ADOPTED RULES An agency may take final action on a section 30 days after a proposal has been published in the Texas Register. The section becomes effective 20 days after the agency files the correct document with the Texas Register, unless a later date is specified or unless a federal statute or regulation requires implementation of the action on shorter notice. If an agency adopts the section without any changes to the proposed text, only the preamble of the notice and statement of legal authority will be published. If an agency adopts the section with changes to the proposed text, the proposal will be republished with the changes. TITLE 16. ECONOMIC REGULATIONS Part I. Railroad Commission of Texas Chapter 5. Transportation Division Subchapter U. General and Special Rules of Practice and Procedure 16 TAC sec.5.460 The Railroad Commission of Texas adopts sec.5.460, concerning certification of minority-owned applicants for motor carrier and motor bus authority, with changes to the proposed text published in the May 24, 1994, issue of the Texas Register (19 TexReg 4002). The rule establishes commission policies and procedures for minority business enterprise applicants for motor carrier and motor bus authority. The changes are to subsections (b) and (g). The purpose of the change to subsection (b) is to clarify that a bona fide MBE transportation contractor is an owner-operator and/or a multi-truck lessor who is a United States citizen and who is a woman or who is Black, Hispanic, Asian American, American Indian, or Alaska Native, and who is leased to a for-hire motor carrier or motor bus company. The purpose of the change to subsection (g) is to clarify that a successful MBE applicant must continue to meet the definition of a bona fide MBE certificate holder and that any failure to do so may result in revocation of the authority granted. Public comments regarding this rule supported and opposed, in equal measure, its adoption. Two comments opposed the rule on the grounds that no one should receive special consideration due to gender or national origin in an application for a certificate of public convenience and necessity. Two other comments were in favor of the rule, but suggested that certain changes be made prior to adoption. One commenter suggested that language be added to the rule to allow consideration of private business MBE goals in determining public necessity for a proposed certificated trucking service. The comment stated that private business MBE goals should be considered if a genuine policy of utilizing bona fide MBE certificate holders and a clear intent to implement such a policy can be established. The comment suggested that this could be established through evidence of solicitation or advertisements seeking MBE certificate holders, past use of MBE contractors, whether certificate holders or not, and internal instructions to staff to utilize MBE certificate holders or other MBE contractors. This commenter also suggested eliminating MBE transportation contractors because such contractors subvert the purpose of the rule by allowing non-MBE protestants to overcome an applicant's position with evidence of the protestants' use of minority owner- operators. Another commenter suggested clarifying the definition of bona fide MBE transportation contractor. The commenter stated that a bona fide MBE transportation contractor is any owner-operator and/or multi-truck lessor who is leased to a for-hire motor carrier who is a bona fide MBE, without regard to the owner-operator's or multi-truck lessor's status as a bona fide MBE. This commenter also suggested that all of the minority definitions be grouped together and that the first two sentences of subsection (g) be eliminated because they are repetitive of the third sentence in subsection (g). The commission agrees with the comments supporting adoption of the rule and agrees that the definition of a bona fide MBE transportation contractor should be clarified. However, the Commission does not agree that the proposed rule would provide special consideration due to gender or national origin for an applicant. The proposed rule recognizes that an MBE applicant must meet the burden of proof required of all other applicants. In addition, the proposed rule recognizes that certain contractors may have a need for the services of an MBE carrier based upon existing governmental requirements. The commission does not agree that a bona fide MBE transportation contractor is a non-MBE owner-operator and/or multi-truck lessor leased to an MBE for-hire motor carrier or motor bus carrier. The commission's intention is that a bona fide MBE transportation contractor is an owner-operator and/or a multi-truck lessor who is a United States citizen and who is a woman or who is Black, Hispanic, Asian American, American Indian, or Alaska Native, and who is leased to a for-hire motor carrier or motor bus company. No other definition supports the term as used in subsections (d) and (e) of the proposed rule. The commission disagrees that private business MBE goals should be considered in determining the issue of public necessity. The commission has limited the factor of unavailability of bona fide MBE certificate holders to those instances where a contractor needs the services of an MBE carrier due to existing governmental MBE programs. Those programs have a presumption of validity under the law which private programs cannot claim. In addition, private programs could require extensive time and expense to determine whether they were legally valid. The commission also disagrees that the minority definitions should all be grouped together because the Texas Register requires that definitions be alphabetized. The commission agrees that the first two sentences of subsection (g) could be considered repetitive and has included revised language to eliminate surplus language. References to partnerships in the definition of bona fide MBE certificate holder in subsection (b) have been added to clarify the requirements specified in subsection (g). No groups or associations commented in favor of or against the proposed rule. The section is adopted pursuant to Texas Civil Statutes Article 911a, sec.4(a)(1), which vests the commission with power and authority to prescribe all rules and regulations necessary for the regulation of motor bus companies, and pursuant to Texas Civil Statutes Article 911b, sec.4(a)(1), which vests the commission with power and authority to prescribe all rules and regulations necessary for the regulation of motor carriers. sec.5.460. Certification of Minority-Owned Applicants. (a) It shall be the policy of the Railroad Commission of Texas to encourage, within the limits of its discretion and statutory authority, more equitable participation in the for-hire motor carrier and motor bus industries by minority-owned businesses. (b) The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise. American Indian and Alaskan Native-A person having origins in any of the original peoples of North America. Asian American -A person having origins in any of the original peoples of the Far East, Southeast Asia, the Indian subcontinent, or the Pacific Islands. Black-A person having origins in any of the black racial groups of Africa. Bona fide MBE applicant-Any individual applicant for new or amended motor carrier or motor bus authority that is a woman, or is Black, Hispanic, Asian American, American Indian, or Alaska Native, and who is also a citizen of the United States. In the case of a corporate applicant for new or amended motor carrier or motor bus authority, it shall mean any corporation, the controlling interest of which is held by a woman or an individual that is Black, Hispanic, Asian American, American Indian, or Alaska Native, and who is also a citizen of the United States. In the case of an applicant company that is owned by a partnership, the controlling interest in the partnership must be specifically affirmed in writing as being held by a woman, Black, Hispanic, Asian American, American Indian, or Alaska Native, and who is also a citizen of the United States. Bona fide MBE certificate holder-Any individual who holds motor carrier or motor bus authority issued by the commission, who is a woman, Black, Hispanic, Asian American, American Indian, or Alaska Native, and who is also a citizen of the United States. In the case of a certificate holder by a corporation or partnership, it shall mean any corporation or partnership, the controlling interest in which is held by a woman, or an individual that is Black, Hispanic, Asian American, American Indian, or Alaska Native, and who is also a citizen of the United States. Bona fide MBE transportation contractor-Any owner-operator and/or a multi- truck lessor who is a United States citizen and who is a woman or who is Black, Hispanic, Asian American, American Indian, or Alaska Native, and who is leased to a for-hire motor carrier or motor bus company. Hispanic-A person of Mexican, Puerto Rican, Cuban, Central American, South American, or other Spanish culture or origin, regardless of race. (c) The director of the transportation division shall designate a bona fide MBE applicant liaison officer within the transportation division who shall have the responsibility of advising bona fide MBE applicants as to the manner of initiating the certificate, permit, and rate processes and as to the manner of the compliance by successful bona fide MBE applicants with transportation division rules, regulations, and procedures. The field auditors of the transportation division, operating under the supervision of the assistant director-enforcement of the transportation division, shall have the responsibility of advising prospective bona fide MBE applicants of the assistance available for the transportation division bona fide MBE applicant liaison officer. (d) In order to obtain a for-hire motor carrier or motor bus certificate or permit, a bona fide MBE applicant shall be required to meet the burden of proof imposed by law on regular applicants. In multiple applicant proceedings where the demonstrated public need will support a grant of some, but not all, of the applicants, and the evidence establishes a need for the availability of bona fide MBE applicant transportation not being met by existing bona fide MBE certificate holders and/or by other existing carriers through the use of bona fide MBE transportation contractors, the commission may consider an applicant's status as a bona fide MBE applicant as a factor, along with all other relevant factors, in determining which of the applications should be approved. (e) The unavailability of existing bona fide MBE certificate holders may be considered as a factor in determining adequacy of existing carrier service: (1) where a bona fide MBE applicant demonstrates, through public witness evidence, a public necessity for use of the services of a bona fide MBE certificate holder as a primary means of meeting requirements of state or federal law, and local ordinances for use of contractors qualifying as a bona fide MBE certificate holder and/or bona fide MBE transportation contractor under the regulations; and (2) where existing carriers opposing the applicant fail to establish that they are capable of adequately meeting the demonstrated need for the availability of bona fide MBE certificate holders and/or bona fide MBE transportation contractors. (f) An applicant under this section shall have the burden of proving that it is a bona fide MBE applicant. In determining the entitlement of an applicant to the benefit of this section, the commission may consider the de facto management control of the applicant as well as incidents of ownership. Evidence that any applicant or any of its owners, officers, employees, agents, or representatives has employed any device whatsoever as a sham or subterfuge for the purpose of attempting to gain the benefit of this section shall be considered as evidence of the lack of an applicant's fitness to receive a grant of a certificate or permit. (g) MBE certificate holders must continue to meet the definition of a bona fide MBE certificate holder in subsection (b) of this section and the commission may revoke the certificate granted to a bona fide MBE certificate holder if such holder fails to meet that definition. (h) All certificates or permits granted under this section may not be sold, transferred, or leased unless the purchaser, transferee, or lessee is a bona fide MBE. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 12, 1994. TRD-9443928 Mary Ross McDonald Assistant Director, Legal Division, Gas Utilities/LP Gas Railroad Commission of Texas Effective date: Proposal publication date: May 24, 1994 For further information, please call: (512) 463-7094 Subchapter CC. Tow Trucks 16 TAC sec.5.809 The Railroad Commission of Texas adopts an amendment to sec.5.809, concerning denial, revocation, or suspension of a tow truck certificate of registration for a criminal conviction, with changes to the proposed text as published in the May 24, 1994, issue of the Texas Register (19 TexReg 4003). The amendment is proposed in order to clarify the information that the commission will consider in determining whether to deny, revoke, or suspend a tow truck certificate of registration when the certificate holder has been convicted of a crime. Changes to the rule, as published, are in subsection (d) and eliminate all uses of the term "et seq" where used to refer to Texas Penal Code sections, in order to clarify for the general public what crimes the commission considers directly related to the performance of a tow truck owner. The term "et seq" has been replaced with specific references to appropriate Texas Penal Code provisions. One public comment was received regarding this rule. The comment was in opposition to the adoption of the proposed rule, because the commenter is of the opinion that there is already too much policing of the tow truck industry. The commission disagrees that the proposed rule is a repetitive, burdensome rule for tow truck owners, because the rule serves only to clarify the information that the commission will consider in determining whether to deny, revoke, or suspend a tow truck certificate of registration when the certificate holder has been convicted of a crime. The commission is required to promulgate a rule that specifically addresses the considerations that will be made by the commission when seeking to deny, revoke, or suspend a tow truck owner's license for a criminal conviction pursuant to Texas Civil Statutes, Article 6252-13c, sec.4 and Article 6252-13d, sec.4. No groups or associations commented in favor of or against the proposed rule. The amendment is adopted pursuant to Texas Civil Statutes, Article 6252-13c, sec.4 and Article 6252-13d, sec.4, which require licensing authorities to examine an applicant's criminal conviction as it affects the duties and responsibilities of the licensed occupation, and Article 6687-9b sec.7(b), which requires the commission to adopt rules establishing procedures for denial, suspension, revocation, or reinstatement of a certificate of registration. sec.5.809. Denial, Revocation, or Suspension for a Criminal Conviction. (a) This rule is promulgated pursuant to Texas Civil Statutes, Article 6252- 13c, sec.4 and Article 6252-13d, sec.4, which require licensing authorities to examine an applicant's criminal conviction as it affects the duties and responsibilities of the licensed occupation, and Article 6687-9b sec.7(b), which requires the commission to adopt rules establishing procedures for denial, suspension, revocation, or reinstatement of a certificate of registration. (b) An owner who has a felony or misdemeanor conviction that directly relates to the duties and responsibilities involved in the operation of a tow truck, or which directly affects such person's present fitness to perform as a tow truck owner including any conviction for a crime involving moral turpitude, may be denied certificates of registration or have a certificate of registration suspended or revoked by the commission. An owner includes any partner in a partnership and any corporation where one of its officers or directors has a felony or misdemeanor conviction of the types described above. (c) In determining whether an owner's criminal conviction directly relates to the performance of a tow truck owner, the commission shall consider the following factors: (1) the nature and seriousness of the crime; (2) the relationship of the crime to the purposes for requiring a certificate of registration; (3) the extent to which a certificate of registration might offer an opportunity for the owner to engage in further criminal activity of the same type as that in which the owner previously had been involved; and (4) the relationship of the crime to the ability, capacity, or fitness required to perform the duties and discharge the responsibilities of a tow truck owner. (d) Those crimes which the commission considers as directly related to the performance of a tow truck owner include, but are not limited to, the following statutes and codes, as they may be amended from time to time: (1) any criminal violation of statutes regulating the registration and operation of tow trucks, as set out in Texas Civil Statutes, Article 911b, sec.16 and Article 6687b-9; (2) any crime involving homicide, as set out in Texas Penal Code, Chapter 19; (3) any crime involving sexual assault, as set out in Texas Penal Code sec.22.011 and sec.22.021; (4) any crime involving assault, as set out in Texas Penal Code, Chapter 22; (5) any crime involving robbery, as set out in Texas Penal Code, Chapter 29; (6) any crime involving burglary, as set out in Texas Penal Code, Chapter 30; (7) any crime involving theft, as set out in Texas Penal Code, Chapter 31; (8) any crime involving fraud, as set out in Texas Penal Code, Chapter 32; (9) any crime involving the unlawful possession or use of weapons, as set out in Texas Penal Code, Chapter 46; (10) any crime involving intoxication, alcoholic beverages, or controlled substances in conjunction with the operation of a motor vehicle, as set out in Texas Penal Code sec.19.05 and sec.38.04; and (11) any crime involving reckless conduct in conjunction with the operation of a motor vehicle, as set out in Texas Penal Code sec.sec.22.05, 38. 