(a) and (c) and deleted sec.501.44. The Board made textual changes to sec.501. 43, which made the rule more narrow or specific, and which allow legitimate marketing to a prospective client who can now make a better informed decision. In response to commenter five's comments on sec.501.44(f)(3), staff suggests the operative part is that the solicitation is made to someone seeking professional services. This is not a "cold call" to someone randomly selected hoping they may need professional services. The prospective client has affirmatively taken some action to make his desire for professional services known to the profession. Section 501.44(f)(3) is only applicable as an exclusion or exemption from the record retention requirement of sec.501.44(d). The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary to carry in effect the purposes of the law, and sec.21, which states the reasons for disciplinary action by the Board. sec.501.43. Advertising. (a) A certificate or registration holder shall not use or participate in the use of: (1) any communication (written, oral, or electronic) having reference to the certificate or registration holder's professional services, which contains a false, fraudulent, misleading, deceptive, or unfair statement or claim; nor (2) any form of communication having reference to the certificate or registration holder's professional services, which is accomplished or accompanied by coercion, duress, compulsion, intimidation, threats, overreaching, or vexatious or harassing conduct. (b) A false, fraudulent, misleading, deceptive, or unfair statement or claim includes, but is not limited to, a statement or claim which: (1) contains a misrepresentation of fact; (2) is likely to mislead or deceive because it fails to make full disclosure of relevant facts; (3) is intended or likely to create false or unjustified expectations of favorable results; (4) implies educational or professional attainments or licensing recognition not supported in fact; (5) represents that professional services can or will be completely performed for a stated fee when this is not the case, or makes representations with respect to fees for professional services that do not disclose all variables that may reasonably be expected to affect the fees that will in fact be charged; (6) contains other representations or implications that in reasonable probability will cause a person of ordinary prudence to misunderstand or be deceived; (7) implies the ability to influence any court, tribunal, regulatory agency or similar body or official improperly or due to some special relations; (8) consists of self-laudatory statements that are not based on verifiable facts; (9) makes untrue comparisons with other accountants; or (10) contains testimonials or endorsements that are not based upon verifiable facts. (c) It shall be a violation of these rules for a certificate or registration holder to persist in contacting a prospective client when the prospective client has made known to the certificate or registration holder or the certificate or registration holder should have known the prospective client's desire not to be contacted. Any attempt to continue a contact, which the certificate or registration holder knows or should know is unwanted, is not permitted. (d) In the case of direct mail communication, the certificate or registration holder shall retain a copy of the actual mailing along with a list or other description of persons to whom the communication was mailed or otherwise distributed. Such copy shall be retained by the certificate or registration holder for a period of at least 36 months from the date of the last transmission or use. (e) Subsection (d) of this section does not apply to persons when: (1) the solicitation is made to a person who is at that time a client of the certificate or registration holder; (2) the solicitation is invited by the person to whom it was made; or (3) the solicitation is made to a person seeking to secure the performance of professional services currently not being provided by another certificate or registration holder. (f) In the case of radio and television broadcasting, the broadcast shall be recorded and the certificate or registration holder shall retain a recording of the actual transmission. (g) Definitions. The following words and terms, when used in this section have the following meanings, unless the context clearly indicates otherwise. (1) Broadcast-Any transmission over the airwaves or over a cable or wireline system, whether or not the broadcaster received any consideration or compensation for such transmission. (2) Coercion-Compelling by force so that one is constrained to do what his free will would otherwise refuse. (3) Compulsion-Driving or urging by force or by physical or mental constraint to perform or forbear from performing an act. (4) Direct personal communication-Either a face-to-face meeting or a conversation by telephone. (5) Duress-Any conduct which overpowers the will of another. (6) Harassing-Any word, gesture or action which tends to annoy, alarm and verbally abuse another person. (7) Intimidation-Willfully to take, or attempt to take, by putting in fear of bodily harm. (8) Overreaching-Tricking, outwitting, or cheating a person into doing an act which he would not otherwise do. (9) Threats-Any menace of such a nature and extent as to unsettle the mind of the person on whom it operates, and to take away from his acts that free and voluntary action which alone constitutes consent. (10) Vexatious-Without reasonable or probable cause or excuse. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 20, 1994. TRD-9435317 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: February 18, 1994 Proposal publication date: December 3, 1993 For further information, please call: (512) 505-7066 Chapter 511. Certification as CPA Certification 22 TAC sec.511.167 The Texas State Board of Public Accountancy adopts an amendment to sec.511. 167, concerning revoking or relinquishing a certificate or registration, with changes to the proposed text as published in the October 15, 1993, issue of the Texas Register (18 TexReg 7089). The change redesignates sec.511. 167(b)(9)(C) as sec.511.167(c). The amendment functions by reducing the space and effort previously expended in storing and securing certificates and registrations. No comments were received concerning adoption of the rule. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary to carry in effect the purposes of the law and sec.21, which authorizes the Board to revoke licenses and certificates and to accept surrenders of certificates and licensees. sec.511.167. Revoking or Relinquishing a Certificate or Registration. (a) Any individual holding a certificate or registration issued by the board may, at any time and for any reason, subject to the approval of the board, relinquish that certificate or registration to the board. An individual relinquishing the certificate or registration may not apply for reinstatement, but may apply for the issuance of a new certificate upon completion of all requirements for the issuance of such certificate. If an individual relinquishes the certificate or registration during the course of a disciplinary investigation or proceeding conducted by the board, this fact shall be disclosed in any later application for a new certificate, and shall be considered before the issuance of a new certificate. (b) The board may revoke the certificate or registration issued by the board after notice and hearing as provided in the Act, sec.21, for any of the following causes: (1) fraud or deceit in obtaining a certificate as certified public accountant or in obtaining a registration under this or any prior Acts or in obtaining a license to practice public accountancy under this Act; (2) dishonesty, fraud, or gross negligence in the practice of public accountancy; (3) violation of any of the provisions of the Act, sec.8 or sec.20A, as they may apply to a person certified or registered by the board; (4) violation of the rules of professional conduct promulgated by the board under the authority granted by the law; (5) final conviction of a felony or imposition of deferred adjudication in connection with a criminal prosecution of a felony under the laws of any state or of the United States; (6) final conviction of a felony or imposition of deferred adjudication in connection with a criminal prosecution, an element of which is dishonesty or fraud, under the laws of any state or of the United States; (7) cancellation, revocation, suspension, or refusal to renew authority to practice as a certified public accountant or public accountant by any other state for any cause other than failing to pay an annual registration fee in such other state; (8) suspension or revocation of or a voluntary consent decree concerning the right to practice before any state or federal agency for a cause which in the opinion of the board warrants its action; (9) failure of a certificate holder or registrant to obtain an annual license under the Act, sec.9, within either: (A) three years from the expiration date of the license to practice, last obtained, or renewed by the certificate holder or registrant; or (B) three years from the date upon which the certificate holder or registrant was granted the certificate or registration, if no license was ever issued; (10) conduct indicating a lack of fitness to serve as a certified public accountant. (c) Any certificate returned to the board for revocation or relinquishment may be destroyed by the board. If an application for reinstatement is later granted by the board and the certificate has been destroyed by the board, a duplicate certificate may be issued. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 20, 1994. TRD-9435314 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: February 18, 1994 Proposal publication date: October 15, 1993 For further information, please call: (512) 505-7066 22 TAC sec.511.168 The Texas State Board of Public Accountancy adopts an amendment to sec.511. 168, concerning Certification, without changes to the proposed text as published in the December 3, 1993, issue of the Texas Register (18 TexReg 8846). The amendment clarifies that applicants for reinstatement of Certificate must pay all due fees and become current on continuing professional education prior to issuance of a new certificate. The amendment will function by ensuring that recertified licensees are current on all fees and have completed continuing professional education prior to offering their services to the public. No comments were received regarding adoption of the rule. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary to carry in effect the purposes of the law; sec.15, which allows the board to charge fees; and sec.15A, which requires continuing professional education. Issued in Austin, Texas, on January 20, 1994. TRD-9435313 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: February 18, 1994 Proposal publication date: December 3, 1993 For further information, please call: (512) 505-7066 22 TAC sec.511.169 The Texas State Board of Public Accountancy adopts an amendment to sec.511. 169, concerning Certification, without changes to the proposed text as published in the December 3, 1993, issue of the Texas Register (18 TexReg 8847). The amendment clarifies that applicants for reinstatement of registration must pay all due fees and become current on continuing professional education prior to issuance of a new certificate. The amendment will function by ensuring that reinstated registrants who are current on all fees and have completed continuing professional education prior to offering their services to the public. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary to carry in effect the purposes of the law; sec.15, which allows the board to charge fees; and sec.15A, which requires continuing professional education. Issued in Austin, Texas, on January 20, 1994. TRD-9435312 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: February 18, 1994 Proposal publication date: December 3, 1993 For further information, please call: (512) 505-7066 Chapter 519. Practice and Procedure 22 TAC sec.519.23 The Texas State Board of Public Accountancy adopts an amendment to sec.519. 23, concerning Practice and Procedure without changes to the proposed text as published in the October 15, 1993, issue of the Texas Register (18 TexReg 7090). The amendment allows the board to assess the cost of preparing the record against an appealing licensee. The rule will function by shifting part of the cost of preparing a record from the board to some licensees. No comments were received concerning adoption of the rule. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary to carry in effect the purposes of the law and the Administrative Procedure Act, Government Code, Chapter sec.2001.177, which allows the board to assess record preparation costs by rule. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 20, 1994. TRD-9435311 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: February 18, 1994 Proposal publication date: December 15, 1993 For further information, please call: (512) 505-7066 22 TAC sec.519.26 The Texas State Board of Public Accountancy adopts an amendment to sec.519. 26, concerning Informal Conferences, without changes to the proposed text as published in the December 3, 1993, issue of the Texas Register (18 TexReg 8847). The amendment allows the executive director or the committee to decide whether an informal conference should be held, and places the conducted proceedings of the informal conference under the control of the committee chair. The rule will function be allowing shorter and more efficient informal conferences. Comments were received from two CPAs concerning adoption of the rule. The two comments opposed adoption of the rule. One commenter stated he opposed adoption, but did not state any reasons. The second commenter opposed adoption because she felt the right to cross- examine witnesses and to examine evidence was an absolute necessity for the defense. Staff notes that this particular rule addresses only the conduct and procedure of Informal Conferences, which are attempts to settle cases and are also proceedings preparatory to contested case hearings before an Administrative Law Judge. During the contested case hearings licensees are afforded their constitutional rights, including cross-examination of witnesses and examination of evidence. Therefore, no changes were made to the proposed text based on these two comments. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law; sec.22, which addresses hearings and procedure of contested cases, and the Administrative Procedure Act, Government Code, Chapter sec.2001.054 which addresses hearings and procedure of contested cases. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 28, 1994. TRD-9435310 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: February 18, 1994 Proposal publication date: December 3, 1993 For further information, please call: (512) 505-7066 22 TAC sec.519.27 The Texas State Board of Public Accountancy adopts an amendment to sec.519. 27, concerning Practice and Procedure, with changes to the proposed text as published in the October 15, 1993, issue of the Texas Register (18 TexReg 7090). The changes are the addition of "clearly" at the end of sec.519. 27(i) which is intended to modify each of the following six paragraphs, and the addition of "or auditing standards" at the end of sec.519.27(i)(3). The amendment recognizes APTRA's recodification, APTRA's name change, uses administrative law judges instead of hearings officers, clarifies that the administrative law judge will serve a copy of the proposal for decision on all parties, and sets forth the policy reasons for which the board may revoke or modify an administrative law judge's recommendations. The rule has current statutory references and a written revocation and modification policy. No comments were received concerning adoption of the rule. