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 1. ADMINISTRATION Part IV. Office of the Secretary of State Chapter 71. Office of the Secretary of State Private Use of the State Seal of Texas 1 TAC sec.71.50 The Office of the Secretary of State adopts an amendment to sec.71.50, concerning the standard design for the reverse of the state seal of Texas, without changes to the proposed text as published in the April 5, 1994, issue of the Texas Register (19 TexReg 2343). Adoption of the amendment will implement that portion of subsection (d) of new Article 6139f of the Texas Civil Statutes, enacted by the 73rd Legislative Session (1993), which pertains to the reverse of the state seal. One commenter suggested that the clarity of the depiction of the reverse of the state seal would have been improved if the "printer's slick" of the reverse had been used for the publication in the above referenced issue of the Texas Register. The commenter suggested that the depiction be republished using the printer's slick. However, such slick was used for the April 5th publication. The Texas Register is a newsprint periodical and clarity may vary from copy to copy. Regardless, the official design is that which is on file with the Texas Register . A copy of the printer's slick is on file. Consequently, the agency does not agree that republication is necessary. The amendment is adopted under the Texas Government Code, sec.2001.004(1), and the Texas Business and Commerce Code, sec.17.08(d), which provide the secretary of state with the authority to prescribe and adopt rules. The amendment affects sec.17.08 of the Business and Commerce Code. 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 May 23, 1994. TRD-9441279 Machree Garrett Gibson Assistant Secretary of State Office of the Secretary of State Effective date: June 13, 1994 Proposal publication date: April 5, 1994 For further information, please call: (512) 463-5558 Chapter 78. Athlete Agents Administrative Penalties 1 TAC sec.78.53 The Office of the Secretary of State adopts new sec.78.53, concerning athlete agent administrative penalties, without changes to the proposed text as published in the March 25, 1994, issue of the Texas Register (19 TexReg 2117). Adoption of the new rule will provide individuals and companies with a clarification of the procedure that is used to assess an administrative penalty when a contract is deemed filed late. No comment were received regarding adoption of the rule. The new section is adopted under the Texas Government Code, sec.2001.004(1), and the Athlete Agents Act, Texas Civil Statutes, Article 8871, which provide the secretary of state with the authority to prescribe and adopt rules. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on May 23, 1994. TRD-9441280 Machree Garrett Gibson Assistant Secretary of State Office of the Secretary of State Effective date: June 13, 1994 Proposal publication date: March 25, 1994 For further information, please call: (512) 463-5558 TITLE 28. INSURANCE Part I. Texas Department of Insurance Chapter 5. Property and Casualty Subchapter O. Flexible Rating Program for Certain Insurance Lines 28 TAC sec.5.11000 The Texas Department of Insurance adopts new sec.5.11000, concerning the definition of the term "small and medium-sized insurers" as that terminology is used in the Insurance Code, Article 5.101, sec.3(c), with changes to the proposed text as published in the November 26, 1993, issue of the Texas Register (18 TexReg 8763). Section 3(c) of Article 5.101 was amended by House Bill 1461, as enacted by the 73rd Texas Legislature, to provide that a trade association that does not collect historical data and that does not provide statistical plans, prospective loss costs, or supplementary rating information to its members may, on behalf of its members that are small and medium-sized insurers, as defined by the Commissioner of Insurance, present rate-making data and make recommendations at benchmark rate hearings. The new section is necessary to comply with the requirement that the Commissioner define the term "small and medium-sized insurers." The definition is needed for the purposes of determining which insurers may be represented at benchmark rate hearings by a trade association as specified in sec.3(c) of Article 5.73 and to ensure that presentation of rate- making data and recommendations at benchmark rate hearings by trade associations on behalf of small and medium-sized insurers will be allowed only for those insurers that cannot otherwise participate in the hearings because of lack of in-house actuarial and legal capabilities or lack of financial resources to hire the necessary actuarial and legal capabilities. As a result of comments objecting to the proposed definition as being too restrictive, the rule as published is changed in subsection (b) to increase from $50 million to $150 million the total annual direct written premiums for all states for all-lines of property and casualty insurance required to be a small or medium insurer. This change will result in an increased number of insurers qualifying for representation by trade associations at benchmark rate hearings (based on company and groups with more than $1,000,000 of total U.S. property and casualty 1993 written premiums, this is an increase from 161 unaffiliated companies and insurer groups under the published definition to 251 unaffiliated companies and insurer groups under the adopted definition). The published rule is also changed in subsections (a) and (b) for economy and clarity of language. Subsection (b) as proposed is amended to provide that the term "small and medium-sized insurers" includes a company in a group of affiliated insurers as defined by Insurance Code, Article 21.49-1, sec.2, if the combined annual direct written premiums of all companies in the group for all states for all-lines of property and casualty insurance do not exceed $150 million. This amendment is needed to ensure that representation at benchmark rate hearings by trade associations on behalf of small and medium-sized insurers will be permitted only for those insurers that cannot otherwise participate in the rate hearings because of the costs associated with benchmark rate hearing presentations. The proposed new section in subsection (a) outlines the purpose of the section; subsection (b) defines what constitutes small and medium-sized insurers based on the total annual direct written premiums for all states for all-lines of property and casualty insurance; and subsection (c) defines "lines of property and casualty" insurance for purposes of determining the total annual direct written premiums. Pursuant to the section, companies that meet either of the following two requirements may be represented at benchmark rate hearings by a trade association that does not collect historical data and that does not provide statistical plans, prospective loss costs, or supplementary rating information to its members: an unaffiliated insurer with total annual direct written premiums for all states for all-lines of property and casualty insurance which do not exceed $150 million; or an affiliated insurer, as defined by Insurance Code, Article 21.49-1, sec.2, if the combined annual direct written premiums of all companies within the group of affiliated insurers for all states for all-lines of property and casualty insurance do not exceed $150 million. No comments were received in support of adoption of the rule. At a hearing held on May 16, 1994, on consideration of the adoption of the proposed rule, the Office of Public Insurance Counsel spoke in support of adoption of the rule. The Department received written comments opposing adoption of the rule from the Texas Automobile Insurance Service Office, Texas Association of Insurance Agents, Federated Insurance, American Fidelity Insurance Companies, Commercial Union Insurance Companies, USF&G Insurance, and one state legislator. At the May 16, 1994 hearing, comments in opposition to adoption of the rule were presented by the Texas Automobile Insurance Service Office, Union Standard Insurance Company, Texas Insurance Advisory Association, and the Association of Fire and Casualty Companies in Texas. Several commenters objected to the definition of small and medium-sized insurers being based on total annual direct written premiums for all states for all property and casualty lines of insurance and supported basing the definition on the Texas all-lines market-only or on Texas writings of the line of business subject to the benchmark rate hearing. According to one commenter the term "small and medium-sized insurers" must be viewed on a relative basis and a more reasonable approach would be to segment the market on a countrywide all-lines basis, or a Texas-only all-lines basis, or a Texas-only auto insurance-only basis, and to define the terms small and medium with respect to the entire market. This commenter indicated that this seems to be more meaningful than an arbitrary dollar limitation as in the proposed rule. The commenter argued that the insurance business is transacted on very small expense margins, and the real test for the management of any insurance company is how well it allocates the available resources to the known and foreseeable cost elements. According to the commenter, management has to use available resources to the best advantage, and it is that consideration which justifies a definition keyed to market share. This same commenter argued that basing the definition on the Texas all-lines market-only is more in keeping with the legislative intent. According to this commenter, the legislature in enacting the amendment was not evaluating whether or not a company had the resources to participate directly in a rate hearing, but whether such participation would represent a more efficient allocation of resources. The commenter stated that adoption of the rule as proposed would exclude virtually all of the trade association's members from representation by the trade association at benchmark rate hearings. The commenter proposed an alternative rule, which was supported by six other commenters, that would define "small and medium-sized insurers" as a company or group of affiliated companies with total annual written premium in Texas for all regulated lines of insurance which does not exceed 1.0% of the total annual written premium in Texas for all insurers. According to the commenter, under the alternative proposal, only 13 of the commenter's 118 member groups would be excluded from representation by the trade association; by contrast, the proposed rule using countrywide all-lines data would exclude virtually all of the commenter's members from representation by the trade association. Another commenter proposed amending the published rule to define small and medium-sized insurers as those companies maintaining less than a 5.0% market share in the line which is the subject of the rate. Two other commenters argued that the published definition is too tight or too narrow and indicated they believe there should be as wide and diverse a range of views as possible. They urged the Commissioner to "just run the numbers. . .in a way that allows a broad range of companies that do business in the state to participate realistically and to give you a feel of the marketplace." The Department disagrees with basing the definition of small and medium-sized insurers on any basis other than nationwide property and casualty premium volume. For the same reasons, the Department disagrees with the commenters' proposed one-percent definition. The Department believes that in the context of Article 5.101, sec.3(c), the term "small and medium-sized insurer" must be related to the resources of an insurer to represent itself at a benchmark rate hearing and also related to the characteristics of a particular class of insurers. The resources may be either in-house actuarial and legal capabilities or the financial resources to hire the necessary actuarial and legal capabilities. The characteristics of the class of small and medium-sized insurers should be those which differentiate them from large insurers. As such, total countrywide property and casualty premiums seem to be a far better measure of such resources than Texas-only writing. Under the proposed 1.0% definition, an analysis of companies and groups with greater than $100,000 of total 1993 Texas property and casualty written premiums shows that there are 264 small and medium-sized insurers and only 23 insurers that are not small and medium-sized. The Department does not believe that the intent of Article 5.101, sec.3(c), is for trade associations to represent as many insurers as possible, but rather to represent those insurers whose operations can be collectively described as small and medium-sized. The Department believes that this is supported by the fact that sec.3(c) of Article 5.101 also provides that the definition of small and medium-sized "shall be a limitation upon the scope of the presentation to be made by a trade association, but may not limit the participation of a trade association because its membership includes other sized insurers." Thus, the Department believes that the statute is clear that the definition of small and medium-sized insurers should not be associated with the number of insurers represented by the trade association, but with the characteristics of those insurers defined as small and medium-sized. The Department believes that the commenter's