04, and 38.15. (e) In determining whether a criminal conviction directly affects a person's present activity and fitness as a tow truck owner, the commission shall consider the following: (1) the extent and nature of the owner's past criminal activity; (2) the age of the person at the time of the commission of the crime; (3) the amount of time that has elapsed since the person's last criminal activity; (4) the conduct and work activity of the person prior to and following the criminal activity; (5) evidence of the person's rehabilitation or rehabilitative effort while incarcerated or following release; and (6) other evidence of the person's present fitness, including letters of recommendation from: (A) prosecution, law enforcement, and correctional officers who prosecuted, arrested, or had custodial responsibility for the person; (B) the sheriff and chief of police in the community where the person resides; and (C) and any other person in contact with the convicted person. (f) It shall be the responsibility of the owner with a criminal conviction to secure and provide to the commission, to the extent possible, the recommendations of the prosecution, law enforcement, and correctional authorities regarding all such convictions. Upon request and prior to a contested case hearing, an owner shall secure and provide to the commission a certified copy of the owner's conviction order and any indictment or information issued prior to such order. (g) The owner with a criminal conviction shall also furnish proof in such form as may be required by the commission that owner has: (1) maintained a record of steady employment; (2) supported his or her dependents; (3) otherwise maintained a record of good conduct; and (4) paid all outstanding court costs, supervision fees, fines, and restitution as may have been ordered in all criminal cases in which owner has been convicted. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 12, 1994. TRD-9443929 Mary Ross McDonald Assistant Director, Legal Division, Gas Utilities/LP Gas Railroad Commission of Texas Effective date: August 2, 1994 Proposal publication date: May 24, 1994 For further information, please call: (512) 463-7094 Subchapter DD. Vehicle Storage Facilities 16 TAC sec.5.902 The Railroad Commission of Texas adopts an amendment to sec.5.902, concerning definitions as they pertain to vehicle storage facilities, with changes to the proposed text as published in the May 3, 1994, issue of the Texas Register (19 TexReg 3326). The amendment clarifies what is necessary to preserve, protect, or service a stored vehicle, for which a vehicle storage facility operator would be entitled to charge a one-time $10 preservation fee. Changes made to the text of the rule include requiring a written inventory to be made only of unsecured personal property contained in the vehicle. The term "unsecured," as used in the rule, refers to personal property that is not affixed to the vehicle and that is visible from outside of the vehicle; excluded from this term is any personal property that is contained in a locked trunk, glove compartment, or console, or is otherwise secured in the vehicle but not visible from outside of the vehicle. Other changes made to the text of the rule reflect that removal and storage of any personal property contained in a stored vehicle are required only when such action is necessary for the safekeeping of such property. The changes allow a vehicle storage facility operator to exercise discretion in determining when additional measures should be taken to ensure the safekeeping of personal property, while still requiring the operator to conduct a written inventory of any personal property contained in the vehicle and to specify any removal and storage of the property on the written inventory. Comments filed by vehicle storage facility operators and member associations asserted that vehicle storage facility operators would have both practical and financial difficulties complying with subparagraph (A) of the proposed rule, which requires that they remove and store for safekeeping all personal property contained in a stored vehicle. On the practical side, the commenters stated that not all such personal property requires removal and storage, and that members of the public would not want their personal property to be handled in such a manner by a vehicle storage facility operator. The commenters believe that the rule should allow some flexibility to vehicle storage facility operators to exercise their own discretion in determining what property, if any, does require removal and storage for safekeeping. Other practical concerns raised were that vehicle storage facility operators would be required to maintain a separate building or facility and employ additional personnel in order to comply with the proposed rule, and that there would have to be a separate tracking system of all the stored property in order to ensure that it is properly returned to its owner. One commenter observed that its employees may be subject to disease or injury from blood or drug paraphernalia such as hypodermic needles found in a stored vehicle. Another commenter stated that the risk of damage to personal property through handling is greater than the risk of loss due to any theft that may occur on a facility's premises. It was also observed that false claims might be directed against vehicle storage facility operators for property not actually contained in a vehicle during its period of storage at the facility. Several commenters stated that vehicle storage facility operators are already responsible for the security of personal property contained in the vehicles they store, and that adequate protection of such property can be provided without removing the property from the vehicles. Finally, on the financial side, the commenters asserted that they would incur additional expenses as a result of having to maintain additional space for storage and having to employ additional personnel to conduct the responsibilities associated with compliance with the rule as proposed. Another commenter pointed out that the proposed amendment contains no provision for the disposition of any personal property removed and stored for safekeeping should a vehicle be unclaimed and, therefore, subject to police auction. The commenter recommended that it be mandatory for a vehicle storage facility operator to provide a vehicle owner with a copy of the itemized inventory at the time a vehicle is released to the owner. Finally, the commenter observed that obtaining motor vehicle registration information for a stored vehicle from the Texas Department of Transportation is a routine part of the notification process, and asserted that the Commission should not consider such conduct to constitute preservation of the stored vehicle. The following associations filed comments against the proposed amendment: Houston Automobile Wrecker Association Texas Towing and Storage Association No groups or associations filed comments in favor of the proposed amendment. The commission generally agrees with the comments received from the regulated industry concerning the suggested change to the proposed rule, because additional clarification in the rule would contribute to the more efficient safekeeping of personal property contained in vehicles stored at a vehicle storage facility. With respect to the comment concerning the lack of any provision in the rule for the disposition of personal property in connection with an unclaimed vehicle, the commission is of the opinion that such a provision is beyond the scope of defining the term "preservation," which is the purpose of this rulemaking proceeding. Likewise, the recommendation that a vehicle storage facility operator be required to provide a vehicle owner with a copy of the written inventory upon release of the vehicle to the owner would be more appropriately addressed in a separate rulemaking involving an amendment of sec.5.908 of this title (relating to responsibilities of the licensee- documentation). Finally, the commission disagrees with the assertion that obtaining motor vehicle registration information from the Texas Department of Transportation does not constitute preservation of a stored vehicle, because such information is necessary in order to ascertain the owner of the vehicle for the inventory procedures required by the rule. The amendment is adopted under Texas Civil Statutes, Article 6687-9a, sec.4(b), which requires the commission to adopt rules establishing requirements for the licensing of persons to operate vehicle storage facilities to ensure that licensed storage facilities maintain adequate standards for the care of stored vehicles. sec.5.902. Definitions. The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise. Preservation-An action taken by or at the direction of the owner or operator of a vehicle storage facility that is necessary to preserve, protect, or service a vehicle stored or parked at the facility. Reasonable efforts necessary for the storage of a vehicle, such as locking doors, rolling up windows, and closing doors, hatchbacks, or convertible tops, are included in the fee for storage of a vehicle, as set forth in sec.5.919(f) of this title (relating to Technical Requirements -Storage Fees/Charges), and do not constitute "preservation." A vehicle storage facility operator will be entitled to charge a fee for preservation if, in addition to the requirements set forth in sec.5.907(d) of this title (relating to Responsibilities of the Licensee-Storage Requirements), the vehicle storage facility operator performs, at a minimum, the following duties: (A) conducts a written inventory of any unsecured personal property contained in the vehicle; (B) removes and stores all such property for which safekeeping is necessary, and specifies such removal and storage on the written inventory; and (C) obtains motor vehicle registration information for the vehicle from the Texas Department of Transportation. For further information, call (512) 463- 7095. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 12, 1994. TRD-9443927 Mary Ross McDonald Assistant Director Legal Division, Gas Utilities/LP Gas Effective date: August 2, 1994 Proposal publication date: May 3, 1994 For further information, please call: (512) 463-7094 Part III. Texas Alcoholic Beverage Commission Chapter 31. Administration Administrative Functions of the Commission 16 TAC sec.31.5 The Texas Alcoholic Beverage Commission adopts a new sec.31.5, which sets copying costs for information requested by the public, details the billing methodology and identifies its general counsel as the open records coordinator, without changes to the proposed text as published in the May 24, 1994, issue of the Texas Register (19 TexReg 4004). The justification for this section is to identify copying costs for information requested by the public. This section itemizes the copy charges for all documents which may be requested by the public which the agency produces. No comments were received. This section is adopted under Alcoholic Beverage Code, sec.5.31, which provides the Texas Alcoholic Beverage Commission with the authority to promulgate rules necessary to carry out provisions of the Alcoholic Beverage 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 authority. Issued in Austin, Texas, on July 7, 1994. TRD-9443670 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: July 28, 1994 Proposal publication date: May 24, 1994 For further information, please call: (512) 206-3204 Chapter 33. Licensing Licensees and Permits Surcharges 16 TAC sec.33.23 The Texas Alcoholic Beverage Commission adopts an amendment to sec.33.23, concerning the annual surcharges for all holders of permits and licenses issued by the Commission as required by the Texas Alcoholic Beverage Code, sec.5.50(b), effective September 1, 1993, without changes to the proposed text as published in the May 20, 1994, issue of the Texas Register (19 TexReg 3872). The justification for this section is it implements sec.5.50, Alcoholic Beverage Code, requiring license and permit surcharges to cover the amount of the Commission's annual appropriation. This section sets the surcharge fee schedule for the 1995 fiscal year for holders of licenses and permits. The Texas Restaurant Association commented in favor of the proposed surcharge methodology. The section is adopted under Alcoholic Beverage Code, sec.5.31, which provides the Texas Alcoholic Beverage Commission with the authority to promulgate rules necessary to carry out provisions of the Alcoholic Beverage 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 July 7, 1994. TRD-9443671 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: September 1, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 Chapter 35. Enforcement Definitions 16 TAC sec.35.41 The Texas Alcoholic Beverage Commission adopts new sec.35.41, defining terms used in the Texas Alcoholic Beverage Code, without changes to the proposed text as published in the May 20, 1994, issue of the Texas Register (19 TexReg 3873). This section defines lewd and vulgar entertainment or acts and controlled substances and how these terms are used in the Texas Alcoholic Beverage Code. This section ties the definition of certain terms to the same definition in the Texas Penal Code. No comments were received. The new section is adopted under the Texas Alcoholic Beverage Code, sec.5.31, which provides the Commission with the authority to promulgate rules necessary to carry out provisions of the Texas Alcoholic Beverage 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 July 8, 1994. TRD-9443742 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: July 29, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 Chapter 41. Auditing Records and Reports by Licensees and Permittees 16 TAC sec.41.20 The Texas Alcoholic Beverage Commission adopts a new sec.41.20 concerning the timely filing of excise tax reports without changes to the proposed text as published in the May 20, 1994, issue of the Texas Register (19 TexReg 3874). This section establishes compliance requirements for taxpayers filing excise tax reports. This section will allow acceptance of late reports if the taxpayer exercised reasonable diligence to file their report in a timely fashion. No comments were received. The new section is adopted under the Texas Alcoholic Beverage Code, sec.5.31, which provides the commission with the authority to promulgate rules necessary to carry out provisions of the Alcoholic Beverage 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 July 8, 1994. TRD-9443812 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: August 1, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 Chapter 45. Marketing Practices Subchapter A. Standards of Identify for Distilled Spirits 16 TAC sec.45.4 The Texas Alcoholic Beverage Commission adopts the repeal of sec.45.4, concerning the standards of identity for distilled spirits to include certain lower alcohol distilled beverages, without changes to the proposed text as published in the May 20, 1994, issue of the Texas Register (19 TexReg 3874). Due to errors in the official version of this rule on file with the Secretary of State's Office, this rule is repealed and republished in its corrected form. No comments were received. The repeal is adopted under the Texas Alcoholic Beverage