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary to carry in effect the purposes of the law; sec.21, which describes the Board's disciplinary procedures; Chapter 2001 of the Government Code, which contains part of the former APTRA, and Chapter 2003 of the Government Code, which contains those parts of former APTRA which addressed the State Office of Administrative hearings. sec.519.27. Hearings in Disciplinary Action. (a) General rule. Hearings in disciplinary actions shall be governed by the provisions of this chapter, the Public Accountancy Act of 1991 and any amendments to it, and the Administrative Procedure Act, Government Code, Chapter 2001. Hearings shall be conducted by an administrative law judge, or the board en banc. (b) Prehearing conferences. In any disciplinary actions, the administrative law judge, on his own motion or on the motion of any party, may direct the parties, their attorneys, or representatives to appear before him at a specified time and place for a conference prior to the hearing for the purpose of considering: (1) the simplification of issues; (2) agreement regarding admissions or stipulations of fact to avoid the unnecessary introduction of proof; (3) the procedure at the hearing; including, but not limited to, the use of prefiled testimony and objections; (4) the limitation, where possible, of the number of witnesses; (5) objections to evidence to be offered at the hearing; and (6) such other matters as may aid in the simplification of the proceedings and disposition of the matters in controversy; the administrative law judge shall cause any action taken at a prehearing conference to be recorded in an appropriate order. (c) Administrative law judge. All proposals for decisions of an administrative law judge shall be given full dissemination to all members of the board. If the decision of the administrative law judge is adverse to a party to the proceeding other than the board itself, a final decision by the board may not be made until a proposal for decision is served on the parties, and an opportunity is afforded each party adversely affected to file exceptions and present briefs to the board. If any party files exceptions or presents briefs, an opportunity must be afforded to all other parties to file replies to the exceptions or briefs. The proposal for decision must contain a statement of the reasons for the proposed decision and of each finding of fact and conclusion of law necessary to the proposed decision, prepared by the administrative law judge which conducted the hearing. The proposal for decision may be amended pursuant to exceptions, replies, or briefs submitted by the parties without again being served on the parties. The parties by written stipulation may waive compliance with this section. (d) Filing of exceptions and replies. Any party of record may, within 15 days of the date of service of the proposal for decision, unless the administrative law judge has set a shorter or longer period of time, file exceptions to the proposal for decision. Replies to these exceptions shall be filed within 15 days after the date of filing the exceptions unless the administrative law judge has set a shorter or longer period of time. A request for extension or decrease of time within which to file exceptions or replies shall be filed with the administrative law judge, and a copy of the request shall be served on all parties of record by the party making the request. The administrative law judge shall promptly notify the parties of the decision with regard to these requests. Additional time shall be allowed only when the interests of justice so require. Upon the expiration of the time for filing exceptions or replies to exceptions, or after time for filing exceptions or replies to exceptions, or after the replies and exceptions have actually been timely filed, the proposal for decision will be considered by the board and either adopted, modified and adopted, or remanded to the administrative law judge. If remanded to the administrative law judge, the revised proposal for decision thereafter rendered by the administrative law judge shall be clearly labeled as an amended proposal for decision. A copy of the proposal for decision shall be served forthwith by the administrative law judge on each party, or each party's attorney of record, and the board. Service shall be in accordance with the board's rules. (e) Form of exceptions and replies. Exceptions and replies to exceptions shall conform as nearly as practicable to the rules provided for pleadings. The specific exceptions shall be concisely stated. The evidence relied upon shall be pointed out with particularity, and that evidence and any arguments and legal authority relied upon shall be grouped under the exceptions to which they relate. Any party filing exceptions and replies shall provide the board with an original and 17 copies. (f) Oral argument before the board. Any party may request oral argument before the board before the final determination of any proceeding, but oral argument shall be allowed only at the discretion of the board. A request for oral argument may be incorporated in the exception, reply to exceptions, or in a separate pleading. In the event oral argument is granted by the board, each party who has filed exceptions and replies may be limited to a maximum of 20 minutes for presentation thereof. The board shall require one spokesman per party and position. (g) Motion for rehearing. In the event a motion for rehearing is filed, the executive director shall have authority to act for the board in either granting or denying such motion. (h) Administrative cost recovery rule. The board may for good cause and in accordance with the Public Accountancy Act 1991, after notice and hearing, impose direct administrative costs in addition to other sanctions provided by law or these rules. Direct administrative costs include, but are not limited to, attorneys' fees, investigative costs, witness fees and deposition expenses, travel expenses of witnesses, fees for professional services of expert witnesses, the cost of a study, analysis, audit or other projects the board finds necessary in preparation of the state's case. (i) Changes to recommendation. To protect the public interest and to ensure that sound accounting principles govern the decisions of the board, it is the policy of the board to change a finding of fact or conclusion of law or to vacate or modify the proposed order of an administrative law judge when the proposed order is clearly: (1) erroneous; (2) against the weight of the evidence; (3) based on unsound accounting principles or auditing standards; (4) based on an insufficient review of the evidence; (5) not sufficient to protect the public interest; or (6) not sufficient to adequately allow rehabilitation of the licensee. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 28, 1994. TRD-9435315 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: February 18, 1994 Proposal publication date: October 15, 1993 For further information, please call: (512) 505-7066 22 TAC sec.519.34 The Texas State Board of Public Accountancy adopts an amendment to sec.519. 34, concerning forms and scope of discovery, protective orders and supplementation of responses, with changes to the proposed text as published in the October 15, 1993, issue of the Texas Register (18 TexReg 7091). The changes replace "a administrative law judges'" with "an administrative law judges'" in sec.519.34(c)(5); capitalize the "E" in "Enforcement" at the start of sec.519.34(h)(2); change "managing agency" to "managing agent" in sec.519. 34(h)(3); and correct the citation in sec.519.34(h)(7) to read "(b)(1)-(5)" instead of "(b)(1)(1-5)." The amendment establishes several possible sanctions for refusing to properly engage in discovery and changes hearing officer to administrative law judge. The amendment will function by ensuring a more open and candid discovery process in contested case hearings. No comments were received regarding adoption of the rule. The rule is adopted 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 necessary or advisable to effectuate the Act; sec.21, which describes the Board's procedures, and Government Code, Chapter 2003, which addresses administrative law judges. sec.519.34. Forms and Scope of Discovery; Protective Orders; Supplementation of Responses. (a) Forms of discovery. Permissible forms of discovery include: (1) oral or written deposition of any party or nonparty; (2) written interrogatories; (3) request of a party for admissions of facts and the genuineness or identity of documents or things; and (4) requests and motions for production, examination, and copying of documents or other tangible materials. (b) Scope of discovery. Except as provided in subsection (c) of this section, unless otherwise limited by order of the administrative law judge in accordance with these rules, the scope of discovery is as follows. (1) In general. Parties may obtain discovery regarding any matter which is relevant to the subject matter in the pending proceeding whether it relates to the pending application, petition, protest, claim, or defense of any other party. It is not grounds for objection that the information sought will be inadmissible at hearing if the information sought appears reasonably calculated to lead to the discovery of admissible evidence. It is also not grounds for objection that an interrogatory propounded pursuant to sec.519.37 of this title (relating to Interrogatories to Parties) involves an opinion or contention that relates to fact or the application of law to fact, but the administrative law judge may order such an interrogatory not be answered until after designated discovery has been completed or until a prehearing conference or other later time. It is also not grounds for objection that a request for admission propounded pursuant to sec.519.38 of this title (relating to Requests for Admissions) relates to statements or opinions of fact or of the application of law to fact or mixed questions of law and fact or that the documents referred to in a request may not be admissible at hearing. (2) Documents and tangible things. A party may obtain discovery of the existence, description, nature, custody, condition, location, and contents of any and all documents (including papers, books, accounts, drawings, graphs, charts, photographs, electronic or videotape recordings, and any other data compilations from which information can be obtained and translated if necessary, by the person from whom production is sought, into reasonably usable form) and any other tangible things which constitute or contain matters relevant to the subject matter in the proceeding. A person is not required to produce a document or tangible thing unless it is within the person's possession, custody, or control. Possession, custody, or control includes constructive possession such that the person need not have actual physical possession. As long as the person has a superior right to compel the production from a third party (including an agency, authority, or representative), the person has possession, custody, or control. (3) Potential parties and witnesses. A party may obtain discovery of the identity and location (name, address, and telephone number) of any potential party and of persons having knowledge of relevant facts. A person has knowledge of relevant facts when he or she has or may have knowledge of any discoverable matter. The information need not be admissible in order to satisfy the requirement of this subsection and personal knowledge is not required. (4) Experts and reports of experts. Discovery of the facts known, mental impressions, and opinions of experts, otherwise discoverable because the information is relevant to the subject matter in the pending proceeding but which were acquired or developed in anticipation of hearing and the discovery of the identity of experts from whom the information may be obtained only as follows. (A) In general. A party may obtain discovery of the identity and location (name, address, and telephone number) of an expert who may be called as an expert witness, the subject matter of which the witness is expected to testify, the mental impressions and opinions held by the expert, and the facts known to the expert (regardless of when the factual information was acquired) which relate to or form the basis of the mental impressions and opinions held by the expert. The disclosure of the same information concerning an expert used for consultation and who is not expected to be called as an expert witness at hearing is required if the consulting expert's opinions or impressions have been reviewed by a testifying expert. (B) Reports. A party may also obtain discovery of documents and tangible things including all tangible reports, physical models, compilations of data, and other materials prepared by an expert or for an expert in anticipation of the expert's hearing and deposition testimony. The disclosure of material prepared by an expert used for consultation is required even if it was prepared in anticipation of the hearing if the consulting expert's opinions or impressions have been reviewed by a testifying expert. (C) Reduction of report to tangible form. If the discoverable factual observations, tests, supporting data, calculations, photographs, or opinions of an expert who will be called as an expert witness have not been recorded and reduced to tangible form, the administrative law judge may order these matters reduced to tangible form and produced within a reasonable time. (5) Statements. Any person, whether or not a party, shall be entitled to obtain, upon written request, his own statement previously made concerning the matter which is the subject of the hearing, or its subject matter, which is in the possession, custody, or control of any party. If the request is refused, the person may move for an administrative law judge's order under the Administrative Procedure Act, Government Code, Chapter 2001. For purposes of this paragraph, a statement previously made is: (A) a written statement signed or otherwise adopted or approved by the person making it; or (B) a stenographic, mechanical, electrical, or other type of recording, or any transcription thereof, which is a substantially verbatim recital of a statement made by the person and contemporaneously recorded. (c) Exemptions. The following matters are protected from disclosure by privilege. (1) Work product. The work product of an attorney, subject to the exceptions of Texas Rules of Civil Evidence, sec.503(d), which shall govern as to work product as well as to attorney-client privilege. (2) Experts. The identity, mental impressions, and opinions of an expert who has been informally consulted or of any expert who has been retained or specially employed by another party in anticipation of, or preparation for, hearing or any documents or tangible things containing such information if the expert will not be called as an expert witness, except that the identity, mental impressions, and opinions of an expert who will not be called to testify as an expert and any documents or tangible things containing such impressions and opinions are discoverable if the consulting expert's opinions or impressions have been reviewed by a testifying expert. (3) Written statement. The written statements of potential witnesses and parties, when made in connection with, or in anticipation of the prosecution, investigation, defense, or protest that is the subject of the proceeding, except that persons, whether parties or not, shall be entitled to obtain, upon request, copies of statements they have previously made concerning the subject of the proceeding and which are in the possession, custody, or control of any party. The term "written statements" includes: (A) a written statement signed or otherwise adopted or approved by the person making it; and (B) a stenographic, mechanical, electrical, or other type of record, or any transcription thereof which is a substantially verbatim recital of a statement made by the person and contemporaneously recorded. For purposes of this paragraph, a photograph is not a statement. (4) Party communications. Party communications are communications between agents or representatives or the employees of a party to the proceeding or communications between a party and that party's agents, representatives, or employees, when made in connection with the prosecution, investigation, defense, or protest of the particular proceeding, or in anticipation of the prosecution, protest, or defense of any claims made as part of the proceeding. This exemption does not include communications prepared by or for experts that are otherwise discoverable. For the purpose of this paragraph, a photograph is not a communication. (5) Other privileged information; any matter protected from disclosure by any other privilege. Upon a showing that the party seeking discovery has substantial need of the materials and that the party is unable without undue hardship to obtain the substantial equivalent of the materials by other means, a party may obtain discovery of the materials otherwise exempt from discovery by paragraphs (3) and (4) of this subsection. Nothing in this subsection shall be construed to render nondiscoverable the identity and location of any potential party, any person having knowledge of relevant facts, any expert who is expected to be called as a witness during hearing, or of any consulting expert whose opinions or impressions have been reviewed by a testifying expert. (d) Presentation of objections. Either an objection or a motion for protective order made by a party to discovery shall preserve that objection without further support or action by the party unless the objection or motion is set for special hearing and a determination is made by the administrative law judge. At any reasonable time, any party may request a special hearing on any objection or motion for protective order. The failure of a party to obtain a ruling prior to the hearing on any objection to discovery or motion for protective order does not waive such objection or motion. In objecting to an appropriate request within the scope of subsection (b) of this section, a party seeking to exclude any matter from discovery on the basis of an exemption, privilege, or immunity from discovery, must specifically plead the particular exemption, privilege, or immunity from discovery relied upon at or prior to any special hearing, shall produce any evidence necessary to support such claim either in the form of affidavits filed and served at least seven days before the special hearing or by testimony. If the administrative law judge determines that an in camera inspection and review by the administrative law judge of some or all of the requested discovery is necessary, the objecting party must segregate and produce the discovery to the administrative law judge in a sealed wrapper or by answers made in camera to deposition questions, to be transcribed and sealed in the event the objection is sustained. When a party seeks to exclude documents from discovery and the basis for objection is undue burden, unnecessary expense, harassment, annoyance, or invasion of personal, constitutional, or property rights rather than a specific immunity or exemption, it is not necessary for the administrative law judge to conduct an inspection and review of the particular discovery before ruling on the objection. After the date on which answers are to be served, objections are waived unless an extension of time has been obtained by written agreement or order of the administrative law judge or good cause is shown for the failure to object within such period. (e) Protective orders. On motion specifying the grounds and made by any person against or from whom discovery is sought under these rules, the administrative law