proposed definition could not fulfill the statutory requirement of Article 5.101, sec.3(c), because the proposed definition cannot provide any necessary limitation on the scope of the trade association's presentation if the definition includes 264 insurers and excludes only 23. (According to the Department's analysis, under the published definition, 161 insurers would qualify as small and medium-sized and 201 would not so qualify.) The Department also disagrees with the proposed alternative 5.0% definition. This definition would define all but four or five companies writing auto or homeowners' insurance as small or medium-sized. Since this definition is even more inclusive of companies than the 1.0% definition, the Department believes such a definition is also inconsistent with either of the essential criteria-limited resources or similar characteristics of the group of insurers defined as small or medium- sized. Even so, the Commissioner has determined that based on an evaluation of actuarial capabilities of property and casualty insurers the public interest is best served by amending the proposed definition to increase from $50 million to $150 million the total annual direct written premiums for all states for all- lines of property and casualty insurance in order for an insurer or group of insurers to qualify for representation by a trade association at benchmark rate hearings. Under this definition, 251 insurers qualify for representation by a trade association at benchmark rate hearings, and 111 do not so qualify. Several commenters emphasized the need to consider an individual insurer's expense to represent itself at a rate hearing. According to one commenter, participating in a benchmark rate hearing is not inexpensive-typically costing from $100,000 to $150,000 in fees and expenses. The commenter points out that even though a company could reduce these costs by utilizing its staff actuary and company attorneys, there would still be substantial cost imposed on participation. Representation by a trade association, according to this commenter, allows the costs of participation to be spread across the membership base. Another commenter pointed out that ultimately the consumer will have to pay for the expense of an individual insurer to participate in benchmark rate hearings. Two other commenters pointed out that for many companies it is too expensive to participate in the rate hearings; it is more efficient for them to be represented by a trade association. Another commenter indicated that while agency companies want to provide input into the benchmark rate setting process, none have the resources or desire to spend the amount of money required to be an individual party to the rate hearings. According to this commenter, these companies need the help and input of their trade associations. Another commenter stated that as a small insurer they are struggling to cut operating costs and that to allow representation by a trade association helps control costs and ultimately helps keep rates lower. The Department agrees that the definition of small and medium-sized insurer must be related to the financial resources or in-house actuarial and legal resources of an insurer to represent itself at a benchmark rate hearing. Accordingly, the Commissioner has amended the published rule to permit insurers with total annual direct written premiums for all states for all property and casualty lines of insurance which do not exceed $150 million, alone or combined with other affiliated insurers, to be represented by a trade association at benchmark rate hearings. The new section is adopted pursuant to the Insurance Code, Articles 5.101, 5.98, and 1.03A; and the Government Code, sec.2001.004 et seq, Article 5.101, sec.3(c) authorizes the Commissioner of Insurance to define small and medium- sized insurers on whose behalf a trade association that does not collect historical data and that does not provide statistical plans, prospective loss costs, or supplementary rating information to its members may present rate making data and make recommendations at a benchmark rate hearing. Article 5.98 authorizes the Commissioner of Insurance to adopt reasonable rules that are appropriate to accomplish the purposes of Chapter 5 of the Insurance Code (Rating and Policy Forms). Article 5.98 by its terms authorizes the State Board of Insurance to adopt reasonable rules that are appropriate to accomplish the purposes of Chapter 5 of the Insurance Code (Rating and Policy Forms); however, this authority is interpreted to be delegated to the Commissioner of Insurance under Article 1.02 of the Insurance Code, as amended by the 73rd Texas Legislature in House Bill 1461, which provides that a reference in the Insurance Code or another insurance law to the State Board of Insurance means the Commissioner of Insurance or the Texas Department of Insurance, as consistent with the respective powers and duties of the Commissioner and the Department under Article 1.02. Article 1.03A, as enacted in House Bill 1461, provides that the Commissioner of Insurance may adopt rules and regulations, which must be for general and uniform application, for the conduct and execution of the duties and functions of the Texas Department of Insurance only as authorized by a statute. The Government Code, sec.2001.004 et seq (Administrative Procedure Act), authorizes and requires each state agency to adopt rules of practice setting forth the nature and requirement of available procedures and to prescribe the procedures for adoption for rules by a state agency. sec.5.11000. Definition of Small and Medium-Sized Insurers as Referenced in Article 5.101 of the Insurance Code. (a) Purpose. The purpose of this section is to define the term "small and medium-sized insurers" as directed by the Insurance Code, Article 5.101, sec.3(c), relating to the Flexible Rating Program for Certain Insurance Lines. (b) What constitutes a Small and Medium-Sized Insurer. The term "small and medium-sized insurer" means an insurer that is either: (1) an unaffiliated insurer with total annual direct written premiums for all states for all-lines of property and casualty insurance which do not exceed $150 million; or (2) an affiliated insurer, as defined by Insurance Code, Article 21. 49-1, sec.2, if the combined annual direct written premiums of all companies within the group of affiliated insurers for all states for all-lines of property and casualty insurance do not exceed $150 million. (c) Definition of Lines of Property and Casualty Insurance. "Lines of property and casualty insurance" means those lines of business for which financial data for direct business was reported by the insurer, including any line written in by the insurer, in the Fire and Casualty Annual Statement Form 2, Part 2B- Premiums Written, page 8, Underwriting and Investment Exhibit, or any duly promulgated equivalent page, most recently filed with the Texas Department of Insurance. 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 May 24, 1994. TRD-9441336 D. J. Powers Legal Counsel to the Commissioner Texas Department of Insurance Effective date: June 14, 1994 Proposal publication date: November 26, 1993 For further information, please call: (512) 463-6327 Title 34. PUBLIC FINANCE Part I. Comptroller of Public Accounts Chapter 5. Funds Management (Fiscal Affairs) Claims Processing-Payroll 34 TAC sec.5.48 The Comptroller of Public Accounts adopts new sec.5.48, concerning deductions for contributions to charitable organizations, with changes to the proposed text as published in the April 19, 1994, issue of the Texas Register (19 TexReg 2885). The new section is necessary to implement and administer the payroll deduction for state employees to make voluntary contributions to charitable organizations. The following is a summary of the changes made to the proposed text. The definition of "campaign year" in subsection (a)(2) was changed because the proposed rule did not consider the fact that some state employees are paid twice each month and other employees are paid every other week. Subsection (b)(7)(A)-(C) was changed so that a state employee who transfers from one state agency to a second state agency is required to submit an additional authorization form to the second agency only if that agency requires it. Subsection (r)(2)(H) was changed because the definition of "campaign year" in subsection (a)(2) was changed. Subparagraph (H) would have required a local campaign manager to distribute accrued interest at the end of a "campaign year. " But "campaign year" will be a variable concept in the adopted rule, depending on how often employees are paid. The comptroller believes that subparagraph (H)'s deadline for accrued interest to be paid should not vary from employee to employee. Therefore, subparagraph (H) has been changed to provide a more definite deadline. Comments from three sources were received about the proposed text. Texas Tech University said that the proposed definition of "campaign year" in subsection (a)(2) does not consider the fact that some state employees are paid every other week. Therefore, the definition is incorrect to the extent it always equates payroll periods occurring from December 1st through November 30th with the paydays occurring on the first workday of each month from January through December. Texas Tech also asked whether bi-weekly payrolls paid in December will be included in the following campaign year. The comptroller believes that the last bi-weekly payroll paid in December should be included in the following campaign year. The comptroller agrees with Texas Tech's other comments about the definition and has changed subsection (a)(2) accordingly. The Texas A&M University System (the "A&M System") recommended a change to proposed subsection (b)(7). The subsection relates to the interagency transfer of a state employee who authorized a charitable payroll deduction before the transfer occurred. As proposed, the subsection would have allowed the deduction to continue at the new state agency only if the employee submitted an additional authorization form to the agency. The A&M System said that the transferring state employee should be required to submit an additional form only if the new state agency requires it. The comptroller agrees with the A&M System's recommendation and has changed subsection (b)(7) accordingly. The University of Houston System (the "UH System") provided several questions, comments, and recommendations. The UH System has asked several questions relating to the use of the percentage method. Various provisions in the proposed rule require statewide federations or funds and local campaign managers to use the percentage method when distributing employee contributions to charitable organizations. The purpose is to make the charitable payroll deduction easier to administer and to fairly distribute pledge losses among charitable organizations. The method does not involve an employee 30>by 30>employee matching of the amount distributed to a charitable organization with the amount contributed to the organization. Therefore, the method usually will result in a charitable organization not receiving exactly the amount that state employees have contributed to the organization. Some organizations will receive more and some less. The UH System has asked whether the charitable payroll deduction program is viable considering the federal government's tightening of charitable contribution reporting requirements. The UH System has asked how the Internal Revenue Service (IRS) regulation about receipts for contributions under $250 will be handled in the program. The UH System says the percentage method will make it impossible for a charitable organization to know exactly who has contributed to the organization. Finally, the UH System has asked whether all or a portion of an employee's contributions to a charitable organization will retain their tax deductibility if the organization loses its tax exempt status in the middle of a campaign year. The comptroller does not have the authority or the expertise to interpret federal income tax laws and regulations. The comptroller recommends that the UH System contact the IRS or appropriate legal counsel for more information. The UH System has asked what will happen if a controversy or bad publicity during the middle of a campaign year motivates state employees to cancel their deduction to a charitable organization. The UH System points out that the percentage method will result in other charitable organizations, not just the organization in question, receiving less money. The UH System is correct because the proposed rule allows a charitable organization's contribution percentage to be calculated only once per year. The contribution percentage is an integral part of the percentage method. The UH System has asked what potential legal problems state agencies will face from the use of the percentage method. The comptroller is not aware of any particular legal problems state agencies will face. The UH System has asked what controls the proposed rule will impose so that misapplication of state employee contributions is avoided. The UH System has also asked how errors and refunds will be handled. The comptroller has not been given statutory authority to require statewide federations or funds or local campaign managers to follow any particular accounting procedures or controls. If a refund is due from a particular organization, state law authorizes