Code, sec.5.31, which provides the commission with the authority to promulgate rules necessary to carry out provisions of the Alcoholic Beverage 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 July 8, 1994. TRD-9443811 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: August 1, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 The Texas Alcoholic Beverage Commission adopts new sec.45.4, concerning the standards of identity of distilled spirits, without changes to the proposed text as published in the May 20, 1994, issue of the Texas Register (19 TexReg 3874). This section replaces the previous sec.45.4, which was repealed due to errors in the version on file with the Secretary of State's Office. This section will also authorize low alcohol vodkas. This section will authorize the approval of distilled spirits including low alcohol vodkas for sale within the state. Comments were received from the Schefflin-Somerset Company requesting authorization of a lower alcohol (70 proof) vodka. The new section is adopted under the Texas Alcoholic Beverage Code sec.5.31, which provides the commission with the authority to promulgate rules necessary to carry out provisions of the Alcoholic Beverage 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 July 8, 1994. TRD-9443810 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: August 1, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 16 TAC sec.45.21 The Texas Alcoholic Beverage Commission adopts an amendment to sec.45.21, concerning the legal standards of fill for containers of distilled spirits, without changes to the proposed text as published in the May 20, 1994, issue of the Texas Register (19 TexReg 5878). This section amends sec.45.21 to include language on the same subject matter now stated in sec.45.141 which is being repealed. This section will allow interested persons to go to one section to determine all legal container sizes authorized for distilled spirits. No comments were received. The amendment is adopted under the Texas Alcoholic Beverage Code, sec.5.31, which provides the Commission with the authority to promulgate rules necessary to carry out provisions of the Alcoholic Beverage 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 July 8, 1994. TRD-9443809 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: August 1, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 Subchapter B. Standards of Identify for Wine 16 TAC sec.45.49 The Texas Alcoholic Beverage Commission adopts an amendment to sec.45.49, concerning the legal standards of fill for containers of wine, without changes to the proposed text as published in the May 20, 1994, issue of the Texas Register (19 TexReg 3878). This section amends sec.45.49 to include language on the same subject matter which now appears in sec.45.141 which is being repealed. This section will allow interested parties to go to one section to determine all legal container sizes authorized for wine. No comments were received. The amendment is adopted under the Texas Alcoholic Beverage Code, sec.5.31, which provides the commission with the authority to promulgate rules necessary to carry out provisions of the Alcoholic Beverage 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 July 8, 1994. TRD-9443808 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: August 1, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 Subchapter C. Standards of Identity for Malt Beverages 16 TAC sec.45.73 The Texas Alcoholic Beverage Commission adopts an amendment to sec.45.73, concerning applications for label approvals, without changes to the proposed text as published in the May 20, 1994, issue of the Texas Register (19 TexReg 3879). This section prohibits private labels of malt beverages for only certain retail license or permit holders as a private brand as a violation of the statutory three-tier system of regulation. Brewers may not under this section produce and have approved labels for specific retail accounts using their logos or brand names to the exclusion of all other retail accounts. Comments were received from the Wholesale Beer Distributors of Texas in favor of this proposal. The amendment is adopted under the Texas Alcoholic Beverage Code, sec.5.31, which provides the Commission with the authority to promulgate rules necessary to carry out provisions of the Alcoholic Beverage 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 July 8, 1994. TRD-9443807 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: August 1, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 16 TAC sec.45.79 The Texas Alcoholic Beverage Commission adopts an amendment to sec.45.79, concerning alcohol content on labels of malt beverages, without changes to the proposed text as published in the May 20, 1994, issue of the Texas Register (19 TexReg 3879). This section is amended to conform to changes made by the 73rd Legislature. This section sets out the form, style and tolerance for printing the alcoholic content on labels of malt beverages. No comments were received. The amendment is adopted under the Texas Alcoholic Beverage Code, sec.5.31, which provides the Commission with the authority to promulgate rules necessary to carry out provisions of the Alcoholic Beverage 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 July 8, 1994. TRD-9443806 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: August 1, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 16 TAC sec.45.80 The Texas Alcoholic Beverage Commission adopts an amendment to sec.45.80, concerning the legal sizes of containers of malt beverages, without changes to the proposed text as published in the May 20, 1994, issue of the Texas Register (19 TexReg 3880). The justification for this section is to update this section to reflect legislative changes. This section provides a listing of the legal container sizes for malt beverages. Miller Brewing Company requested additional sizes of 22 fluid ounces and 40 fluid ounces. These sizes are specifically not authorized under the Texas Alcoholic Beverage Code and cannot be added by rule. The amendment is adopted under the Texas Alcoholic beverage Code, sec.5.31, which provides the commission with the authority to promulgate rules necessary to carry out provisions of the Alcoholic Beverage 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 July 8, 1994. TRD-9443805 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: August 1, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 16 TAC sec.45.82 The Texas Alcoholic Beverage Commission adopts an amendment to sec.45.82, concerning the prohibition of private labels of malt beverages for retail accounts, without changes to the proposed text as published in the May 20, 1994, issue of the Texas Register (19 TexReg 3880). This section is adopted to strengthen the three-tier system of regulation of the malt beverage industry. This section will prohibit a manufacturer or wholesaler to produce private labels of malt beverages for any single or chain retail account including any name, trademark or tradename of any retail account. The Wholesale Beer Distributors of Texas commented in favor of this section. The amendment is adopted under the Texas Alcoholic Beverage Code, sec.5.31, which provides the commission with the authority to promulgate rules necessary to carry out provisions of the Alcoholic Beverage 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 July 8, 1994. TRD-9443804 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: August 1, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 16 TAC sec.45.90 The Texas Alcoholic Beverage Commission adopts an amendment to sec.45.90, concerning the printing of alcoholic content on labels of malt beverages, without changes to the proposed text as published in the May 20, 1994, issue of the Texas Register (19 TexReg 3881). This amendment conforms this section to changes made during the 73rd Legislature. This amendment removes the prohibition of placing alcoholic content on the labels of malt beverages. No comments were received. The amendment is adopted under the Texas Alcoholic Beverage Code, sec.5.31, which provides the commission with the authority to promulgate rules necessary to carry out provisions of the Alcoholic Beverage 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 July 8, 1994. TRD-9443803 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: August 1, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 Subchapter D. Advertising and Promotion-All Beverages 16 TAC sec.45.101 The Texas Alcoholic Beverage Commission adopts an amendment to sec.45.101, concerning coupons for cents off or rebates on the purchase of alcoholic beverages, without changes to the proposed text as published in the May 20, 1994, issue of the Texas Register (19 TexReg 3881). This amendment implements legislation passed during the 73rd Legislature, specifically prohibiting manufacturers and wholesalers from using coupons or rebates to promote alcoholic beverages. This section prohibits any cents off coupons or rebates on the sale of alcoholic beverages. Comments were received from the Texas Restaurant Association requesting that retailers be allowed to publish coupons. The amendment is adopted under the Texas Alcoholic Beverage Code, sec.5.31, which provides the commission with the authority to promulgate rules necessary to carry out provisions of the Alcoholic Beverage 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 July 8, 1994. TRD-9443802 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: August 1, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 16 TAC sec.45.107 The Texas Alcoholic Beverage Commission adopts a new sec.45.107, concerning private club advertising, without changes to the proposed text as published in the May 20, 1994 issue of the Texas Register (19 TexReg 3883). The justification for this section is to clarify advertising requirements for holders of private club permits. This section requires private clubs to include in any advertisement that alcoholic beverage service is for members of the club only. No comments were received. The new section is adopted under the Texas Alcoholic Beverage Code, sec.5.31, which provides the commission with the authority to promulgate rules necessary to carry out provisions of the Alcoholic Beverage 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 July 11, 1994. TRD-9443801 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: August 1, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 16 TAC sec.45.108 The Texas Alcoholic Beverage Commission adopts new sec.45.108, concerning the authorization for manufacturers, distributors, distillers and wineries to sponsor groups or participants in activities and to regulate insignia of brand names worn by employees, without changes to the proposed text as published in the May 20, 1994, issue of the Texas Register (19 TexReg 3883). This section implements changes to sec.108.03 of Alcoholic Beverage Code from the 73rd Legislature. This section will regulate the use of logos or insignia of brands worn by employees of manufacturers, distillers, distributors, and wineries or persons they might sponsor in any event such as athletic contests or revues. No comments were received. The new section is adopted under the Texas Alcoholic Beverage Code, sec.5.31, which provides the commission with the authority to promulgate rules necessary to carry out provisions of the Alcoholic Beverage 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 July 11, 1994. TRD-9443819 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: August 1, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 16 TAC sec.45.111 The Texas Alcoholic Beverage Commission adopts the repeal of sec.45.111, concerning games of chance, without changes to the proposed text as published in the May 20, 1994, issue of the Texas Register (19 TexReg 3885). This section is repealed to conform with changes made by the 73rd Legislature authorizing sweepstakes. No comments were received. The repeal is adopted under the Texas Alcoholic Beverage Code, sec.5.31, which provides the commission with the authority to promulgate rules necessary to carry out provisions of the Alcoholic beverage 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 July 11, 1994. TRD-9443820 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: August 1, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 Subchapter E. Advertising and Promotion-Malt Beverages 16 TAC sec.45.112 The Texas Alcoholic Beverage Commission adopts an amendment to sec.45.112, concerning use of insignia by manufacturers and distributors, without changes to the proposed text as published in the May 20, 1994, issue of the Texas Register (19 TexReg 3885). This section is amended to delete redundant language which now appears in sec.45.108. No comments were received. The amendment is adopted under the Texas Alcoholic Beverage Code, sec.5.31, which provides the commission with the authority to promulgate rules necessary to carry out provisions of the Alcoholic Beverage 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 July 11, 1994. TRD-9443821 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: August 1, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 16 TAC sec.45.113 The Texas Alcoholic Beverage Commission adopts an amendment to sec.45.113, concerning relaxation of certain restrictions on advertisement and promotion of malt beverages, without changes to the proposed text as published in the May 20, 1994, issue of the Texas Register (19 TexReg 3886.) This section is amended to reflect changes made by the 73rd Legislature making advertising and promotion of all types of alcoholic beverages similar. This section allows the promotion of malt liquor in the same manner as beer. One comment was received from Anheuser-Busch Company regarding concern that malt liquor could be promoted through bar spending like beer. The agency found that this comment was based mainly on a current competitive advantage that one manufacturer and their distributors enjoy in the market and this section would make promotions equal for all companies. The amendment is adopted under the Texas Alcoholic Beverage Code, sec.5.31, which provides the commission with the authority to promulgate rules necessary to carry out provisions of the Alcoholic Beverage 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 July 11, 1994. TRD-9443822 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: August 1, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 Subchapter F. Advertising and Promotion-Liquor (Distilled Spirits and Wine) 16 TAC sec.45.117 The Texas Alcoholic Beverage Commission adopts a new sec.45.117, concerning prizes, premiums and gifts to consumers by distillers, wineries and wholesalers, without changes to the proposed text as published in the May 20, 1994, issue of the Texas Register (19 TexReg 3886). This section implements changes in the law made by the 73rd Legislature. This section authorizes persons involved in the manufacture or wholesaling of distilled spirits and wine to make promotional advertising gifts of nominal value which carry brand advertising to the ultimate consumer. No comments were received. The new section is adopted under the Texas Alcoholic Beverage Code, sec.5.31, which provides the commission with the authority to promulgate rules necessary to carry out provisions of the Alcoholic Beverage 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 July 11, 1994. TRD-9443823 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: August 1, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 16 TAC sec.45.118 The Texas Alcoholic Beverage Commission adopts a new sec.45.118, concerning advertising specialties which may be furnished to retailers by manufacturers or wholesalers of liquor, without changes to the proposed text as published in the May 20, 1994, issue of the Texas Register (19 TexReg 3887). This section implements changes made by the 73rd Legislature authorizing advertising specialties which may be given to retailers. This section sets limits on the types and costs of promotional advertising specialties which may be given to retail permittees. No comments were received. The new rule is adopted under the Texas Alcoholic Beverage Code, sec.5.31, which provides the commission with the authority to promulgate rules necessary to carry out provisions of the Alcoholic Beverage 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 July 11, 1994. TRD-9443824 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: August 1, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 16 TAC sec.45.119 The Texas Alcoholic Beverage Commission adopts a new sec.45.119, concerning charitable contributions by the liquor and wine industry, without changes to the proposed text as published in the May 20, 1994 issue of the Texas Register (19 TexReg 3887). This section authorizes charitable contributions as authorized by the 73rd Legislature. This section sets out the parameters in which the distilled spirits and wine industry may make gifts to charitable and/or religious organizations. No comments were received. The new section is adopted under the Texas Alcoholic Beverage Code, sec.5.31, which provides the commission with the authority to promulgate rules necessary to carry out provisions of the Alcoholic Beverage 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 July 11, 1994. TRD-9443825 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: August 1, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 16 TAC sec.45.120 The Texas Alcoholic Beverage Commission adopts a new sec.45.120, concerning co-packaging of liquor, without changes to the proposed text as published in the May 20, 1994, issue of the Texas Register (19 TexReg 3888). The justification for this section is to implement changes made by the 73rd Legislature authorizing co-packaging of products with liquor. This section requires that if packages of liquor are combined with other promotional items they must be sold as a unit and not be separated by the retailer. No comments were received. The new rule is adopted under the Texas Alcoholic Beverage Code, sec.5.31, which provides the commission with the authority to promulgate rules necessary to carry out provisions of the Alcoholic Beverage 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 July 11, 1994. TRD-9443826 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: August 1, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 Miscellaneous Metric System 16 TAC sec.45.141 The Texas Alcoholic Beverage Commission adopts the repeal of sec.45.141, concerning metric sizes for containers of distilled spirits and wine, without changes as published in the May 20, 1994 issue of the Texas Register (19 TexReg 3888). This section is repealed since the language has now been reprinted in sec.45. 