judge may make any order in the interest of justice necessary to protect the movant from undue burden, unnecessary expense, harassment, annoyance, or invasion of personal, constitutional, or property rights. Specifically, the administrative law judge's authority as to such order extends to, but is not limited by, any of the following: (1) ordering that requested discovery not be sought in whole or in part, or that the extent or subject matter of discovery be limited, or that discovery not be undertaken at the time or place specified; (2) ordering that the discovery be undertaken only by such method or upon such terms and conditions or at the time and place directed by the administrative law judge. (f) Duty to supplement. A party who has responded to a request for discovery that was correct and complete when made is under no duty to supplement his response to include information thereafter acquired, except the following shall be supplemented not less than 30 days prior to hearing unless the hearings officer finds that good cause exists for permitting or requiring later supplementation. (1) A party is under a duty reasonably to supplement his response if he obtains information upon the basis of which: (A) he knows that the response was incomplete and incorrect when made; (B) he knows that the response, though correct and complete when made, is no longer true and complete and the circumstances are such that failure to amend the answer is in substance misleading. (2) If the party expects to call an expert witness when the identity or the subject matter of such expert's testimony has not been previously disclosed in response to an appropriate inquiry directly addressed to these matters, such response must be supplemented to include the name, address, and telephone number of the expert witness, and the substance of the testimony concerning which the expert witness is expected to testify, as soon as is practical, but in no event less than 30 days prior to hearing except on leave of the administrative law judge. (3) In addition, a duty to supplement any and all responses may be imposed by order of the administrative law judge or by written agreement of the parties, or at any time prior to hearing, through new requests for supplementation of prior answers. (g) Discovery motions. All discovery motions shall contain a certificate by the party filing same that efforts to resolve the discovery dispute without the necessity of administrative law judge intervention have been attempted and failed. (h) Discovery sanctions. Requirements concerning discovery sanctions include the following: (1) Motions for sanctions or order compelling discovery. Upon reasonable notice to all party representatives and affected persons, a party may apply to the administrative law judge for an order compelling discovery. A party may not request sanctions under paragraph (3) of this subsection without having first obtained an order compelling discovery. (2) Enforcement in district court. If a person fails to comply with a subpoena or a commission for deposition issued by an administrative law judge, the agency or party requesting the subpoena or commission for deposition may seek its enforcement in district court in any manner provided by law. (3) Failure to comply with order or with discovery request. If a party, or an officer, director, or managing agent of a party, or a person designated to testify on behalf of a party fails to comply with proper discovery requests or to obey an order compelling discovery, an administrative law judge may, after opportunity for hearing, make orders in response to the failure, including any of the following orders: (A) preventing the disobedient party from further discovery of any kind, or of a particular kind; (B) deeming any facts pertaining to the order, or any other facts, to be established, as claimed by the moving party; (C) disallowing the disobedient party from supporting or opposing designated claims or defenses, or prohibiting the party from introducing designated matters in evidence; (D) striking out pleadings or parts of pleadings, staying further action until the order is obeyed; dismissing the proceeding with or without prejudice; or rendering a judgment against the disobedient party; and (E) assessing costs in obtaining sanctions as direct administrative costs pursuant to the Act, sec.21(b)(6), and sec.519.27(h) of this title (relating to Practice and Procedure). (4) Abuse of discovery process. The administrative law judge may impose any of the sanctions listed above on a party who abuses the discovery process in seeking or resisting discovery or who files a request, response, or answer that is frivolous, oppressive, or made for the purpose of delay. (5) Failure to respond to or supplement discovery. A party who fails to respond to or supplement a discovery request or refuses to supplement a response to a discovery request may not present evidence that the party was under a duty to provide in a response or supplemental response, and may not offer the testimony of an expert witness or of any other person having knowledge of the discoverable matter, unless the administrative law judge finds good cause to permit the evidence despite the noncompliance. The burden of establishing good cause is upon the party offering the evidence, and good cause must be shown in the record. (6) Impermissible communications. Unless permitted by law, a party representative shall not communicate with the administrative law judge or the Board without the knowledge of all other parties. The administrative law judge or the Board may impose any of the preceding sanctions for impermissible communication. (7) Record of basis for sanction. The administrative law judge shall state the specific basis for any sanction in the order. A party sanctioned under subsection (b)(1)-(5) of this section may raise the issue of sanctions in the exceptions to the proposal for decision and in the motion for rehearing. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 28, 1994. TRD-9435309 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: February 18, 1994 Proposal publication date: October 15, 1993 For further information, please call: (512) 505-7066 Chapter 523. Continuing Professional Education Continuing Professional Education Standards 22 TAC sec.523.28 The Texas State Board of Public Accountancy adopts an amendment to sec.523. 28, concerning Continuing Professional Education, without changes to the proposed text as published in the October 15, 1993, issue of the Texas Register (18 TexReg 7094). The amendment redefines continuing education to be continuing professional education. The rule will function by clarifying continuing professional education rules which result in a better educated licensee. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law and sec.15A, which requires licensees to participate in continuing professional education. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 20, 1994. TRD-9435308 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: February 18, 1994 Proposal publication date: October 15, 1993 For further information, please call: (512) 505-7066 22 TAC sec.523.29 The Texas State Board of Public Accountancy adopts an amendment to sec.523. 29, concerning Continuing Professional Education, without changes to the proposed text as published in the October 15, 1993, issue of the Texas Register (18 TexReg 7094). The amendment redefines continuing education to be continuing professional education. The rule will function by clarifying continuing professional education rules, which result in a better educated licensee. No comments were received concerning adoption of the rule. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provides the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary to carry in effect the purposes of the law and sec.15A, which requires licensees to participate in continuing professional education. sec.523.29. Minimum Hours Required as a Participant. A minimum of 50% requirement must be from involvement as a participant in a qualified continuing professional education program. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 20, 1994. TRD-9435307 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: February 18, 1994 Proposal publication date: October 15, 1993 For further information, please call: (512) 505-7066 22 TAC sec.523.30 The Texas State Board of Public Accountancy adopts an amendment to sec.523. 30, concerning Continuing Professional Education, without changes to the proposed text as published in the October 15, 1993, issue of the Texas Register (18 TexReg 7094). The amendment redefines continuing education to be continuing professional education. No comments were received concerning adoption of the rule. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary to carry in effect the purposes of the law and sec.15A, which requires licensees to participate in continuing professional education. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 20, 1994. TRD-9435306 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: February 18, 1994 Proposal publication date: October 15, 1993 For further information, please call: (512) 505-7066 22 TAC sec.523.31 The Texas State Board of Public Accountancy adopts an amendment to sec.523. 31, concerning Continuing Professional Education, without changes to the proposed text as published in the October 15, 1993, issue of the Texas Register (18 TexReg 7094). The amendment redefines continuing education to be continuing professional education. No comments were received concerning adoption of the rule. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary to carry in effect the purposes of the law and sec.15A, which requires licensees to participate in continuing professional education. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 20, 1994. TRD-9435305 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: February 18, 1994 Proposal publication date: October 15, 1993 For further information, please call: (512) 505-7066 22 TAC sec.523.32 The Texas State Board of Public Accountancy adopts new sec.523.32, concerning Continuing Professional Education, without changes to the proposed text as published in the December 3, 1993, issue of the Texas Register (18 TexReg 8847). The new rule requires licensees to complete at least four hours of ethics study every three years as part of the mandatory 120 hours of continuing professional education. No comments were received regarding adoption of the new section. The new section is adopted under Texas Civil Statues, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary to carry in effect the purposes of the law, and sec.15A, which requires licensees to complete 120 hours of continuing professional education every three years, but leaves it to the board to define the requirements. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 20, 1994. TRD-9435304 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: February 18, 1994 Proposal publication date: December 3, 1993 For further information, please call: (512) 505-7066 Mandatory Continuing Professional Education (CPE) Program 22 TAC sec.523.61 The Texas State Board of Public Accountancy adopts an amendment to sec.523. 61, concerning Mandatory CPE Program, with changes to the proposed text as published in the October 15, 1993, issue of the Texas Register (18 TexReg 7090). The changes are changing "Sources of Continuing Education" to "Sources of Continuing Professional Education" at the end of 523.61(b). The amendment clarifies continuing professional education rules which result in better educated licensees, redefines continuing education to be continuing professional education, and deletes unnecessary language. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to promulgate rules regarding CPA certificates or registrations and sec.15A, which requires continuing professional education. sec.523.61. Establishment of Mandatory CPE Program. (a) A mandatory CPE program was established pursuant to the Public Accountancy Act of 1979, Texas Civil Statutes, Article 41a-1, sec.6(a), which provided the board with authority to adopt a system of required continuing professional education for licensees. (b) A licensee shall be responsible for ensuring that CPE credit hours claimed conform to the board's standards as outlined in sec.sec.523.21-523.31 of this title (relating to Program Presentation Standards; Instructors; Program Sponsors; Learning Environment; Evaluation; Program Measurement; Credits for Instructors and Discussion Leaders; Credits for Published Articles and Books; Minimum Hours Required as a Participant; Limitation for Nontechnical courses, and Alternative Sources of Continuing Professional Education). This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 20, 1994. TRD-9435303 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: February 18, 1994 Proposal publication date: October 15, 1993 For further information, please call: (512) 505-7066 22 TAC sec.523.62 The Texas State Board of Public Accountancy adopts an amendment to sec.523. 62, concerning Continuing Professional Education, without changes to the proposed text as published in the October 15, 1993, issue of the Texas Register (18 TexReg 7095). The amendment clarifies subsection (b) by rewording and editing and changes continuing education to continued professional education. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 20, 1994. TRD-9435302 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: February 18, 1994 Proposal publication date: October 15, 1993 For further information, please call: (512) 505-7066 22 TAC sec.523.63 The Texas State Board of Public Accountancy adopts an amendment to sec.523.63, concerning relating to Continuing Professional Education, without changes to the proposed text as published in the October 15, 1993, issue of the Texas Register (18 TexReg 7095). The amendment removes the requirement of not practicing public accountancy while on active military duty as a condition of exemption and changes continuing education to continuing professional education. No comments were received concerning adoption of the rule. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary to carry in effect the purposes of the law and sec.15A, which requires licensees to participate in continuing professional education. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 20, 1994. TRD-9435301 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: February 18, 1994 Proposal publication date: October 15, 1993 For further information, please call: (512) 505-7066 22 TAC sec.523.64 The Texas State Board of Public Accountancy adopts an amendment to sec.523. 64, concerning Continuing Professional Education, without changes to the proposed text as published in the October 15, 1993, issue of the Texas Register (18 TexReg 7096). The amendment redefines continuing education to be continuing professional education, to clarify the specific education desired, and clarifies continuing professional education rules which result in better educated licensees. No comments were received concerning adoption of the rule. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary to carry in effect the purposes of the law and Section 15A, which requires licensees to participate in continuing professional education. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 20, 1994. TRD-9435300 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: February 18, 1994 Proposal publication date: December 15, 1993 For further information, please call: (512) 505-7066 22 TAC sec.523.65 The Texas State Board of Public Accountancy adopts an amendment to sec.523. 65, concerning Continuing Professional Education, without changes to the proposed text as published in the October 15, 1993, issue of the Texas Register (18 TexReg 7096). The amendment redefines continuing education to continuing professional education and clarifies continuing professional education rules which result in better educated licensees. No comments were received concerning adoption of the rule. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary to carry in effect the purposes of the law and sec.15A, which requires continuing professional education. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 20, 1994. TRD-9435299 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: February 18, 1994 Proposal publication date: October 15, 1993 For further information, please call: (512) 505-7066 Registered Continuing Professional Education Sponsors 22 TAC sec.523.71 The Texas State Board of Public Accountancy adopts an amendment to sec.523. 71, concerning Continuing Professional Education, without changes to the proposed text as published in the October 15, 1993, issue of the Texas Register (18 TexReg 7097). The amendment redefines continuing education to be continuing professional education, to clarify the specific education desired and clarified, continuing professional education rules which result in a better educated licensee. No comments were received concerning adoption of the rule. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law and sec.15A, which requires licensees to participate in continuing professional education. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 20, 1994. TRD-9435298 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: February 18, 1994 Proposal publication date: October 15, 1993 For further information, please call: (512) 505-7066 22 TAC sec.523.72 The Texas State Board of Public Accountancy adopts an amendment to sec.523. 72, concerning Professional Education, without changes to the proposed text as published in the October 15, 1993, issue of the Texas Register (18 TexReg 7097). The amendment redefines continuing education to be continuing professional education, to clarify the specific education desired. No comments were received concerning adoption of the rule. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary to carry in effect the purposes of the law and sec.15, which requires licensee to participate in continuing professional education. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 20, 1994. TRD-9435319 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: February 18, 1994 Proposal publication date: October 15, 1993 For further information, please call: (512) 505-7066 Registered Continuing Professional Education Sponsors 22 TAC sec.523.73 The Texas State Board of Public Accountancy adopts an amendment to sec.523. 73, concerning Continuing Professional Education, without changes to the proposed text as published in the October 15, 1993, issue of the Texas Register (18 TexReg 7097). The amendment redefines continuing education to be continuing professional education, to clarify the specific education desired. No comments were received concerning adoption of the rule. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary to carry in effect the purposes of the law and sec.15, which requires licensee to participate in continuing professional education. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 20, 1994. TRD-9435318 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: February 18, 1994 Proposal publication date: October 15, 1993 For further information, please call: (512) 505-7066 TITLE 30. ENVIRONMENTAL QUALITY Part I. Texas Natural Resource Conservation Commission Chapter 305. Consolidated Permits Subchapter M. Waste Treatment Fee Program 30 TAC sec.sec.305.501-305.507 The Texas Natural Resource Conservation Commission (Commission) adopts amendments to sec.sec.305.501-305.506 and new sec.305.507, concerning the waste treatment fee program, without changes to the proposed text as published in the November 23, 1993, issue of the Texas Register (18 TexReg 8648). Water Code, sec.26.0291, authorizes the Commission to assess an annual fee against each permittee holding a permit for wastewater treatment or discharge issued under Water Code, Chapter 26. In determining the revenue to be derived from these assessments the Commission considers the funds available from all authorized sources and the requirements to meet budgeted expenses of the water quality activities to which these fee revenues may be allocated. In determining the amount of the fee, the Commission may consider permitting factors such as flow volume, toxic pollutant potential, levels of traditional pollutants and heat load. In addition, the Commission may consider the designated uses and the ranking classifications of the waters affected by discharges from the permitted facility. To meet the requirements for funds anticipated during the 1994-1995 biennium, the Commission proposes to modify certain features of the rate schedule for determination of waste treatment fees and increase the fee rates. Fee assessments for all permits will increase under this rule. The rule as adopted will increase the rate per each point assigned to a permit from $70 to $75. In addition, other changes will increase the point values for permitted flow volume assigned to certain permits and increase the fee assessments. Revenue increases of approximately $1,160,000 per year are anticipated. Comments on the proposed rule were received from Occidental Chemical Corporation, Texas Association of Dairymen, Associated Milk Producers, Inc., Texas Poultry Federation, City of Big Spring, City of Abilene, and Texas Municipal League. Generally, respondents were opposed to the increases in fee rates and questioned the justification for the increases and the economic impacts on affected permit holders. Other issues were raised concerning the Commission's authority to adopt proposed changes in fees for certain types of wastewater operations and the need to clarify certain provisions of the rule. Most commenters questioned the justification for the fee increases and the proposed uses of additional revenue. The Commission clearly recognizes that any state-mandated increase in cost will be of concern to businesses and local governments. The fees in question are authorized to be used to support water quality regulatory activities in conjunction with other funds, essentially general revenues and federal funds. Both general revenue appropriations and federal funds will be reduced for water quality programs in FY 1994-1995. Reductions in alternative sources of funds create an increased demand for fee revenue sources. To meet increasing demands for new and improved services to be provided by the agency, including permit processing, enforcement, public participation and information management, the Commission has dedicated all available fund balances. Also, the Commission is facing significant new costs for office space and related support systems due to the relocation and physical consolidation of the agency as required under Senate Bill 2, Acts of the 72nd Legislature, First Called Session, 1991. These additional one-time and recurring costs must be allocated to each source of dedicated revenue and each program area. The Commission would note that the increase in revenue and the total amounts to be collected are consistent with the Commission's request for appropriations approved by the Legislature in Senate Bill 5, Acts of the 73rd Legislature (the General Appropriations Act). The preamble to the proposed rule cited both increased costs and reductions in other sources of revenues as justifications for fee increases. While these are both valid reasons, the Commission does agree with the several commenters who suggested that reductions in other sources of revenue were the more significant of the causes leading to the proposed amendments. One commenter noted that the proposed rule did not include specific definitions for the different groups into which industrial wastewater discharges are classified based on pollutant potential. This classification is based on a schedule which relates the type of facility and its Standard Industrial Classification to pollutant potential. The schedule has been and will continue to be provided with each invoice delivered annually to each permittee. In addition, the Commission will publish the schedule as a future appendix to Chapter 305, Subchapter M, in order to provide broader distribution of the guidance document and public notice of its role in the fee schedule. Other comments were received which stated that the proposed fee increases would impose unacceptable costs to agricultural operations, primarily confined animal feeding operations, which have already made substantial investments in state- mandated water pollution control facilities. Most of these operations are wastewater treatment facilities which discharge to evaporation ponds or land disposal (irrigation) facilities. It was also suggested that the proposed fee increases do not equitably derive the costs of water quality regulation from all users who benefit from the preservation of water quality. Agricultural interests are also concerned that fee increases will affect operating costs which cannot be recovered under fixed wholesale pricing structure for commodities. The Commission acknowledges that the increases will affect agricultural permit holders and that substantial monetary investments have been made by the industry to alleviate water quality control problems. The agency feels, however, that the anticipated state-wide impact of $51,000, an average of $100 per facility, is justified in terms of maintaining adequate levels of funding for water quality programs and does not critically impact any one operator or the industry as a whole. The Commission agrees with the assessment of these respondents that there are "users" who benefit from the state's water quality programs who are assessed less (or none) of the costs paid by some persons subject to this rule. The Commission lacks the legal authority, however, to collect revenue from all users to more equitably support water quality programs and is constrained by the limits of statute and the current appropriation authority approved by the legislature. Another commenter felt that the classification of agricultural facilities as industrial facilities under this subchapter was inappropriate. The issue of whether an agricultural permit should be classified as industrial is beyond the scope of the rules adopted here. This subchapter classifies such permits consistent with other agency waste treatment permitting regulations. For the purposes of assessing fees, the distinction between "agricultural" or "industrial" permit has no significant effect. It is the specific parameters of an individual permit that determine the amount of an assessment more than the classification of permit type. Other commenters stated that the fee increases which will affect municipal governments could not be justified given the significant costs incurred and to be incurred to meet new and stricter state and federal water quality standards. As we stated in our response regarding agricultural facilities, the significant costs of water quality infrastructural and regulatory costs on local governments and their utility rate payers is clearly recognized. While the costs imposed through fee assessments by the state to operate regulatory programs are a very small part of these overall costs, we agree that these costs are also significant, particularly to smaller operators and municipalities. It is important to note that the statutory maximum fee of $11, 000 which can be assessed against any one permit results in the most significant impact of the fee increases being felt by smaller to moderate sized facilities, rather than the largest. We have attempted to apportion the impact of the fee increases as equitably as possible within this very significant constraint. We cannot agree, however, that the increases are not justified if they are clearly authorized by statute, are within the legislative budget authority of the Commission and are necessary to maintain the existing levels of effort in the Commission's water quality regulatory programs. This commenter also questioned the extent to which the agency has considered the designated uses and the ranking classifications of the waters affected by discharges from permitted facilities. The authority of the agency to use such criteria in establishing rates is granted under provisions of Water Code, sec.26.0291, and was acknowledged in the preamble to the proposed rule. The rate schedule, however, does not include a specific parameter which relates to the effects of a specific discharge to a specific receiving water. It is the opinion of the agency that, while such an approach is legally and technically justifiable, the complexities of evaluating and differentiating different stream segments would not be practicable or cost effective at this time. Another comment was received in opposition to the proposed rule on the basis that the existing fee for wastewater facility inspection was being replaced with an assessment with much broader authority which was not based on waste discharge permit parameters and further, that fees should not increase without increases in the number or frequency of inspections. This commenter also stated that the fiscal impact of the rule was unclear. The agency disagrees with this characterization of the proposal. The changes to be adopted will affect only the way the fee is calculated and the amount of the fee. No expansion of the use of the fee revenues or the types of facilities to which the fee applies is contemplated or intended. The deletion of the word "inspection" from the definition of the fee simply makes it consistent with the authorizing statutory language which states that the fee is to be used "in inspecting waste treatment facilities 32>and enforcing the laws of the state, and the rules of the commission, governing waste discharge and waste treatment facilities (emphasis added), which would include permitting, enforcement and related program areas and their support and administrative costs. As discussed earlier, it is not simply cost increases of inspections that are the basis for the fee increase. As to the issue of broader authority, the fees as adopted will not apply to any facility not currently subject to a fee. The only change adopted which relates to the issue of a permit being subject to a fee is the clarification that permits by rule (general permits) are subject to assessment. This change will allow the agency to simplify the permit process and mitigate the regulatory impact on small facilities which qualify for permits by rule without reducing required revenue levels. Several commenters pointed out that the total fiscal impact of the proposed rule was not clearly stated in the preamble. The fiscal note to the proposed rule did include a typographical error. The note stated that income to the state would increase by "$1,160,00", which should have been correctly stated as "$1,160,000". This error was acknowledged and a notice of correction to the proposed rule was filed and published in the December 10, 1993, issue of the Texas Register (18 TexReg 9225). Comments were received which questioned the authority of the Commission to assess a fee for facilities which were not discharge facilities. The contention is that the statutory authority limits the assessment of a fee to permits which authorize a discharge and would not apply to permits which are treatment permits and do not authorize a discharge. We disagree. In clarifying this point, it should be understood that all permits under Water Code, Chapter 26, are "discharge" permits. Some discharges are authorized to surface waters, others to evaporation ponds, and others to land, by way of irrigation. It is this discharge which is, in fact, the basis for the requirement for a permit under Chapter 26. Most discharge permits are for treatment facilities, although some, such as stormwater permits, may not involve treatment of wastewater. This general use of the term "discharge" in Chapter 26 must be compared with the much more limited application of the term as it has been used in reference to Water Code, sec.26.0291 and its use in the preamble to the proposed rules. Under the waste treatment facility fee schedule, a distinction is made between facilities which discharge to surface waters and those which do not. The rationale is that the variable permit parameters, such as flow volume and pollutant load, are not applicable to facilities which are not authorized to discharge to surface waters. The fee schedule treats these evaporation and land disposal facilities differently based solely on the fact that their discharge points are different. In earlier versions of these sections, these facilities were referred to as "no discharge" permits. This term was deleted in prior revisions to these sections for the specific purpose of avoiding the obvious confusion due to the use of a term which really had no meaning under Water Code, Chapter 26. Similarly, this commenter was also concerned that the rule as amended would result in the assessment of a fee against facilities which are not subject to permits under Water Code, Chapter 26, in violation of the provisions of Water Code, sec.26.0291. We disagree that the proposed rule exceeds the authority granted under Water Code, sec.26.0291, which authorizes a fee "on each permittee for each waste discharge permit held by the permittee". The change adopted will clarify that, for the purposes of fee assessments, the term "permit" will include any authorization of a waste discharge under the provisions of Water Code, Chapter 26. The Commission is authorized, under Water Code, sec.26.040, to control and set requirements for small waste discharges by rule, rather than by individual permit. It is the opinion of the Commission that this use of the term "permit" is not inconsistent with the definition of the term under Water Code, sec.26.001, and the intent of the fee authority, which is to assess the costs of water quality regulation against those who discharge wastes. The effect of this change will be to allow the Commission to continue its efforts to reduce the administrative burden of permit application and approval for operators of small facilities by permitting minor discharges by rule, without significantly reducing the revenues available to the state to address water quality program requirements. The amendments are adopted under the Water Code, sec.26.0291, which authorizes the Texas Natural Resource Conservation Commission to revise fee rates for waste treatment facilities in order to fund regulatory programs for waste treatment facilities, and Water Code, sec.5.102 and sec.5.105, which provide the Commission with the authority to adopt any rules necessary to carry out its powers and duties under the Code and other laws of the State of Texas, and to establish and approve all general policy of the Commission. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 25, 1994. TRD-9435208 Mary Ruth Holder Director, Legal Division Texas Natural Resource Conservation Commission Effective date: February 14, 1994 Proposal publication date: November 23, 1993 For further information, please call: (512) 463-8069 Chapter 335. Industrial Solid Waste and Municipal Hazardous Waste Subchapter J. Industrial Solid Waste and Hazardous Waste Fee System 30 TAC sec.sec.335.321-335.323, 335.325-335.329, 335.331, 335.332 The Texas Natural Resource Conservation Commission adopts amendments to sec.sec.335.321-335.323, 335.325-335.329, 335.331, and 335.332. Sections 335.323, 335.325, and 335.326 are adopted with changes to the proposed text as published in the November 9, 1993, issue of the Texas Register (18 TexReg 8154). Sections 335.321, 335.322, 335.327-335.329, 335.331, and 335.332 are adopted without changes and will not be republished. The Health and Safety Code, Chapter 361, Subchapter D, authorizes the commission to establish an industrial solid waste and hazardous waste fee system related to the generation and disposition of waste and the operation of waste management facilities subject to permits. Under the current fee program, annual assessments are levied based on the quantities of industrial solid waste and hazardous waste generated and the capacity of permitted treatment, storage and disposal facilities. In addition, monthly fees are assessed based on the actual amounts of waste which are managed at permitted facilities. Senate Bill 1201, Acts of the 73rd Legislature, 1993, amended the Health and Safety Code, Chapter 361, Subchapter D, to require certain changes in the fee program. Senate Bill 1201 authorizes increases in the maximum fees that may be assessed for the generation of wastes and the treatment, storage or disposal of wastes at both commercial and non-commercial facilities. The maximum annual generation fee is increased from $1,000 to $10,000 for Class I non-hazardous industrial solid waste and from $25,000 to $50,000 for hazardous waste. The maximum fee for management of waste is increased from $20 per ton to $40 per ton. The assessment of fees on a monthly basis for treatment, storage and disposal of hazardous waste is expanded to include assessments on the commercial disposal of Class I non-hazardous industrial solid waste. Fees for disposal of Class I waste are proposed to be set at the limits authorized by Senate Bill 1201, that is, 20% of the applicable rate for disposal of hazardous waste. In addition, the commission is authorized under the bill to establish penalties and interest charges for late payment of fees which do not exceed rates charged by the Comptroller of Public Accounts for the payment of delinquent sales taxes. Under this revised authority the commission adopts amended rate schedules and increased maximum fees to be assessed. The maximum fee for disposal of hazardous waste is increased from $20 per ton to $30 per ton. This amount is less than the maximum authorized by statute, but will enable the commission to exercise discretion in the future regarding the maximum fees to be established and revenues to be collected. Section 335.323 (relating to Generation Fee Assessment) is changed by adding additional language to clarify the assessment of fees on the generation of industrial wastewaters. Section 335.323(c) is divided into four new subsections. Section 335.323 provides for an exemption for the assessment of hazardous waste fees for wastewaters which exhibit a characteristic of hazardous waste and which are treated and rendered non-hazardous. The additional provisions, in new paragraphs (1) and (2), will clarify that a hazardous waste which is treated to a standard of a Class I waste will be assessed as a Class I waste and a Class I waste which is treated to a standard of a Class II waste will not be assessed a generation fee. In addition, language is added at new paragraph (4) to clarify that a waste stream subject to assessment which is subsequently treated to meet another waste classification is not subject to additional assessment of a generation fee. Section 335.325 (relating to Industrial Solid Waste and Hazardous Waste Management Fee Assessment) is changed by deleting a provision which was proposed to be added to the section. This provision would have added new sec.335.325(p) to authorize a reduced fee for the underground injection of certain waste streams which are high in naturally occurring inorganic salts. This provision was recommended by the staff in response to a petition for rulemaking filed with the commission on behalf of Merichem Company. The provision is being deleted from the section as adopted at this time to allow the staff to further evaluate the effects of the proposal and develop more specific guidance for implementation of the proposed change. It is the intention of the commission to publish at a later date a separate proposal for additional amendments to sec.335.325 to address the petition for rulemaking and comments received on the amendments as originally proposed. Proposed new sec.335.325(p) is deleted and new sec.335.325(q) is redesignated accordingly. In addition, sec.335.326 (relating to Dry Weight Determination) is changed to delete a proposed new sec.335.326(c), which incorporated provisions to define which waste streams high in inorganic salts would be eligible for the reduced fee under the proposed sec.335.325(p), which is deleted and is not adopted at this time. The provisions will be reconsidered and re-proposed in conjunction with the commission's further evaluation of the changes. Comments on the proposed rules were received from Texas Eastman, Merichem Company, DuPont, Texas Chemical Council, ASARCO, and Texas Instruments. DuPont and Texas Chemical Council were generally in support of the proposed amendments but expressed concern over the broad financial implications for industry and the rate of recent fee increases. Other commenters responded concerning specific provisions of the rules and suggested modifications. One commenter suggested that the proposed rates for incineration of certain hazardous wastewater treatment sludges were inequitable when compared with rates for other methods of waste disposition, and especially deep well injection. The commission recognizes that a number of valid arguments can be made concerning the rates proposed for underground injection as opposed to those for other management methods, particularly for aqueous wastes. We feel, however, that a variety of factors must be evaluated in assessing this inequity, including the exemption of certain wastewaters from generation fees. It must be recognized also that the determination of a fee for either method on the basis of total weight or dry weight is set by law and cannot be superseded by rule. Because of the complexity of the issue and the implications for a number of potentially affected facilities, however, the commission intends to further evaluate the proposal and will incorporate any recommendations in subsequent rulemaking. A similar comment related to the proposal to assess a reduced fee for the underground injection of certain wastes high in inorganic salts. While the proposed rate would be 40% of the fee for other wastes similarly disposed, it was suggested that a rate of 20% would be more appropriate. This proposal is based on the ratio of fees established for commercial disposal of hazardous and non-hazardous waste, the rate for disposal of a Class I non-hazardous waste being 20% of the rate for disposal of a hazardous waste. We disagree. We agree with the contention that the waste constituents at issue, inorganic salts, are not hazardous constituents. The waste streams at issue, however, are classified and regulated as hazardous wastes, rather than Class I wastes, and are in our opinion justifiably addressed in the proposed rates. Although we disagree with the alternate proposal, the 40% rate is not adopted at this time. As stated earlier, this provision is deleted from the rules as adopted and its consideration will be postponed pending further evaluation and re-proposal, in which case the issue of relative rates for these waste streams can be continued. Other commenters also addressed this issue and suggested that clearer guidance and technical criteria were needed in the determination of wastes which would qualify for a reduced fee and the methods of measurement of inorganic salt constituents. These comments will be considered in the development of any subsequent proposed rule. Other comments were received concerning the inclusion of incineration under the fee schedule for commercial disposal of Class I waste. The position of the commenter is that incineration is not specifically defined as disposal within the definition of "disposal" under Health and Safety Code, sec.361.003. The definition of disposal cited says, in part, that disposal means the discharge of waste so that the waste or any constituent thereof may be emitted into the air, discharged into surface water or groundwater, or introduced into the environment in any other manner (emphasis added). We would agree that incineration clearly involves a change in waste character and there are distinct differences between incineration and either landfilling or underground injection as methods of waste disposition that warrant different treatment under any program for technical regulation. For the purpose of assessing fees, however, we feel that the practice of incineration is adequately covered in the statutory definition of disposal and appropriately included in the rate structure for commercial waste management. Additional comments were received that requested consideration of a provision to exempt non-hazardous wastewaters from the assessment of generation fees under sec.335.323 (relating to Generation Fee Assessment). We partially agree, although we do not agree that all wastewaters should be exempted. Under sec.335.323, characteristic hazardous wastewaters are exempt from hazardous waste assessment if treated on-site to be non-hazardous. Under the rule, a hazardous waste treated to a standard of a Class I non-hazardous waste would be assessed at a lower rate as a Class I waste. Language has been added to sec.335.323 as adopted to clarify that a Class I waste treated on site in the same manner to a standard of a Class II waste will be exempted from generation fee assessment altogether. Also, the issue of waste reporting requirements as they relate to fee assessments was the subject of comments. The concern is that if a quantity of a wastewater stream is reported both before and after treatment, the potential exists to over-report the actual total quantity and initiate both Class I and hazardous fee billings for the same volume of waste. We agree with this concern and have included language in sec.335.323 as adopted to clarify that such duplicative assessment is not intended. It should be noted that existing procedures for resolution of disputed billings should provide a straightforward process for handling any inadvertent billings resulting from incorrect or duplicate reports. The commission is committed as well to analyzing the existing reporting programs and accounting programs to determine whether automated means are available to resolve any inconsistencies between waste reporting and fee revenue requirements. A third comment related to this subject for the purpose of clarifying the obligations for a waste generator whose wastewater stream is received by a publicly-owned treatment facility. Section 335.325 (relating to Industrial Solid Waste and Hazardous Waste Management Fee Assessment) requires that an owner or operator of a waste treatment, storage or disposal facility is liable for a fee for wastes managed on-site, but exempts wastewater facilities permitted under Water Code, Chapter 26. Since a generator contributing wastewater as a retail customer of a publicly-owned treatment facility is not the owner or operator of a facility, there would be no basis for an assessment on the generator. The amendments are adopted under the Health and Safety Code, Chapter 361, as amended by Senate Bill 1201, Acts of the 73rd Legislature, 1993, which provides the Texas Natural Resource Conservation Commission with the authority to establish an industrial solid waste and hazardous waste fee program and implement fee assessments for industrial solid waste and hazardous waste generators, waste management facilities and permit applicants and under Water Code, sec.5.103, which gives the Texas Natural Resource Conservation Commission the authority to adopt any rules necessary to carry out its powers, duties and responsibilities. The sections will implement provisions of Health and Safety Code, sec.361. 013 and sec.sec.361.131-361.134, 361.136, 361.139, and 361.140. sec.335.323. Generation Fee Assessment. (a) An annual generation fee is hereby assessed each generator which generates Class I industrial solid waste or hazardous waste or whose act first causes such waste to become subject to regulation under Subchapter B of this chapter on or after September 1, 1985. These fees shall be deposited in the hazardous and solid waste fee fund. The amount of a generation fee is determined by the total amount of Class I nonhazardous waste or hazardous waste generated during the previous calendar year. The annual generation fee may not be less than $50. The annual generation fee for hazardous waste shall not be more than $50,000 and for nonhazardous waste not more than $10,000. (b) Hazardous wastes subject to the provisions of sec.335.78 of this title (relating to Special Requirements for Hazardous Waste Generated by Conditionally Exempt Small Quantity Generators) and precluded from the quantity determinations of such section shall be considered for the purposes of this subchapter in the total volume of hazardous waste generated and subject to fee assessment. (c) Wastewaters are exempt from assessment under the following conditions: (1) Wastewaters containing hazardous wastes which are designated as hazardous solely because they exhibit a hazardous characteristic as defined in 40 Code of Federal Regulations, Part 261, Subpart C, relating to characteristics of hazardous waste, and are rendered nonhazardous by neutralization or other treatment on-site in totally enclosed treatment facilities or wastewater treatment units for which no permit is required under sec.335.2 of this title (relating to Permit Required) or sec.335.41 of this title (relating to Purpose, Scope, and Applicability) are exempt from the assessment of hazardous waste generation fees. (2) Wastewaters classified as Class I industrial solid wastes because they meet the criteria for a Class I waste under the provisions of sec.335.505 of this title (relating to Class I Waste Determination) and are treated on-site in totally enclosed treatment facilities or wastewater treatment units for which no permit is required under sec.335.2 of this title (relating to Permit Required) or sec.335. 41 of this title (relating to Purpose, Scope, and Applicability) and no longer meet the criteria for a Class I waste are exempt from the assessment of waste generation fees. (3) These exemptions or adjustments in fee assessment in no way limit a generator's obligation to report such waste generation or waste management activity under any applicable provision of this chapter. (4) A wastewater stream treated to meet a different waste classification is subject to only one assessment under this section. (d) Wastes generated in a removal or remedial action accomplished through the expenditure of public funds from the hazardous and solid waste remediation fee fund shall be exempt from any generation fee assessed under this section. (e) Wastes which are recycled shall be exempt from any generation fee assessed under this section. (f) Generation fees are to be assessed according to the following schedule: (1) hazardous waste: [graphic] (2) nonhazardous waste: [graphic] (g) Any claim of exemption from or adjustment to the assessment of a generation fee under this section must be made in writing to the executive director prior to the due date of the assessment. sec.335.325. Industrial Solid Waste and Hazardous Waste Management Fee Assessment. (a) A fee is hereby assessed on each owner or operator of a waste storage, processing or disposal facility, except as provided in subsections (b)-(e) of this section. A fee is assessed for hazardous wastes which are stored, processed, disposed, or otherwise managed and for Class I industrial wastes which are disposed at a commercial facility. For the purpose of this section, the storage, processing or disposal of hazardous waste for which no permit is required under sec.335.2 of this title (relating to Permit Required) or sec.335.41 of this title (relating to Purpose, Scope, and Applicability) is not subject to a hazardous waste management fee. (b) A fee imposed on the owner or operator of a commercial hazardous waste storage, processing or disposal facility for hazardous wastes which are generated in this state and received from an affiliate or wholly owned subsidiary of the commercial facility, or from a captured facility, shall be the same fee imposed on a noncommercial facility. For the purpose of this section, an affiliate of a commercial hazardous waste facility must have a controlling interest in common with that facility. (c) The storage, processing or disposal of industrial solid waste or hazardous wastes generated in a removal or remedial action accomplished through the expenditure of public funds from the hazardous and solid waste remediation fee fund shall be exempt from the assessment of a waste management fee under this section. (d) A fee shall not be imposed on the owner or operator of a waste storage, processing or disposal facility for the storage of hazardous wastes if such wastes are stored within the time periods allowed by and in accordance with the provisions of sec.335.69 of this title (relating to Accumulation Time). (e) A fee may not be imposed under this section on the operation of a facility permitted under the Water Code, Chapter 26, or the federal National Pollutant Discharge Elimination System program for wastes treated, processed or disposed of in a wastewater treatment system that discharges into surface waters of the state. For the purpose of this section, the management of a hazardous waste in a surface impoundment which is not exempt from assessment under this subsection will be assessed the fee for processing under subsection (j) of this section. (f) The waste management fee authorized under this section shall be based on the total weight or volume of a waste except for wastes which are disposed of in an underground injection well, in which case the fee shall be based on the dry weight of the waste, measured in dry weight tons (dwt), as defined in sec.335.322 of this title (relating to Definitions) and sec.335.326 of this title (relating to Dry Weight Determination). (g) The hazardous waste management fee for