the attorney general to bring an action in a court of competent jurisdiction to recover the money. In the absence of a court order dictating how the refunds will be made, state law requires the state policy committee to instruct the comptroller about making the refunds. In addition to asking various questions about the percentage method, the UH System has also suggested several changes to the proposed rule. The UH System suggests that the percentage method not be used. Instead, distributions to a charitable organization should be matched on an employee 30>by 30>employee basis with contributions to the organization. The comptroller has examined all options in this area. The comptroller believes that the percentage method is the best option because it fairly distributes pledge losses to charitable organizations and is more administrable. The UH System also suggests that the number of statewide federations or funds should be limited to five and the number of local campaign areas should be limited to three. The comptroller is unable to adopt this suggestion because state law does not authorize the comptroller to impose those limits. Finally, the UH System suggests that the comptroller's electronic funds transfer system should be used to send contributions and donor information directly to charitable organizations instead of sending them through statewide federations or funds and local campaign managers. The comptroller is unable to adopt this suggestion for the following administrative reasons. The suggestion would require one of two major changes. The first change would require the comptroller to change the Automated Clearing House format currently used when electronic funds transfers are made. That format does not include the addenda records necessary to send the donor information. Changing the format is not feasible at this time. The second change relates to how a state employee's contribution would be paid to a charitable organization. The contribution would be paid through an electronic funds transfer that would relate solely to that contribution. For example, if 10,000 state employees contributed to an average of two charitable organizations each, then 20,000 different electronic funds transfers per month would have to be initiated. Those transfers would be much more expensive to the state than the procedure established in the proposed rule. In addition, the transfers would require state agencies to establish a large number of new mail codes on the comptroller's computer system, which could cause processing and performance problems for that system. The new section is adopted under the Texas Civil Statutes, Article 6813h, which requires the comptroller to adopt necessary rules for the administration of the payroll deduction for state employees to make voluntary contributions to charitable organizations. The new section implements Texas Civil Statutes, Article 6813h. sec.5.48. Deductions for Contributions to Charitable Organizations. (a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise. (1) Campaign material-A logo identifying the state employee charitable campaign, a campaign slogan, a campaign film, a campaign donor brochure, a donor authorization form, and other materials as approved by the state policy committee. (2) Campaign year-For salary or wages paid once each month, the payroll periods from December 1st through November 30th. For salary or wages paid twice each month, the payroll periods from December 16th through December 15th. For salary or wages paid every other week, the 26 consecutive payroll periods beginning with the period that corresponds to the payment of salary or wages occurring on or closest to, but not after, December 31st. (3) Charitable organization-Has the meaning assigned by Texas Civil Statutes, Article 6813h. (4) Comptroller-The comptroller of public accounts for the State of Texas. (5) Comptroller's electronic funds transfer system -The system authorized by the Government Code, sec.403.016, that the comptroller uses to initiate payments instead of issuing warrants. (6) Deduction-The amount subtracted from a state employee's salary or wages to make a contribution to a local campaign manager or a statewide federation or fund that has been assigned a payee identification number by the comptroller. (7) Designated representative-A state employee volunteer or other individual named by a local campaign manager or a statewide federation or fund as its representative. (8) Direct services-Has the meaning assigned by Texas Civil Statutes, Article 6813h. (9) Eligible charitable organization-A charitable organization that is determined to be eligible to participate in the state employee charitable campaign as provided by this section and Texas Civil Statutes, Article 6813h. (10) Eligible local charitable organization-A local charitable organization that has been approved for local participation in the state employee charitable campaign. (11) Employer-A state agency that employs at least one state employee. (12) Federated community campaign organization-Has the meaning assigned by Texas Civil Statutes, Article 6813h. (13) Federation or fund-Has the meaning assigned by Texas Civil Statutes, Article 6813h. (14) Generic campaign materials-Campaign materials that have not been modified to reflect a particular local campaign area's participants or a local employee committee. (15) Health and human services-Has the meaning assigned by Texas Civil Statutes, Article 6813h. (16) Holiday-A state or national holiday as specified by the General Appropriations Act or the Government Code, sec.sec.662.001-662.010. (17) Include-A term of enlargement and not of limitation or exclusive enumeration. The use of the term does not create a presumption that components not expressed are excluded. (18) Indirect services-Has the meaning assigned by Texas Civil Statutes, Article 6813h. (19) Institution of higher education-Has the meaning assigned by the Education Code, sec.61.003. (20) Local campaign area-Has the meaning assigned by Texas Civil Statutes, Article 6813h. (21) Local campaign manager-A federated community campaign organization that is selected by a local employee committee as provided by this section and Texas Civil Statutes, Article 6813h. (22) Local campaign materials-Campaign materials that have been modified to reflect a particular local campaign area's participants and the local employee committee for the area if the state policy committee has approved the modifications, and additional materials that the state policy committee has approved because they are based on and consistent with the campaign materials approved by the committee. (23) Local charitable organization-Has the meaning assigned by Texas Civil Statutes, Article 6813h. (24) Local employee committee-Has the meaning assigned by Texas Civil Statutes, Article 6813h. (25) May not-A prohibition. The term does not mean "might not" or its equivalents. (26) Payee identification number-The 14-digit number that the comptroller assigns to each direct recipient of a payment made by the comptroller for the State of Texas. (27) Salary or wages-Base salary or wages, longevity pay, or hazardous duty pay. (28) State advisory committee-Has the meaning assigned by Texas Civil Statutes, Article 6813h. (29) State agency-Has the meaning assigned by Texas Civil Statutes, Article 6813h. (30) State campaign manager-A federated community campaign organization that is selected by the state policy committee to coordinate state employee charitable campaign operations with local campaign managers. (31) State employee-An employee of a state agency. (32) State employee charitable campaign-Has the meaning assigned by Texas Civil Statutes, Article 6813h. (33) State policy committee-Has the meaning assigned by Texas Civil Statutes, Article 6813h. (34) Statewide federation or fund-A federation or fund that has been approved for statewide participation in the state employee charitable campaign. (35) Uniform statewide payroll/personnel system-A system in which uniform statewide payroll procedures are followed. (36) Workday-A calendar day other than Saturday, Sunday, or a holiday. (b) Deductions. (1) Authorization of deductions. (A) A state employee may authorize not more than three monthly deductions from the employee's salary or wages. A state employee may authorize only one deduction to any particular statewide federation or fund or local campaign manager. (B) A state employee may authorize a deduction only if the employee: (i) properly completes an authorization form; and (ii) submits the form to a designated representative of the statewide federation or fund or the local campaign manager to which the deduction will be paid. (C) Except as provided in this subparagraph, a state employee may authorize a deduction only during a state employee charitable campaign. (i) State law says that a state agency, other than an institution of higher education, is not required to permit its state employees to authorize a deduction until the first full payroll period after the agency is converted to the uniform statewide payroll/personnel system. A state agency covered by that law shall permit its state employees to authorize deductions so that they are effective not later than the first full payroll period after conversion of the agency. Those authorizations may be made even if a state employee charitable campaign is not occurring when the authorizations are made. (ii) A state employee who begins employment with the state may authorize a deduction if the employee's employer receives the employee's properly completed authorization form not later than the 30th day after the employee's first day of employment with the agency. A new state employee may authorize a deduction even if a state employee charitable campaign is not occurring when the employment begins or the form is provided. This clause does not apply to a state employee who transfers from one state agency to a second state agency. (D) Neither the comptroller nor a state agency is liable or responsible for any damages or other consequences resulting from a state employee authorizing an incorrect amount of a deduction. (2) Minimum amount of deductions. If a state employee authorizes a deduction, the minimum amount of the deduction is two dollars per month. This minimum applies to each deduction authorized by the employee. For example, if the employee authorizes two deductions, then the amount of each of those deductions must be at least two dollars per month. (3) Changes in the amount of deductions. (A) At any time during a campaign year, a state employee may authorize a change in the amount to be deducted from the employee's salary or wages during that year. (B) A state employee may authorize a change only if the employee: (i) properly completes an authorization form; and (ii) submits the form to the employee's employer. (C) A state employee may not change the statewide federation or fund or the local campaign manager that receives deducted amounts if the change would be provided outside the time a state employee charitable campaign is being conducted. (D) A state employee may not change the eligible charitable organizations designated to receive deducted amounts paid to a statewide federation or fund if the change would be provided outside the time a state employee charitable campaign is being conducted. (E) A state employee may not change the eligible local charitable organizations designated to receive deducted amounts paid to a local campaign manager if the change would be provided outside the time a state employee charitable campaign is being conducted. (4) Sufficiency of salary or wages to support a deduction. (A) A state employee is solely responsible for ensuring that the employee's salary or wages are sufficient to support a deduction. (B) If a state employee's salary or wages are sufficient to support only part of a deduction, then no part of the deduction may be made. (C) If a state employee has multiple deductions and the employee's salary or wages are insufficient to support all the deductions, then none of the deductions may be made. (D) The amount that may not be deducted from a state employee's salary or wages because they are insufficient to support the deduction may not be made up by deducting the amount from subsequent payments of salary or wages. (5) Timing of deductions. (A) Except as provided in subparagraph (B) of this paragraph, a deduction may be made only from the salary or wages that are paid on the first workday of a month. (B) If a state employee is not entitled to receive a payment of salary or wages on the first workday of a month, then the employee's employer may designate the payment of salary or wages during the month from which a deduction will be made. A deduction may be made only once each month. (6) Cancellation of deductions. A state employee may cancel a deduction at any time. A cancellation is effective only if the employee properly completes an authorization form and submits the form to the employee's employer. (7) Interagency transfers of state employees. (A) A deduction that started while a state employee was employed by a state agency may resume after the employee transfers to a second state agency only if: (i) the employee requests a copy of the employee's authorization form from the first state agency and submits the copy to the second state agency; (ii) the employee properly completes and submits an additional authorization form to the second state agency, if the