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 4. AGRICULTURE Part I. Texas Department of Agriculture Chapter 28. Texas Agricultural Finance Authority: Loan Guaranty Program 4 TAC sec.28.8 The Board of Directors of the Texas Agricultural Finance Authority of the Texas Department of Agriculture (the department) adopts an amendment to sec.28. 8, concerning procedures for participation in the Texas Agricultural Finance Authority (TAFA) Loan Guaranty Program, with changes to the proposed text as published in the January 14, 1994, issue of the Texas Register (19 TexReg 247). Section 28.8(f) is adopted with changes to clarify that, although the appeals process is being deleted, loan guaranty applicants may still re-apply to the program. The amendment is adopted to make the loan guaranty applications process more efficient and consistent with other state loan programs, and to reflect the defeat of the constitutional amendment regarding the loan program on November 2, 1993. The amendment will function by deleting references to the appeals process and by removing specific percentages from the minority provisions. No comments were received regarding adoption of the rule. The amendment is adopted under the Texas Agriculture Code, sec.58.023, which provides the TAFA Board with the authority to adopt rules to establish criteria for eligibility of applicants and lenders under the TAFA Loan Guaranty Program; sec.58.022, which provides the Board with the authority to adopt rules and procedures as necessary for the administration of its programs. sec.28.8. Filing Requirements and Consideration of Applications. (a)-(e) (No change.) (f) Denial of qualified application. If the qualified application is denied by the board, the Authority will notify the applicant and the lender in writing, identifying the reasons for denial. Applicants who have been denied may re-apply to the loan guaranty program. (g)-(h) (No change.) (i) The Authority shall make a good faith effort to provide loan guaranties to businesses owned by minorities and women. 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 April 20, 1994. TRD-9439522 Dolores Alvarado Hibbs Chief Administrative Law Judge Texas Department of Agriculture Effective date: May 11, 1994 Proposal publication date: January 14, 1994 For further information, please call: (512) 463-7583 TITLE 7. BANKING AND SECURITIES Part I. Finance Commission of Texas Chapter 4. Currency Exchange 7 TAC sec.4.6 The Finance Commission of Texas (the Commission) adopts new sec.4.6 concerning exemptions, without changes to the proposed text as published in the March 8, 1994, issue of the Texas Register (19 TexReg 1618). The 73rd Legislature amended the Act, sec.3, specifically subsection (c), to narrow the circumstances under which a discretionary exemption from licensing can be granted by the Banking Commissioner of Texas (the Commission). Pursuant to sec.3(c)(4), however, the exemption is not available to a person engaged in "the business of cashing checks, drafts, or other monetary instruments," a phrase not defined in the Act. Section 4.6 as adopted defines this phrase and will provide the Commissioner, the Banking Department of Texas (the Department) , and the public with the guidance necessary to understand the application of the Act, sec.3(c) and the availability of exemptions thereunder. Subsection (c) of the Act, sec.3, makes clear the legislature's intent that the purchase of goods or services with currency of a country or government other than the United State constitutes "currency exchange" for the purposes of the Act. The Commission is of the opinion that the legislature did not intend that a purchase of goods or services by check, draft, or other monetary instrument denominated in a foreign currency, which is collected or cleared through normal banking channels, should constitute "currency exchange" for the purposes of the Act, because the funds associated with the transaction are already in the banking system and their origin may be readily traced. New sec.4. 6 clarifies this ambiguity. New sec.4.6(b) provides that a retailer, wholesaler, or service provider is deemed to be engaged in "the business of cashing checks, drafts, or other monetary instruments" if, in the 12-month period immediately preceding the filing of an application for exemption, more than 1.0% of such person's gross receipts was derived, directly or indirectly, from fees or other consideration charged, earned, or imputed from cashing checks, drafts, or other monetary instruments. Such a person is not eligible for exemption. New sec.4.6(c) provides an exception to the Act for foreign denominated checks, provided any change given is in the same currency as the check. Repetitive inquiries regarding these types of transactions should diminish. No comments were received regarding adoption of the new section. The new section is proposed under Texas Civil Statutes, Article 350, sec.7, which require that the Commission adopt rules necessary to implement Article 350. 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 April 22, 1994. TRD-9439685 Everette D. Jobe General Counsel Department of Banking Effective date: May 14, 1994 Proposal publication date: March 8, 1994 For further information, please call: (512) 475-1300 Part II. Banking Department of Texas Chapter 10. Trust Companies 7 TAC sec.10.2 The Finance commission of Texas (the Commission) adopts new sec.10.2, establishing requirements applicable to trust companies, regarding the physical location of books and records, without changes to the proposed text as published in the March 8, 1994, issue of the Texas Register (19 TexReg 1620). The Banking Commission is charged with conducting a comprehensive examination of each trust company pursuant to Texas Civil Statutes, Article 342-1103, sec.3. In recent years, issues have arisen regarding whether trust company books and records must be maintained within the State of Texas. This issue has been largely generated by the increasing number of domestic trust companies owned by out-of-state interests, particularly banks and securities firms, that perform or wish to perform centralized data processing functions at locations outside of Texas. The issue is also fueled by the increasing sophistication of electronic networks and the shift to a more integrated national and world economy. New sec.10.2 provides flexibility to businesses regarding data processing and administration in recognition of the cost effectiveness of centralized practices, but serves the fundamental policy of the State of Texas underlying the requirement of domestic incorporation of trust companies conducting business in this state. As adopted, sec.10.2 establishes requirements regarding the types of records that must be maintained within the State of Texas, generally those dealing with corporate activities, and those that must be maintained at the site of account administration, whether inside or outside of Texas, generally those dealing with fiduciary activities, for the reasons stated in the proposed language for sec.10.2 (19 TexReg 1620). Corporate records of a domestic trust company, is itemized in sec.10.2, must be maintained, controlled and available for review by examining personnel at its principal place of business in this state. Fiduciary records of a domestic trust company, as itemized in sec.10.2, must be maintained, controlled and available for review by examining personnel at the location(s) where the actual administration of the accounts takes place. If corporate records and fiduciary records are separated as permitted by sec.10.2 and maintained at two or more locations, examinations may be conducted at each location at the expense of the examined entity. One comment expressing support for sec.10.2 was received from a trust company that would be subject to the rule. However, the trust company that urged a clarification to the effect that corporate records should be permitted to be generated at locations outside of Texas, and certain supporting documentation and other records should be permitted to be maintained electronically or at centralized warehouses so long as they may be retrieved and produced on-site in Texas either physically or via computer terminals. Commenting in favor of the rule was Merrill Lynch Trust Company of Texas. The Department has considered the request for clarification and has elected to not change the proposed text. The rule itself expressly permits maintenance of duplicate records, and storage of noncurrent, supporting documentation is beyond the scope of the rule. The Department also believes that electronic access may meet the requirement of the rule assuming the functional locus of corporate activities remains in Texas. The Department may in the future propose amendments to sec.10.2 based on examination experience under the rule. The new section is adopted under Texas Civil Statutes, Article 342-1106(b), which provide the Commission with the authority to promulgate and adopt general rules and regulations as may be necessary to accomplish the purposes of Chapter XI of the Banking Code, and Texas Civil Statutes, Article 342-113(a) (3), made applicable to trust companies by virtue of Article 342-1102, which authorizes the Commission to promulgate rules and regulations to provide for the preservation of the books and records of trust companies. 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 April 22, 1994. TRD-9439674 Everette D. Jobe General Counsel Department of Banking Effective date: May 14, 1994 Proposal publication date: March 8, 1994 For further information, please call: (512) 475-1300 Chapter 25. Prepaid Funeral Contracts Subchapter B. Regulation of Licenses 7 TAC sec.25.17 The Banking Department of Texas (the Department) adopts an amendment to sec.25.17, concerning the creation and administration of the Prepaid Funeral Guaranty Fund and the composition of the Prepaid Funeral Guaranty Fund Advisory Council. Section 25.17 is adopted with changes to the proposed text as published in the March 8, 1994, issue of the Texas Register (19 TexReg 1621). The changed correct typographical errors. The amendment is sec.25.17 is necessary to accurately and cogently reflect the law regarding prepaid funeral regulation and provide additional safeguards for prepaid funeral benefits consumers. The amendment to sec.25.17 will bring the rule into conformity with legislative amendments to Texas Civil Statutes, Article 548b, sec.8A, effective September 1, 1993; eliminate unnecessary references; and promote consistency in organization and terminology. No comments were received regarding adoption of the rule. The amendment is adopted under Texas Civil Statutes, Article 548b, sec.2 and sec.8A. Section 2 permits the Department to write rules regarding any matter "incidental to the enforcement and orderly administration" of the Act. Section 8A authorizes the Department to prescribe rules to maintain a fund guaranteeing the performance by sellers of prepaid funeral contracts of their obligations to purchasers of such contracts. sec.25.17. Guaranty Fund. (a) Pursuant to Texas Civil Statutes, Article 548b, sec.8A, a guaranty fund is hereby created to guarantee performance by sellers of prepaid funeral services. The fund will be named the prepaid funeral guaranty fund, and will be supervised by an advisory council composed of the following: the Banking Commissioner or the Commissioner's official designee, who will sit as the chairperson of the council; the Attorney General or the Attorney General's official designee; and industry representative appointed by the Finance Commission; and a consumer representative appointed by the Finance Commission. The consumer representative will serve a two-year term beginning on January 1 of an even-numbered year and ending December 31 of the following odd-numbered year. The industry representative will serve a two-year term beginning on January 1 of an odd-numbered year and ending December 31 of the following even-numbered year. Appointments made after January 1 will be deemed to run from January 1 of the even year for the consumer representative, and of the odd year for the industry representative. Neither the industry nor the consumer representative may serve more than two terms. (b) The prepaid funeral guaranty fund will be capitalized as follows: (1) The Texas Department of Banking shall assess and collect from all sellers of trust-funded prepaid funeral benefits $1.00 for each unmatured contract sold during each calendar year beginning with 1993 and will provide a schedule reflecting this rate to all such sellers for use in reporting the number of contracts each has sold. Each seller shall remit its completed schedule together with the amount of its calculated assessment directly to the Department. The rate assessed under this paragraph shall remain at $1.00 for each unmatured contract sold until the fund balance reaches $1 million. (2) Pursuant to Texas Civil Statutes, Article 548b, sec.8A(d), the advisory council may make and administering additional assessments on behalf of the fund as needed from time to time in order to pay claims against the fund when the balance of the fund is not sufficient to pay those claims. (c) The Commissioner may use any earnings from the fund for the expenses of operating, maintaining, and supervising the fund, including the reimbursement of travel expenses incurred by the industry and the consumer representatives pursuant to the travel guidelines applicable to state employees, and for the expenses of providing any other legislatively mandated action with respect to the fund, including but not limited to audits. (d) The advisory council shall meet on a periodic basis as determined by the Commissioner in order to fulfill the requirements of supervising the operation and maintenance of the fund. However, in no event shall the advisory council fail to meet at least once annually. 