wastes generated in this state shall not exceed $40 per ton for wastes which are landfilled. (h) The operator of a waste storage, processing or disposal facility receiving industrial solid waste or hazardous waste from out-of-state generators shall be assessed the fee amount required on wastes generated in state plus an additional increment to be established by rule, except as provided in subsection (k) of this section. (i) for the purposes of subsection (j) of this section, energy recovery means the burning or incineration of a hazardous waste fuel and fuel processing means the handling of a waste fuel, including storage and blending, prior to its disposal by burning. (j) Except as provided in subsections (k)-(p) of this section, waste management fees shall be assessed according to the following schedule: (1) Hazardous Waste. [graphic] (2) Class I Non-hazardous Waste. [graphic] (k) For wastes which are generated out of state, the fee will be that specified in subsection (j) of this section, except that the fee for the storage, processing, incineration and disposal of hazardous waste fuels shall be the same for wastes generated out of state and in state. (l) Except as provided in subsection (m) of this section, only one waste management fee shall be paid for a waste managed at a facility. In any instance where more than one fee could be applied under this section to a specific volume of waste, the higher of the applicable fees will be assessed. (m) A fee for storage of hazardous waste shall be assessed in addition to any fee for other waste management methods at a facility. No fee shall be assessed under this section for the storage of a hazardous waste for a period of less than 90 days as determined from the date of receipt or generation of the waste (or the effective date of this section). The fee rate specified in the schedule under subsection (j) of this section shall apply to the quantity of waste in any month which has been in storage for more than 90 days or the number for which an extension has been granted under sec.335.69 of this title (relating to Accumulation Time). (n) A facility which receives waste transferred from another facility shall pay any waste management fee applicable under this section and shall not receive credit for any fee applied to the management of the waste at the facility of origin. (o) The fee rate for incineration of aqueous wastes containing 5.0% or less of total organic carbon will be 10% of the fee for incineration under the schedule in subsection (j) of this section. (p) A commercial waste disposal facility receiving solid waste not subject to assessment under this section shall pay any assessment due under Chapter 330, Subchapter P of this title (relating to Fees and Reports). No fee for disposal of a solid waste under Chapter 330, Subchapter P, shall be assessed in addition to a fee for disposal under this section. sec.335.326. Dry Weight Determination. (a) The method of calculating the dry weight of each waste stream subject to assessment under sec.335.325 of this title (relating to Industrial Solid Waste and Hazardous Waste Management Fee Assessment) shall be determined initially and at any time the waste stream undergoes a significant change in water content using the appropriate method(s) as specified in this section. Determinations shall be made from a representative sample collected by grab or composite. Collection methods and sample preservation shall be by methods to minimize volatilization. (1) Wastes which contain suspended solids greater than or equal to 15% of the sample on a weight basis shall have the dry weight determination calculated using the method specified in Appendix I in sec.335.332 of this title (relating to Appendices I and II). (2) Aqueous-based wastes which contain suspended solids less than 15% of the sample by weight basis and which contain a single liquid phase shall have the dry weight determination calculated using Standard Methods for the Examination of Water and Wastewater, 15th Edition; Method 209A; pages 92-93 or equivalent method in later editions. (3) Organic-based wastes which contain suspended solids less than 15% of the sample by weight and which contain a single liquid phase shall have the dry weight determination calculated using: (A) 1981 Annual Book of ASTM Standards, Part 30; Method E203, pages 803-812 or equivalent method in later editions; or (B) The method specified in Appendix II in sec.335. 332 of this title (relating to Appendices I and II). (4) Wastes which do not meet any of the criteria specified in paragraphs (1)- (3) of this subsection shall have the dry weight determination calculated using: (A) The 1981 Annual Book of ASTM Standards, Part 23; Method D96, pages 64-81 or equivalent method in later editions; or (B) The method specified in Appendix II in sec.335.332 of this title (relating to Appendices I and II); or (C) The 1981 Annual Book of ASTM Standards, Part 23; Method D95, pages 59-63 or equivalent method in later editions. Method D96 determines the water and sediment content of the sample. The calculations shall be modified to determine only the water content. (5) The method for calculating the dry weight shall be that method specified in Appendix I in sec.335.332 of this title (relating to Appendices I and II) or an alternate method selected by the generator pursuant to sec.335.327 of this title (relating to Alternate Methods of Dry Weight Determination), if the waste cannot be analyzed by one of the other required methods of this section due to interfering constituents. Documentation identifying the method of analysis and describing the interference shall be maintained by the generator. (b) Wastes containing free liquids which are designated for disposal in a landfill and must be solidified prior to disposal shall have the dry weight determination made on the waste, prior to the addition of the solidification agent. (c) For purposes of a fee assessed under sec.335.325 of this title (relating to Industrial Solid Waste and Hazardous Waste Management Fee Assessment), the dry weight of a waste disposed in an underground injection well, to which brine, inorganic salts, or other authorized agents are added to maintain density control to assure compliance with no-migration requirements of 40 Code of Federal Regulations, 148, Subpart C, shall be determined prior to the addition of the agent. No solid waste, as defined by the Health and Safety Code, sec.361. 003(37), may be excluded from the determination of dry weight under this subsection. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 26, 1994. TRD-9435237 Mary Ruth Holder Director, Legal Division Texas Natural Resource Conservation Commission Effective date: February 16, 1994 Proposal publication date: November 9, 1993 For further information, please call: (512) 239-6087 TITLE 34. PUBLIC FINANCE Part IV. Employees Retirement System of Texas Chapter 81. Insurance 34 TAC sec.sec.81.1, 81.3, 81.5, 81.7 The Employees Retirement System of Texas (ERS) adopts amendments to sec.sec.81.1, 81.3, 81.5, and 81.7. Sections 81.1, 81.5, and 81.7 are adopted with changes to the proposed text as published in the December 21, 1993, issue of the Texas Register (18 TexReg 9838). Section 81.3 is adopted without changes and will not be republished. These amendments are justified by updating the rules to reflect the program conversion from a carrier insured health plan to a plan of health coverage fully self-insured by the ERS; clarifying when health and other insurance coverages begin for eligible newborn children, newborn grandchildren, and other added dependents; and making several technical corrections to the rules. The amendments will function by improving explanation of the terms of coverage regarding ERS members and their dependents, particularly with regard to newborn children, newborn grandchildren, and other dependents added to coverage under the insurance program. The law firm of Akin, Gump, Strauss, Hauer & Feld, L.L.P. submitted comments concerning sec.81.1. The firm suggested changing the wording under the definition of "Self-insured health plan" in order to clarify the meaning that the ERS does not exclude HMOs from bidding on administering the state's health plan. The ERS agreed with this suggestion and reworded the definition. The amendments are adopted under the Insurance Code, Article 3.50-2, sec.4, which provides the Board of Trustees of the ERS with the authority to promulgate all rules, regulations, plans, procedures, and orders reasonably necessary to implement and carry out the purposes and provisions of the Texas Employees Group Insurance Benefits Act. sec.81.1. Definitions. The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise. AD&D-Accidental death and dismemberment. Board or trustee -The board of trustees of the Employees Retirement System of Texas. Committee or GBAC-The Group Benefits Advisory Committee as established by the Act, sec.18. Evidence of insurability-Such evidence required by a qualified carrier for approval of coverage or changes in coverage pursuant to the rules of sec.81.7(f) of this title (relating to Enrollment and Participation). HMO-A health maintenance organization approved by the board to provide health care benefits to eligible participant, in the program in lieu of participation in the program's self-insured health plan. ORP-The Optional Retirement Program as provided in the Government Code, Chapter 830. Preexisting condition -Any physical or mental condition, including pregnancy, for which the participant received medical advice or was treated by a practitioner during the six-month period immediately preceding the effective date of the participant's coverage, excluding treatment of a medical condition resulting from congenital or birth defects. However, if the evidence of insurability requirements set forth in sec.81.7(f) must first be satisfied, the six-month period for purposes of determining the preexisting conditions exclusion will be the six-month period immediately preceding the date of the employee's completed application for coverage. Program-The Texas Employees Uniform Group Insurance Program as established by the board. Self-insured health plan-That plan of health coverage fully self-insured by the Employees Retirement System of Texas and administered by a qualified carrier or HMO. TRS-The Teacher Retirement System of Texas. sec.81.5. Eligibility. (a)-(c) (No change.) (d) Dependents of employees and retirees. The dependents of an employee or retiree are eligible for coverage on the same day that the employee or retiree becomes eligible. A newly acquired dependent is eligible for coverage on the date the individual becomes a dependent of a covered employee or retiree. The employee or retiree must be enrolled for a particular coverage before the employee's or retiree's dependents are eligible for that type of coverage. A newborn natural child or eligible newborn grandchild is covered automatically on date of birth. A retiree's dependents are eligible for dependent life insurance coverage only if that coverage was in effect the day before the retiree became eligible for retiree life insurance; however, where the retiree was precluled from adding dependent life coverage because eligible dependents were either active employees or covered as dependents of an active employee, the retiree may add dependent life coverage upon an eligible dependent's termination of employment other than by retirement. The request to add this coverage must be submitted within 30 days following the date the dependent terminates employment other than by retirement. A dependent may not be simultaneously covered for basic term life and dependent term life. A family member who is covered as an employee or retiree is not eligible to be covered as a dependent in the program. A dependent may not be covered by more than one employee or retiree for the same coverage. Double coverage is not permitted for any participant in the program. (e)-(f) (No change.) (g) Disability retirement. An applicant who is approved for disability retirement is entitled to retiree insurance coverages as provided in sec.81.7(c) of this title (relating to Enrollment and Participation). An ORP participant granted ORP disabled retiree status in the program, as established by the disability test used by the system, is eligible to remain in the program for the amount of time the person would be eligible for benefits had retirement coverages been under the Teacher Retirement System of Texas. Initial or continued eligibility for insurance coverage for an ORP disabled retiree will be determined by the system under the following provisions. (1)-(2) (No change.) (3) The effective date of coverage for an ORP disabled retiree in the program is the first of the month following the date the application for ORP disabled retiree status in the program is received by the system, or the first of the month following the date employment is terminated, whichever is later. (h) Former members of the legislature. On application to the trustee and on arrangement for the payment of contributions, a person who has at least eight years of creditable legislative service, as defined in the Government Code, sec.812.002, on ending his or her service in the legislature, continues to be eligible for participation in the program under the Act. Except as provided in this section, former members of the legislature will be subject to the same eligibility rules and effective dates that apply to active members of the legislature. (i) Former employees of the legislature. On application to the trustee and on arrangement for the payment of contributions, a person who has at least ten years of creditable service in the system, as defined in the Government Code, sec.812. 003, as an employee of the legislature, on ending his or her service for the legislature, continues to be eligible for participation in the program under the Act. Except as provided in this section, a former legislative employee will be subject to the same eligibility rules and effective dates that apply to an active employee of the State of Texas. (j) Continuation of health and dental coverages only for certain spouses and dependent children of employees/retirees, and for certain terminating employees, their spouses, and dependent children (as provided by the Consolidated Omnibus Budget Reconciliation Act, Public Law 99-272). (1)-(2) (No change.) (3) An employee, spouse, or dependent child determined by the Social Security Administration to have been disabled on the date the employee's employment terminated may have continuation health and dental coverages extended up to an additional 11 months, for a total of 29 months. Notification of the Social Security Administration's determination must be received by the system before the end of the original 18 months of continuation coverage. Continuation coverage will be canceled the month that begins more than 30 days after the date the Social Security Administration determines that the participant is no longer disabled. (4)-(9) (No change.) sec.81.7. Enrollment and Participation. (a) Full-time employees and their dependents. (1)-(3) (No change.) (4) Unless not in compliance with Chapter 85 of this title (relating to Flexible Benefits), a newborn natural child or eligible newborn grandchild will be covered immediately and automatically from the date of birth in the health plan in effect for the employee or retiree. (A) If there are no other dependents covered at the time of birth, the newborn natural child or eligible newborn grandchild will be automatically covered in the same health plan in which the employee or retiree is then covered. To continue coverage for more than 30 days after the date of birth, an, application for health coverage must be submitted within 30 days after the date of birth. (B) If health coverage for dependent children was already in effect, an application to add a subsequent newborn natural child or eligible newborn grandchild must be completed before verification of coverage for the newborn dependent will be provided to the health carrier. (5) The effective date of a newborn natural child's or eligible newborn grandchild's life and AD&D insurance will be the 14th day after the date of birth, unless the newborn natural child or eligible newborn grandchild is then confined to a hospital or other institution for medical care; in which case, the newborn natural child or eligible newborn grandchild's life and AD&D insurance coverage will become effective on the day after the day the newborn natural child or eligible newborn grandchild is released from the hospital or institution. The effective date of all other eligible dependents' life and AD&D insurance coverages will become effective as stated in paragraph (3) of this subsection, unless the dependent is confined in a hospital or other institution for medical care at the date of eligibility; in which case, the life and AD&D insurance coverage will become effective on the day after the lay the dependent is released from the hospital or institution. (6) The effective date of self-insured health plan coverage for an employee's or retiree's dependent, other than a newborn natural child or eligible newborn grandchild, will be as stated in paragraph (3) of this subsection, unless the dependent is confined in a hospital or other institution for medical care at the date of eligibility; in which case, the self-insured health plan coverage will be effective on the day after the day the dependent is released from the hospital or institution. (b)-(d) (No change.) (e) Special rules for additional or alternative coverages. (1)-(3) (No change.) (4) An employee, retiree, or other eligible participant in the Uniform Group Insurance Program enrolled in an HMO, whose contract is not renewed for the next fiscal year will be eligible to make one of the following elections: (A) (No change.) (B) enroll in the self-insured health plan without evidence of