agency requires submission of the form; and (iii) the second state agency receives the copy of the employee's authorization form and the additional authorization form, if required, not later than the 30th day after the employee's first day of employment by the second state agency. (B) A deduction that may resume under subparagraph (A) of this paragraph shall become effective at the second state agency not later than with the salary and wages paid on the first workday of the second month following the later of: (i) the month in which the agency receives the copy of the authorization form to which subparagraph (A)(i) of this paragraph refers; or (ii) the month in which the agency receives the additional authorization form, if the agency requires submission of the form. (C) This subparagraph applies only if a state agency requires an additional authorization form to be submitted under subparagraph (A)(ii) of this paragraph. The statewide federation or fund or the local campaign manager named on the form must be the same as that named on the original authorization form. The additional authorization form may not make any changes other than those that a state employee who has not changed employers may make after a state employee charitable campaign has ended. (c) Designation of charitable organizations to receive deducted amounts. (1) Receiving deducted amounts through local campaign managers. (A) A state employee's authorization of a deduction to a local campaign manager may designate not more than three eligible local charitable organizations to receive the deducted amounts through the manager. (i) If a state employee's authorization designates only one eligible local charitable organization, then the organization's designated initial distribution amount with respect to the employee is equal to the employee's entire deduction to the local campaign manager. (ii) If an authorization designates more than one eligible local charitable organization, then the designation is valid only if it specifies the designated initial distribution amount for each organization. (B) If an eligible local charitable organization that a state employee designates under subparagraph (A) of this paragraph is a federation or fund, then the federation or fund shall distribute the deducted amounts it receives to its affiliated eligible charitable organizations according to its policy. (C) This subparagraph applies if a state employee's authorization of a deduction to a local campaign manager does not contain a valid designation. The undesignated initial distribution amounts with respect to the employee for eligible local charitable organizations and statewide federations or funds shall be determined according to this subparagraph. (i) Only an eligible local charitable organization that has been approved to participate in the local campaign area may have an undesignated initial distribution amount. Only a statewide federation or fund to which state employees in the local campaign area have authorized deductions may have an undesignated initial distribution amount. (ii) The undesignated initial distribution amount for an eligible local charitable organization is equal to the distribution percentage for the organization multiplied by the amount of the employee's deduction authorization to the local campaign manager. The distribution percentage is equal to the organization's total designated initial distribution amount as determined or specified under subparagraph (A) of this paragraph for all state employees in the local campaign area divided by the sum of: (I) the total designated initial distribution amount for all eligible local charitable organizations in the local campaign area as determined or specified under subparagraph (A) of this paragraph; and (II) the total amount of deductions authorized to statewide federations or funds by state employees in the local campaign area. (iii) The undesignated initial distribution amount for a statewide federation or fund is equal to the distribution percentage for the federation or fund multiplied by the amount of the employee's deduction authorization to the local campaign manager. The distribution percentage is equal to the total amount of deductions authorized to the federation or fund by state employees in the local campaign area divided by the sum of: (I) the total designated initial distribution amount for all eligible local charitable organizations in the local campaign area as determined or specified under subparagraph (A) of this paragraph; and (II) the total amount of deductions authorized to statewide federations or funds by state employees in the local campaign area. (D) The following example illustrates the calculation of undesignated initial distribution amounts according to subparagraph (C) of this paragraph. (i) The following assumptions apply in this example. (I) State employees in the Austin local campaign area have authorized $15,000 in deductions to the Austin local campaign manager. Of that amount, state employees have designated $10,000 for distribution to the following eligible local charitable organizations. Organization 1 has been designated to receive $5,000. Organization 2 has been designated to receive $3,000. And Organization 3 has been designated to receive $2,000. (II) Of the $15,000 in authorized deductions to the Austin local campaign manager, $5,000 is undesignated. (III) State employees in the Austin local campaign area have authorized total deductions of $10,000 to the following statewide federations or funds. Organizations 4 and 5 have each been authorized to receive $5,000. (ii) The calculation of undesignated initial distribution amounts in this subparagraph relates only to the $5,000 in undesignated deductions to the Austin local campaign manager. This is because an eligible local charitable organization or a statewide federation or fund has an undesignated initial distribution amount only with respect to undesignated deductions. (iii) The first step is to determine the designated initial distribution amount for each eligible local charitable organization listed in clause (i)(I) of this subparagraph. That amount for each organization is the total amount of deductions that state employees have designated to the organization. Therefore, the designated initial distribution amount for Organization 1 is $5,000, Organization 2 is $3,000, and Organization 3 is $2,000. (iv) The second step is to determine the distribution percentage for each eligible local charitable organization listed in clause (i) (I) of this subparagraph. The distribution percentage must be determined according to subparagraph (C)(ii) of this paragraph. The distribution percentage for each organization is as follows: (I) Organization 1-25%; (II) Organization 2-15%; (III) Organization 3-10%. (v) The third step is to determine the distribution percentage for each statewide federation or fund listed in clause (i)(III) of this subparagraph. The distribution percentage must be determined according to subparagraph (C)(iii) of this paragraph. The distribution percentage for each federation or fund is as follows: (I) Organization 4-25%; (II) Organization 5-25%. (vi) The fourth step is to determine the undesignated initial distribution amount for each eligible local charitable organization listed in clause (i)(I) of this subparagraph. The amount must be determined by multiplying the organization's distribution percentage by the amount of undesignated deductions to the Austin local campaign manager. The amount for each organization is as follows: (I) Organization 1-$1,250; (II) Organization 2-$750; (III) Organization 3-$500. (vii) The fifth and final step is to determine the undesignated initial distribution amount for each statewide federation or fund listed in clause (i) (III) of this subparagraph. The amount must be determined by multiplying the federation or fund's distribution percentage by the amount of undesignated deductions to the Austin local campaign manager. The amount for each organization is as follows: (I) Organization 4-$1,250; (II) Organization 5-$1,250. (E) Notwithstanding anything in this paragraph, a local campaign manager shall distribute deducted amounts to an eligible local charitable organization or a statewide federation or fund according to the percentage method required by subsection (j) of this section. A designated or undesignated initial distribution amount specified or determined under this paragraph is only the starting point for calculating the amount to be distributed. (2) Receiving deducted amounts through statewide federations or funds. (A) A state employee's authorization of a deduction to a statewide federation or fund may designate not more than three eligible charitable organizations to receive the deducted amounts through the federation or fund. (i) If a state employee's authorization designates only one eligible charitable organization, then the organization's designated initial distribution amount with respect to the employee is equal to the employee's entire deduction to the statewide federation or fund. (ii) If a state employee's authorization designates more than one eligible charitable organization, then the designation is valid only if it specifies the designated initial distribution amount for each organization. (B) This subparagraph applies if a state employee's authorization of a deduction to a statewide federation or fund does not contain a valid designation. The statewide federation or fund shall determine the undesignated initial distribution amount with respect to the employee for each eligible charitable organization affiliated with the federation or fund. The determination must be accomplished according to the federation or fund's policy. (C) Notwithstanding anything in this paragraph, a statewide federation or fund shall distribute deducted amounts to an eligible charitable organization according to the percentage method required by subsection (k) of this section. A designated or undesignated initial distribution amount specified or determined under this paragraph is only the starting point for calculating the amount to be distributed. (d) State employee charitable campaign. (1) Time of the state employee charitable campaign. The state employee charitable campaign shall be conducted annually during the period after August 31st and before November 1st. (2) Reimbursement of expenses incurred by state employees while representing charitable organizations. A state agency may not reimburse a state employee for expenses incurred while acting as a representative of a charitable organization. (3) Participation by state employees. Participation by a state employee in the state employee charitable campaign is voluntary. (e) Effective dates of authorization forms. (1) Effective date of authorization forms provided during a state employee charitable campaign. A state employee's authorization form that is provided during a state employee charitable campaign is effective for the following campaign year if the employee's employer receives the form not later than November 15th before the start of that year. The deductions may not start before the beginning of that year. (2) Effective date of authorization forms provided immediately after a state agency is converted to the uniform statewide payroll/personnel system. State law says that a state agency, other than an institution of higher education, is not required to permit its state employees to authorize a deduction until the first full payroll period after the agency is converted to the uniform statewide payroll/personnel system. A state agency covered by that law shall permit its employees to authorize deductions so that they are effective not later than the first full payroll period after conversion of the agency. To be effective by that date, a properly completed authorization form must be received by the agency not later than the tenth workday before the first day of the agency's first full monthly payroll period after conversion. (3) Effective date of authorization forms provided by new state employees. (A) Paragraph (1) of this subsection applies to a new state employee's authorization form if it: (i) is received by the employee's employer during a state employee charitable campaign; and (ii) authorizes a deduction to begin during the campaign year following the campaign year in which the form is received. (B) This subparagraph applies to a new state employee's authorization form only if the form authorizes a deduction to begin during the same campaign year as the campaign year in which the employee's employer receives the form. The employer may decide when the deduction will take effect, subject to the following limitations. (i) Except as provided in clause (ii) of this subparagraph, the deduction must begin not later than with the employee's salary or wages that are paid on the first workday of the second month following the month in which the employer receives the form. (ii) If the employer receives the form during October or November, then the employer may decide whether and when to give effect to the form. (4) Effective date of authorization forms that request changes in deductions. (A) This paragraph applies only to a state employee's authorization form that requests a change to a deduction. (B) The employer of the employee may decide when the change will take effect, subject to the following limitations. (i) Except as provided in clause (ii) of this subparagraph, the change must take effect