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 April 22, 1994. TRD-9439691 Everette D. Jobe General Counsel Department of Banking Effective date: May 14, 1994 Proposal publication date: March 8, 1994 For further information, please call: (512) 475-1300 Subchapter B. Regulation of Licenses 7 TAC sec.25.18 The Banking Department of Texas (the Department) adopts an amendment to sec.25.18, concerning definitions applicable to sec.25.19 and sec.25.20. Section 25.18 is adopted with changes to the proposed text as published in the March 8, 1994, issue of the Texas Register (19 TexReg 1622). The changes correct typographical errors. The amendment to sec.25.18 is necessary to accurately and cogently reflect the law regarding prepaid funeral regulation. The amendment brings sec.25.18 into conformity with a legislative amendment to Texas Civil Statutes, Article 548b, sec.8A, effective September 1, 1993, providing for an additional member of the Guaranty Fund Adivisory Council; deleting the definition of "maturity;" and making editorial changes for clarity, accuracy and uniformity. No comments were received regarding adoption of the rule. The amendment is adopted under Texas Civil Statutes, Article 548b, sec.2 and sec.8A. Section 2 permits the Department to write rules regarding any matter incidental to the enforcement and orderly administration of the Act. Section 8A authorizes the Department to prescribe rules to maintain a fund guaranteeing the performance by sellers of prepaid funeral contracts of their obligations to purchasers of such contracts. sec.25.18. Definitions Applicable to sec.25.19 and sec.25.19. The following words and terms, when used in sec.25.19 and sec.25.20, shall have the following meanings, unless the context clearly indicates otherwise. Commissioner-The Banking Commissioner of Texas or the Commissioner's designee. Council or Guaranty Fund Advisory Council-The Prepaid Funeral Contract Guaranty Fund Advisory Council created by Texas Civil Statutes, Article 548b, sec.8A(c), to supervise operation and maintenance of the Prepaid Funeral Contract Guaranty Fund. Department-The Texas Department of Banking. Guaranty Fund-The Prepaid Funeral Contract Guaranty Fund created, operated, and maintained pursuant to Texas Civil Statutes, Article 548b, sec.8A, for the purpose of guaranteeing performance of prepaid funeral contracts. Funeral provider -An individual, firm, partnership, corporation, or association licensed by the Texas Funeral Service Commission to provide funeral services and merchandise in the State of Texas. Non-permit holder -An individual, firm, partnership, corporation, or association that does not hold a permit to sell prepaid funeral benefits in the State of Texas. Permit-A permit to sell prepaid funeral benefits issued by the Commissioner pursuant to Texas Civil Statutes, Article 548b, sec.3. Permit holder-An individual, firm, partnership, corporation, or association that holds a valid permit to sell prepaid funeral benefits in the State of Texas. Prepaid funeral contract-A written contract and written amendments thereto sold by a permit holder to provide prepaid funeral benefits in the State of Texas. Prepaid funeral funds-Those funds paid or collected on prepaid funeral contracts, less retainage but including earnings. Purchaser-An individual who has purchased prepaid funeral benefits in the State of Texas from a permit holder on a written contract. Seized funds-Funds arising from seizures of prepaid funeral funds under the Texas Civil Statutes, Article 548b, sec.4. Seized funds are separate from, and do not become part of, the Guaranty Fund. 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 April 22, 1994. TRD-9439690 Everette D. Jobe General Counsel Department of Banking Effective date: May 14, 1994 Proposal publication date: March 8, 1994 For further information, please call: (512) 475-1300 7 TAC sec.25.19 The Banking Department of Texas (the Department) adopts amendments to sec.25.19, concerning notices regarding the cancellation of a prepaid funeral benefits permit and the selection process for a successor permit holder, with changes to the proposed text as published in the March 8, 1994 issue of the Texas Register (19 TexReg 1623). The changes correct typographical errors. The Department adopts amendments to sec.25.19 to provide greater assurance that successor permittees will provide the same or better funeral benefits to purchasers as they are entitled to under contracts with cancelled permittees and that such services will be provided with minimal expense to the guaranty fund. The amendments to sec.25.19 will permit the Commissioner, in her discretion, to reject all bids received to fulfill obligations of a cancelled permit holder and to combine or group contracts seized for the purposes of bidding or sale. The amendments also permit the Commissioner to solicit bids on seized contracts that were not placed with successor permittees and establish management authority for prepaid funeral contracts and contract funds of a cancelled permit holder. Finally, the amendments make other editorial changes for clarity, accuracy, and uniformity. No comments were received regarding adoption of the amendment. The section is amended pursuant to the Department's rulemaking authority under Texas Civil Statutes, Article 548b, sec.2 and sec.8A. In addition to specific grants of rulemaking authority, sec.2 permits the Department to write rules regarding any matter "incidental to the enforcement and orderly administration" of the Act. Section 8A authorizes the Department to prescribe rules concerning the maintenance of a fund to guarantee performance by sellers of prepaid funeral contracts of their obligations to purchasers thereof. sec.25.19. Notice of Seizure; the Bid Process. (a) Notice to purchasers. Within 30 days of cancellation of a permit to sell prepaid funeral benefits and the seizure of prepaid funeral funds, the Department shall notify those who have purchased prepaid funeral contracts from the cancelled permit holder. The notice shall inform the purchasers of the cancellation and seizure; provide instructions set out in Texas Civil Statutes, Article 548b, sec.4(g); provide an address to which any future payments due under the contracts must be sent; explain how monies can be released from the seized funds prior to selection of a successor permit holder; and explain how the contract may be cancelled should the purchaser wish to cancel it. (b) Bid list. The Department shall maintain a bid list of permit holders who wish to bid for the right to assume the cancelled permit holder's obligations under prepaid funeral contracts and the right to receive the balance of prepaid funeral funds paid or to be paid under those contracts. Upon the request of any permit holder, the Department shall add to or delete from the bid list the permit holder's name. The Department shall purge the list by deleting the names of those whose permits are cancelled or surrendered prior to the consideration of any bid award. (c) Solicitation of bids. Within 60 days after cancelling a permit to sell prepaid funeral benefits, the Department shall notify those on the bid list of the cancellation. The notice shall include the name and address of the cancelled permit holder, the number and aggregate dollar amount of unperformed prepaid funeral contracts, the balance of unearned prepaid funeral funds, and the date by which sealed bid proposals must be submitted to the Department to be considered for the bid award. The notice shall also include instructions as to how eligible potential bidders may inspect the cancelled permit holder's prepaid funeral contract records. The seized contracts will be bid on as a bloc rather than on an individual contract basis, and the Commissioner shall have the discretion to combine or group contracts seized for bidding and sale purposes. (d) Notice to non-permit holder funeral providers. If no permit holder or only one permit holder submits a sealed bid to assume the prepaid funeral obligations, or if no permit holder bidding on the prepaid funeral obligations submits a bid acceptable to the Commissioner, the Department may invite bids from non-permit holder funeral providers located in the same vicinity as the cancelled permit holder. The notice shall include the same information contained in the notice to those on the eligible bid list and, in addition, shall inform the non-permit holder that it must apply for and obtain a permit from the Commissioner to sell prepaid funeral benefits in the State of Texas in the event that it receives the bid award. The Commissioner may solicit bids from non- permit holder funeral providers at the same time as bids are solicited from permit holders under subsection (c) of this section. (e) Solicitation of Bids on Certain Contracts. The Commissioner may also from time to time solicit bids on seized prepaid funeral contracts which were not placed with successor permittees as a result of the original or any subsequent bid solicitations. (f) Selection Criteria. (1) Time of selection. After the deadline has expired for submitting sealed bids, the Commissioner may select a successor to the cancelled permit holder. (2) Criteria for permit holders. If the bidder is a permit holder, the Commissioner shall consider: (A) whether the bidder has demonstrated an ability to properly manage, maintain and account for its own prepaid funeral funds; (B) whether the bidder has properly remedied violations of law cited by the Department in its examination reports; (C) whether the bidder has a history of repeated or continuous violations; (D) whether the bidder has the ability to fulfill the terms of the prepaid funeral contract; (E) whether the bidder poses any other significant regulatory concern; and (F) the amount of money in the cancelled permit holder's prepaid funeral funds, the value of receivables that are due under the contracts of the cancelled permit holder to a successor permit holder, the amount of money offered for the prepaid funeral business, the current or potential claim against the Guaranty Fund, and any other relevant information. (3) Criteria for non-permit holder funeral providers. If the bidder is a non- permit holder funeral provider, the Commissioner shall consider, to the extent applicable, all of the factors listed in subsection (f)(2) of this section and the following: (A) the bidder's general reputation in the community where it is located; (B) whether the bidder's business ability, experience, character and general fitness warrant the confidence of the public; (C) any state or federal regulatory or law enforcement, administrative, or other action taken against the bidder; and (D) the bidder's willingness to obtain a permit from the Commissioner to sell prepaid funeral benefits in the State of Texas and to abide by the statutes and rules governing such permits. (4) Rejection of bids. The Commissioner may reject all bid proposals received pursuant to this section. If all bids are rejected, a new bid proposal may be solicited or, alternatively, the balance of prepaid funeral funds paid or to be paid under the contracts of the cancelled permit holder shall be received into the Guaranty Fund for management by the Guaranty Fund Advisory Council, and the Department shall manage the prepaid funeral contracts; provided, however, that the Commissioner may thereafter solicit additional bid proposals under subsection (e) of this section. (g) Selection of successor. The Commissioner alone shall be responsible for the selection of a successor permit holder under this section. The Commissioner shall make no contract regarding the selection of a successor permit holder that obligates the Guaranty Fund in any way until a vote of the members of the Guaranty Fund Advisory Council approving such obligation has been given in a properly posted open meeting. 