insurability by completing an application during the annual limited enrollment period, if the participant is eligible to enroll in another approved HMO. The preexisting conditions exclusion will apply, as defined in subsection (g) of this section. The effective date of the change in coverage for the employee/retiree shall be September 1. Eligible dependents shall be subject to evidence of insurability requirements. The preexisting conditions exclusion will apply as defined in subsection (g) of this section. The effective date of coverage for dependents may be either September 1 or the first day of the month following the date approval is received by the employing agency; (C) enroll in the self-insured health plan without evidence of insurability by completing an application during the annual limited enrollment period, if the participant is not eligible to enroll in another approved HMO (an approved HMO is not available to the participant). Eligible dependents shall not be subject to evidence of insurability requirements. The preexisting conditions exclusion will not apply except that, if the participant's or dependent's enrollment in the self-insured health plan occurs within 12 months of the initial date of coverage under the current term of employment or retirement, the exclusion will apply for the remainder of such 12-month period. The effective date of the change in coverage will be September 1; or (D) if the participant does not make one of the elections, as defined in subparagraphs (A)-(C) of this paragraph, the participant will automatically be enrolled in the basic plan. Evidence of insurability and preexisting conditions exclusion for the participant and the participant's dependents will apply as referenced in subparagraph (B) of this paragraph. (5) An employee, retiree, or other eligible program participant enrolled in an HMO whose contract is terminated during the fiscal year or which fails to maintain compliance with the letter of agreement will be eligible to make one of the following elections: (A) change to another approved HMO for which the participant is eligible. The effective date of the change in coverage will be determined by the board; (B) enroll in the self-insured health plan without evidence of insurability if the participant is not eligible to enroll in another approved HMO. Application of the preexisting conditions exclusion and the effective date of the change in coverage will be determined by the board; or (C) if a participant is eligible to enroll in another HMO, the board may allow the participant to enroll in the self-insured health plan without evidence of insurability and the preexisting conditions exclusion. The effective date of the change in coverage will be determined by the board. (f) Changes in coverages beyond the first 31 days of eligibility. (1) An employee or retiree who wishes to add or increase coverage, add eligible dependents to the self-insured health plan, or change coverage from an HMO to the self-insured health plan more than 30 days after the initial date of eligibility must make application for approval by providing evidence of insurability acceptable to the system. Unless not in compliance with Chapter 5 of this title (relating to Flexible Benefits), coverage will become effective on the first day of the month following the date approval is received by the employee's agency benefits coordinator or by the system, if the applicant is a retiree or an individual in a direct pay status. If the applicant is an employee in a leave without pay status, it will become effective on the date the employee returns to active duty if the employee returns to active duty within 30 days of the approval letter. If the date the employee returns to active duty is more than 30 days after the date on the approval letter, the approval is null and void; and a new application shall be required. An employee or retiree may withdraw the application at any time prior to the effective date of coverage by submitting a written notice of withdrawal. (2) The evidence of insurability provision applies only to those employees, retirees, or eligible dependents who: (A)-(B) (No change.) (C) enrolled in any coverage under the basic plan and later dropped or were canceled from such coverage, except as provided in subsection (h)(2) and (3) of this section. (3) An employee or retiree who wishes to add eligible dependents to the employee's or retiree's HMO coverage may do so during the annual enrollment period, when a spouse terminates employment, when a dependent loses health coverage or reasons other than voluntary cancellation, when a dependent moves into the service area of the employee's or retiree's HMO, and as provided in paragraph 10 of this subsection, unless not in compliance with Chapter 85 of this title. (4) An employee or retiree, who moves his or her place of residence into an HMO service area, is eligible to apply for coverage on or within the first 30 days after the date of residence in the HMO service area. Coverage will become effective on the first of the month following the date of application. (5) An employee, retiree, COBRA continuant, surviving spouse, TRS annuitant, ORP annuitant, elected state official, former member or employee of the legislature, or judge, who is enrolled in an approved HMO and permanently moves his or her place of residence out of that HMO's service area to a location where the participant is no longer eligible to be enrolled in any approved HMO, will be allowed to enroll in the self-insured health plan and other optional coverages held immediately prior to the date of change in residence. Coverage in the HMO will be canceled on the last day of the month in which the previously described participant moved from the service area, and the coverages in the self-insured health plan will become effective on the day following the day HMO coverage is canceled. The evidence of insurability rule shall not apply in these cases. The preexisting conditions exclusion shall apply if the return to the self-insured health plan occurs within 12 months of the initial date of coverage under the current term of employment, as defined in subsection (g)(3) of this section. (6) When a covered dependent of an employee/retiree permanently moves out of the employee/retiree's HMO service area, the employee/retiree must make one of the following elections, to become effective on the first day of the month following the date the dependent moved out of the employee/retiree's HMO service area: (A) (No change.) (B) change coverage to an HMO for which the employee/retiree and covered dependent are eligible. If there is no HMO for which all are eligible, then the employee/retiree and covered dependent may enroll in the self-insured health plan. The evidence of insurability rule shall not apply. The preexisting conditions exclusion shall apply if the return to the self-inured health plan occurs within 12 months of the initial date of coverage under the current term of employment, as defined in subsection (g)(3) of this section. (7) Persons wishing to change from one HMO to another HMO in the same service area or change from the self-insured health plan to an HMO will be allowed an annual opportunity to do so. Such opportunity will be scheduled prior to September 1 of each year at times announced by the system. The preexisting conditions exclusion and evidence of insurability provision will not apply in these cases. Coverages in the new HMO will be effective September 1. Persons in a declined or canceled status may apply for coverages in an HMO for which they are eligible during the annual limited enrollment period. Coverage in the HMO will be effective September 1. An employee who re-enrolled after the close of the annual opportunity but prior to September 1 of the same calendar year shall have until August 31 of that calendar year to make changes as allowed above to be effective September 1. (8) Participants who are enrolled in the self-insured health plan and do not reside in any HMO service area will be provided an annual opportunity to enroll eligible dependents in dependent health coverage without evidence of insurability. Such opportunity will be scheduled during the annual enrollment period. Coverage will be effective September 1. (9)-(11) (No change.) (g) Preexisting conditions exclusion. The preexisting conditions exclusion shall apply to employees, retirees, and eligible dependents who are enrolled in the self-insured health plan. The exclusion for benefit payments shall apply for a full 12 months from the effective date of coverage for a preexisting condition, as defined in sec.81.1 of this title (relating to Definitions). The preexisting conditions exclusion will not apply to: (1) an eligible newborn natural child or eligible newborn grandchild; (2) (No change.) (3) an individual allowed to return to the self-insured health plan because the individual moves permanently out of an HMO service area except that, if the return to the self-insured health plan occurs within 12 months of the initial date of coverage under the current term of employment, the exclusion will apply for the remainder of the 12-month period for any condition for which the participant received medical advice or was treated by a physician during the six-month period immediately prior to the initial date of coverage under the current term of employment; (4) (No change.) (5) an individual (including previously covered dependents) transferring employment with no break in service from the University of Texas System or the Texas A&M University System to a department in the program. (6) (No change.) (h) (No change.) (i) Continuing coverage in special circumstances. (1) Continuation of health, dental, and optional coverages for terminating employees. A terminating employee is eligible to continue all coverages through the last day of the month in which employment is terminated. (2) Continuation of health, dental, and life coverages for employees in a leave without pay status. An employee in a leave without pay status may continue the types and amounts of health, life, and dental coverages in effect on the date the employee entered that status for a maximum period of up to 12 months. The maximum period may be extended for up to 12 additional months for a total of 24 continuous months, provided the extension is certified by the department to be for educational purposes. During this period, the employee, other than an employee whose leave without pay status is a result of the Family and Medical Leave Act of 1993 (Public Law 103-3), may not change coverage except that, employees in a leave without pay status may: add new dependents, including newborns; reduce or cancel coverage; and make such coverage changes as are permitted during the annual enrollment period as described in subsection (f)(7) of this section. Disability income coverage for an employee in a leave without pay status will be suspended beginning on the first day of the month in which the employee enters the leave without pay status and continuing for those months in which the employee remains in that status. Suspended disability income coverage for an employee returning to active duty from a leave without pay status will be reactivated effective on the first day the employee returns to active duty if the entire period of unpaid leave was certified by the agency as approved leave without pay. The coverages of an employee whose leave without pay status is a result of the Family and Medical Leave Act of 1993 may continue at the same level of benefits and contributions that would have been in place if the employee had not taken the leave. (3) Continuation of health, dental, and life coverages for a former member or employee of the legislature. A former member or employee of the legislature, who is eligible to continue to participate in the program, must notify the system within 30 days after leaving office or employment of the employee's intent to continue the coverage in effect. Coverage will be canceled if a premium is not received within 30 days of the due date. A former member or employee of the legislature is not eligible to continue disability insurance coverage. (4) Continuation of health, dental, and life coverages for a former judge. A former State of Texas judge, who is eligible for judicial assignments and who does not serve on judicial assignments during a period of one calendar month or longer, may continue the types and amounts of coverages, other than disability income, that were in effect during the calendar month immediately prior to the month in which the former judge did not serve on judicial assignments. These coverages may continue for no more than 12 continuous months during which the former judge does not serve on judicial assignments as long as, during the period, the former judge continues to be eligible for assignment. Disability income coverage during the period will be canceled on the first day of the month during which the former judge does not serve on a judicial assignment. To reinstate canceled disability income coverage once service on judicial assignments is resumed, a former judge must submit evidence of insurability acceptable to the system. If approved, disability income coverage will become effective on the first day of the month following the date approval is received by the employing department. (5)-(11) (No change.) This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 28, 1994. TRD-9435410 Charles D. Travis Executive Director Employees Retirement System of Texas Effective date: February 21, 1994 Proposal publication date: December 21, 1993 For further information, please call: (512) 867-3336 TITLE 37. PUBLIC SAFETY AND CORRECTIONS Part VI. Texas Department of Criminal Justice Chapter 157. State Jail Felony Facilities 37 TAC sec.sec.157.1, 157.3, 157.4, 157.11-157.13 The Texas Department of Criminal Justice adopts amendment to sec.sec.157.1, 157.3, 157.4, and 157.11-157.13, concerning designation of regions all allocation of admission to the Texas Department of Criminal Justice State Jail Division, without changes to the proposed text as published in the August 31, 1993, issue of the Texas Register (18 TexReg 5384). Under the Texas Government Code, sec.507.003, as added by Acts of the 73rd Legislature, 1993, the Texas Board of Criminal Justice is required to designate not fewer than nine regions in the state for the purpose of providing regional state jail felony facilities. Under the proposed rule, the state is divided into a total of 13 regions, with the six largest judicial districts (each of which serves a municipality of 400,000 of more) being designated as separate regions. Under the Texas Government Code, sec.507.004(1), as added by Acts of the 73rd Legislature, 1993, the Texas Department of Criminal Justice is required to adopt and enforce a regional allocation policy for the purpose of allocating the number of facilities and beds to each region established under sec.157.3 of this title. The allocation policy adopted by the board will become effective when state jail felony facilities are located in all regions. Under the proposed rules, the board policy allocates state jail felony facility capacity to a region based on the sum of the fixed percentages established by the allocation formula for admissions to the institutional division as adopted by the board in sec.152.3(f) of this title in July 1993 (to be effective September 1, 1993) for the counties located in that region, multiplied by the total number of state jail felony facility beds authorized by the 73rd Legislature, 1993, for construction (22,000). The actual number of facilities and beds allocated to a particular region is equal to the number of beds derived using the formula, with a range of plus or minus 500 beds. Under the Texas Government Code, sec.507.004(2), as added by Acts of the 73rd Legislature, 1993, the Texas Board of Criminal Justice is also required to adopt and enforce an intra-regional allocation policy for each region for the purpose of allocating the number of facilities and beds within a region to the community supervision and corrections departments in that region, unless those departments by their own agreement establish the allocation of beds in the region. The allocation policy adopted by the board or by community supervision and corrections departments within a region, as applicable, will become effective when state jail felony facilities are located in all regions. Under the proposed rule, the Intra-regional allocation policy established by the board allocates state jail felony facility capacity to a community supervision and corrections department based on their proportionate share of the beds allocated to the region in sec.157.12 of this title using the fixed percentage established by the allocation formula for admission to the Institutional division as adopted by the board in sec.152.3(f) of the title in July 1993 (to be effective September 1, 1993) for the county or counties served by the community supervision and corrections department, multiplied by the available capacity for the region as established sec.157.12 of this title. The Intra-regional allocation policy as it applies to a particular region will be in effect only if the community supervision and corrections departments in that region are unable by their own agreement to establish the allocations of beds in the region. The board must receive written notice on or before September 1, 1994, of the Intra-regional allocation policy for a region if one is established by the community supervision and corrections departments by their own agreement. The agreement must be documented in a form to be prescribed by the director of the community justice assistance division. Only one comment was received in response to the proposed rules. The comment, which was received from the firm of Green & McElreath, Certified Public Accountants, noted that one the chart which lists the proposed regional allocation of state jail facilities, the column headed "percentage" actually represents "ratios". The commenter modified the figures in the column to reflect percentage by moving the decimal point and adding "%" of the end of each figure in the column. No change to the rules is being made as a result of the comment. The Board is adopting an allocation policy for state jails based on the percentages established by the allocation formula for admissions to the Institutional Division. In order to be consistent with the language used in 37 TAC sec.152. 