not later than with the employee's salary or wages that are paid on the first workday of the second month following the month in which the employer receives the form. (ii) If the employer receives the form during October or November of a campaign year and the form requests a change in a deduction for the year, then the employer may decide whether and when to give effect to the form. (C) The following example illustrates the requirements of this paragraph. Assume that a state agency receives an authorization form on July 2, 1994, and that the form requests a decrease in the amount of a deduction. The agency may make the decrease effective with the deduction that occurs on the August 1, 1994, salary payment. If the agency does not, then the agency must make the decrease effective with the deduction that occurs on the September 1, 1994, salary payment. (5) Effective date of authorization forms that request cancellations of deductions. (A) This paragraph applies only to a state employee's authorization form that requests the cancellation of a deduction. (B) The employer of the employee may decide when the cancellation will take effect. However, the cancellation must take effect not later than with the employee's salary or wages that are paid on the first workday of the second month following the month in which the employer receives the form. (C) The following example illustrates the requirements of this paragraph. Assume that a state agency receives an authorization form on July 2, 1994, and that the form requests the cancellation of a deduction. The agency may make the cancellation effective with the August 1, 1994, salary payment. If the agency does not, then the agency must make the cancellation effective with the September 1, 1994, salary payment. (f) Requirements for the content and format of authorization forms. (1) Prohibition against distributing or providing authorization forms. A local campaign manager or a statewide federation or fund may distribute or provide an authorization form to a state employee only if both the comptroller and the state policy committee have approved the form. (2) Requirement to produce authorization forms. A local campaign manager or a statewide federation or fund must produce an authorization form that complies with the comptroller's requirements and this section. (3) Restrictions on approval of authorization forms. Neither the comptroller nor the state policy committee may approve the authorization form of a local campaign manager or a statewide federation or fund unless the form: (A) is at least 8 1/2 inches wide and 11 inches long; (B) states that statewide federations or funds and local campaign managers are required to use the percentage method to distribute a state employee's deducted amounts to eligible charitable organizations designated by the employee instead of matching deducted amounts received to actual designations; (C) accurately describes the percentage method; and (D) complies with the comptroller's requirements for format and substance. (g) Procedure for federations or funds to apply for statewide participation. (1) Request for statewide participation. A federation or fund may not be a statewide federation or fund unless the federation or fund applies to the state policy committee for that status in accordance with this section, Texas Civil Statutes, Article 6813h, and the committee's procedures. (2) Requirements for the application. The application of a federation or fund to be a statewide federation or fund must include: (A) a letter from the presiding officer of the federation or fund's board of directors certifying compliance by the federation or fund and its affiliated agencies with the eligibility requirements of Texas Civil Statutes, Article 6813h; (B) a copy of a letter from each affiliate of the federation or fund certifying that the federation or fund serves as the affiliate's representative and fiscal agent in the state employee charitable campaign; (C) a copy of the conflict of interest policy approved by the federation or fund's board of directors, which prohibits its board members, executive director, and staff from engaging in business transactions in which they have material conflicting interests; (D) if the executive director of the federation or fund receives material compensation for services rendered to any organization other than the federation or fund, a full disclosure of: (i) the name of the organization; (ii) the nature and amount of the compensation; and (iii) the relationship of the organization to the federation or fund; (E) a copy of the federation or fund's current operating budget, signed by the presiding officer of the federation or fund's board of directors; and (F) an acknowledgment that the federation or fund is responsible for filing any appeals from its affiliated agencies that have not secured approval for statewide or local participation in the state employee charitable campaign. (3) Notification of the comptroller. Upon approval of a federation or fund for statewide participation in the state employee charitable campaign, the state policy committee shall submit to the comptroller: (A) the complete name of the federation or fund; (B) the mailing address of the federation or fund; (C) the full name, title, telephone number, and mailing address of the federation or fund's primary contact; (D) the payee identification number of the federation or fund, when available; and (E) the other information deemed necessary by the comptroller. (4) Payee identification numbers. A federation or fund that has been approved for statewide participation and that does not have a payee identification number shall submit a request for one to the comptroller. (5) Electronic funds transfers. A federation or fund that has been approved for statewide participation in the state employee charitable campaign shall submit a request to be paid through electronic funds transfers under rules adopted by the comptroller. (6) Beginning of deductions. The first payment of deducted amounts to a statewide federation or fund shall occur the first month of the first campaign year that begins after the federation or fund is approved for statewide participation in the state employee charitable campaign. (h) Procedure for charitable organizations to apply for local participation. (1) Request for local participation. (A) A charitable organization may not be an eligible local charitable organization unless it applies to the appropriate local employee committee for that status in accordance with this section, Texas Civil Statutes, Article 6813h, and the committee's procedures. (B) A federation or fund that wants to be an eligible local charitable organization may apply on behalf of its affiliated agencies. (2) Requirements for applications from federations or funds. If a charitable organization applying to be an eligible local charitable organization is a federation or fund, then the organization must provide to the appropriate local employee committee: (A) a letter from the presiding officer of the federation or fund's board of directors certifying compliance by the federation or fund and its affiliated agencies with the eligibility requirements of Texas Civil Statutes, Article 6813h; (B) a copy of a letter from each affiliate of the federation or fund certifying that the federation or fund serves as the affiliate's representative and fiscal agent in the state employee charitable campaign; (C) a copy of the conflict of interest policy approved by the federation or fund's board of directors, which prohibits its board members, executive director, and staff from engaging in business transactions in which they have material conflicting interests; (D) if the executive director of the federation or fund receives material compensation for services rendered to any organization other than the federation or fund, a full disclosure of: (i) the name of the organization; (ii) the nature and amount of the compensation; and (iii) the relationship of the organization to the federation or fund; (E) a copy of the federation or fund's current operating budget, signed by the presiding officer of the federation or fund's board of directors; and (F) an acknowledgment that the federation or fund is responsible for filing any appeals from its affiliated agencies that have not secured approval for statewide or local participation in the state employee charitable campaign. (3) Beginning of deductions. The first deduction to pay an eligible local charitable organization shall occur the first month of the first campaign year that begins after the charitable organization is approved for local participation in the state employee charitable campaign. (i) Payments of deductions. (1) Prohibited payments to eligible local charitable organizations. (A) Neither the comptroller nor an institution of higher education may pay deducted amounts directly to an eligible local charitable organization. (B) Except as otherwise provided in this subparagraph, deducted amounts shall be paid directly to the appropriate local campaign manager. If the eligible local charitable organization involved is an affiliate of a statewide federation or fund, then the deducted amounts shall be paid directly to the federation or fund. (2) Payments by the comptroller through electronic funds transfers. If feasible, the comptroller shall pay deducted amounts to a local campaign manager or a statewide federation or fund by electronic funds transfer. (3) Payments through warrants issued by the comptroller. (A) This paragraph applies only if it is infeasible for the comptroller to pay deducted amounts by electronic funds transfer. (B) The comptroller shall pay deducted amounts by warrant and make the warrant available for pick up by the state agency whose employees' deductions are being paid by the warrant. (C) A state agency shall mail or hand deliver a warrant picked up under subparagraph (B) of this paragraph to the payee of the warrant. (D) Except as provided in subparagraph (E) of this paragraph, the deadline for mailing or hand delivering a warrant is the tenth workday of the month following the month when the salary or wages from which the deductions are made were earned. (E) This subparagraph applies only to a deduction that occurs after the tenth workday of the month following the month when the salary or wages from which the deduction is made were earned. The deadline for a state agency to mail or hand deliver a warrant to pay the deduction is the second workday after the agency receives the warrant. (4) Payments by institutions of higher education. (A) This paragraph applies to deducted amounts from the salary or wages of a state employee of an institution of higher education only if the comptroller does not pay those amounts directly to a local campaign manager or a statewide federation or fund. (B) If feasible, an institution of higher education shall pay deducted amounts to a local campaign manager or a statewide federation or fund by electronic funds transfer. (C) If it is infeasible for an institution of higher education to pay deducted amounts by electronic funds transfer, then the institution shall make the payment by check. (D) This subparagraph applies only if an institution of higher education pays deducted amounts by check. (i) This clause applies only to deductions from salary or wages that are paid on the first workday of a month. An institution of higher education shall mail or hand deliver its check to the payee of the check not later than the 10th workday of the month. (ii) This clause applies only to deductions from salary or wages that are paid on a day other than the first workday of a month. An institution of higher education shall mail or hand deliver its check to the payee of the check not later than the 10th workday of the month following the month in which the salary or wages were earned. (j) Distributions of deductions by local campaign managers. (1) Requirement to use the percentage method. A local campaign manager shall use the percentage method to distribute deducted amounts to eligible local charitable organizations and statewide federations or funds. (2) Description of the percentage method. (A) Immediately after the end of a state employee charitable campaign, a local campaign manager shall calculate the contribution percentage for: (i) each eligible local charitable organization that has been approved to participate in the local campaign area under the manager's responsibility; and (ii) each statewide federation or fund to which state employees in the local campaign area have authorized deductions. (B) The contribution percentage for an eligible local charitable organization is the ratio of: (i) the sum of: (I) the organization's designated initial distribution amount with respect to all state employees in the local campaign area as determined under subsection (c)(1)(A) of this section; and (II) the organization's undesignated initial distribution amount with respect to all state employees in the local campaign area as determined under subsection (c) (1)(C)(ii) of this section; to (ii) the total amount of deductions authorized to the local campaign manager on authorization forms completed during the campaign. (C) The contribution percentage for a statewide federation or fund is the ratio of: (i) the federation or fund's undesignated initial distribution amount with respect to all state employees in the local campaign area as determined under subsection (c)(1)(C) (iii) of this