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 April 22, 1994. TRD-9439689 Everette D. Jobe General Counsel Department of Banking Effective date: May 14, 1994 Proposal publication date: March 8, 1994 For further information, please call: (512) 475-1300 7 TAC sec.25.20 The Banking Department of Texas (the Department) adopts an amendment to sec.25.20, concerning eligibility guidelines and claims procedures regarding the prepaid funeral guaranty fund, with changes to the proposed text as published in the March 8, 1994, issue of the Texas Register (19 TexReg 1624). The changes correct typographical errors. The Department adopts an amendment to sec.25.20 to provide greater public assurance that guaranty fund monies will be dispersed in accordance with the actual intent of sec.25.20, being to guarantee performance by sellers of prepaid funeral contracts of their obligations to purchasers. The adopted amendments clarify that claims may not be filed against the guaranty fund on contracts purchased prior to its establishment; delete, with one exception, provision for permit holder claims against the guaranty fund; and make other editorial changes for clarity, accuracy, and uniformity. No comments were received regarding adoption of the amendment. The amendment is adopted pursuant to the Department's rulemaking authority under Texas Civil Statutes, Article 548b, sec.2 and sec.8A. In addition to specific grants of rulemaking authority, sec.2 permits the Department to write rules regarding any matter "incidental to the enforcement and orderly administration" of the Act. Section 8A authorizes the Department to prescribe rules concerning the maintenance of a fund to guarantee performance by sellers of prepaid funeral contracts of their obligations to purchasers thereof. sec.25.20. Guaranty Fund Claims Filing Procedures and Eligibility for Payment Standards. (a) Who may make a claim. Unless expressly precluded from making a claim against the Guaranty Fund in subsection (b) of this section, the following parties or their heirs, successors, and assignees may make a claim against the Guaranty Fund: (1) purchasers of prepaid funeral benefits from permit holders; and (2) those selected to assume obligations and liabilities of a cancelled permit holder in the event they assumed those obligations and liabilities under a contract that expressly authorizes them to make a claim against the Guaranty Fund. (b) Who cannot make a claim. All other claims, including claims submitted by the following parties and their heirs, successors, and assignees, will be denied: (1) those who hold a contract that was purchased prior to August 31, 1987, the date of origin of the Guaranty Fund; (2) those who purchased prepaid funeral benefits from a vendor that did not hold a permit to sell prepaid funeral benefits at the time of sale; and (3) those who purchased prepaid funeral benefits under a plan that does not pay assessments to the Guaranty Fund, such as the plan litigated in Sexton v. Mount Olivet Cemetery Association, 720 S.W. 2d 129 (Tex. App. -- Austin 1986, no writ) (specifically including, but not limited to, any prepaid funeral benefits purchased from Mount Olivet Cemetery Association). (c) Purchaser claims. Claims by individual purchasers will be handled on a case by case basis. (d) Claims approval process and right to reconsideration. (1) Delegation of authority to commissioner. The Guaranty Fund Advisory Council may delegate to the Commissioner the authority to settle and determine all claims against the Guaranty Fund up to such amount and with such restrictions as the Council may from time to time determine. These limits and restrictions shall be reflected in the minutes of the meetings of the Council. (2) Appeals to the Guaranty Fund Advisory Council. Unless an appeal is expressly waived in a settlement agreement, any action by the Commissioner approving, modifying, or denying claims against the Guaranty Fund may be appealed to the Guaranty Fund Advisory Council by submitting a request for review to the Council within 30 days of receipt of notice of the Commissioner's action; otherwise the action of the Commissioner shall be final and not subject to review. Such request shall be addressed to the Council in care of the Commissioner and filed with the Commissioner on or before the close of business on the last day of the 30-day period. (3) Hearings on claims. Either the Commissioner or the Guaranty Fund Advisory Council may direct that an administrative hearing be held on any claim in order to clarify the facts or law pertinent to its disposition. No claim shall be reduced or denied without affording the claimant an opportunity for a hearing; provided, however, that if a hearing has been held or offered by the Commissioner and waived by the claimant, the Council need not offer another opportunity for a hearing. All hearings shall be conducted in compliance with the Administrative Procedure Act, Texas Government Code, sec.2001.001, et seq. (e) Claimant's filings. A claimant shall file with the Department a completed claim form prescribed by the Department together with the following documents and information: (1) a copy of the prepaid funeral contract and any amendments thereto; (2) evidence of the status of the account, including whether the account is paid in full, the amount owed thereon and whether payments are current or delinquent; (3) a statement containing the name of the seller and the date of purchase; (4) a certified copy of the death certificate of the person designated by the purchaser to receive the funeral benefits under the contract, if applicable; (5) a notarized statement setting forth any special circumstances that may bear on the claim; and (6) any other information that may be pertinent to the claim that is requested by the Department. (f) Claims of permit holders. With respect to a claim submitted by a permit holder: (1) the Department shall furnish the Guaranty Fund Advisory Council at its request with all information pertinent to the claim that is contained in the Department's files or that may be obtained from the claimant under subsection (e) of this section; and (2) the Department shall provide the Council with the Department's recommendations and analysis of the claim. 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 April 22, 1994. TRD-9439688 Everette D. Jobe General Counsel Department of Banking Effective date: May 14, 1994 Proposal publication date: March 8, 1994 For further information, please call: (512) 475-1300 TITLE 22. EXAMINING BOARDS Part XX. Texas Board of Private Investigators and Private Security Agencies Chapter 421. General Provisions 22 TAC sec.421.1 The Texas Board of Private Investigators and Private Security Agencies adopts an amendment to sec.421.1, with changes to the proposed text as published in the January 14, 1994, issue of the Texas Register (19 TexReg 257). The Board has determined that the amendment is necessary to regulate individuals who are corresponding with the agency on behalf of a licensed company. The rule will require that persons corresponding with the agency be appointed by the licensed company and be registered. No comments were received regarding adoption of the rule. The amendment is adopted under Texas Civil Statutes, Article 4413(29bb), which provide the Texas Board of Private Investigators and Private Security Agencies with the authority to promulgate all rules and regulations necessary in carrying out the provisions of the Act. sec.421.1. Notice of Change or Fact. Whenever the Act or board rules require a notice to the board of any change or fact, the notice shall be in writing and shall contain: (1) licensee's name and license number; (2) details of the change or fact; (3) the effective date of the change or fact; and (4) the signature of the licensee, manager, branch manager or a person who is currently registered as an employee of the licensee who has been authorized by the licensee, manager, or branch manager to sign notices of any change or fact. (A) The licensee shall notify the Board in writing within 14 days of the name and date of appointment of any person authorized to sign notices of change or fact and furnish the board with a signature card of the person authorized to sign notices of change or fact. (B) No licensee may have more than two persons who are authorized to sign notices of change or fact for each principal place of business or branch office. 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 April 21, 1994. TRD-9439602 Clema D. Sanders Executive Director Texas Board of Private Investigators and Private Security Agencies Effective date: May 13, 1994 Proposal publication date: January 14, 1994 For further information, please call: (512) 463-5545 TITLE 28. INSURANCE Part I. Texas Department of Insurance Chapter 7. Corporate and Financial Regulation Subchapter A. Examination and Corporate Custodian and Tax 28 TAC sec.7.87 The Texas Department of Insurance adopts new sec.7.87, concerning the filing of audit reports of risk pools created under the Local Government Code, Chapter 172, Texas Political Subdivisions Uniform Group Benefits Program. The new section is adopted with changes to the proposed text as published in the December 21, 1993, issue of the Texas Register (18 TexReg 9822). Local Government Code, Chapter 172, Texas Political Subdivisions Uniform Group Benefits Program, authorizes political subdivisions to create risk pools to provide health and accident coverage for the political subdivision's officials, employees, retirees and their dependents; requires the trustees of a risk pool to have the records of the risk pool audited annually and to file the audit report with the Texas Department of Insurance. The new rule will provide guidance to political subdivisions in filing the audit reports and provide notice to the public of the availability of the audit reports. The new rule requires the auditor's report of the risk pool to be filed with the Texas Department of Insurance within six months of the end of the fiscal year of the risk pool. The Texas Department of Insurance will make the audit reports available for public inspection and copying. The rule was changed to reflect the new name of the division that is to receive the reports and make them available to the public. No comments were received regarding adoption of the section. The new section is adopted under the authority of Local Government Code, sec.172.010(d) and Insurance Code, Article 1.03A. Local Government Code, sec.172. 010(d), authorizes the commissioner of insurance to adopt rules governing the time and manner for filing audit reports of risk pools created under the Local Government Code, Chapter 172, Texas Political Subdivisions Uniform Group Benefits Program. The Insurance Code, Article 1.03A, authorizes the commissioner to determine rules for general and uniform application for the conduct and execution of the duties and functions of the department. sec.7.87. Risk Pool Audits. (a) The Local Government Code, Chapter 172, Texas Political Subdivisions Uniform Group Benefits Program, authorizes certain political subdivisions to create risk pools to provide health and accident coverage for political subdivision officials, employees, and retirees. (b) The Local Government Code, sec.172.010, requires that an independent auditor perform an annual audit of a risk pool, and that the trustees of the risk pool file a copy of the independent auditor's report with the Texas Department of Insurance. (c) The independent auditor's report of the risk pool required by the Local Government Code shall be filed within six months of the end of the fiscal year of the risk pool with the Financial Monitoring Division, Financial Program, Texas Department of Insurance, P.O. Box 149104, MC 303-1A, Austin, Texas 78714- 9104. (d) The risk pool audit reports can be inspected during regular business hours at the Texas Department of Insurance, Financial Monitoring Division, 333 Guadalupe, Austin, Texas. (e) Persons desiring copies of such audit reports can obtain copies from the Texas Department of Insurance, Financial Monitoring Division, Financial Program, P.O. Box 149104, MC 303-1A, Austin, Texas 78714-9104. 