49. This will allow persons to go to one section to find the legal sizes of containers of alcoholic beverages in a separate section. No comments were received. The repeal is adopted under the Texas Alcoholic Beverage Code, sec.5.31, which provides the commission with the authority to promulgate rules necessary to carry out provisions of the Alcoholic Beverage 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 July 11, 1994. TRD-9443827 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: August 1, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 Chapter 50. Alcohol Awareness and Education 16 TAC sec.sec.50.2-50.21 The Texas Alcoholic Beverage Commission adopts the repeal of sec.sec.50.2-50. 21, concerning the minimum substantive and procedural requirements for the approval of conducting and certification of seller-server training programs, without changes to the proposed text as published in the May 20, 1994, issue of the Texas Register (19 TexReg 3888). The justification for this section is that it will allow new rules which are more specific to be put in place, thus providing for better programs and better trained instructors, resulting in better educated students. The repealed sections will be replaced by new sections which will delineate the requirements for seller-server training schools, their program content and student certification. One comment was received from Texas Seller Training, Inc. suggesting that sec.50.21, concerning trainee certification revocation, not be repealed but strengthened on the basis that this put "teeth" into the certification program. The Texas Alcoholic Beverage Commission disagrees in that not one known certification has ever become eligible for revocation since the program's inception. The repeals are adopted under Alcoholic Beverage Code, sec.106.18 and sec.5. 31, which provides the Texas Alcoholic Beverage Commission with the authority to pass rules to establish the minimum requirements for seller-server training programs. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on July 13, 1994. TRD-9443669 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: July 28, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 16 TAC sec.50.2 The Texas Alcoholic Beverage Commission adopts new sec.50.2, which defines the terms used in the ensuing rules concerning requirements for seller-server training and certification, without changes to the proposed text as published in the May 20, 1994, issue of the Texas Register (19 TexReg 3889). This rule is justified in that it clarifies all of the rules relating to seller-server training and certification. This rule defines, "Customer," "Intoxication," "Program-Seller Training Program," "Seller or Server" and "Student or Trainee," and sets forth the rules of construction for terms not defined. No comments were received regarding the adoption of this rule. The new rule is adopted under the Alcoholic Beverage Code, sec.106.14 and sec.5.31, which provides the Texas Alcoholic Beverage Commission with the authority to pass rules to establish the minimum requirements for seller-server training programs. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 8, 1994. TRD-9443743 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: July 29, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 16 TAC sec.50.3 The Texas Alcoholic Beverage Commission adopts new sec.50.3, which sets forth the procedures and requirements to become an approved seller-server training program and the program content requirements, with a change to the proposed text as published in the May 20, 1994, issue of the Texas Register (19 TexReg 3889). The change to sec.50.3(i)(5)(A) adds "drink counting" as a method of monitoring intoxication. This addition was made in response to a citizen comment. This rule is justified in that it will provide for better training programs and in turn better trained seller-servers. This rule sets forth all the conditions that must be met to become an approved program, clearly delineates the course content and testing requirements. A summary of comments received and the department's responses are as follows: TABSS-Metroplex objected in sec.50.3(e) to trade associations being allowed to train members and non-members of the general public. The commission disagrees as the exception was made to allow trade associations to offer training classes as a community service. Training the general public is part of the community service. Select Concepts and Alcoholic Beverage Training commented on sec.50.3(h). They were in favor of the proposed rule. One commenter asked for clarification. One commenter affirmed that an integral part of the program is the individual who teaches the program. Another commenter was pleased to have training for the trainer. One commenter wanted to know if the trainer development program can be submitted at the time of renewal or be covered by a grandfather clause and what constitutes a trainer development program. The commission agrees that a trainer development program will enhance the programs. Currently approved programs may wait to submit a trainer development program at the time of renewal. Maurice Dennis, PhD, Texas A & M commented concerning sec.50.3(i)(5)(A), and suggested that this subsection should also address the need to monitor intoxication by the number of drinks consumed. The commission agrees that emphasis in addition to the Know Your Limits Chart should be given to drink counting. Maurice Dennis, PhD, Texas A & M commented on sec.50.3(i)(7)(B) and suggested that the discussion of alcoholism as a disease and the addictive property of alcohol be deleted from the program content because it cannot be discussed in full and may only confuse trainees. The commission disagrees that the subsection should be deleted because the seller training programs do not go into the nature of the disease, but rather emphasize the need for a seller-server to intervene if a seller-server has reason to believe that an individual is an alcoholic because an alcoholic cannot monitor his/her drinking. Maurice Dennis, PhD, Texas A & M commented concerning sec.50.3(i)(7)(C), suggesting that the TCADA drink/drive calculator be used in place of the Know Your Limits Chart. No action can be taken by the commission at this time because it has not yet received a drink/drive calculator from TCADA which has been requested. Under the new rule it will be usable as a "similar chart". Alcoholic Beverage Training commented on sec.50.3(i)(12)(A), suggesting that the subsection be deleted because the administrator should not supersede the Administrative Procedure and Texas Register Act. The commission disagrees with the comment. The administrator needs the authority to require that programs be updated as laws change so that misinformation is not offered through the programs and newly developed information can be disseminated as quickly as possible. This section will not significantly impact the operation of seller training schools. The new rule is adopted under Alcoholic Beverage Code, sec.5.31 and sec.106. 04, which provide the Texas Alcoholic Beverage Commission with the authority to prescribe and publish rules necessary to carry out provisions of this code. sec.50.3. Application for Program Approval. (a) Application for program approval shall be made by the person, corporation or other entity who will administer and supervise the actual teaching of the program to Texas sellers and servers. The commission specifically finds that the training entity or school is an inseparable part of the seller training program. The integrity and ability of the people directly engaged in the administration, supervision and training of the curriculum to seller trainees are an integral part of the program contemplated by the Texas Alcoholic Beverage Code, sec.106.14. Therefore, a curriculum, alone, is not eligible for approval. (b) Application for approval shall be made on forms provided by the commission. (c) No licensee or permittee, or his spouse, agent, servant, or employee, or any subsidiary or affiliate, may directly or indirectly conduct, sponsor, or support a seller training program approved under this chapter except as provided in the Texas Alcoholic Beverage Code, sec.106.14(c) and (d). (d) A licensee or permittee may be a member of an Advisory Board, but not the Governing Board of a non-profit agency which sponsors a seller training program. (e) A bona fide state trade association qualified under this section may train personnel of its own regular membership and non-members of the same level of the alcoholic beverage industry. For the purposes of this subsection, package stores which hold local distributor's permits, and private clubs, shall be considered to be retailers. State retail trade associations may also train individual members of the general public. To qualify under this subsection a trade association must: (1) be a statewide organization with members in at least 10 Texas counties; (2) have been in existence as a statewide organization for at least 20 years; (3) not be an organization primarily composed of members of a particular retail chain. (f) Persons engaged in the manufacturing or wholesaling of alcoholic beverages for national distribution may contribute to the development of a curriculum of seller training being developed for national use; provided, that any such contribution or involvement shall not be directly or indirectly tied to the actual offering of training to employees of any retailer, group of retailers, or the general public. Such involvement by an alcoholic beverage manufacturer shall be in a primarily noncommercial manner consistent with the spirit and intent of the provisions of the Texas Alcoholic Beverage Code and the rules of the commission prohibiting the tied-house and prohibiting the furnishing of things of value to a retailer of alcoholic beverages. (g) No licensee, permittee, or other person engaged in the manufacturing or wholesaling level of the alcoholic beverage industry, or any agent, servant, or employee of any of those, may directly or indirectly conduct or sponsor a seller training program for retail level employees or members of the general public. (h) Each application shall be accompanied by a full and complete copy of the curriculum, including a copy of all materials to be used therewith, including workbooks, videos, and examinations. The curriculum and other materials shall be indexed and labeled in detail to indicate the location of all of the requirements for program approval specified in this chapter. The amount of time allocated to cover each segment of the curriculum shall be specified with a minimum of 200 minutes of instruction required. Programs utilizing a different format from lecturing will be evaluated case by case. Each application shall also be accompanied by a trainer development program which includes a minimum of eight hours of study time, eight hours of observation and eight hours of practice teaching in front of an audience. The initial trainer for a school- program may substitute the eight hours of observation for an additional eight hours of practice teaching (with or without a live audience). (i) The program shall include: (1) sec.50.2(a)(2) of this title (relating to the Definition of Intoxication); (2) the Law Pertaining to Intoxicated Persons. Each approved seller training program shall review and explain all provisions of the Texas Alcoholic Beverage Code pertaining to intoxicated persons and provisions of the Texas Penal Code pertaining to public intoxication and shall include a discussion of any significant court decisions or opinions of the attorney general of Texas which the administrator may from time to time determine to be appropriate; (3) the Law Pertaining to Minors. Each approved seller training program shall review and explain all provisions of the Texas Alcoholic Beverage Code relating to the sale or service of alcoholic beverages to minors, the provisions of the code relating to purchase, possession or consumption of alcoholic beverages by minors and the provisions of the code relating to a person making alcoholic beverages available to a minor or permitting a minor to possess or consume alcoholic beverages and shall include a discussion of any significant court decisions or opinions of the attorney general of Texas which the administrator may from time to time determine to be appropriate; (4) the Law Pertaining to Proper Identification. Each approved seller training program shall review and explain the Texas laws pertaining to false, counterfeit, or deceptively similar identification documents including, specifically, the Texas Traffic Laws, Driver's License, Texas Civil Statutes, Article 6687b, Article II, sec.11(a) and sec.14A(a); Article IV, sec.32(a), sec.32A(a) and (b), and 33(a); and Article VI, sec.44A(a), and shall include a discussion of any significant court decisions or opinions of the attorney general of Texas which the administrator may from time to time determine to be appropriate; (5) detection of Intoxication. (A) Each approved seller training program shall explain how to detect possible intoxication. It shall describe the common indicators including, but not limited to, slurred speech, mental confusion, impaired balance, impaired motor ability, bloodshot eyes, the smell of alcoholic beverages on the breath, dishevelment, nausea and signs of lost control of bladder or bowels. The program shall note that an intoxicated person may sometimes display none of the common indicators. It shall describe ways to detect an atypical intoxicated person through methods such as drink counting, conversations calculated to reveal emotional stability or common indicators which might not otherwise be manifest. (B) Students shall be made aware that serious illness can masquerade as intoxication. All students shall be instructed to recognize bracelet and necklace emblems of the Medic Alert Foundation and the significance of such identification. (6) monitoring Customer Behavior. (A) Each approved seller training program shall describe techniques for monitoring customer behavior for the purpose of implementing timely intervention pursuant to paragraphs (10) and (11) of this subsection (relating to Intervention Pertaining to Minors; and Intervention Pertaining to Intoxication). It shall describe methods to obtain appropriate information in a commercially acceptable manner, including: (i) observing customer response during any conversations with the seller; (ii) observing customer interaction with third parties; (iii) observing the customer's initial mood and general conduct; and (iv) observing any change in any of the customer behavior previously mentioned. (B) Each program shall describe and explain typical warnings signs that customer behavior may be degenerating toward illegal behavior. Such warning signs shall include: (i) the development