section; to (ii) the total amount of deductions authorized to the local campaign manager on authorization forms completed during the campaign. (D) The contribution percentage for an eligible local charitable organization or a statewide federation or fund may not be recalculated before the conclusion of the next state employee charitable campaign. (E) The amount of deductions that a local campaign manager distributes to an eligible local charitable organization or a statewide federation or fund is equal to the product of: (i) the contribution percentage of the organization or federation or fund; and (ii) the total amount of deductions the manager is distributing. (3) Example of the percentage method. This paragraph illustrates the percentage method described in paragraph (2) of this subsection. (A) The following assumptions apply in this example. (i) Organization 1, an eligible local charitable organization, has a designated initial distribution amount of $5,000 and an undesignated initial distribution amount of $1,250. (ii) Organization 2, an eligible local charitable organization, has a designated initial distribution amount of $3,000 and an undesignated initial distribution amount of $750. (iii) Organization 3, an eligible local charitable organization, has a designated initial distribution amount of $2,000 and an undesignated initial distribution amount of $500. (iv) Organization 4, a statewide federation or fund, has an undesignated initial distribution amount of $1,250. (v) Organization 5, a statewide federation or fund, has an undesignated initial distribution amount of $1,250. (vi) The total amount of deductions authorized to the local campaign manager is $15,000. (vii) The local campaign manager has actually received $10,000 in deducted amounts. (B) The first step is to calculate the contribution percentage for each organization according to paragraph (2)(B)-(C) of this subsection. The contribution percentage for each organization is as follows: (i) Organization 1-41.67%; (ii) Organization 2-25%; (iii) Organization 3-16.67%; (iv) Organization 4-8.33%; (v) Organization 5-8.33%. (C) The second and final step is to calculate the amount that the local campaign manager distributes to each organization according to paragraph (2)(E) of this subsection. The amount for each organization is as follows: (i) Organization 1-$4,167; (ii) Organization 2-$2,500; (iii) Organization 3-$1,667; (iv) Organization 4-$833; (v) Organization 5-$833. (4) Prohibition of distributions until payment reports reconciled. A local campaign manager may not make a distribution before the manager reconciles the payment reports received from the comptroller or an institution of higher education with the payments received by electronic funds transfer or by warrant or check. (5) Frequency of distributions. A local campaign manager shall make distributions quarterly or more frequently than quarterly. (k) Distributions of deductions by statewide federations or funds. (1) Requirement to use the percentage method. A statewide federation or fund shall use the percentage method to distribute deducted amounts to eligible charitable organizations. (2) Description of the percentage method. (A) Immediately after the end of a state employee charitable campaign, a statewide federation or fund shall calculate the contribution percentage for each eligible charitable organization that is an affiliate of the federation or fund. (B) The contribution percentage for an eligible charitable organization is the ratio of: (i) the sum of: (I) the organization's designated initial distribution amount with respect to all state employees who have authorized deductions to the statewide federation or fund as determined under subsection (c)(2)(A) of this section; and (II) the organization's undesignated initial distribution amount with respect to all state employees who have authorized deductions to the statewide federation or fund as determined under subsection (c)(2)(B) of this section; to (ii) the total amount of deductions authorized to the statewide federation or fund on authorization forms completed during the campaign. (C) The contribution percentage for an eligible charitable organization may not be recalculated before the conclusion of the next state employee charitable campaign. (D) The amount of deductions that a statewide federation or fund distributes to an eligible charitable organization is equal to the product of: (i) the contribution percentage of the organization; and (ii) the total amount of deductions the federation or fund is distributing. (3) Example of the percentage method. This paragraph illustrates the percentage method described in paragraph (2) of this subsection. (A) The following assumptions apply in this example. (i) Eligible charitable organization 1 has a designated initial distribution amount of $5,000 and an undesignated initial distribution amount of $1,250. (ii) Eligible charitable organization 2 has a designated initial distribution amount of $3,000 and an undesignated initial distribution amount of $750. (iii) Eligible charitable organization 3 has a designated initial distribution amount of $2,000 and an undesignated initial distribution amount of $500. (iv) The total amount of deductions authorized to the statewide federation or fund is $12,500. (v) The statewide federation or fund has actually received $10,000 in deducted amounts. (B) The first step is to calculate the contribution percentage for each eligible charitable organization according to paragraph (2)(B) of this subsection. The contribution percentage for each organization is as follows: (i) Organization 1-50%; (ii) Organization 2-30%; (iii) Organization 3-20%. (C) The second and final step is to calculate the amount that the statewide federation or fund distributes to each organization according to paragraph (2)(D) of this subsection. The amount for each organization is as follows: (i) Organization 1-$5,000; (ii) Organization 2-$3,000; (iii) Organization 3-$2,000. (4) Prohibition of distributions until payment reports reconciled. A statewide federation or fund may not make a distribution before the federation or fund reconciles the payment reports received from the comptroller or an institution of higher education with the payments received by electronic funds transfer or by warrant or check. (5) Frequency of distributions. A statewide federation or fund shall make distributions quarterly or more frequently than quarterly. (l) Charging administrative fees to cover costs incurred to make deductions. The comptroller intends to adopt at a later date provisions about charging administrative fees to cover costs incurred by the comptroller and employers in the implementation and administration of Texas Civil Statutes, Article 6813h. (m) Refunding excessive payments of deductions. (1) Authorization of refunds. If the amount of deductions paid to a local campaign manager or a statewide federation or fund exceeds the amount that should have been paid, then the excess may be refunded to the state agency on whose behalf the payment was made. (2) Methods for accomplishing refunds. If a refund is authorized by paragraph (1) of this subsection, then the refund shall be accomplished by: (A) the state agency on whose behalf the payment was made subtracting the amount of the refund from a subsequent payment of deductions to the local campaign manager or statewide federation or fund; or (B) the local campaign manager or the statewide federation or fund issuing a check in the amount of the refund to the state agency on whose behalf the payment was made, if authorized by paragraph (3) of this subsection. (3) Paying refunds by check. A local campaign manager or a statewide federation or fund may issue a refund check only if the payee of the check first submits a written request for the refund to be made by check. (4) Deadline for paying refunds by check. This paragraph applies only if a local campaign manager or a statewide federation or fund is authorized by paragraph (3) of this subsection to make a refund by check. The local campaign manager or the statewide federation or fund shall ensure that the refund check is received by the payee not later than the 30th day after the date on which the written request for the refund to be made by check is received. (n) Responsibilities of the state policy committee. (1) Statutory responsibilities. The state policy committee shall fulfill its statutory responsibilities as set forth in Texas Civil Statutes, Article 6813h. (2) Additional responsibilities. In addition to its statutory responsibilities, the state policy committee: (A) shall establish an annual application, eligibility determination, and appeals period for statewide or local participation in the state employee charitable campaign; (B) shall determine the eligibility of a federation or fund and its affiliated agencies for statewide participation in the state employee charitable campaign; (C) shall review and resolve the appeals of entities not accepted for statewide or local participation in the state employee charitable campaign under procedures that comply with paragraph (3) of this subsection; (D) shall disqualify a federation or fund from statewide participation in the state employee charitable campaign if the committee determines that the federation or fund intentionally filed an application that contains false or misleading information; (E) shall establish penalties for non-compliance with this section by a statewide federation or fund, an eligible local charitable organization, the state campaign manager, or a local campaign manager; (F) shall establish procedures for the selection and oversight of the state campaign manager and local campaign managers; (G) shall select a federated community campaign organization to act as the state campaign manager in accordance with the criteria contained in paragraph (4) of this subsection; (H) shall contract with the federated community campaign organization selected as the state campaign manager; (I) may establish policies and procedures for the operation and administration of the state employee charitable campaign, including policies and procedures about the hearing of any grievance concerning the operation and administration of the campaign; (J) shall consult with the state campaign manager and the state advisory committee before approving the campaign plan, budget, and materials; (K) may not approve campaign materials if: (i) they do not state that statewide federations or funds may or may not provide services in all local campaign areas; (ii) they list a charitable organization as both a statewide federation or fund and an eligible local charitable organization; (iii) they list a charitable organization as an affiliate of two or more statewide federations or funds unless the organization serves separate and distinct populations as part of each statewide federation or fund; (iv) they list similarly named eligible local charitable organizations in the same local campaign area unless the appropriate local employee committee has determined that each organization delivers services in different geographical areas within the local campaign area; (v) they list a charitable organization as an affiliate of more than one federation or fund certified as an eligible local charitable organization unless the appropriate local employee committee has determined that the charitable organization delivers services to separate and distinct populations in the local campaign area as part of its membership in the federations or funds; (vi) they do not state that a local campaign manager or a statewide federation or fund may distribute quarterly a state employee's deductions; (vii) they do not state that a local campaign manager or a statewide federation or fund is required to distribute a state employee's deductions based on the percentage method instead of matching deducted amounts received by the local campaign manager or statewide federation or fund to the employee's designations; or (viii) they do not accurately describe the percentage method; (L) shall review and approve or disapprove the generic materials used by the state campaign manager and local campaign managers; (M) shall ensure that local campaign areas do not overlap; (N) shall ensure that only one local campaign manager is responsible for solicitation of all state employees in the local campaign area for which the manager has responsibility; (O) shall submit to the comptroller the name and boundaries of each local campaign area not later than the 30th day after the end of the annual application period; (P) shall compile and submit to the comptroller not later than the 30th day after the end of the annual application period a list of the local campaign managers and the name, address, and telephone number of each manager's primary contact; (Q) shall notify the comptroller immediately after a change occurs to the name or mailing address of a statewide federation or fund or local campaign manager; (R) shall notify the comptroller immediately after a change occurs to the name, title, telephone number, or mailing address of the primary contact of a local campaign manager or a statewide federation or fund; and (S) shall represent all statewide federations or funds and local campaign managers for the purposes of: (i) communicating with the comptroller, including receiving and responding to correspondence from the comptroller; and (ii) disseminating information, including information about