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 April 23, 1994. TRD-9439711 J. D. Powers Legal Counsel to the Commissioner Texas Department of Insurance Effective date: May 14, 1994 Proposal publication date: December 21, 1993 For further information, please call: (512) 463-6327 TITLE 30. ENVIRONMENTAL QUALITY Part I. Texas Natural Resource Conservation Commission Chapter 305. Consolidated Permits Subchapter C. Application for Permit 30 TAC sec.305.50 The Texas Natural Resource Conservation Commission (TNRCC) adopts an amendment to sec.305.50, concerning application for permit. Section 305.50 is adopted with changes to the proposed text as published in the November 9, 1993, issue of the Texas Register (18 TexReg 8152). The amendment is adopted in order to clarify certain hazardous waste permit application requirements regarding financial information and assurances stemming from provisions of the Texas Solid Waste Disposal Act, Chapter 361, Texas Health and Safety Code, Annotated (Vernon Pamphlet 1993), enacted by the legislature in Senate Bill Number 1099, 72nd Legislature, 1991, and in Senate Bill Number 124, 73rd Legislature, 1993. Comments on the proposed rules were received from Akin, Gump, Strauss, Hauer & Feld, L.L.P., from Crain, Caton & James, and from the Texas Chemical Council. One commenter expressed some concern over proposed sec.305.50(4)(B) (vii) with regard to the clarity of its meaning. The proposed language stated "(vii) for an applicant who cannot or chooses not to otherwise demonstrate sufficient financial resources under this subparagraph and who must or chooses to obtain additional financing through a new stock offering or new debt issuance for facility expansion, capacity expansion, or new construction; and for safe operation, proper closure, and adequate liability coverage, the following information:" This commenter suggested changes to the wording which would carry out the perceived intent of the proposal, which was that applicants who demonstrate compliance with the requirements of proposed sec.305.50(4)(B)(i)-(v), would not have to additionally demonstrate compliance with proposed sec.305.50(4)(B)(vii). We agree that such was the intent of the proposal and therefore have adopted the commenter's suggested clarifying wording changes. The adopted rule now states, under sec.305.50(4)(D)(vii), that "if an applicant cannot or chooses not to demonstrate sufficient financial resources through submittal of the financial documentation specified in clauses (i)-(v) of this subparagraph and who must or chooses to obtain additional financing through a new stock offering or new debt issuance for facility expansion, capacity expansion, or new construction; and for safe operation, proper closure, and adequate liability coverage, the following information:" We agree with the commenter that this change more clearly expresses the TNRCC's intent, and it makes the rule more easily understood. Another commenter stated, with reference to proposed sec.305.50(4)(B)(i), that it appeared the Commission was attempting to make financial decisions that strictly are business decisions, with no impact on the health and welfare of the citizens of the State. With regard to this comment, it should be noted that the Commission is merely requiring applicants to document and submit information demonstrating how they meet the statutory requirements of sec.361. 085(a) of the Texas Solid Waste Disposal Act, Chapter 361, Texas Health and Safety Code, Annotated (Vernon Pamphlet 1993). This commenter expressed concern that the proposed rule language, if adopted, would restrict the flexibility of a permittee to alter his or her financial plans, and requested that the rules be revised to explicitly authorize applicants to specify alternative financing mechanisms to provide construction and start-up funds. The commenter maintained that an applicant should not be required to specify, to the exclusion of other financing arrangements, the method selected to obtain funding. We believe that no change is necessary to the proposed rule language, in this regard. The rules are structured to require an applicant to submit a reasonable and obtainable financial plan. Once demonstrated that financing is obtainable, the rules do not restrict the permittee from altering his or her financial arrangements, subject to any applicable permit and/or permit application amendment or modification requirements. Two commenters requested changes to proposed sec.305.50(4)(B)(vii)(I), which would have required applicants choosing to demonstrate financial assurance through a new stock offering or new debt issuance to submit letters of opinion from financial experts certifying, among other things, that financing is obtainable within 180 days from permit issuance. The commenters suggested that the rule provide that this certification be required within 180 days from the time that the permit becomes final and not subject to further appeal. We agree with this suggested revision, and the adopted rule, under sec.305.50(4)(D)(vii) (I), includes the phrase "...certify that financing is obtainable within 180 days of final administrative and judicial disposition of the permit application." These two commenters on proposed sec.305.50(4)(B)(vii)(I) raised an issue related to permit finality and the requirement for submittal of time schedules for securing financing. We agree that it is appropriate to condition the requirement for this submittal upon permit finality, and have included the following language under sec.305.50(4)(D)(vii)(I): "...and include the time schedule contingent upon permit finality for securing the financing." A comment was received concerning provisions for certain alternative financial capability demonstrations pursuant to Senate Bill Number 124, 73rd Legislature, 1993. Under this bill, an applicant is deemed to have demonstrated that sufficient resources are available to satisfy all applicable financial assurance requirements, if the applicant provides a resolution from the County Commissioners agreeing to approve the issuance of development bonds to satisfy the financial assurance requirements. We agree that it is appropriate to include these provisions during this rulemaking; thus, they have been codified under adopted sec.305.50(4)(C). Other changes to sec.305.50(4), relate to the reformatting necessary in the designations of the subparagraphs. New subparagraphs (C) and (D) have been adopted, so that existing subparagraphs (C), (D), and (E) have been redesignated as subparagraphs (E), (F), and (G). Finally, no comments were received on proposed sec.305.50(12)(E), with the concomitant redesignation of subparagraph (E) to (F) of sec.305.50(12). Thus, these subparagraphs are adopted as proposed. The amendment is adopted under the Texas Water Code, sec. sec.5.103, 5.105, and 26.011, which provides the commission the authority to adopt any rules necessary to carry out its powers, duties, and policies and to protect water quality in the state. The amendment is also adopted under the Solid Waste Disposal Act, sec.3 and sec.4, which provides the commission the authority to regulate industrial solid wastes and hazardous municipal wastes and to adopt rules and promulgate rules consistent with the general intend and purposes of the Act. sec.305.50. Additional Requirements for an Application for a Hazardous or Industrial Solid Waste Permit. Unless otherwise stated, an application for a permit to store, process, or dispose of solid waste shall meet the following requirements. (1)-(3) (No change.) (4) An application for a permit, permit amendment, or permit modification to store, process, or dispose of hazardous waste shall be subject to the following requirements, as applicable. (A) (No change.) (B) An application for a permit to store, process or dispose of hazardous waste shall also contain financial information sufficient to demonstrate to the satisfaction of the executive director that the applicant has sufficient financial resources to operate the facility in a safe manner and in compliance with the permit and all applicable rules, including, but not limited to, how an applicant intends to obtain financing for construction of the facility, and to close the facility properly. Financial information submitted to satisfy this subparagraph shall meet the requirements of subparagraphs (C) or (D) of this paragraph. (C) For applicants possessing a resolution from a governing body approving or agreeing to approve the issuance of bonds for the purpose of satisfying the financial assurance requirements of subparagraph (B) of this paragraph, submission of the following information will be an adequate demonstration: (i) a statement signed by an authorized signatory in accordance with sec.305.44(a) of this title (relating to Signatories to Applications) explaining in detail how the applicant demonstrates sufficient financial resources to construct, safely operate, properly close, and provide adequate liability coverage for the facility. This statement shall also address how the applicant intends to comply with the financial assurance requirements for closure, post- closure care, and liability coverage in accordance with Title 40 Code of Federal Regulations, Part 264, Subpart H as adopted by reference under sec.335.152(a)(6) of this title (relating to Standards); (ii) a certified copy of the resolution; and (iii) certification by the governing body of passage of the resolution. (D) For all applicants not meeting the requirements of subparagraph (C) of this paragraph, financial information submitted to satisfy the requirements of subparagraph (B) of this paragraph shall include the applicable items listed under clauses (i)-(vii) of this subparagraph. Financial statements required under clauses (ii) and (iii) of this subparagraph shall be prepared in accordance with generally accepted accounting principles and include a balance sheet, income statement, cash flow statement, notes to the financial statements, and accountant's opinion letter: (i) a statement signed by an authorized signatory in accordance with sec.305.44(a) of this title (relating to Signatories to Applications) explaining in detail how the applicant demonstrates sufficient financial resources to construct, safely operate, properly close, and provide adequate liability coverage for the facility. This statement shall also address how the applicant intends to comply with the financial assurance requirements for closure, post- closure care, and liability coverage in accordance with Title 40 Code of Federal Regulations, Part 264, Subpart H as adopted by reference under sec.335.152(a)(6) of this title (relating to Standards); (ii) for applicants for which audited financial statements have been prepared the previous two or more years, the following financial statements: (I) audited financial statements for the previous two years; and (II) the most current quarterly financial statement prepared according to generally accepted accounting principles; (iii) for applicants for which audited financial statements have not been prepared the previous two or more years, the following copies of tax returns and financial statements: (I) copies of tax returns for the previous two years, each certified by original signature of an authorized signatory as being a "true and correct copy of the return filed with the Internal Revenue Service;" (II) financial statements for the previous two years; and (III) additionally, an audited financial statement for the most recent fiscal year; (iv) for publicly traded companies, copies of Securities and Exchange Commission Form 10-K for the previous two years and the most current Form 10-Q; (v) for privately-held companies, written disclosure of the information that would normally be found in Securities and Exchange Commission Form 10-K including, but not limited to, the following: (I) descriptions of the business and its operations; (II) identification of any affiliated relationships; (III) credit agreements and terms; (IV) any legal proceedings involving the applicant; (V) contingent liabilities; and (VI) significant accounting policies; (vi) for applications encompassing facility expansion, capacity expansion, or new construction, estimates of capital costs for expansion and/or construction; (vii) if an applicant cannot or chooses not to demonstrate sufficient financial resources through submittal of the financial documentation specified in clauses (i)-(v) of this subparagraph and who must or chooses to obtain additional financing through a new stock offering or new debt issuance for facility expansion, capacity expansion, or new construction; and for safe operation, proper closure, and adequate liability coverage, the following information: (I) a financial plan sufficiently detailed to clearly demonstrate that the applicant will be in a position to readily secure financing for construction, operation, and closure if the permit is issued. The submitted financial plan must be accompanied by original letters of opinion from two financial experts, not otherwise employed by the applicant, who have the demonstrated ability to either finance the facility or place the required financing. The opinion letters must certify that the financial plan is reasonable; certify that financing is obtainable within 180 days of final administrative and judicial disposition of the permit application; and include the time schedule contingent upon permit finality for securing the financing. Only one opinion letter from a financial expert, not otherwise employed by the applicant, is required if the letter renders a firm commitment to provide all the necessary financing; and (II) written detail of the annual operating costs of the facility and a projected cash flow statement including the period of construction and first two years of operation. The cash flow statement must demonstrate the financial resources to meet operating costs, debt service, and financial assurance for closure, post-closure care, and liability coverage requirements. A list of the assumptions made to forecast cash flow shall also be provided. (E) If any of the information required to be disclosed under sec.305.50(4)(D) of this section would be considered confidential under applicable law, the information shall be protected accordingly. During hearings on contested applications, disclosure