3(f), no change is being made to the chart. The new sections are adopted under Government Code, Title 4, Subchapter D, sec.507.003 and sec.507.004 Texas Civil Statutes, which provide the Texas Department of Criminal Justice with the authority to designate regions and promulgate policies for allocation of admissions to the State Jail Division. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 31, 1994. TRD-9435397 Carl Reynolds General Counsel Texas Board of Criminal Justice Effective date: February 21, 1994 Proposal publication date: August 13, 1993 For further information, please call: (512) 463-9693 TITLE 40. SOCIAL SERVICES AND ASSISTANCE Part I. Texas Department of Human Services Chapter 13. Title IV-A Emergency Assistance Program Program Requirements 40 TAC sec.sec.13.101, 13.105, 13.110 The Texas Department of Human Services (DHS) adopts new sec.sec.13.101, 13. 105, and 13.110, concerning overview, eligibility, and service provision, in its new Chapter 13, Title IV-A Emergency Assistance Program. The new sections are adopted without changes to the proposed text as published in the December 24, 1993, issue of the Texas Register (18 TexReg 9921). The justification for the new sections is to establish the Title IV-A Emergency Assistance Program. This program serves child protective services clients with a documented risk of child abuse or neglect or who are at risk of having a child removed from the home as determined by Texas Department of Protective and Regulatory Services caseworkers. DHS adopts the new sections on the basis that an interagency cooperative agreement between DHS and TDPRS will delineate each agency's responsibilities in providing services. The sections will function by making additional services available to help stabilize families with children at risk of abuse or neglect. No comments were received regarding adoption of the new sections. The new sections are adopted under the Human Resources Code, Title 2, Chapters 22 and 34, which provides the department with the authority to administer public assistance and emergency relief programs. The new sections implement the Human Resources Code, sec.22.002 and sec.34.001. This agency hereby certifies that the rule as adopted had been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 31, 1994. TRD-9435413 Nancy Murphy Section Manager, Policy and Document Support Texas Department of Human Services Effective date: March 1, 1994 Proposal publication date: December 24, 1993 For further information, please call: (512) 450-3765 Chapter 19. Long-Term Care Nursing Facility Requirements for Licensure and Medicaid Certification The Texas Department of Human Services (DHS) adopts amendments to sec.sec.19.604, 19.1104, and 19.1807, and adopts new sec.19.1103, concerning Preadmission Screening and Annual Resident Review (PASARR), rehabilitative services system, rate setting methodology, and specialized services, in its Long-Term Care Nursing Facility Requirements rule chapter. Section 19.1103 and sec.19.1807 are adopted with changes to the proposed text as published in the November 23, 1993, issue of the Texas Register (18 TexReg 8664). The amendments to sec.sec.19.604 and 19.1104 are adopted without changes to the proposed text, and will not be republished. The justification for the amendments and new section is to maximize federal Medicaid dollars by providing mental retardation and/or related conditions specialized therapy services through several existing Medicaid programs, including DHS's Goal-Directed Therapy program. The Goal-Directed Therapy program provides physical therapy, occupational therapy, and speech and language pathology services on a prior-approval basis to recipients residing in nursing facilities and receiving Medicaid benefits. In addition, the amendments include changes in reference from the Texas Department of Health to DHS which now administers the Bureau of Long-Term Care. The amendments and new section will function by ensuring that services provided to Medicaid nursing facility recipients are similar to the services provided to the general resident population in nursing facilities. During the public comment period, DHS received comments from Advocacy, Inc.; the Texas Health Care Association; and United Cerebral Palsy of Texas, Inc. A summary of the comments and DHS's response to the comments follow: Comment: Two commenters suggested that DHS adopt sec.19.1103(a) with added language to clarify specialized services and the intent of the section. Also, in reference to this section, one commenter recommended that referrals should not be limited to TXMHMR case managers and that DHS should allow family, staff, and legal representatives to make recommendations for specialized services. Response: DHS agrees and has added the recommended clarifying language and deleted the language that would limit referrals to TXMHMR case managers. Comment: One commenter questioned the removal of the administrative fee for processing claims from sec.19.1104. Response: The intent of this amendment is to prevent possible duplication of payments for services covered in the reimbursement methodology. Staff time and copying costs related to preparation of the Form 4116, State of Texas Purchase Voucher, are covered as part of the nursing facility per diem, which is calculated from the cost report. DHS is adopting this section without changes. In addition to changes resulting from public comments, DHS is adopting sec.19.1807 with a change to include subsection (f) which was inadvertently omitted from the proposal. Subchapter G. Resident Assessment 40 TAC sec.19.604 The amendment is adopted under the Human Resources Code, Title 2, Chapters 22 and 32, which provides the department with the authority to administer public and medical assistance programs; and under Texas Civil Statutes, Article 4413 (502), sec.16, which provides the Health and Human Services Commission with the authority to administer federal medical assistance funds. The amendment implements the Human Resources Code, sec.32.021(c) and sec.32. 024. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 31, 1994. TRD-9435414 Nancy Murphy Section Manager, Policy and Document Support Texas Department of Human Services Effective date: April 1, 1994 Proposal publication date: November 23, 1993 For further information, please call: (512) 450-3765 Subchapter L. Specialized Rehabilitative Services 40 TAC sec.19.1103, sec.19.1104 The new section and amendment are adopted under the Human Resources Code, Title 2, Chapters 22 and 32, which provides the department with the authority to administer public and medical assistance programs and under Texas Civil Statutes, Article 4413 (502), sec.16, which provide the Health and Human Services Commission with the authority to administer federal medical assistance funds. The new section and amendment implement the Human Resources Code, sec.32.021(c) and sec.32.024. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 31, 1994. TRD-9435415 Nancy Murphy Section Manager, Policy and Document Support Texas Department of Human Services Effective date: April 1, 1994 Proposal publication date: November 23, 1993 For further information, please call: (512) 450-3765 Chapter 48. Community Care for Aged and Disabled 1915(c) Medicaid Home and Community-Based Waiver Services for Aged and Disabled Adults Who Meet Criteria for Alternatives to Nursing Facility Care The Texas Department of Human Services (DHS) adopts an amendment to sec.48. 6003 and the repeal of sec.48.6004 without changes to the proposed text published in the November 23, 1993, issue of the Texas Register (18 Tex Reg 8666). The justification for the amendment and repeal is to permit DHS to identify and serve those individuals who choose to live in the community and whose needs cannot be met without the Nursing Facility Waiver. The amendment and repeal will function by placing a cost ceiling on the clients' plan of care, modifying and clarifying some targeting criteria, and deleting Priority One as an eligibility criteria. The department received one comment regarding the adoption of the proposal. Texas Health Care Association commented that some tasks require trained personnel to perform, and those tasks should only be performed under licensed supervision. The department agrees and has addressed these comments in the draft provider manual. 40 TAC sec.48.6003 The amendment is adopted under the Human Resources Code, Title 2, Chapters 22 and 32, which authorizes the department to administer public and medical assistance programs and under Texas Civil Statutes, Article 4413 (502), sec.16, which provide the Health and Human Services Commission with the authority to administer federal medical assistance funds. The amendment implements Human Resources Code sec.22.001 and sec.sec.32.001-32.040. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 31, 1994. TRD-9435394 Nancy Murphy Section Manager, Policy and Document Support Texas Department of Human Services Effective date: March 1, 1994 Proposal publication date: November 23, 1993 For further information, please call: (512) 450-3765 40 TAC sec.48.6004 The repeal is adopted under the Human Resources Code, Title 2, Chapters 22 and 32, which authorizes the department to administer public and medical assistance programs and under Texas Civil Statutes, Article 4413 (502), sec.16, which provide the Health and Human Services Commission with the authority to administer federal medical assistance funds. The repeal implements Human Resources Code sec.22.001 and sec.sec.32.001-32.040. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 31, 1994. TRD-9435395 Nancy Murphy Section Manager, Policy and Document Support Texas Department of Human Services Effective date: March 1, 1994 Proposal publication date: November 23, 1993 For further information, please call: (512) 450-3765 Chapter 79. Legal Services Subchapter Z. Reimbursement Rates for Prosecution of Intentional Program Violations 40 TAC sec.79.2501 The Texas Department of Human Services (DHS) adopts an amendment to sec.79. 2501, concerning rates of reimbursement, in its Legal Services rule chapter, without changes to the proposed text as published in the December 17, 1993, issue of the Texas Register (18 TexReg 9702). The justification for the amendment is to establish payment amounts for contested and uncontested fraud prosection cases involving Aid to Families with Dependent Children (AFDC) program and Food Stamp program benefits. The amendment will function by providing for appropriate reimbursement of county and district attorneys for the costs involved in prosecuting public assistance fraud cases. No comments were received regarding adoption of the amendment. The amendment is adopted under the Human Resources Code, Title 2, Chapters 22 and 33, which provides the department with the authority to administer public assistance and nutritional assistance programs. The amendment implements the Human Resources Code, sec.33.011(e). This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 31, 1994. TRD-9435417 Nancy Murphy Section Manager, Policy and Document Support Texas Department of Human Services Effective date: April 1, 1994 Proposal publication date: December 17, 1993 For further information, please call: (512) 450-3765 Part IV. Texas Commission for the Blind Chapter 171. Cooperative Activities 40 TAC sec.171.3 The Texas Commission for the Blind adopts an amendment to sec.171.3, without changes to the proposed text as published in the December 24, 1993, issue of the Texas Register (18 TexReg 9922). The amendment has been adopted in order to comply with House Bill 7, Article 1, sec.1.06, as passed by the 72nd Texas Legislature, and to comply with the Human Resources Code, sec.41.001, as passed by the 71st Texas Legislature, which revised the list of participating agencies to a memorandum of understanding for services to multiproblem children and youth and incorporated references to the Health and Human Services Commission. The section provides for increased coordination of services to children and sharing of data related to service data and the implementation of a system of community resource coordination groups to coordinate services for all multiproblem children and youth. No comments were received regarding adoption of the amendment. The amendment is adopted under the Human Resources Code, Title 5, Chapter 91, which provides the agency with the authority to negotiate interagency agreements with other state agencies to provide services for individuals who have both a visual disability and another disabling condition so that those multiply disabled individuals may be provided the most beneficial services with the greatest possible economy. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 25, 1994. TRD-9435289 Pat D. Westbrook Executive Director Texas Commission for the Blind Effective date: February 18, 1994 Proposal publication date: December 24, 1993 For further information, please call: (512) 459-2600 Texas Department of Insurance Exempt Filing Notification Pursuant to the Insurance Code, Chapter 5, Subchapter L (Editor's Note: As required by the Insurance Code, Article 5.96 and 5. 97, the Texas Register publishes notices of actions taken by the Department of Insurance pursuant to Chapter 5, Subchapter L, of the Code. Board action taken under these articles is not subject to the Administrative Procedure Act. These actions become effective 15 days after the date of publication or on a later specified date. The text of the material being adopted will not be published, but may be examined in the offices of the Department of Insurance, 333 Guadalupe, Austin.) The Commissioner of Insurance at a public hearing held at 9:00 a.m. on January 27, 1994, under Docket Number 2083, in Room 100 of the Texas Department of Insurance Building, 333 Guadalupe Street in Austin, adopted a staff proposal to repeal Rule II-A-2 in the Farm and Ranch Section and Rule II-A-2 in the Farm and Ranch Owners Section of the Texas Personal Lines Manual (Manual) to eliminate in its entirety the requirement of ten or more acres of land as a qualifying factor for eligibility for Farm and Ranch and Farm and Ranch Owners policies. The Commissioner adopted the staff proposal in lieu of a proposal by the Continental Insurance Companies to amend the two rules to reduce the requirement of ten or more acres of land to three acres as a qualifying factor for eligibility for Farm and Ranch and Farm and Ranch Owners policies. The two proposals were considered at the same time under the same docket number. Notice of both proposals (Reference Number O-1193-31) was published in the December 17, 1993 issue of the Texas Register (18 TexReg 9704). The repeal of the two rules does not change or eliminate the other Manual requirements for property to qualify for coverage under Farm and Ranch and Farm and Ranch Owners policies. The repeal will result in insurers being able to provide farm and ranch coverage and farm and ranch owners coverage for insureds that would otherwise be eligible for this coverage but have less than ten acres. For example, certain farms such as emu and ostrich farms can be successfully operated on less than ten acres. However, because of the ten-acre requirement for farm and ranch coverage and farm and ranch owners coverage, these farms were not eligible for farm and ranch coverage and farm and ranch owners coverage, and because these farms have buildings and equipment that do not qualify the residence for coverage under a homeowner's policy, they also were not eligible for homeowner's coverage. With the repeal of the ten-acre requirement, owners of farm or ranch operations of less than ten acres that also qualify under the other eligibility rules for Farm and Ranch and Farm and Ranch Owners coverage will be able to obtain coverage under the Farm and Ranch and Farm and Ranch Owners policies. The Commissioner has determined that because of other Manual rules that require property to be used for farm and ranch purposes to qualify for coverage under the Farm and Ranch and Farm and Ranch Owners policies there is no reason to continue an acreage requirement if insurers are willing to write these policies on property of less than ten acres. The repeal will result in individual insurers determining as an underwriting matter whether to cover farm and ranch operations of less than ten acres that otherwise qualify for such coverage under the Farm and Ranch or Farm and Ranch Owners policies, rather than the determination being based on a Manual rule prohibition. The Commissioner has jurisdiction of this matter pursuant to the Insurance Code, Articles 5.35, 5.98, 5.101, and 5.96. The two rules repealed by the Commissioner are filed with the Chief Clerk under Reference Number O-1193-31 and are incorporated by reference by Commissioner Order Number 94-0081. Consistent with the Insurance Code, Article 5.96(h), prior to March 1, 1994, the effective date of this action, the Texas Department of Insurance will notify all insurers affected by this action. This notification is made pursuant to the Insurance Code, Article 5.96, which exempts it from the requirements of the Administrative Procedure Act. 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, 1994. TRD-9435386 Linda K. von Quintus-Dorn Chief Clerk Texas Department of Insurance Effective date: March 1, 1994 For further information, please call: (512) 463-6328