of any indicator of intoxication other than the smell of alcoholic beverages on the breath; (ii) any continuing argument or physical confrontation with any person; (iii) any rapid or pronounced change in mood or emotional state such as excessive euphoria, sadness, confusion, excitability or aggressiveness. (7) physiology. (A) Each approved seller training program shall include a basic explanation of how the human body reacts to the ingestion of beverage alcohol. It shall use simple language and concepts. It shall explain the effect of variables including body weight and type, gender, muscle/fat ratios, type and timing of food consumption, fatigue, and common diseases or disorders. It shall explain how alcohol can interact with many types of medicines and other drugs. (B) Each program shall include a basic discussion of alcoholism as a disease and the addictive property of alcohol. (C) Each program shall describe the Know Your Limits Chart developed by the Distilled Spirits Council of the United States, Inc., or a similar chart, and provide a copy of the chart. (8) detection of Minors. (A) Each approved seller training program shall explain techniques for determining if a customer is a minor. It shall explain the common signs of underage status including lack of physical maturity. It shall stress that most minors are mature in physical appearance before the age of majority, and that signs of physical maturity are not a reliable guide. (B) Each program shall describe and explain conduct and mannerisms which might raise a suspicion of minority status. It shall include: (i) a discussion of current fads and fashions in clothing, accessories, and grooming among minors; (ii) a description, based upon authoritative sources, of behavior patterns characteristic of minors; (iii) an explanation of how to look for suspicious behavior such as: (I) a group of young-appearing persons pooling their money and giving it to the oldest-appearing member; (II) a youthful appearing person waiting in the background away from the point of purchase or service while an adult obtains more than one serving; and (III) prior observation that a particular adult has purchased for a youthful appearing person. (9) identification. (A) Each approved seller training program shall describe valid drivers licenses and identification certificates issued by the Texas Department of Public Safety. (B) Each approved seller training program shall explain how to detect invalid identification documents presented in an attempt to establish proof of adult status. This shall include counterfeit and altered official documents. It shall also include unofficial documents which are deceptively similar to official documents. Emphasis shall be placed on drivers licenses and identification cards issued by the state of Texas and other states. Each program shall describe the most common types of counterfeiting and alteration and shall describe warning signs such as erasures, cut- and-paste numerals, substandard or inconsistent graphics and substandard lamination. (10) intervention Pertaining to Minors. (A) Each approved seller training program shall describe and explain techniques of intervention to prevent or terminate illegal sale, service, possession, or consumption regarding a minor. (B) Such techniques shall include, when appropriate to the circumstances: (i) ask for and carefully examine an identification card; (ii) removal of the alcoholic beverages in a non-aggressive manner from the reach or sight of the offender; (iii) an explanation that the demeanor of the seller or server should never be such that is likely to provoke violence; (iv) an explanation of the obligation to notify law enforcement authorities in the event that intervention attempts fail; (v) specific examples of words and conduct which may be used in an attempt to avoid or terminate illegal activity amicably. (11) intervention Pertaining to Intoxication. (A) Each approved seller training program shall explain effective techniques of intervention with persons who are intoxicated or who appear to be becoming intoxicated. This part of the program is of considerable importance to the public peace and safety and shall therefore receive due emphasis. The program may take into account the fact that permittees, licensees, and their employees will generally desire to avoid alienating a customer whenever possible. Therefore, the program shall describe specific language and conduct of the seller or server which is calculated to terminate or avoid illegal behavior of the customer as amicably as possible. (B) Such techniques shall include, when appropriate to the circumstances: (i) an explanation that the demeanor of the seller or server should never be such that is likely to provide violence; (ii) removal of the alcoholic beverages in a non-aggressive manner from the reach or sight of the offender; (iii) specific examples of words and conduct which may be used in an attempt to avoid or terminate illegal activity amicably; (iv) an explanation of how to slow down service of alcoholic beverages; (v) a suggestion that food, snacks or alternative beverages be served and an explanation of the types of food most likely to slow or reduce intoxication. (C) The student shall be made aware that coffee and other caffeine- containing products do not reduce intoxication, but may misleadingly appear to do so. (D) The student shall be made aware of designated driver programs and shall be encouraged to provide such special services and courtesies to a designated driver as may be allowed by the student's employer. (E) The student shall be made aware of the obligation to notify law enforcement authorities in the event that intervention attempts fail. (12) additional Program Content. (A) The administrator is hereby delegated the authority to modify or add requirements for the content of approved seller training programs in addition to the requirements specified in this chapter. (B) Any approved seller training program may contain any additional material except material which the administrator finds under the circumstances tends to be: (i) a substantial detraction from the effectiveness of the minimum program requirements; or (ii) a substantial detriment to the health, safety, or welfare of the general public or any segment thereof. (C) Approved programs are encouraged to exceed the minimum requirements of program content and to develop new methods and techniques designed to fulfill the intent of the Texas Alcoholic Beverage Code, sec.106.14. (13) appropriate testing of trainees in a form and manner adequate to demonstrate the effectiveness of the training program shall be required. (j) Each application for program approval shall be accompanied by a cashier's check, certified check or United States postal money order in the amount of $250. (k) Programs found to be acceptable under this chapter shall be approved in writing by the administrator in such form as he may deem to be appropriate. (l) Approval shall be valid for a period of three years unless earlier revoked. (m) A person commits an offense under the Texas Alcoholic Beverage Code, sec.101.61, if he falsely represents to any person that a program has been approved by the commission or administrator, or misleads any person into believing that a program is approved by the commission or administrator when, in fact, it is not. (n) The developer of a curriculum, or his authorized agent, may for marketing purposes in the normal course of business represent that the basic curriculum is part of an approved program, provided such representation is, in fact, truthful. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 7, 1994. TRD-9443906 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: August 2, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 16 TAC sec.50.4 The Texas Alcoholic Beverage Commission adopts new sec.50.4, concerning the administration of the program with respect to filing reports, class facilities, program presentation, testing and trainee certification, with a change to the proposed text as published in the May 20, 1994, issue of the Texas Register (19 TexReg 3892). This rule is justified in that it details how the seller-server training program shall function. This rule describes specific procedures to be followed in administration of a program. Alcoholic Beverage Training and TABSS-Metroplex suggested as to sec.50.4(a) that requiring notification of sessions three business days prior to the session is too much in some cases. Alcoholic Beverage Training suggested further that it is unnecessary to inform the Texas Alcoholic Beverage Commission of a class cancellation. The commission disagrees with the comment. The commission needs to receive notices of scheduled classes in time to set a schedule for the agent monitoring the classes. TEA requires 30 days notice for defensive driving classes. Clients can meet the three-day notice rule if they know it is required. Also, Texas Alcoholic Beverage Commission needs to know ahead of time if an instructor is not planning to hold a scheduled session, so that it does not waste a monitor's time going to that location. However, if the cancellation cannot be anticipated, ie. no or low attendance, a cancellation helps us clear out our records for scheduled classes. One comment was received from Alcoholic Beverage Training concerning sec.50. 4(b). They concurred with the rule but thought further stipulations should be included. The commission disagrees that further stipulations should be included in order to keep the stipulations to a minimum, and allow a trainer to ensure that the training environment is conducive to learning. One comment was received from Alcoholic Beverage Training concerning sec.50. 4(f) which requested clarification on how to handle trainee's questions within the scope of the program. The commission does not think that it is possible to incorporate into the rules how to handle unknown questions. Common sense will have to be used to determine if the question is something the trainer has the knowledge to answer or if the trainer will need to refer the trainee to another source. Comments were received from TABSS-Metroplex and Select Concepts in favor of sec.50.4(i) and supporting the idea of a retest. Also Select Concepts suggested that the trainer should have the option of retesting immediately or at a later date based upon the needs of the particular trainee. Some trainees fail because they cannot assimilate all of the material immediately; they need study time. The commission agrees with retesting, but disagrees with the option to retest at a later date. In order to be able to monitor sessions, the Texas Alcoholic Beverage Commission requires that the commission receives proper notice for each session. The Texas Alcoholic Beverage Commission does not allow testing any time except immediately following the session the participant attended because we want the ability to monitor the testing and do not want to create an environment where testing could be given in lieu of program attendance. The addition of an immediate retest should enable trainers to identify students who cannot read and give the trainer the opportunity to offer an oral exam for the student. One comment received from TABSS-Metroplex is in favor of sec.50.4(k) which enables the offering of a test in a language best understood by the trainee. The commission agrees with the comment and proposes no changes to the subsection. One comment was received from Health Communications, Inc. suggesting as to sec.50.4(m), that the Reports of Seller Training be filed within 45 days of the date on which the session was held. This would allow programs that utilize standardized grading of tests off site ample time to transmit tests through the mail. The commission disagrees with this comment because the 30 day requirement is generous and the commission wants to encourage filing reports as quickly as possible so that our records are current and so that the trainee can receive a certification card as timely as possible. Comments were received from Alcoholic Beverage Training and TABSS Metroplex suggesting as to sec.50.4(n), that the date of birth of each student is not necessary on the report of seller training. The commission disagrees with the comment. On a few occasions, the date of birth has had to be used to determine the identity of the trainee. With both the social security number and the date of birth, cross validation can be used when necessary. One comment was received from Gulf Coast Texas Alcoholic Beverage Seller School concerning sec.50.4(p) and sec.50.4(q) and in support of the commission issuing the trainee certificates because it adds credibility to the program. Alcoholic Beverage Training and TABSS-Metroplex suggested that the schools, rather than the commission issue the trainee certificates. The commission agrees that it is easiest to pass out certificates while a student is present because mailing addresses do change in a matter of weeks. However, the commission upholds the issuance of the certification cards by the commission because the issuance is a measure of control for the commission both by preventing blank cards from being misplaced or misused and by allowing the commission to have a record of the certification before the certificate is issued. Section 50.4(p), Program Administration. The Report of Seller Training shall be accompanied by a cashier's check, certified check, or United States Postal money order in the amount of $2.00 per trainee. The new rule is adopted under Alcoholic Beverage Code, sec.106.18 and sec.5. 31, Texas Civil Statutes, which provides the Texas Alcoholic Beverage Commission with the authority to pass rules to establish the minimum requirements for seller-server training programs. sec.50.4. Program Administrator. (a) The Texas Alcoholic Beverage Commission shall receive written notification from each school at least three business days prior to the session date. Said notice shall include the date, time, and location of each class and shall be received in the headquarters of the Texas Alcoholic Beverage Commission, P. O. Box 13127, Austin, Texas 78711 or local field office on forms prescribed by the commission. The commission must be notified by phone of session cancellations prior to the actual session date except when cancellation cannot be anticipated before the session's scheduled start. When cancellation cannot be anticipated, the commission must be notified within a reasonable time. (b) All training facilities shall meet the requirements of the Americans with Disabilities Act (ADA) and contain: (1) adequate seating facilities for all students; (2) appropriate space to ensure that visuals can be seen from all seating positions; (3) private space to limit distractions; and (4) access to a restroom. (c) Sessions may be monitored unannounced to evaluate the trainer presentation and the classroom environment. (d) Programs approved for licensees/permittees or hotel management companies shall be limited to employees of the said licensee, permittee, or hotel management company. (e) No class may exceed 50 trainees. Trainees who arrive more than 15 minutes after the start of the program session shall be denied admission to the session. (f) Discussions must be presented in a manner consistent with the contents of the approved instructor's guide. (g) Each program session will be presented in a continuous block of instruction. While instruction shall be interrupted for brief breaks, these should be limited in number and duration. The program must be presented in its entirety to each student in a language approved for use by the instructor. (h) Each trainee is to be tested immediately following the conclusion of instruction at the program session he or she attends. Testing of session participants at any other place or time is prohibited. (i) Each trainee must correctly answer at least 70% of the questions found on the test administered to him. Schools are encouraged to set higher completion standards. Trainees who receive failing scores may be immediately retested once. Otherwise, trainees must repeat the course in full. (j) All tests shall be administered on a closed book basis. (k) At the trainer's discretion the test may be offered in a language best understood by the trainee. Bilingual instructors may, in response to direct inquiries, clarify test questions using another language. (l) Each test must be maintained by the school for a period of at least four years and be made available to the commission upon written request. (m) Reports of Seller Training shall be made by the training entity or school to the commission. Reports must be delivered or postmarked within 30 calendar days of the date on which the session was held upon forms prescribed and approved by the administrator. (n) Each Report of Seller Training shall contain the name, social security number and date of birth of each student in that class who has completed the training program and has passed the required test. (o) The certified trainer who actually conducted the program shall in connection with the Report of Seller Training verify in writing under oath that each designated student has successfully completed the program approved by the commission on the date indicated and shall verify such other facts as the administrator may from time to time direct. (p) The Report of Seller Training shall be accompanied by a cashier's check, certified check, or United States postal money order in the amount of $2.00 per trainee. (q) The administrator shall send the certificates to the school which trained the trainees. Upon receipt, the school shall make a good faith effort to promptly transmit each certificate to the appropriate trainee. Failure to comply with this requirement is grounds for revoking or suspending approval of the seller training program administered by that school. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 7, 1994. TRD-9443907 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: August 2, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 16 TAC sec.50.5 The Texas Alcoholic Beverage Commission adopts new sec.50.5, concerning the denial, suspension or revocation of seller-server training program approval, without changes to the proposed text as published in the May 20, 1994, issue of the Texas Register (19 TexReg 3893). This rule is added to describe the specific reasons for which seller-server program approval may be suspended, denied or revoked; giving potential program applicants specific guidelines. This rule, in addition, describes the procedures to be followed should a program be denied, suspended or revoked. One comment was received from Alcoholic Beverage Training suggesting as to sec.50.5(a)(3) and (c)(3) that the classifications be reconsidered for the convictions that prohibit an individual from being certified as a program administrator or instructor because misdemeanor theft convictions do not prohibit a person from becoming a licensed peace officer. A person with multiple misdemeanor DWI convictions should probably not be certified. Consider, instead: no felony convictions within the last two years; no DWI convictions within the last two years; and no class A misdemeanor drug-related offenses in the last two years. The department disagrees with the comment. No program administrator should have a record of theft, fraud, or misrepresentation in that these offenses relate directly to their duties and functions within the school. The new rule is adopted under the Alcoholic Beverage Code, sec.106.14 and sec.5.31, which provides the Texas Alcoholic Beverage Commission with the authority to pass rules to establish the minimum requirements for seller-server training programs. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 8, 1994. TRD-9443744 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: July 29, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 16 TAC sec.50.6 The Texas Alcoholic Beverage Commission adopts new sec.50.6, concerning the application for a trainer's certification, without changes to the proposed text as published in the May 20, 1994 issue of the Texas Register (19 TexReg 3894). This rule is added to set forth the requirements and procedures to apply for certification as a trainer. This rule will enable the prospective trainer to take the required steps to gain certification. No comments were received regarding the adoption of this rule. The new rule is adopted under Alcoholic Beverage Code sec.106.14 and sec.5.31, which provide the Texas Alcoholic Beverage Commission with the authority to pass rules to establish minimum requirements for seller training programs. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 7, 1994. TRD-9443908 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: August 2, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 16 TAC sec.50.7 The Texas Alcoholic Beverage Commission adopts new sec.50.7, concerning the denial or revocation of trainer approval, without changes to the proposed text as published in the May 20, 1994, issue of the Texas Register (19 TexReg 3894). This rule is added to describe the specific reasons for which trainer approval may be denied or revoked; giving potential trainer applicants specific guidelines. This rule, in addition, describes the procedures to be followed should a trainer be denied or revoked. One comment was received from Alcoholic Beverage Training suggesting as to sec.50.7(a)(3) that the classifications be reconsidered for the convictions that prohibit an individual from being certified as a program administrator or instructor because misdemeanor theft convictions do not prohibit a person from becoming a licensed peace officer. A person with multiple misdemeanor DWI convictions should probably not be certified. Consider, instead: no felony convictions within the last two years; no DWI convictions within the last two years; and no class A misdemeanor drug-related offenses in the last two years. The commission disagrees with the comment. No trainer should have a record of theft, fraud, or misrepresentation in that these offenses relate directly to their duties and functions within the school. The new rule is adopted under Alcoholic Beverage Code, sec.106.18 and sec.5. 31, Texas Civil Statutes, which provide the Texas Alcoholic Beverage Commission with the authority to pass rules to establish the minimum requirements for seller-server training programs. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 7, 1994. TRD-9443909 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: August 2, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 16 TAC sec.50.8 The Texas Alcoholic Beverage Commission adopts new sec.50.8, concerning the certification of trainees who have successfully completed an approved seller training program, without changes to the proposed text as published in the May 20, 1994, issue of the Texas Register (19 TexReg 3895). This rule is justified in that it details the procedure for the issuance of certificates to persons who successfully complete seller-server training. This rule is added to describe the method for the issuance of trainee certificates and to establish the commission as the central record keeping source for trainee certification. The following comments were received regarding this new rule: Gulf Coast Alcoholic Beverage Seller School sec.50.8(a), supported the commission in issuing the trainee certificates because they felt it added credibility to the program. Alcoholic Beverage Training and TABSS-Metroplex suggested that the schools, rather than the commission issue the trainee certificates. The department agrees with Alcoholic Beverage Training and TABSS-Metroplex that it is easiest to pass out certificates while a student is present because mailing addresses often do change in a matter of weeks. However, the department disagreed in that issuance is a measure of control for the commission both by preventing blank cards from being misplaced or misused and by allowing the commission to have a record of the certification before the certificate is issued. The new rule is adopted under Alcoholic Beverage Code, sec.106.18 and sec.5. 31, Texas Civil Statutes, which provide the Texas Alcoholic Beverage Commission with the authority to pass rules to establish the minimum requirements for seller-server training programs. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 7, 1994. TRD-9443910 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: August 2, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 16 TAC sec.50.9 The Texas Alcoholic Beverage Commission adopts new sec.50.9, regarding licensee/permittee exemption from administrative action if they required their employees attend an approved seller-server training program, without changes to the proposed text as published in the May 20, 1994 issue of the Texas Register , (19 TexReg 3895). This rule creates a method by which a licensee/permittee can claim an exemption from administrative action. This rule sets forth in detail the procedures to be followed to receive an exemption. No comments were received regarding the adoption of this rule. The new rule is adopted under Alcoholic Beverage Code sec.106.14 and sec.5.31, which provide the Texas Alcoholic Beverage Commission with the authority to pass rules to establish minimum requirements for seller-server training programs. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 7, 1994. TRD-9443911 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: August 2, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 206-3204 Part IV. Texas Department of Licensing and Regulation Chapter 75. Air Conditioning and Refrigeration Contractor License Law 16 TAC sec.sec.75.20, 75.23, 75.30, 75.40, 75.70 The Texas Department of Licensing and Regulation adopts amendments to sec.sec.75.20, 75.23, 75.30, 75.40, and 75.70, concerning licensing for air conditioning and refrigeration contractors without changes to the proposed text as published in the June 7, 1994, issue of the Texas Register (19 TexReg 4373). The amendment to sec.75.20 reflects a change in the name of the trade school accrediting body; sec.75.23 clarifies requirements for eligibility for a temporary license; sec.75.30 extends the maintenance man exemption to apply to an owner of property on his own property; sec.75.40 allows insurance to be obtained from eligible surplus lines insurance carriers; and sec.75.70 limits subcontracting of service work to licensed persons, firms, or corporations. The justification for the amendments is that consumers will have more protection. This is particularly true for sec.75.70, because when service work is subcontracted to an unlicensed individual, there is no personal supervision by the licensed contractor for any part of the job. This type of operation makes it difficult for the consumer to identify the person responsible for the fairness and integrity of a job, and has been shown to facilitate those few contractors who operate scams or provide poor or incompetent service. The amendments will function by increasing program integrity. No comments were received regarding adoption of the rules. The amendments are adopted under Texas Civil Statutes, Article 8861, which authorize the department to license and regulate air conditioning and refrigeration contractors. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas on July 11, 1994. TRD-9443829 Jack W. Garrison Executive Director Texas Department of Licensing and Regulation Effective date: August 1, 1994 Proposal publication date: June 7, 1994 For further information, please call: (512) 463-7357 TITLE 28. INSURANCE Part II. Texas Workers' Compensation Commission Chapter 110. Required Notices of Coverage 28 TAC sec.110.110 The Texas Workers' Compensation Commission adopts new sec.110.110, concerning requirements for governmental entities awarding a contract for a building or construction project, and for persons providing services on a building or construction project for a governmental entity. The new rule is adopted with changes to the proposed text published in the April 26, 1994 issue of the Texas Register (19 TexReg 3131). Subsections (a)(7) and (c)(7) were amended by adding language to further clarify who is covered by the rule. Subsections (c)(7)(J) and (e)(3) were added to clarify that a contractor or subcontractor is representing to the governmental entity that workers' compensation coverage is provided. Subsections (d)(8)(C) and (e)(8)(C) were added to require specific language regarding representations of coverage to be added to contracts to provide services on the project. Subsections (c)(7)(F), and (c)(7)(I)(5), (d)(5), (d)(8)(F), (e)(6), and (e)(8)(F) were amended to reduce the retention period for contractors and other persons providing services on the project from three years to one year. Subsection (g) was changed to state that this rule applies to contract advertised for bid after September 1, 1994, rather than awarded after September 1, 1994. The Texas Labor Code, sec.406.096, requires workers' compensation insurance coverage for all persons providing services on a building or construction project for a governmental entity. The commission is aware that this statutory requirement is not being met, and this rule is designed to achieve compliance and to implement a recordkeeping process which will enable oversight of compliance. The rule does this by placing requirements on the governmental entity and on contractors and other persons providing services on a project. These requirements include coverage, certificates of coverage, posted notices of coverage, and notification of changes in coverage status. The rule does not create any duty or burden on anyone which the law does not establish. The rule defines terms which apply to governmental entity building or construction projects and sets up a clear procedure for governmental entities and contractors that bid for building and construction projects to follow in complying with the requirements of the Texas Labor Code, sec.406.096. It also defines "persons who provide services on a project" who are subject to the statutory requirement of coverage, and sets forth their requirements to comply with the statute and the rule. It specifically excludes persons such as food/beverage vendors whose deliveries and labor are not permanently incorporated into the project. The rule puts persons on notice that providing false or misleading certificates of coverage, or failing to provide or maintain required coverage, or failing to report any change that materially affects the provision of coverage may subject the contractor or other persons providing services on the project to administrative penalties, civil penalties, or other civil actions. The rule requires a governmental entity to timely obtain certificates of coverage, retain them for the duration of the project plus three years, and provide them to the commission upon request and to others entitled to them by law. It also requires the governmental entity, as a prerequisite to awarding a contract, and as part of the contract, to require that the contractor: provide coverage and certificates of coverage for the contractor's employees; timely obtain and provide the governmental entity all required certificates of coverage for all persons providing services on the project; retain certificates of coverage on file for the duration of the project and for one year thereafter; notify the governmental entity in writing by certified mail or personal delivery, within 10 days after the contractor knew or should have known, of any change that materially affects the provision of coverage of any person providing services on the project; post notices on each project site; and contractually require persons with whom it contracts to do the same, with the certificates of coverage to be provided to the person for whom they are providing services. The rule also sets out the language to be included in bid specifications and in contracts awarded by a governmental entity and the information required to be in the posted notice to employees. It further establishes a method for obtaining the certificates from persons providing services on the project and providing them to the governmental entity. It requires a contractor awarded a building or construction contract to: provide workers' compensation coverage to the contractor's employees for the duration of the project; file a certificate of coverage of the contractor's employees with the governmental entity prior to being awarded a contract; obtain and provide to the governmental entity, certificates of coverage from each other person with whom it has contracted to provide services on the project, prior to that person beginning work on the project; obtain and provide new certificates of coverage shown on the current certificate ends during the duration of the project; retain all certificates of coverage for the duration of the project and for one year thereafter; notify the governmental entity of material changes in coverage; contractually require each other person with whom it contracts to provide a certificate of coverage; and post notices on each project site. All other persons providing services on a project have the same requirements as a contractor, with the exception of posting notices and with the exception that the certificate of coverage is given to the person for whom they contracted to provide services on the project. The rule uses the term "persons providing services on the project" in lieu of the statutory term "subcontractor" because the term "subcontractor" as used in the statute (sec.406.096) and in this rule is broader than standard industry