of confidential information may be allowed only under an appropriate protective order. (F) An application for a modification or amendment of a permit which includes a capacity expansion of an existing hazardous waste management facility shall also contain information delineating all faults within 3,000 feet of the facility, together with a demonstration, unless previously demonstrated to the commission or the United States Environmental Protection Agency, that: (i) the fault has not displacement within Holocene time, or if faults have had displacement within Holocene time, that no such faults pass within 200 feet of the portion of the surface facility where treatment, storage, or disposal of hazardous wastes will be conducted; and (ii) the fault will not result in structural instability of the surface facility or provide for groundwater movement to the extent that there is endangerment to human health or the environment. (G) At any time after the effective date of the requirements contained in Chapter 335, Subchapter F, of this title (relating to Permitting Standards for Owners and Operators of Hazardous Waste Storage, Processing or Disposal Facilities), the executive director may require the owner or operator of an existing hazardous waste management facility to submit that portion of his application containing the information specified in 40 Code of Federal Regulations, sec.sec.270.14-270.26. Any owner or operator shall be allowed a reasonable period of time from the date of the request to submit the information. An application for a new hazardous waste management facility must be submitted at least 180 days before physical construction of the facility is expected to commence. (5)-(11) (No change.) (12) In the case of an application for a permit to store, process, or dispose of hazardous waste at a new commercial hazardous waste management facility, the application shall also contain the following: (A)-(D) (No change.) (E) a written statement signed by an authorized signatory in accordance with sec.305. 44(a) of this title (relating to Signatories to Applications) explaining how the applicant intends to provide emergency response financial assurance to meet the requirements of subparagraphs (C) or (D) of this paragraph; and (F) a summary of the applicant's experience in hazardous waste management and in particular the hazardous waste management technology proposed for the application location, and, for any applicant without experience in the particular hazardous waste management technology, a conspicuous statement of that lack of experience. 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 April 20, 1994. TRD-9439525 Mary Ruth Holder Director, Legal Division Texas Natural Resource Conservation Commission Effective date: May 11, 1994 Proposal publication date: November 9, 1993 For further information, please call: (512) 239-6087 Chapter 330. Municipal Solid Waste Subchapter A. General Information 30 TAC sec.330.4 The Texas Natural Resource Conservation Commission (TNRCC) adopts the repeal of sec.330.65, amendment to sec.330.4(d), and new sec.330.65, concerning municipal solid waste management. Section 330.4(d) is adopted with changes to the proposed text as published in the November 26, 1993, issue of the Texas Register (18 TexReg 8766). New sec.330.65 is adopted with changes to the proposed text as published in the November 23, 1993, issue of the Texas Register (18 TexReg 8652). Published in the December 3, 1993, issue of the Texas Register (18 TexReg 8863), is the proposed preamble to the repeal of and new sec.330.65. These sections amend portions of the 30 Texas Administrative Code (TAC), Chapter 330 rules, which were adopted by the commission on May 26, 1993, and published in the June 18, 1993, issue of the Texas Register (18 TexReg 4058). The repeal to sec.330.65 is adopted without changes and will not be republished. The new and amended sections are in response to Senate Bill (S.B.) 963, which amended the Texas Solid Waste Disposal Act, sec.361.111, Texas Health and Safety Code (Vernon Supplement 1994) to exempt certain solid waste management facilities involved in the transfer of municipal solid waste from TNRCC municipal solid waste permit requirements. The amendment to sec.330.4(d) will exempt certain municipal solid waste transfer facilities from TNRCC municipal solid waste permit requirements. In order to qualify for one of the delineated exemptions, the facility must comply with design and operational requirements established by the TNRCC and the owner/operator must hold a public meeting regarding the siting of the facility. The public meeting must be held in the municipality or county where the facility is to be located. In order to be more consistent with Senate Bill 963, sec.330.4(d)(3) will be revised. It shall read as follows: a facility used in the transfer of municipal solid waste that transfers or will transfer 125 tons per day or less. The new sec.330.65 relates to the requirements for an application for registration of solid waste facilities (Type V) that are exempt from permit requirements under sec.330.4(d) and (g). This section delineates operational and design criteria which must be met by these registered facilities. The TNRCC has revised sec.330.65(e)(4) to provide a cross reference regarding on-site wastewater treatment systems. This reference was added to alert applicants to other particular design and permitting requirements which may pertain to them. It shall read as follows: Water pollution control. Provisions for the treatment of wastewaters from the facility shall be provided. A connection into a public sewer system, a septic system, or a small wastewater treatment plant are acceptable. On-site wastewater treatment systems shall comply with Chapter 285 of this title (relating to On-site Wastewater Treatment). The applicant shall obtain any permit or other approval required by state or local code for the system installed. The floor of the operating area shall be concrete, and the walls of the operating areas shall be smooth masonry, metal or concrete. A sump drain shall be provided to collect all wastewaters generated by the facility, and transport them to the treatment facility. The TNRCC extended an opportunity for public comment on the proposed amendments to the rules. A public hearing was held on December 6, 1993, in Austin, Texas but no one attended to present comments. Written comments on the proposed rules were received for a period of 30 days, from December 3, 1993, until January 3, 1994. Written comments on the proposed rules were received from the following entities during the comment period: Laidlaw Waste Systems, Inc., North Richland Hills, Texas; Scanlan & Buckle, P.C., Attorneys at Law, Austin Texas; National Solid Waste Management Association, Texas Chapter, Austin Texas; and Lloyd, Gosselink, Fowler, Blevins & Mathews, P.C., Attorneys at Law, Austin, Texas. The TNRCC received one comment that stated the wrong authority had been cited and the proposed amendments should be resubmitted to fulfill the notice requirements of the Texas Government Code. It has been noted that the incorrect Bill was mentioned in the preamble of the proposed rule. Senate Bill 963 is the prevailing legislation and these rules are in response to that legislation. The TNRCC finds that the rules are consistent with the legislation and its intent. The correct legislation has been noted in this preamble. The TNRCC received one comment that stated that the rules were in conflict with House Bill (HB) 2043. That bill used the conjunctive term "and" rather than the disjunctive term "or" used in the proposed rule. The argument was made that a transfer station, pursuant to HB 2043, must meet all four conditions to be exempt from TNRCC permit requirements. The wording in the rule would allow an exemption if any one of the three conditions listed in the proposed rule were met. As noted previously, SB 963 was determined to be the prevailing legislation rather than HB 2043. SB 963 uses the term "or". TNRCC finds that the rules are consistent with the legislation. The TNRCC received two comments pointing out that the fourth provision in HB 2043 had been omitted from the list of acceptable sources of solid waste and recommended that the provision concerning material recovery facilities be included in the proposed rule. Three additional comments were received regarding certain exemptions for material recovery facilities. The TNRCC, as previously indicated in the December 3, 1993 issue of the Texas Register (18 TexReg 8863), will make material recovery facilities a subject of a separate rule making. The TNRCC received two comments requesting that the pre-opening inspections and approval should be removed from sec.330.65(b). It was stated that this requirement delayed operations and was unnecessary. It is the position of the TNRCC that the public must be assured that the facility will safeguard its health, welfare, physical property and the environment. Field verification of these new facilities should in no way significantly delay the opening of a facility which meets the design criteria. No change will be made to the rule. The TNRCC received two comments requesting that requirements for pre-approval (registration requirements of sec.330.65(d)) be reduced or removed. The information requested by the TNRCC must be addressed by each owner/operator of such facilities. It is not overly burdensome for the applicant to provide the information. The TNRCC believes that this information must be reviewed prior to opening a facility in order to ensure that the facility will comply with the design and operational criteria necessary to protect public health and the environment. The TNRCC received one recommendation to revise sec.330.65(d)(1)(B), which requires submission of disposal reports, by adding the phrase "if available". This would recognize that new facilities do not have past disposal fee reports. TNRCC believes this change is unnecessary. Section 330.65(d)(1)(B) provides a list of documentation which can demonstrate that the transfer stations can and do meet regulatory conditions for the exemption from a permit. The cited paragraph ends by saying "... or other data acceptable to the executive director." This is clear indication that other information can serve to demonstrate what the projected incoming waste rate will be. With respect to sec.330.65(d)(3)(B), the TNRCC received one recommendation that this section be revised to say "... documentation if applicable ...." , to recognize cases where local approval may not be required. The TNRCC believes this change is unnecessary. An applicant providing the information required by other subsections of sec.330.65 can easily demonstrate that this provision may not be applicable to a particular site. The amendment is adopted under the authority of the Texas Water Code (Vernon 1992), sec.5.103, which provides the TNRCC with the authority to adopt any rules necessary to carry out the powers and duties under the provisions of the Texas Water Code and other laws of this state; and sec.361.024 of the Texas Solid Waste Disposal Act, Texas Health and Safety Code (Vernon 1992), which provides the TNRCC with the authority to adopt rules to regulate the operation, management and control of solid waste under its jurisdiction. sec.330.4. Permit Required. (a)-(c) (No change.) (d) A permit is not required for a municipal solid waste transfer station facility that is used in the transfer of municipal solid waste to a solid waste processing or disposal facility from: (1) a municipality with a population of less than 50,000; (2) a county with a population of less than 85,000; or (3) a facility used in the transfer of municipal solid waste that transfers or will transfer 125 tons per day or less. (e) -(o) (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 April 20, 1994. TRD-9439527 Mary Ruth Holder Director, Legal Services Division Texas Natural Resource Conservation Commission Effective date: May 11, 1994 Proposal publication date: November 26, 1993 For further information, please call: (512) 239-6087 Subchapter E. Permit Procedures 30 TAC sec.330.65 The repeal is adopted under the Texas Health and Safety Code, Chapter 361, which provides the commission with all powers necessary and convenient under that chapter to carry out its responsibilities concerning the regulation and management of municipal solid waste. sec.330.65. Requirements of an Application for Registration of Solid Waste Facilities (Type V). 