the requirements of this section, to representatives of federations or funds, local employee committees, and local campaign managers. (3) Appeals procedures. The procedures that the state policy committee adopts to review and resolve the appeal of an entity that was not accepted for statewide or local participation in the state employee charitable campaign must: (A) prohibit the consideration of information that the committee has considered previously; (B) provide sufficient time for a federation or fund to reapply for participation in that campaign; and (C) permit a federation or fund that was not accepted for statewide participation to apply for participation in a local campaign area during the campaign. (4) Criteria for selection of a state campaign manager. The state policy committee shall consider the following criteria when evaluating the application of a federated community campaign organization to act as the state campaign manager: (A) the number and diversity of voluntary health and human services agencies or affiliates that rely on the organization for financial support; (B) the capability of the organization to conduct employee campaigns, as demonstrated by records of the amount of funds raised during the organization's last completed annual public solicitation of funds; (C) the percent of solicited funds received by the organization during its last completed annual public solicitation of funds that were distributed to voluntary health and human services agencies; (D) the geographic area serviced by the organization; and (E) the organization's capability and expertise to provide effective campaign counsel and management as demonstrated by staff and equipment resources and examples of past campaign management. (5) Comptroller's reliance on decisions made by the state policy committee. The comptroller is entitled to rely on the state policy committee's: (A) determination about the eligibility of a federation or fund and its affiliated agencies for statewide participation in the state employee charitable campaign; (B) disqualification of a federation or fund from statewide participation in the state employee charitable campaign; and (C) other decision unless the committee has no legal authority over the subject covered by the decision. (o) Responsibilities of the state advisory committee. The state advisory committee shall fulfill its statutory responsibilities as set forth in Texas Civil Statutes, Article 6813h. (p) Responsibilities of local employee committees. (1) Statutory responsibilities. A local employee committee shall fulfill its statutory responsibilities as set forth in Texas Civil Statutes, Article 6813h. (2) Additional responsibilities. In addition to its statutory responsibilities, a local employee committee: (A) shall determine the eligibility of a local charitable organization for local participation in the state employee charitable campaign; (B) may call upon and use outside expertise and resources available to the committee to assess the eligibility of a local charitable organization; (C) shall disqualify a local charitable organization from local participation in the state employee charitable campaign if the committee determines that the organization intentionally filed an application that contains false or misleading information; (D) shall select a federated community campaign organization to act as the local campaign manager according to criteria contained in paragraph (3) of this subsection; (E) shall contract with the federated community campaign organization selected as the local campaign manager; (F) shall consult with the local campaign manager before approving the local campaign plan, budget, and materials; and (G) shall submit to the state policy committee upon contracting with a federated community campaign organization: (i) the name of the local campaign area; (ii) the name of the federated community campaign organization with which the local employee committee has contracted; and (iii) the name, address, and telephone number of the primary contact of the local campaign manager. (3) Criteria for selection of a local campaign manager. A local employee committee shall consider the following criteria when evaluating the application of a federated community campaign organization to act as the local campaign manager: (A) the number and diversity of voluntary health and human services agencies or affiliates that rely on the organization for financial support; (B) the capability of the organization to conduct employee campaigns, as demonstrated by records of the amount of funds raised during the organization's last completed annual public solicitation of funds; (C) the percent of solicited funds received by the organization during its last completed annual public solicitation of funds that were distributed to voluntary health and human services agencies; (D) the geographic area serviced by the organization; and (E) the organization's capability and expertise to provide effective campaign counsel and management as demonstrated by staff and equipment resources and examples of past campaign management. (4) Comptroller's reliance on decisions made by a local employee committee. The comptroller is entitled to rely on a local employee committee's: (A) determination about the eligibility of a local charitable organization for local participation in the state employee charitable campaign; (B) disqualification of a local charitable organization from local participation in the state employee charitable campaign; and (C) other decision unless the committee has no legal authority over the subject covered by the decision. (q) Responsibilities of the state campaign manager. (1) Statutory responsibilities. The state campaign manager shall fulfill the manager's statutory responsibilities as set forth in Texas Civil Statutes, Article 6813h. (2) Additional responsibilities. In addition to the state campaign manager's statutory responsibilities, the manager shall: (A) develop the state employee charitable campaign plan in consultation with the state advisory committee; (B) serve as liaison to the state policy committee, the state advisory committee, the local campaign managers, and the local employee committees on behalf of statewide federations or funds and eligible local charitable organizations; (C) structure the state employee charitable campaign fairly and equitably according to the policies and procedures established by the state policy committee; (D) provide for involvement of all statewide federations or funds, including the use of their resources, at all levels of the state employee charitable campaign; (E) conduct the manager's responsibilities on behalf of the state employee participants in the state employee charitable campaign separately from the manager's internal operations; (F) prepare and submit for review by the state advisory committee a single statewide campaign budget that has been prepared in cooperation with local campaign managers and that includes campaign materials, staff time, and other expenses incurred for the state employee charitable campaign; (G) establish, after consulting with the state advisory committee, the state policy committee, and the local campaign managers, a uniform campaign reporting form to allow reporting of designated deductions, undesignated deductions, campaign expenses, and other information deemed necessary by the state campaign manager; and (H) submit a statewide campaign report that complies with paragraph (3) of this subsection. (3) Statewide campaign reports. A statewide campaign report shall represent a compilation of the local campaign managers' campaign reports. The state campaign manager shall submit the statewide campaign report to the state policy committee, the state advisory committee, and the comptroller not later than the 60th day after the day on which the campaign ended. (r) Responsibilities of local campaign managers. (1) Statutory responsibilities. A local campaign manager shall fulfill the manager's statutory responsibilities as set forth in Texas Civil Statutes, Article 6813h. (2) Additional responsibilities. In addition to a local campaign manager's statutory responsibilities, the manager shall: (A) recruit, train, and supervise state employee volunteers; (B) involve participating eligible local charitable organizations and statewide federations or funds in the training of state employee volunteers; (C) consult with eligible local charitable organizations and statewide federations or funds about the operation of the state employee charitable campaign and the preparation of local campaign materials; (D) provide eligible local charitable organizations and statewide federations or funds with the opportunity to participate in local state employee charitable campaign events and access to all records for the local campaign area; (E) maintain campaign records for the local campaign area, including total pledges, total pledges by eligible local charitable organization and statewide federation or fund, state agencies contacted, and other records deemed necessary by the state policy committee for organization, control, and progress reporting; (F) submit to the state campaign manager a final campaign report of designated deductions, undesignated deductions, campaign expenses, and other information deemed necessary by the state campaign manager not later than the 40th day following the close of the state employee charitable campaign; (G) establish an account at a financial institution for the purpose of receiving payments from the comptroller and institutions of higher education by electronic funds transfer, warrant, or check; (H) distribute interest accrued during a campaign year as soon as possible after December 31st to each eligible local charitable organization and statewide federation or fund in the same manner that undesignated deductions are distributed, subject to the limitation in paragraph (3) of this subsection; (I) submit a request to the comptroller to be paid through electronic funds transfers under rules adopted by the comptroller; (J) reconcile the payment report provided by the comptroller or an institution of higher education with the amount of deductions paid to the manager; (K) report to the comptroller or an institution of higher education, as appropriate, each discrepancy between a payment report provided by the comptroller or an institution and the actual amount of deductions received not later than the 30th day after the day on which the comptroller or the institution mailed or delivered the report; (L) report to each eligible local charitable organization and statewide federation or fund the amount of its undesignated and designated initial distribution amounts as determined under subsection (c)(1) of this section; and (M) report to each eligible local charitable organization and statewide federation or fund its contribution percentage as determined under subsection (j)(2) of this section. (3) Limitation on distributions of accrued interest. A local campaign manager may not distribute accrued interest to: (A) an eligible local charitable organization that did not receive deducted amounts through the manager during the campaign year; or (B) a statewide federation or fund that did not receive deducted amounts through the manager during the campaign year, unless the only reason for not receiving the deducted amounts through the manager is the direct payment requirement of the second sentence of subsection (i)(1)(B) of this section. (4) Prohibition against solicitation. A local campaign manager may not solicit a deduction from a state employee at the employee's worksite unless the solicitation is pursuant to the state employee charitable campaign. (s) Responsibilities of statewide federations or funds. (1) Reconciliation of payment reports. A statewide federation or fund shall reconcile the payment report provided by the comptroller or an institution of higher education with the amount of deductions paid to the federation or fund. (2) Reports of discrepancies. (A) A statewide federation or fund shall report to the comptroller or an institution of higher education, as appropriate, each discrepancy between a payment report provided by the comptroller or an institution and the actual amount of deductions received. (B) A report of discrepancies is due not later than the 30th day after the day on which the comptroller or the institution of higher education mailed or delivered the report. (3) Prohibition against solicitation. A statewide federation or fund may not solicit a deduction from a state employee at the employee's worksite unless the solicitation is pursuant to the state employee charitable campaign. (t) Prohibition against certain solicitation by eligible local charitable organizations. An eligible local charitable organization may not solicit a deduction from a state employee at the employee's worksite unless the solicitation is pursuant to the state employee charitable campaign. (u) Acceptance of authorization forms by state agencies. (1) Prohibition against accepting certain authorization forms. A state agency may accept an authorization form only if it complies with the comptroller's requirements. (2) Acceptance of altered authorization forms. A state agency is not required to accept an authorization form that contains an obvious alteration without the appropriate state employee's written consent to the alteration. (v) Payment reports. (1) Monthly submission of payment reports. (A) An