usage. The use of the different terminology will prevent confusion. The rule does not create any duty or burden on anyone which the law does not establish. Comments on the proposed new rule were received from the Texas Municipal League, Turner-Bass and Associates, Associated General Contractors of Texas (Highway, Heavy, Utilities & Industrial Branch), Brown and Root, Inc., Texas Concrete Company. Comments supporting the proposed new rule were received from Turner-Bass and Associates and Texas Concrete Company. Comments opposing the proposed new rule were received from the Texas Municipal League, Brown and Root and the Associated General Contractors of Texas. Summaries of the comments and commission responses are as follows. The Texas Municipal League made the following comments: Comment: The rule imposes onerous posting and recordkeeping requirements on governmental entities when sanctioning governmental entities or contractors who do not comply with the simple language of the statute would better accomplish the stated purpose of the rule. The Commission disagrees with this comment for two reasons. First, the posting requirement is placed on the contractor and not on the governmental entity. Second, the Commission's goal is to achieve compliance with the law, rather than sanction failure to comply. Comment: The rule is inappropriate because it requires governmental entities to maintain employment records and lists of all persons working on a public building or construction project. The Commission disagrees. The rule requires only that governmental entities obtain certificates of coverage for each person providing services on the project. Multiple persons can be covered by a single certificate. In addition, the Commission believes it is not unduly burdensome for a governmental entity to maintain a list of all contractors and subcontractors working on its projects. The commenter was also concerned that the rule creates new liabilities for governmental entities which overlook the failure of a subcontractor to maintain workers' compensation insurance coverage. The Commission disagrees. The rule creates no liability on the part of governmental entities which does not already exist. Brown and Root made the following comments: Comment: The definition of "persons providing services on the project" is too broad and may include food/beverage vendors. The Commission agrees the original language creates confusion. Subsections (a)(7) and (c)(7) have been amended to reflect the intention that services does not include activities unrelated to the project such as food/beverage vendors, office supply deliveries, and delivery of portable toilets. Comment: The commission should require notice to the governmental entity only of "cancellations and/or renewals" rather than of "changes that materially affect" the provision of coverage. The Commission disagrees because this limitation would make it more difficult for governmental entities to ensure all contractors and subcontractors on a project maintain the required coverage. While the rule as written covers cancellations and renewals, the Commission believes the language as proposed also encompasses other possible scenarios such as dropping coverage for some employees after beginning work on a project. Comment: It is not always feasible to provide certificates of coverage to a governmental entity prior to a subcontractor beginning work on a project. The Commission disagrees and asserts that contractors can alleviate this problem through advance planning and the use of facsimile machines. Comment: The contractor might be subject to fines and penalties if a subcontractor fails to keep the contractor informed about the status of their coverage. The rule places an additional recordkeeping burden on contractors. The Commission agrees that the rule appropriately places a burden on the contractor to obtain new certificates of coverage from subcontractors when coverage expires during the contract period. When the contractor fails to provide new certificates as required by the rule, the contract becomes voidable by the governmental entity if the contractor does not timely remedy the problem. However, the rule does give contractors some leeway in timeframes in that it allows a contractor to file certificates of coverage extension for its subcontractors within seven days after the contractor receives the certificate from its subcontractor. (See (d)(4)(B)). The commission has also added text to clarify that each person providing services on a project is responsible for representations as to their coverage only. (See (c)(7)(J), (d) (8)(C), (e)(3), and (e)(8)(C)). Comment: Contractors would be required to maintain a tickler system on all certificates of coverage and pursue late or missing certificates. The Commission agrees that the rule imposes these requirements but believes the law already requires this. The Association of General Contractors of Texas made the following comments: Comment: The definition of "persons providing services on the project" should merely track the statutory language. The Commission disagrees. Contractors and subcontractors are misinterpreting the statutory language and many persons working on government projects are not covered by workers' compensation insurance even though coverage is required by law. The new definition makes clear that all persons working on a government contract must be covered. Comment: The expense and burden of using certified mail is excessive. The Commission disagrees. The cost of using certified mail is outweighed by the benefit of having a record that something was mailed. In addition, a contractor also has the option of making a personal delivery in lieu of using certified mail. Comment: The posting requirements are redundant because the Commission already requires posted notices of coverage. The Commission disagrees. The notice currently required provides only information about coverage, the identity of an employer's workers' compensation carrier, Commission assistance, and the safety hotline. The notice required by this rule informs employees that coverage of them is mandatory. Brown and Root and the Association of General Contractors both made the following comment: Comment: Retaining records for three years is too long. The Commission agrees in part. The statute of limitations on fraud is three years and records must be maintained to allow prosecution of this crime. Also, state law requires business records to be kept for three years. Because the access to these records is essential to prosecution of violation of the law and this rule, a three-year period will continue to exist for governmental entities but the period is reduced to one year past the duration of the project for contractors and persons providing services on the contract. This change has been made in subsections (c)(7)(F), (c)(7)(I)(5), (d)(5),(d)(8)(F), (e)(6), and (e)(8)(f). Texas Concrete Company made the following comment: Comment: The rule should cover plants producing prestressed-precast concrete products to be used in government projects. The Commission disagrees. The purpose of this rule is to ensure persons working on the jobsite are covered. The new rule is adopted under the Texas Labor Code, sec.402.061, which authorizes the commission to adopt rules necessary to administer the Act, and Texas Labor Code, sec.406.096, which establishes requirements for governmental entities, contractors, and subcontractors ("persons providing services on the project") regarding workers' compensation coverage for workers on public building or construction projects. sec.110.110. Reporting Requirements for Building or Construction Projects for Governmental Entities. (a) The following words and terms, when used in this rule, shall have the following meanings, unless the context clearly indicates otherwise. Terms not defined in this rule shall have the meaning defined in the Texas Labor Code, if so defined. (1) Certificate of coverage ("certificate")- A copy of a certificate of insurance, a certificate of authority to self-insure issued by the commission, or a coverage agreement (TWCC-81, TWCC-82, TWCC-83, or TWCC-84), showing statutory workers' compensation insurance coverage for the person's or entity's employees (including those subject to a coverage agreement) providing services on a project, for the duration of the project. (2) Building or construction-Has the meaning defined in the Texas Labor Code, sec.406.096(e)(1). (3) Contractor-A person bidding for or awarded a building or construction project by a governmental entity. (4) Coverage-Workers' compensation insurance meeting the statutory requirements of the Texas Labor Code, sec.401.011(44). (5) Coverage agreement-A written agreement on form TWCC-81, form TWCC-82, form TWCC-83, or form TWCC-84, filed with the Texas Workers' Compensation Commission which establishes a relationship between the parties for purposes of the Workers' Compensation Act, pursuant to the Texas Labor Code, Chapter 406, Subchapters F and G as one of employer/employee and establishes who will be responsible for providing workers' compensation coverage for persons providing services on the project. (6) Duration of the project-Includes the time from the beginning of work on the project until the work on the project has been completed and accepted by the governmental entity. (7) Persons providing services on the project ("subcontractor" in sec.406.096 of the Act)-Includes all persons or entities performing all or part of the services the contractor has undertaken to perform on the project, regardless of whether that person contracted directly with the contractor and regardless of whether that person has employees. This includes but is not limited to independent contractors, subcontractors, leasing companies, motor carriers, owner-operators, employees of any such entity, or employees of any entity furnishing persons to perform services on the project. "Services" includes but is not limited to providing, hauling, or delivering equipment or materials, or providing labor, transportation, or other service related to a project. "Services" does not include activities unrelated to the project, such as food/beverage vendors, office supply deliveries, and delivery of portable toilets. (8) Project-Includes the provision of all services related to a building or construction contract for a governmental entity. (b) Providing or causing to be provided a certificate of coverage pursuant to this rule is a representation by the insured that all employees of the insured who are providing services on the project are covered by workers' compensation coverage, that the coverage is based on proper reporting of classification codes and payroll amounts, and that all coverage agreements have been filed with the appropriate insurance carrier or, in the case of a self-insured, with the commission's Division of Self-Insurance Regulation. Providing false or misleading certificates of coverage, or failing to provide or maintain required coverage, or failing to report any change that materially affects the provision of coverage may subject the contractor or other person providing services on the project to administrative penalties, criminal penalties, civil penalties, or other civil actions. (c) A governmental entity that enters into a building or construction contract on a project shall: (1) include in the bid specifications, all the provisions of subsection (d) of this rule, using the language required by paragraph (7) of this subsection; (2) as part of the contract, using the language required by paragraph (7) of this subsection, require the contractor to perform as required in subsection (d) of this rule; (3) obtain from the contractor a certificate of coverage for each person providing services of the project, prior to that person beginning work on the project; (4) obtain from the contractor a new certificate of coverage showing extension of coverage: (A) before the end of the current coverage period, if the contractor's current certificate of coverage shows that the coverage period ends during the duration of the project; and (B) no later than seven days after the expiration of the coverage for each other person providing services on the project whose current certificate shows that the coverage period ends during the duration of the project; (5) retain certificates of coverage on file for the duration of the project and for three years thereafter; (6) provide a copy of the certificates of coverage to the commission upon request and to any person entitled to them by law; and (7) use the following language for bid specifications and contracts, without any additional words or changes, except those required to accommodate the specific document in which they are contained or to impose stricter standards of documentation: Article _____. Workers' Compensation Insurance Coverage. A. Definitions: Certificate of coverage ("certificate")- (A) copy of a certificate of insurance, a certificate of authority to self- insure issued by the commission, or a coverage agreement (TWCC-81, TWCC-82, TWCC-83, or TWCC-84), showing statutory workers' compensation insurance coverage for the person's or entity's employees providing services on a project, for the duration of the project. Duration of the project-includes the time from the beginning of the work on the project until the contractor's/person's work on the project has been completed and accepted by the governmental entity. Persons providing services on the project ("subcontractor" in sec.406.096) -includes all persons or entities performing all or part of the services the contractor has undertaken to perform on the project, regardless of whether that person contracted directly with the contractor and regardless of whether that person has employees. This includes, without limitation, independent contractors, subcontractors, leasing companies, motor carriers, owner-operators, employees of any such entity, or employees of any entity which furnishes persons to provide services on the project. "Services" include, without limitation, providing, hauling, or delivering equipment or materials, or providing labor, transportation, or other service related to a project. "Services" does not include activities unrelated to the project, such as food/beverage vendors, office supply deliveries, and delivery of portable toilets. (B) The contractor shall provide coverage, based on proper reporting of classification codes and payroll amounts and filing of any coverage agreements, which meets the statutory requirements of Texas Labor Code, Section 401. 