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 April 20, 1994. TRD-9439524 Mary Ruth Holder Director, Legal Services Division Texas Natural Resource Conservation Commission Effective date: May 11, 1994 Proposal publication date: November 23, 1993 For further information, please call: (512) 239-6087 Subchapter E. Permit Procedures and Design Criteria 30 TAC sec.330.65 The new section is adopted under the Texas Health and Safety Code, Chapter 361, which provides the commission with all powers necessary and convenient under that chapter to carry out its responsibilities concerning the regulation and management of municipal solid waste. sec.330.65. Registration for Solid Waste Management Facilities. (a) Applicability. This section shall apply to a municipal solid waste management facility which is exempt from permit requirements under sec.330.4(d) and (g) of this title (relating to Permit Required). (b) Construction and operation. Owners/operators may proceed with construction of a solid waste management facility meeting all the requirements of this section without prior executive director approval, provided that a public meeting is held pursuant to subsection (d)(3)(C) of this section and the applicant has submitted an application complete with all information demonstrating compliance with these rules to the executive director. The operation of the facility shall not begin until after a pre-opening inspection has been conducted and authorization to accept waste has been given by the executive director. Owners/operators must comply with all applicable regulations, and shall remain responsible for making corrections and/or other changes that are necessary to meet the requirements, prior to beginning operation of the facility. (c) Number of copies. Registrants shall submit three copies of the completed application for registration. (d) Application. The complete registration application shall include Part I of a permit application as required by sec.330.52 of this title (relating to Technical Requirements of Part I of the Application), including, but not limited to, documentation of population or incoming waste rate, site plan, land use narrative, site operating plan, legal description, evidence of competency, evidence of financial assurance, and an applicant's statement, and shall be submitted as follows. (1) Documentation of population or incoming waste rate. (A) Documentation of the population to be served shall be submitted with the application. The population information shall be consistent with the latest population data from the last decennial census. (B) Documentation of the incoming waste rate shall be submitted with the application. The incoming municipal solid waste rate shall be supported by the reports submitted for calculation of the municipal solid waste disposal fee for the previous six reporting quarters, documentation of new or existing programs that recycle and would reduce the waste loading for the facility, existing data of the municipal solid waste generated by the area to be served, or other data acceptable to the executive director. (2) Site plan. The site plan shall include all the general design criteria which could be incorporated in a set of construction plans and specifications. A site layout plan, signed and sealed by a registered professional engineer, and a location map shall be included in the plans. (3) Land use narrative. (A) The land use narrative shall include a description of the surrounding land use within one-half mile of the site and it shall be shown on a topographic map. (B) The applicant shall attach documentation of local government approval/acceptance of the site location, e.g., conformity with local zoning restrictions, a building permit, license, nonconforming use authorization, etc. These regulations do not grant authorization for development/operation of the facility in noncompliance with local government ordinances and regulations. (C) The applicant and the commission shall conduct a public meeting in the local area, prior to the beginning of construction of the facility, to describe the proposed action to the general public. The public meeting shall be held as prescribed in the Health and Safety Code, sec.361.0791 (relating to Public Meeting and Notice Requirement) and sec.305.107 of this title (relating to Public Meeting and Notice Requirements). (4) Site operating plan. (A) The site operating plan shall include, as a minimum, a description of the solid waste data, the facility operation, operational characteristics of the equipment, facility maintenance, safety provisions, emergency procedures, fire protection, sanitation, facility rules, operating hours, litter control procedures, and vector control procedures. (B) The plan shall also address alternate processing or disposal procedures of the solid waste in the event that the facility becomes inoperable for periods longer than 24 hours. (C) The solid waste data shall include an estimate of the amount of solid waste to be received daily, the maximum amount of solid waste to be stored, the maximum and average lengths of time that solid waste is to remain on the site, and the intended destination of the solid waste received at this site. (5) Legal description. A legal description of the property, including the book and page number of the county deed records of the current property owner shall be submitted. The legal description shall be a metes and bounds description of the site signed and sealed by a registered professional land surveyor. A drawing of the description, signed and sealed by the surveyor, shall also be submitted. If the property is platted, the book and page number of the final plat record and a copy of the final plat shall be submitted. (6) Evidence of competency. (A) The applicant shall submit a list of all Texas solid waste sites which the applicant has owned or operated within the past ten years. The site name, site type, permit or registration number, county, and dates of operation shall be also submitted. (B) The names of the principals and supervisors of the applicant's organization shall be provided, together with previous affiliations with other organizations engaged in solid waste activities. (7) Evidence of financial assurance. Evidence of financial assurance shall be provided in accordance with sec.sec.330.9 and 330. 280-330.286 of this Chapter, (relating to Financial Assurance). (8) Statement of applicant. The following document shall be signed, notarized, and submitted with the application: (A) [graphic] (B) Notary public's certificate: [graphic] (C) The applicant shall provide documentation that the person signing the application meets the requirements of sec.305.44 of this title (relating to Signatories to Applications). (e) Design Criteria. (1) Site access. The site access road from a publicly owned roadway shall be at least a two lane gravel or paved road, designed for the expected traffic flow. Safe on-site access for commercial collection vehicles and for residents shall be provided. The access road design shall include adequate turning radii according to the vehicles that will utilize the site and shall avoid disruption of normal traffic patterns. A positive means to control dust and mud shall be provided. (2) Access control. Access to the site shall be controlled by a perimeter fence, four-foot barbed wire or six-foot chain-link, with lockable gates. An attendant shall be on-site during operating hours. A sign shall be provided that gives the site name, registrant name, registration number, operating hours, and site rules. (3) Miscellaneous design details. The facility shall be designed in accordance with all local building code and land development code requirements. Building setback lines shall be followed, if applicable. Vehicle parking shall be provided for equipment, employees, and visitors. Safety bumpers at hoppers shall be provided for vehicles. Necessary connections for facility cleaning shall be provided. Provisions shall be made to prevent the entry of precipitation into vehicles. The operating area and transport shall be enclosed by walls, chain-link fencing, and/or gates. (4) Water pollution control. Provisions for the treatment of wastewaters from the facility shall be provided. A connection into a public sewer system, a septic system, or a small wastewater treatment plant are acceptable. On-site wastewater treatment systems shall comply with Chapter 285 of this title (relating to On-site Wastewater Treatment). The applicant shall obtain any permit or other approval required by state or local code for the system installed. The floor of the operating area shall be concrete, and the walls of the operating areas shall be smooth masonry, metal or concrete. A sump drain shall be provided to collect all wastewaters generated by the facility, and transport them to the treatment facility. (5) Air pollution and ventilation. Ventilation of structures designed in accordance with applicable codes shall be provided. The applicant shall consult with the TNRCC for assistance and any permit requirements. (6) Storage requirements. On-site storage of source-separated recyclable materials should be provided and this area shall be separate from the transfer area. Control of odors, vectors, and windblown waste from the storage area shall be maintained. (7) Fire protection. A fire protection plan shall be prepared. This fire protection plan shall describe the source of fire protection (a local fire department, fire hydrants, fire extinguishers, water tanks, water well, etc.), procedures for using the fire protection source, and employee training and safety procedures. The fire protection plan shall comply with local fire codes. (8) Noise pollution and screening. Screening or other measures to minimize the noise pollution and adverse visual impacts shall be provided. (9) Site drainage. Drainage provisions for controlling surface water on or near the site shall be provided. The locations of any proposed dikes, berms, storm sewers, levees, detention ponds, and the outfall point shall be identified. Drainage calculations shall be in accordance with sec.330.55 of this title (relating to Site Development Plan). (10) Site facilities. The site shall provide facilities for potable water, sanitary purposes, office, maintenance, recyclable materials collection, and solid waste transfer. Concrete pads with raised curbs around the perimeter or asphalt paved areas with berms shall be utilized to control spills and contaminated water. (11) Additional technical information for composting facilities. For registration of composting facilities, additional technical information related to the specifics of composting shall be submitted by the applicant in accordance with the criteria for composting facilities provided by 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 April 20, 1994. TRD-9439526 Mary Ruth Holder Director, Legal Services Division Texas Natural Resource Conservation Commission Effective date: May 11, 1994 Proposal publication date: November 23, 1993 For further information, please call: (512) 239-6087 TITLE 31. NATURAL RESOURCES AND CONSERVATION Part II. Texas Parks and Wildlife Department Chapter 65. Wildlife Subchapter V. Wildlife Management Association Area Hunting Lease License 31 TAC sec.sec.65.801, 65.802, 65.804-65.807 The Texas Parks and Wildlife Department adopts new sec. sec.65.801, 675.802, 65.804, and 65.807 concerning Wildlife Management Association Area Hunting Lease License. Section 65.804 is adopted with changes to proposed text as published February 18, 1994, issue of the Texas Register (19 TexReg 1204). Sections 65.801, 65.802, 65.806, and 65.807 were adopted without changes and will not be republished. Proposed sec.65.803 (concerning License Fees) is withdrawn. The change to sec.65.804(3) (concerning License Issuance) requires a Wildlife Management Association Area Plan as opposed to a Wildlife Habitat and Harvest Annual Recommendation, prior to issuance of a Wildlife Management Association license. The new sections are necessary for the implementation of a legislative mandate, a result of legislation passed in the 73rd Texas Legislature which provides for Hunting Lease for landowners within Wildlife Management Associations in Parks and Wildlife Code, Chapter 43, Subchapter D, sec.43.0432 and sec.43.044, Hunting Lease Licenses; and Chapter 81, Subchapter D, sec. sec.81. 301, 81.302, and 81.303 Wildlife Management Association Areas. The new rules provide the framework for cooperative efforts of landowners in management and enhancement of wildlife species. The rules set requirements for boundaries and proximity of association lands, recordkeeping and reporting, and wildlife management within Wildlife Management Association Areas. The agency received no public comments regarding adoption of the rules. The new rules are proposed under the Texas Parks and Wildlife Code, Chapter 43, Subchapter D, Hunting Lease Licenses, and Chapter 81, Subchapter D, Wildlife Management Association Area, which provides the Parks and Wildlife Commission with authority to adopt rules necessary to implement this subchapter. sec.65.804. License Issuance. The department may issue a license to an applicant if the following requirements have been satisfied: (1) an application supplied by the department for a license has been completed and filed with the department; (2) the department finds the observing wildlife and collecting information within the Wildlife Management Association Area will serve the purpose of wildlife management in this state; (3) a department-approved Wildlife Management Association Plan has been completed and filed with the department; and (4) all application, license, and review fees have been paid to the department. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 21, 1994. TRD-9439550 Paul M. Shinkawa Director, Legal Services Texas Parks and Wildlife Department Effective date: May 12, 1994 Proposal publication date: February 18, 1994 For further information, please call: 1 (800) 792-1112, Ext. 4433 or (512) 389- 4433 Chapter 69. Resource Protection Wildlife Rehabilitation Permits 31 TAC sec.69.45 The Texas Parks and Wildlife Commission adopts an amendment to sec.69.45, relating to Wildlife Rehabilitation Permits, without changes to the proposed text as published in the February 18, 1994, issue of the Texas Register (19 TexReg 1205). The amendment was necessary to implement a legislative mandate. The amendment sets requirements and guidelines for permit issuance to those persons who wish to participate in wildlife rehabilitation efforts. The rules are intended to clearly delineate the responsibilities of wildlife rehabilitators and provide means to prevent abuse and exploitation of wildlife. The agency received no comments regarding adoption of the rule. This amendment is adopted under Parks and Wildlife Code, Chapter 43, Subchapter C, sec.43.027, which delegates authority to the Texas Parks and Wildlife Commission to make regulations governing the taking and possession of wildlife indigenous to the state for rehabilitation purposes. 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 April 21, 1994. TRD-9439551 Paul M. Shinkawa Director, Legal Services Texas Parks and Wildlife Department Effective date: May 12, 1994 Proposal publication date: February 18, 1994 For further information, please call: 1 (800) 792-1112, Ext. 4433 or (512) 389- 4700 Part X. Texas Water Development Board Chapter 359. Water Banking 31 TAC sec.sec.359.1-359.14 The Texas Water Development Board (the board) adopts new sec.sec.359.1- 359.14, concerning Water Banking. Section 359.2 and sec.359.8 are adopted with changes to the proposed text as published in the March 18, 1994, issue of the Texas Register (19 TexReg 1892). Sections 359.1, 359.3-359.7, and 359. 9-359.14 are adopted without changes and will not be republished. Chapter 359 is created to establish and administer the Texas Water Bank in accordance with the Texas Water Code, Chapter 15, Subchapter K. Chapter 359 will allow the board to administer the water bank to facilitate the transfer of water from all sources as necessary to provide adequate water supplies for use within the State of Texas. The following comments from individuals were received regarding adoption of the new rule. One commenter was concerned that the board had not defined the term "conserved water" in the context of the new sections. In response, sec.359.2 was expanded to include a definition for conserved water. Another commenter expressed concern that the language in sec.359.8(c) was unnecessarily restrictive in the protection of rights from cancellation after transfer from the bank. In response, wording was changed to cover all types of transfers. No other specific comments requiring changes were made. Commenters unanimously supported the concept of water banking. Neutral comments were received from the Brazos River Authority and the City of McAllen. The chapter is adopted pursuant to Texas Water Code, sec.6.101, which provides the Texas Water Development Board with the authority to adopt rules necessary to carry out the powers and duties in the Code and the laws of the state, and Texas Water Code, sec.15.703(b), which authorizes the board to adopt rules necessary for implementing the water bank. sec.359.2. Definitions. The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise. Administrator-The Executive Administrator of the Texas Water Development Board or designated representative(s). Board-The Texas Water Development Board. Bank-The Texas Water Bank, including regional banks established pursuant to this Subchapter. Commission-The Texas Natural Resource Conservation Commission. Conserved water -That water which has been made available for alternative or future uses through practices, techniques, and technologies that reduce the consumption of water, reduce the loss or waste of water, improve the efficiency in use of water, or increase the availability of water through recycling or reuse. Department-The Texas Parks and Wildlife Department. Deposit-The authorized placement of a water right or the right to use water in the bank for transfer. Depositor-A person who deposits or has on deposit a water right in the bank. Lease-To convey by contract the right to use water for a specified time period in accordance with the authorized right and other applicable law. Person-Includes, but is not limited to, any individual, corporation, organization, government, or governmental subdivision or agency, including the board, business trust, estate, trust, partnership, association, and any other legal entity. Political subdivision -A state agency, a county, city, or other body politic or corporate of the state, including any district or authority created under the Texas Constitution, Article III, sec.52 or Article XVI, sec.59, and including any interstate compact commission to which the state is a party and any nonprofit water supply corporation created and operating under Acts of the 43rd Legislature, Chapter 76, First Called Session, 1933 (Texas Civil Statutes, Article 1434a). Transfer-The conveyance of a water right or the right to use water under a water right in any of the following manners: (A) the conveyance of legal title to a water right; or (B) a contract or option contract to allow use of a water right. Water right-A right acquired or authorized under the laws of this state to impound, divert, or use state water, underground water, or water from any source to the extent authorized by law. sec.359.8. Deposits, Transfers, Cancellation Protection, and Withdrawals. (a) Up to 50% of a water right may be deposited in the bank for an initial term of up to 10 years, during which time the portion of the water right deposited is exempt from cancellation by the commission under the terms of Texas Water Code, Chapter 11, Subchapter E, as provided by Texas Water Code, sec.15.704. That portion of the water right deposited is exempt from cancellation under this subsection only once, even if it has been transferred or redeposited. That portion of the water right which is on deposit remains on deposit until it is withdrawn. (b) The administrator may accept deposits of water rights, including conserved water, into the bank. The administrator, acting within the purposes of the Texas Water Code, Chapter 15, Subchapter K, may also take any appropriate action to facilitate water transfers both within and external to the operations of the water bank. (c) That portion of a water right that has been transferred while on deposit in the bank is exempt from cancellation by the commission under the terms of the Texas Water Code, Chapter 11, Subchapter E, for a period of 10 years following commission approval of any necessary actions relating to the transfer of that water right. (d) The depositor must notify the administrator within 30 calendar days of the date a contract to transfer a water right or portion thereof is signed. (1) For transfers requiring regulatory approval, transfers are not complete until all necessary regulatory approvals are obtained. The depositor must notify the administrator in writing within 30 calendar days of the date of receipt of final regulatory approvals. The date of final regulatory approvals is the effective date of transfer. (2) For transfers not requiring regulatory approval, transfers are not complete until the terms and conditions of the contract have been fulfilled. In these cases, the depositor must notify the administrator in writing within 30 calendar days of the contract closure. The date the contract is closed is the effective date of transfer. (e) That portion of a water right that has been deposited in the bank may be withdrawn upon the depositor's completion of a withdrawal form and its submission to the administrator. A copy of this form must be submitted by the withdrawing depositor to the executive director of the commission at the same time it is submitted to the administrator. The withdrawal is effective upon the date of signature by the administrator on the withdrawal form or 30 days after the submission of the withdrawal form, whichever occurs earlier. A water right may be withdrawn by the administrator under sec.359.6 of this title (relating to Bank Review). (f) A water right may be used as authorized by law while on deposit in the bank. The depositor must notify the administrator of any actions or conditions that would affect the transferability of the deposited right. (g) A water right transferred while on deposit in the bank may remain in the bank. 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 April 22, 1994. TRD-9439639 Craig D. Pedersen Executive Administrator Texas Water Development Board Effective date: May 13, 1994 Proposal publication date: March 18, 1994 For further information, please call: (512) 463-7981 TITLE 40. SOCIAL SERVICES AND ASSISTANCE Part I. Texas Department of Human Services Chapter 79. Legal Services 40 TAC sec.79.403, sec.79.404 The Texas Department of Human Services (DHS) adopts amendments to sec.79. 403 and sec.79.404, without changes to the proposed text as published in the March 18, 1994, issue of the Texas Register (19 TexReg 1943). The justification for the amendments is to establish the Advisory Committee on Fire Safety Standards; add one member to the Aged and Disabled Services Advisory Committee; and change the abolishment date for the Advisory Committee on Mental Retardation Facilities and the Advisory Committee on Nursing Facility Affairs. After those committees are abolished, their functions will be performed by the Aged and Disabled Services Advisory Committee. The amendments will function by providing an improved structure to address conflicts in building codes and regulations related to renovation and remodeling of structures to be used as heath care facilities; and consolidating the review committees involved in the aged and disabled programs. No comments were received regarding adoption of the amendments. The amendments are adopted under the Human Resources Code, Title 2, Chapter 22, which provides the department with the authority to administer public assistance programs. 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 April 21, 1994. TRD-9439553 Nancy Murphy Section Manager, Policy and Document Support Texas Department of Human Services Effective date: May 15, 1994 Proposal publication date: March 18, 1994 For further information, please call: (512) 450-3765 Chapter 90. Nursing Facilities and Related Institutions The Texas Department of Human Services (DHS) adopts amendments to sec.sec.90. 15, 90.16, and 90.235, concerning renewal procedures and qualifications, change of ownership, and administrative penalties, in its Nursing Facilities and Related Institutions rule chapter. The amendments are adopted with changes to the proposed text as published in the March 15, 1994, issue of the Texas Register (19 TexReg 1789). The justification for the amendments to sec.90.15 and sec.90.16 is to add definitions for "timely and sufficient application" in relation to applications for licensure or relicensure of a nursing facility or a facility serving persons with mental retardation and/or a related condition. In addition, sec.90.15(a) is amended to reflect an amendment to the Health and Safety Code, sec.242.033, which changed the duration of a license from one year to two years. The justification for the amendment to sec.90.235(i) Schedule A(R) and Schedule B(H) is to add the amounts of the administrative penalties for failure to submit required renewals or changes of ownership established in sec.90.15 and sec.90.16. The justification for the amendment to sec.90.235(i) Schedule A(S) and Schedule B(I) is to enforce compliance with the Health and Safety Code, sec.242. 