institution of higher education shall submit a payment report each month to each local campaign manager or statewide federation or fund that has received during the month deducted amounts from the institution's state employees. (B) The comptroller shall submit a payment report each month to each local campaign manager or statewide federation or fund that has received during the month deducted amounts through the comptroller's electronic funds transfer system. (2) Information included in payment reports. (A) An institution of higher education's payment report must include the amount and date of each check written to or electronic funds transfer made to a local campaign manager or a statewide federation or fund by the institution. (B) The comptroller's payment report must include the amount and date of each electronic funds transfer made to a local campaign manager or statewide federation or fund by the comptroller. (3) Format of payment reports. An institution of higher education's payment report must be in the format prescribed by the comptroller. (4) Deadline for submission of payment reports. (A) Except as otherwise provided in this subparagraph, an institution of higher education shall mail or deliver a payment report not later than the tenth workday of the month in which the institution paid the deducted amounts covered by the report. For deductions from salary or wages paid by an institution of higher education after the tenth workday of a month, the institution may include the deductions in the institution's payment report for the following month. (B) Except as otherwise provided in this subparagraph, the comptroller shall mail or deliver a payment report not later than the fifth workday of the month in which the comptroller paid the deducted amounts covered by the report. For deductions from salary or wages paid by the comptroller after the first workday of a month, the comptroller may include the deductions in the comptroller's payment report for the following month. (w) Complaints by state employees about coercive activity. (1) Definition. (A) In this section, "coercive activity" includes: (i) a state agency or its representative pressuring a state employee to participate in a state employee charitable campaign; (ii) a state agency or its representative inquiring about: (I) whether a state employee has chosen to participate in a state employee charitable campaign; or (II) the amount of a state employee's deduction except as necessary to administer the deduction; (iii) a state agency or its representative establishing a goal for 100% of the agency's state employees to authorize a deduction; (iv) a state agency or its representative establishing a dollar contribution goal or quota for a state employee; (v) a state agency, a statewide federation or fund, a local campaign manager, or a representative of the preceding developing or using a list of state employees who did not complete an authorization form during a state employee charitable campaign; (vi) a state agency, a statewide federation or fund, a local campaign manager, or a representative of the preceding using or providing to others a list of state employees who completed authorizations forms during a state employee charitable campaign, unless the purpose of the list is to make a deduction or transmit deducted amounts to a local campaign manager or a statewide federation or fund; and (vii) a state agency or its representative using as a factor in a performance appraisal the results of a state employee charitable campaign in a particular section, division, or other level of the agency. (B) Notwithstanding subparagraph (A) of this paragraph, "coercive activity" does not include: (i) the head of a state agency's participation in the customary activities associated with a state employee charitable campaign; or (ii) the head of a state agency's demonstration of support for the campaign in newsletters or other routine communications with state employees. (2) Submission of complaints to the comptroller. A state employee may submit a written complaint to the comptroller when the employee believes that coercive activity has occurred in a state employee charitable campaign. (3) Investigation by the comptroller of complaints. (A) The comptroller shall investigate a state employee's written complaint about coercive activity. The comptroller shall mail or deliver a description of the comptroller's findings about the complaint to the employee not later than the 30th day after the comptroller receives the complaint. (B) If the comptroller finds that coercive activity has occurred, then the comptroller shall mail or deliver notice of the finding to the state policy committee not later than the 30th day after the comptroller makes the finding. (4) Action by the state policy committee. (A) If the state policy committee receives written notification that the comptroller has found that coercive activity has occurred, then the committee shall take appropriate action. Actions that the state policy committee may take include suspension of the person or entity that engaged in the coercive activity from participation in the state employee charitable campaign for one campaign year. (B) A person or entity that has been suspended from the state employee charitable campaign for a campaign year may apply to the state policy committee for participation in the campaign for the next campaign year. 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 May 24, 1994. TRD-9441350 Martin E. Cherry Chief, General Law Section Comptroller of Public Accounts Effective date: June 15, 1994 Proposal publication date: April 19, 1994 For further information, please call: (512) 463-4028 TITLE 40. SOCIAL SERVICES AND ASSISTANCE Part I. Texas Department of Human Services Chapter 15. Medicaid Eligibility Subchapter C. Basic Program Requirements 40 TAC sec.15.315 The Texas Department of Human Services (DHS) adopts an amendment to sec.15. 315, concerning Preadmission Screening and Annual Resident Review (PASARR), in its Medicaid Eligibility rule chapter. The amendment is adopted without changes to the proposed text as published in the April 19, 1994, issue of the Texas Register (19 TexReg 2898). The justification for the amendment is to ensure that all clients seeking long- term care services participate in the assessment/screening process. The assessment/screening process has been made the first step in receiving services in pilot sites selected by the Board of Human Services. The amendment will function by ensuring that clients in pilot sites will be screened for an assessment of their care needs and offered a choice of appropriate services. The department received no comments regarding adoption of the amendment. The amendment is adopted under the Human Resources Code, Title 2, Chapters 22 and 32, which provides the department with the authority to administer public and medical assistance programs and under Texas Civil Statutes, Article 4413 (502), sec.16, which provide the Health and Human Services Commission with the authority to administer federal medical assistance funds. 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 May 25, 1994. TRD-9441371 Nancy Murphy Section Manager, Policy and Document Support Texas Department of Human Services Effective date: July 1, 1994 Proposal publication date: April 19, 1994 For further information, please call: (512) 450-3765 TITLE 43. TRANSPORTATION Part I. Texas Department of Transportation Chapter 2. Environmental Affairs Subchapter B. Memorandum of Understanding with Natural Resource Agencies 43 TAC sec.2.25 The Texas Department of Transportation adopts new sec.2.25, concerning a Memorandum of Understanding with Texas Natural Resource Conservation Commission (TNRCC), without changes to the proposed text as published in the March 18, 1994, issue of the Texas Register (19 TexReg 1985). Section 2. 25 adopts a memorandum of understanding, previously published as Exhibit A of 30 TAC sec.114.25 in the December 24, 1993, issue of the Texas Register (18 TexReg 9893), between the department and TNRCC. Texas Civil Statutes, Article 6673g, requires the department to adopt a memorandum of understanding with each state agency that has responsibilities for the protection of the natural environment or for the preservation of historical or archaeological resources. Article 6673g also requires the department and each of the resource agencies to adopt the memoranda and all revisions by rule. In order to comply with Article 6673g and to ensure the natural resources are given full consideration in accomplishing the department's activities, this new section is permanently adopted. New sec.2.25 is necessary to provide for the review of department projects that have the potential to affect air quality and concerns the development of a system by which information developed by the department and TNRCC may be exchanged to their mutual benefit. On March 28, 1994, the department conducted a public hearing on the proposed section. No written or oral comments were received concerning the proposed rule. The new section is adopted under Texas Civil Statutes, Articles 6666 and 6673g, which provide the Texas Transportation Commission with the authority to promulgate rules and regulations for the conduct of the work of the Texas Department of Transportation, and specifically for the adoption by rule of memoranda of understanding with natural resource agencies. 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 May 23, 1994. TRD-9441260 Diane L. Northam Legal Executive Assistant Texas Department of Transportation Effective date: June 13, 1994 Proposal publication date: March 18, 1994 For further information, please call: (512) 463-8630 Chapter 17. Vehicle Titles and Registration Motor Vehicle Registration 43 TAC sec.sec.17.20-17.23, 17.26 The repeals are adopted under the Texas Civil Statutes, Article 6666, which provide the Texas Transportation Commission with the authority to establish rules for the conduct of the work of the Texas Department of Transportation, and more specifically Texas Civil Statutes, Article 6675a-1, et seq, which authorizes the department to promulgate rules necessary to carry out the provisions of laws governing the issuance of vehicle registration. 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 May 23, 1994. TRD-9441306 Diane L. Northam Legal Executive Assistant Texas Department of Transportation Effective date: June 13, 1994 Proposal publication date: February 18, 1994 For further information, please call: (512) 463-8630 The Texas Department of Transportation adopts the repeal of sec.sec.17.20-17. 23 and 17.26, new sec.sec.17.20-17.23 and 17.26, under the existing undesignated head of Motor Vehicle Registration, and new sec.sec.17.56-17.58, under the new undesignated head of Miscellaneous Registration Provisions, without changes to the proposed text as published in the February 18, 1994, issue of the Texas Register (19 TexReg 1205). Sections 17.20-17.23 are being repealed and contemporaneously re-enacted by being renumbered and adopted in their existing form as new sec.sec.17.26, 17.57, 17.23, and 17.58 respectively. Section 17.26 is repealed by being renumbered and adopted in its existing form as new sec.17.56. New sec.17.20 and sec.17.21 describe the Purpose and Scope, and the Definitions of the undesignated head. New sec.17.22 describes how a motor vehicle is registered by an owner, the information required on an application form and accompanying documentation, vehicle registration insignia and placement, and renewal information. In order for the department to efficiently and effectively register motor vehicles, maintain records, and collect the applicable fees, the department finds it necessary to repeal certain existing sections and adopt new sections by reorganizing the structure and content of its existing registration rules and procedures. A public hearing was held on March 3, 1994, and no oral or written comments were received. The new sections are adopted under Texas Civil Statutes, Article 6666, which provide the Texas Transportation Commission with the authority to establish rules for the conduct of the work of the Texas Department of Transportation, and more specifically Texas Civil Statutes, Article 6675a-1, et seq, which authorizes the department to promulgate rules necessary to carry out the provisions of laws governing the issuance of vehicle registration. 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 May 23, 1994. TRD-9441286 Diane L. Northam Legal Executive Assistant Texas Department of Transportation Effective date: June 13, 1994 Proposal publication date: February 18, 1994 For further information, please call: (512) 463-8630 Miscellaneous Registration Provisions 43 TAC sec.sec.17.56-17.58 The new sections are adopted under the Texas Civil Statutes, Article 6666, which provide the Texas Transportation Commission with the authority to establish rules for the conduct of the work of the Texas Department of Transportation, and more specifically Texas Civil Statutes, Article 6675a-1, et seq, which authorizes the department to promulgate rules necessary to carry out the provisions of laws governing the issuance of vehicle registration. 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 May 23, 1994. TRD-9441305 Diane L. Northam Legal Executive Assistant Texas Department of Transportation Effective date: June 13, 1994 Proposal publication date: February 18, 1994 For further information, please call: (512) 463-8630