011(44) for all employees of the contractor providing services on the project, for the duration of the project. (C) The Contractor must provide a certificate of coverage to the governmental entity prior to being awarded the contract. (D) If the coverage period shown on the contractor's current certificate of coverage ends during the duration of the project, the contractor must, prior to the end of the coverage period, file a new certificate of coverage with the governmental entity showing that coverage has been extended. (E) The contractor shall obtain from each person providing services on a project, and provide to the governmental entity: (1) a certificate of coverage, prior to that person beginning work on the project, so the governmental entity will have on file certificates of coverage showing coverage for all persons providing services on the project; and (2) no later than seven days after receipt by the contractor, a new certificate of coverage showing extension of coverage, if the coverage period shown on the current certificate of coverage ends during the duration of the project. (F) The contractor shall retain all required certificates of coverage for the duration of the project and for one year thereafter. (G) The contractor shall notify the governmental entity in writing by certified mail or personal delivery, within ten days after the contractor knew or should have known, of any change that materially affects the provision of coverage of any person providing services on the project. (H) The contractor shall post on each project site a notice, in the text, form and manner prescribed by the Texas Workers' Compensation Commission, informing all persons providing services on the project that they are required to be covered, and stating how a person may verify coverage and report lack of coverage. (I) The contractor shall contractually require each person with whom it contracts to provide services on a project, to: (1) provide coverage, based on proper reporting of classification codes and payroll amounts and filing of any coverage agreements, which meets the statutory requirements of Texas Labor Code, sec.401.011(44) for all of its employees providing services on the project, for the duration of the project; (2) provide to the contractor, prior to that person beginning work on the project, a certificate of coverage showing that coverage is being provided for all employees of the person providing services on the project, for the duration of the project; (3) provide the contractor, prior to the end of the coverage period, a new certificate of coverage showing extension of coverage, if the coverage period shown on the current certificate of coverage ends during the duration of the project; (4) obtain from each other person with whom it contracts, and provide to the contractor : (a) a certificate of coverage, prior to the other person beginning work on the project; and (b) a new certificate of coverage showing extension of coverage, prior to the end of the coverage period, if the coverage period shown on the current certificate of coverage ends during the duration of the project; (5) retain all required certificates of coverage on file for the duration of the project and for one year thereafter; (6) notify the governmental entity in writing by certified mail or personal delivery, within 10 days after the person knew or should have known, of any change that materially affects the provision of coverage of any person providing services on the project; and (7) contractually require each person with whom it contracts, to perform as required by paragraphs (1)-(7), with the certificates of coverage to be provided to the person for whom they are providing services. (J) By signing this contract or providing or causing to be provided a certificate of coverage, the contractor is representing to the governmental entity that all employees of the contractor who will provide services on the project will be covered by workers' compensation coverage for the duration of the project, that the coverage will be based on proper reporting of classification codes and payroll amounts, and that all coverage agreements will be filed with the appropriate insurance carrier or, in the case of a self- insured, with the commission's Division of Self-Insurance Regulation. Providing false or misleading information may subject the contractor to administrative penalties, criminal penalties, civil penalties, or other civil actions. (K) The contractor's failure to comply with any of these provisions is a breach of contract by the contractor which entitles the governmental entity to declare the contract void if the contractor does not remedy the breach within ten days after receipt of notice of breach from the governmental entity. (d) A contractor shall: (1) provide coverage for its employees providing services on a project, for the duration of the project based on proper reporting of classification codes and payroll amounts and filing of any coverage agreements; (2) provide a certificate of coverage showing workers' compensation coverage to the governmental entity prior to beginning work on the project; (3) provide the governmental entity, prior to the end of the coverage period, a new certificate of coverage showing extension of coverage, if the coverage period shown on the contractor's current certificate of coverage ends during the duration of the project; (4) obtain from each person providing services on a project, and provide to the governmental entity: (A) a certificate of coverage, prior to that person beginning work on the project, so the governmental entity will have on file certificates of coverage showing coverage for all persons providing services on the project; and (B) no later than seven days after receipt by the contractor, a new certificate of coverage showing extension of coverage, if the coverage period shown on the current certificate of coverage ends during the duration of the project; (5) retain all required certificates of coverage on file for the duration of the project and for one year thereafter; (6) notify the governmental entity in writing by certified mail or personal delivery, within 10 days after the contractor knew or should have known, of any change that materially affects the provision of coverage of any person providing services on the project; (7) post a notice on each project site informing all persons providing services on the project that they are required to be covered, and stating how a person may verify current coverage and report failure to provide coverage. This notice does not satisfy other posting requirements imposed by the Act or other commission rules. This notice must be printed with a title in at least 30 point bold type and text in at least 19 point normal type, and shall be in both English and Spanish and any other language common to the worker population. The text for the notices shall be the following text provided by the commission on the sample notice, without any additional words or changes: REQUIRED WORKERS' COMOPENSATION COVERAGE "The law requires that each person working on this site or providing services related to this construction project must be covered by workers' compensation insurance. This includes persons providing, hauling, or delivering equipment or materials, or providing labor or transportation or other service related to the project, regardless of the identity of their employer or status as an employee." "Call the Texas Workers' Compensation Commission at (512) 440-3789 to receive information on the legal requirement for coverage, to verify whether your employer has provided the required coverage, or to report an employer's failure to provide coverage." and (8) contractually require each person with whom it contracts to provide services on a project, to: (A) provide coverage based on proper reporting of classification codes and payroll amounts and filing of any coverage agreements for all of its employees providing services on the project, for the duration of the project; (B) provide a certificate of coverage to the contractor prior to that person beginning work on the project; (C) include in all contracts to provide services on the project the language in subsection (e)(3) of this rule; (D) provide the contractor, prior to the end of the coverage period, a new certificate of coverage showing extension of coverage, if the coverage period shown on the current certificate of coverage ends during the duration of the project; (E) obtain from each other person with whom it contracts, and provide to the contractor: (i) a certificate of coverage, prior to the other person beginning work on the project; and (ii) prior to the end of the coverage period, a new certificate of coverage showing extension of the coverage period, if the coverage period shown on the current certificate of coverage ends during the duration of the project; (F) retain all required certificates of coverage on file for the duration of the project and for one year thereafter; (G) notify the governmental entity in writing by certified mail or personal delivery, within 10 days after the person knew or should have known, of any change that materially affects the provision of coverage of any person providing services on the project; and (H) contractually require each other person with whom it contracts, to perform as required by paragraphs (A)-(H), with the certificate of coverage to be provided to the person for whom they are providing services. (e) A person providing services on a project, other than a contractor, shall: (1) provide coverage for its employees providing services on a project, for the duration of the project based on proper reporting of classification codes and payroll amounts and filing of any coverage agreements; (2) provide a certificate of coverage as required by its contract to provide services on the project, prior to beginning work on the project; (3) have the following language in its contract to provide services on the project: "By signing this contract or providing or causing to be provided a certificate of coverage, the person signing this contract is representing to the governmental entity that all employees of the person signing this contract who will provide services on the project will be covered by workers' compensation coverage for the duration of the project, that the coverage will be based on proper reporting of classification codes and payroll amounts, and that all coverage agreements will be filed with the appropriate insurance carrier or, in the case of a self-insured, with the commission's Division of Self-Insurance Regulation. Providing false or misleading information may subject the contractor to administrative penalties, criminal penalties, civil penalties, or other civil actions." (4) provide the person for whom it is providing services on the project, prior to the end of the coverage period shown on its current certificate of coverage, a new certificate showing extension of coverage, if the coverage period shown on the certificate of coverage ends during the duration of the project; (5) obtain from each person providing services on a project under contract to it, and provide as required by its contract: (A) a certificate of coverage, prior to the other person beginning work on the project; and (B) prior to the end of the coverage period, a new certificate of coverage showing extension of the coverage period, if the coverage period shown on the current certificate of coverage ends during the duration of the project; (6) retain all required certificates of coverage on file for the duration of the project and for one year thereafter; (7) notify the governmental entity in writing by certified mail or personal delivery, of any change that materially affects the provision of coverage of any person providing services on the project and send the notice within 10 days after the person knew or should have known of the change; and (8) contractually require each other person with whom it contracts to: (A) provide coverage based on proper reporting of classification codes and payroll amounts and filing of any coverage agreements for all of its employees providing services on the project, for the duration of the project; (B) provide a certificate of coverage to it prior to that other person beginning work on the project; (C) include in all contracts to provide services on the project the language in subsection (e)(3) of this rule; (D) provide, prior to the end of the coverage period, a new certificate of coverage showing extension of the coverage period, if the coverage period shown on the current certificate of coverage ends during the duration of the project; (E) obtain from each other person under contract to it to provide services on the project, and provide as required by its contract: (i) a certificate of coverage, prior to the other person beginning work on the project; and (ii) prior to the end of the coverage period, a new certificate of coverage showing extension of the coverage period, if the coverage period shown on the current certificate of coverage ends during the duration of the contract; (F) retain all required certificates of coverage on file for the duration of the project and for one year thereafter; (G) notify the governmental entity in writing by certified mail or personal delivery, within ten days after the person knew or should have known, of any change that materially affects the provision of coverage of any person providing services on the project; and (H) contractually require each person with whom it contracts, to perform as required by paragraphs (A)-(H), with the certificate of coverage to be provided to the person for whom they are providing services. (f) If any provision of this rule or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this rule that can be given effect without the invalid provision or application, and to this end the provisions of this rule are declared to be severable. (g) This rule is applicable for building or construction contracts advertised for bid by a governmental entity on or after September 1, 1994. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 11, 1994. TRD-9443879 Susan Cory General Counsel Texas Workers' Compensation Commission Effective date: September 1, 1994 Proposal publication date: April 26, 1994 For further information, please call: (512) 440-3700 TITLE 34. PUBLIC FINANCE Part VI. Texas Municipal Retirement System Chapter 129. Domestic Relations Orders 34 TAC sec.129.12 The Texas Municipal Retirement System adopts an amendment to sec.129.12, concerning payments to alternate payees, without changes to the proposed text as published in the May 10, 1994, issue of the Texas Register (19 TexReg 3568). The amendment adds a subsection (d) to authorize a lump-sum payment to an alternate payee at the time when an annuity would otherwise be payable, if the reserves upon which the alternate payee's annuity would be calculated are $5,000 or less. No comments were received regarding adoption of the amendment. The amendment is adopted under the Government Code, sec.855.102, which provides the board of trustees of the Texas Municipal Retirement System with the authority to adopt rules necessary or desirable for effective administration of the System. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 11, 1994. TRD-9443828 Gary W. Anderson Executive Director Texas Municipal Retirement System Effective date: August 1, 1994 Proposal publication date: May 10, 1994 For further information, please call: (512) 476-7577 TITLE 37. PUBLIC SAFETY AND CORRECTIONS Part III. Texas Youth Commission Chapter 81. Administrative Provisions General 37 TAC sec.81.11 The Texas Youth Commission (TYC) adopts an amendment to sec.81.11, concerning state inscription, without changes to the proposed text as published in the June 7, 1994, issue of the Texas Register (19 TexReg 4411). The justification for amending the section is to minimize the possibility of personal injury to TYC staff and assist in apprehension of runaways. The amendment will add state vehicles used by personnel whose duties require regular and extended travel away from their home base to the list of vehicles currently exempted from the inscription requirement. The inscription currently impedes the possibility of apprehension of runaway youth. No comments were received regarding adoption of the amendment. The amendment is adopted under the Human Resources Code, sec.61.034, which provides the Texas Youth Commission with the authority to make rules appropriate to the proper accomplishment of its functions. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 12, 1994. TRD-9443896 Steve Robinson Executive Director Texas Youth Commission Effective date: August 2, 1994 Proposal publication date: June 7, 1994 For further information, please call: (512) 483-5244 37 TAC sec.81.17 The Texas Youth Commission (TYC) adopts new sec.81.17, concerning research projects, without changes to the proposed text as published in the June 10, 1994, issue of the Texas Register (19 TexReg 4489). The justification for the new section is to ensure that TYC research projects provide benefits to TYC or the juvenile justice profession and ensure confidentiality of TYC youth. The new rule will provide guidelines for TYC research projects as required by the Appropriations Act, sec.66. No comments were received regarding adoption of the rule. The new section is adopted under the Human Resources Code, sec.61.041, which provides the Texas Youth Commission with the authority to conduct continuing inquiry into the effectiveness of the treatment methods it employs in the reformation of children. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 12, 1994. TRD-9443897 Steve Robinson Executive Director Texas Youth Commission Effective date: August 2, 1994 Proposal publication date: June 10, 1994 For further information, please call: (512) 483-5244 Chapter 93. General Provisions Records, Reports and Forms 37 TAC sec.93.57 The Texas Youth Commission (TYC) adopts an amendment to sec.93.57, concerning access to youth records, without changes to the proposed text as published in the June 7, 1994, issue of the Texas Register (19 TexReg 4411). The justification for amending the section is to ensure compliance by TYC staff of state and federal laws and regulations limiting access to youth records. The amendment will require that staff receiving a subpoena for a TYC youth's file consult with the TYC legal department before responding to the subpoena. No comments were received regarding adoption of the amendment. The amendment is adopted under the Human Resources Code, sec.61.073, which provides the Texas Youth Commission with the authority to keep written records on each child subject to its control. These records are not public and are available only according to the provisions of Family Code, sec.51.14(B). This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 12, 1994. TRD-9443898 Steve Robinson Executive Director Texas Youth Commission Effective date: August 2, 1994 Proposal publication date: June 7, 1994 For further information, please call: (512) 483-5244