134, which requires nursing facilities to report deaths of residents to DHS. The amendment specifies penalties and amounts that DHS may assess against facilities that fail to meet this requirement. The amendments will function by clarifying the application process and ensuring better enforcement of DHS's policy on reporting deaths in facilities licensed under Chapter 242 of the Health and Safety Code. No comments were received regarding adoption of the proposal; however, DHS is adopting the amendments with a number of editorial clarifications as follows: In sec.90.15(a), DHS is deleting the word "annually" to clarify that licenses are renewed every two years, and, for consistency, in subsection (b), to substitute "license holder" for "facility." Section 90.15(b)(3) is adopted with deletion of an extraneous "and" following the first comma. In sec.90.16, DHS is deleting "and" following the first comma in paragraph (3). DHS is adopting sec.90.235(i), Schedule B(H), to read "Failure to submit a renewal or change..." Subchapter B. Application Procedures 40 TAC sec.90.15, sec.90.16 The amendments are adopted under the Health and Safety Code, Chapter 242, which provides the department with the authority to license long-term care nursing facilities and under Texas Civil Statutes, Article 4413(502), which transferred all functions, programs, and activities related to long-term care licensing, certification, and surveys from the Texas Department of Health to the Texas Department of Human Services. sec.90.15. Renewal Procedures and Qualifications. (a) Each license issued under this chapter must be renewed every two years. Each license expires two years from the date issued. A license issued under this chapter is not automatically renewed. (b) Each license holder must, at least 45 days prior to the expiration of the current license, file an application for renewal with the Texas Department of Human Services (DHS). DHS considers that an individual has made timely and sufficient application for the renewal of a license if the license holder: (1) submits a complete application to DHS, and DHS receives the complete application at least 45 days before the current license expires; (2) submits an incomplete application to DHS with a letter explaining the circumstances which prevented the inclusion of the missing information, and DHS receives the incomplete application and letter at least 45 days before the current license expires; or (3) submits an application to DHS, DHS receives the application during the 45- day period ending on the date the current license expires, and the individual pays a fine under the administrative penalties described in Schedules A(R) and B(H) of sec.90.235 of this title (relating to Administrative Penalties). (c) The application for renewal must contain the same information required for an original application as well as payment of the annual licensing fees. (d) The renewal of a license may be denied for the same reasons an original application for a license may be denied. See sec.90.17 of this title (relating to Criteria for Denying a License or Renewal of a License). sec.90.16. Change of Ownership. (a) During the license term, a license holder may not transfer the license as a part of the sale of the facility. Prior to the sale of the facility, the license holder must notify the Texas Department of Human Services (DHS) that a change of ownership is about to take place. (b) To avoid a gap in the license because of a change in ownership of the facility, the prospective purchaser must submit to DHS a complete application for a license under sec.90.11 of this title (relating to Criteria for Licensing) at least 30 days before the anticipated date of sale. The applicant must meet all requirements for a license. If the applicant has made timely and sufficient application for a license and otherwise meets all requirements for a license, DHS will issue the applicant a license effective on the date of transfer of ownership. DHS considers an individual has made timely and sufficient application for a license if the individual: (1) submits a complete application to DHS, and DHS receives the complete application at least 30 days before the anticipated date of sale; (2) submits an incomplete application to DHS with a letter explaining the circumstances which prevented the inclusion of the missing information, and DHS receives the incomplete application and letter at least 30 days before the anticipated date of sale; (3) submits an application to DHS, DHS receives the application during the 30- day period ending on the anticipated date of sale, and the individual pays a fine under the administrative penalties described in Schedules A(R) and B(H) of sec.90.235 of this title (relating to Administrative Penalties); or (4) submits an application to DHS, DHS receives the application by the date of sale, and the individual proves to DHS's satisfaction that the health and safety of the facility residents required an emergency change of ownership. (c) Pending the review of the prospective purchaser's application, the license holder shall continue to meet all requirements for operation of the facility. 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 April 22, 1994. TRD-9439624 Nancy Murphy Section Manager, Policy and Document Support Texas Department of Human Services Effective date: July 1, 1994 Proposal publication date: March 15, 1994 For further information, please call: (512) 450-3765 40 TAC sec.90.17 The Texas Department of Human Services (DHS) adopts an amendment to sec.90. 17, concerning criteria for denying a license or renewal of a license, in its Nursing Facilities and Related Institutions rule chapter. The amendment is adopted with changes to the proposed text as published in the March 18, 1994, issue of the Texas Register (19 TexReg 1943). The justification for the amendment is to specify what constitutes "substantial failure to comply with the nursing facility requirements." As stated in the rule prior to this amendment, a license could be denied when a facility substantially fails to comply with the nursing facility requirements. The amendment will function by providing for denial of licensure to nursing facilities whose noncompliance poses a serious threat to health and safety or that fail to maintain compliance with nursing facility requirements on a continuing basis. No comments were received regarding adoption of the amendment; however, DHS is adopting sec.90.17(a) with an editorial clarification. The amendment is adopted under the Health and Safety Code, Chapter 242 which provides the department with the authority to license long-term care nursing facilities and under Texas Civil Statutes, Article 4413(502), historical note (Vernon Supplement 1993), 72nd Legislature, which transferred all functions, programs, and activities related to long-term care licensing, certification, and surveys from the Texas Department of Health to the Texas Department of Human Services. The amendment implements the Health and Safety Code, sec. sec.242.001-242.186. sec.90.17. Criteria for Denying a License or Renewal of a License. (a) The Texas Department of Human Services (DHS) may deny a license or a renewal of a license if an applicant, manager, or affiliate: (1) substantially fails to comply with the requirements described in sec.90.41 of this title (relating to Standards for Nursing Facilities), including, but not limited to: (A) noncompliance that poses a serious threat to health and safety; or (B) a failure to maintain compliance on a continuous basis; (2)-(5) (No change.) (b)-(e) (No change.) This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 25, 1994. TRD-9439714 Nancy Murphy Section Manager, Policy and Document Support Texas Department of Human Services Effective date: June 1, 1994 Proposal publication date: March 18, 1994 For further information, please call: (512) 450-3765 Subchapter H. Enforcement 40 TAC sec.90.235 The amendment is adopted under the Health and Safety Code, Chapter 242 which provides the department with the authority to license long-term care nursing facilities and under Texas Civil Statutes, Article 4413 (502), which transferred all functions, programs, and activities related to long-term care licensing, certification, and surveys from the Texas Department of Health to the Texas Department of Human Services. sec.90.235. Administrative Penalties. (a) (No change.) (b) When a violation cited by the department is determined to be within the scope and description of the penalty schedules as stated in subsection (i) of this section, known as Schedule A and Schedule B, the violation is cause for assessment of a penalty as described in this section and as listed in the schedules. In determining whether a violation limits the facility's ability to comply with the law, a violation must be: (1) -(3) (No change.) (4) of a magnitude or nature that constitutes a health and safety hazard having a direct or imminent adverse effect on resident health, safety, or security, or which presents even more serious danger or harm; or (5) of a type established elsewhere in DHS's rules concerning licensing standards for long term care facilities. (c) -(d) (No change.) (e) An offense is defined as all deficiencies cited during a particular survey. The first offense carries the penalty shown in the "first offense" column on the schedule. The second offense carries the penalty shown in the "second offense" column on the schedule. The third offense carries the penalty shown in the "third offense" column of the schedule. For purposes of determining a "first offense," this provision does not apply to Schedule A(S) or Schedule B(I). (f)-(h) (No change.) (i) Conditions and assessments for violations warranting administrative penalties for licensed facilities are described in Schedule A and Schedule B which are as follows. [graphic] 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 April 22, 1994. TRD-9439625 Nancy Murphy Section Manager, Policy and Document Support Texas Department of Human Services Effective date: July 1, 1994 Proposal publication date: March 15, 1994 For further information, please call: (512) 450-3765 Part IV. Texas Commission for the Blind Chapter 172. Consumer Advisory Committee 40 TAC sec.sec.172.1-172.7 The Texas Commission for the Blind adopts the repeal of sec.sec.172.1-172.7, without changes to the proposed text as published in the March 18, 1994, issue of the Texas Register (19 TexReg 1980). The repeals are necessary to comply with the provisions of Senate Bill 383 (73rd Legislature) which requires an agency advised by advisory committees to describe in a rule the committees purpose, tasks, reporting requirements, and duration. New sections are being adopted simultaneously which contain all of the required information. No comments were received regarding adoption of the repeals. The repeals are adopted under the Human Resources Code, Title 5, and the Rehabilitation Act of 1973, as amended, which provide the Texas Commission for the Blind with the authority to adopt rules and to take actions that are necessary or appropriate to carry out commission purposes. 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 April 19, 1994. TRD-9439557 Pat D. Westbrook Executive Director Texas Commission for the Blind Effective date: May 12, 1994 Proposal publication date: March 18, 1994 For further information, please call: (512) 459-2611 Chapter 172. Advisory Committees and Councils 40 TAC sec.sec.172.1-172.3 The Texas Commission for the Blind adopts new sec.sec.172.1-172.3. Section 172.1 is adopted with changes to the proposed text as published in the March 18, 1994, issue of the Texas Register (19 TexReg 1980). Section 172.2 and sec.172.3 are adopted without changes and will not be republished. The only changes to sec.172.1 are to the chapter title and the section title. Chapter 172 has been changed to Advisory Committees and Councils to reflect the broader content of the chapter; the title of sec.172.1 has been changed to Establishment of Advisory Committees and Councils; and the word "section" has been changed to "chapter" in sec.172.1(a). The rules are necessary to comply with the provisions of Senate Bill 383 (73rd Legislature) which requires an agency advised by advisory committees to describe in a rule the committees' purpose, tasks, reporting requirements, and duration. The rule will function as a resource to the public on the committees that advise the agency, which will maintain the public's ability to participate in the commission's rulemaking process in an advisory capacity. No comments were received regarding adoption of the rules. The new sections are adopted under the Human Resources Code, Title 5, and the Rehabilitation Act of 1973, as amended, which provide the Texas Commission for the Blind with the authority to adopt rules and to take actions that are necessary or appropriate to carry out commission purposes. sec.172.1. Establishment of Advisory Committees and Councils. (a) The Texas Commission for the Blind is advised by advisory committees and councils established under its enabling legislation and by other state and federal laws, and by committees and councils created by the Board in order to effectively administer the agency's programs. The purpose of this chapter is to identify these advisory bodies, their purpose, tasks, reporting requirements, general membership, and duration. (b) The size of advisory committees and councils varies according to statute or need. When the size of a committee or council is not specified in statute the executive director has the authority to review representation and increase or decrease the size as necessary to assure proper representation and/or to operate within economic constraints. At no time shall any committee exceed 24 members. 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 April 19, 1994. TRD-9439558 Pat D. Westbrook Executive Director Texas Commission for the Blind Effective date: May 12, 1994 Proposal publication date: March 18, 1994 For further information, please call: (512) 459-2611