ADOPTED RULES An agency may take final action on a section 30 days after a proposal has been published in the Texas Register. The section becomes effective 20 days after the agency files the correct document with the Texas Register, unless a later date is specified or unless a federal statute or regulation requires implementation of the action on shorter notice. If an agency adopts the section without any changes to the proposed text, only the preamble of the notice and statement of legal authority will be published. If an agency adopts the section with changes to the proposed text, the proposal will be republished with the changes. TITLE 4. AGRICULTURE Part I. Texas Department of Agriculture Chapter 9. Plant Quality Citrus Fruit Maturity Standards 4 TAC sec.9.30 The Texas Department of Agriculture (the department) adopts new sec.9.30, concerning citrus fruit maturity standards, without changes to the proposed text as published in the July 5, 1994, issue of the Texas Register (19 TexReg 5141). The Texas Agriculture Code (the Code), sec.94.025, prohibits the sale of citrus fruit that is immature, unripe, overripe, frozen, or otherwise unfit for consumption. The marketing of unfit citrus fruit cheats the consumer and adversely affects demand for, and the orderly distribution of, citrus fruit. The new section is adopted in order to establish minimum juice content requirements for citrus fruit offered for sale in the state, and is intended to establish such minimum standards of fitness and quality for citrus fruit as will be in the public interest. The new section provides minimum juice content requirements to establish the fitness for consumption of citrus fruit that is to be prepared, received or delivered for sale or transportation, transported, sold or offered for sale in Texas. No comments were received regarding the adoption of the new section. The new section is adopted under the Texas Agriculture Code, sec.94.003, which provides the Texas Department of Agriculture with the authority to adopt rules necessary for the administration of Texas Agriculture Code, Chapter 94, concerning the seasonal requirements of citrus fruit for fitness for human consumption. 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 August 11, 1994. TRD-9446508 Dolores Alvarado Hibbs Chief Administrative Law Judge Texas Department of Agriculture Effective date: September 1, 1994 Proposal publication date: July 5, 1994 For further information, please call: (512) 463-7583 TITLE 7. BANKING AND SECURITIES Part VI. Credit Union Department Chapter 91. Chartering, Operations, Mergers, Liquidations Direction of Affairs 7 TAC sec.91.507 The Credit Union Commission adopts an amendment to sec.91.507, without changes to the proposed text as published in the June 14, 1994, issue of the Texas Register (19 TexReg 4615). The rule is amended to clarify the length of time between audits. The rule will continue to require an audit each year, but the audit period will be limited to 18 months. It will provide flexibility to credit unions in scheduling an audit each year. One comment was received. The commenter stated that the percentage of accounts for a negative verification was greater than necessary and placed a financial burden on credit unions. The commission disagreed that the verification percentages were excessive, stating that most credit unions conducted verifications with a controlled mailing of quarterly statements of a members' accounts. The amendment is adopted under Texas Civil Statutes, Article 2461-11.07, which provide the Credit Union Commission with the authority to adopt reasonable rules necessary for the administration of the Texas Credit Union Act. 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 August 11, 1994. TRD-9446436 Robert W. Rogers Commissioner Texas Credit Union Department Effective date: September 1, 1994 Proposal publication date: June 14, 1994 For further information, please call: (512) 837-9236 Chapter 97. Commission Policies and Administrative Rules 7 TAC sec.97.114 The Credit Union Commission adopts new sec.97.114, without changes to the proposed text as published in the June 14, 1994, issue of the Texas Register (19 TexReg 4616). The rule is adopted to comply with House Bill 1009 of the 73rd Legislature, requiring that changes for copying and reproducing public records be established in a rule. The rule specifies that fees will be changed in accordance with rules of the General Services Commission. There were no comments received concerning adoption of the rule. The new section is adopted under Texas Civil Statutes, Article 2461-11.07, which provide the Credit Union Commission with the authority to adopt reasonable rules necessary for the administration of the Texas Credit Union Act. 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 August 11, 1994. TRD-9446437 Robert W. Rogers Commissioner Texas Credit Union Department Effective date: September 1, 1994 Proposal publication date: June 14, 1994 For further information, please call: (512) 837-9236 TITLE 10. COMMUNITY DEVELOPMENT Part IV. Texas Department of Housing and Community Affairs Chapter 49. Low-Income Housing Tax Credit Rules 10 TAC sec.sec.49.1-49.14 The Texas Department of Housing and Community Affairs adopts new sec.sec.49. 1-49.14, concerning low-income housing tax-credit. Sections 49.1, 49.2, 49. 4- 49.11, 49.13, and 49.14 are adopted with changes to the proposed text as published in the May 20, 1994, issue of the Texas Register (19 TexReg 3859). Section 49.3 and sec.49.12 are adopted without changes and will not be republished. The adoption of the sections will provide procedures for the allocation by the Texas Department of Housing and Community Affairs of certain low-income housing tax credits available under federal income tax law. The new sections provide procedures and guidelines by which the Department of Housing and Community Affairs will prioritize and process application received for allocations of low-income housing tax credits. The Department did not receive any public comment in opposition to the adoption of the low-income housing tax credit rules during either the 30-day comment period or at the public hearing held on June 8, 1994. However, the Department did receive public comment on specific sections of the low-income housing tax credit rule, which are summarized as follows: Two commenters requested that the Department clarify the level of participation which the Historically Underutilized Business (HUB) would have in the development process. Further, the respondents asked whether the Department would be giving priority in the application process for HUB participation or would only require that the project owners undertake a good faith effort approach to meeting the Departments goal. The Department also received comments in favor of promoting the utilization of HUBs in the development of affordable housing under the tax credit program. Another commenter opposed the process of establishing set-asides as a method of selecting projects. The commenter instead would prefer the Department increase the level of selection criteria points so as to make it possible for high- priority developments to compete more favorably within a larger pool of tax credits. Specifically, the commenter disagreed with the Departments establishment of a set-aside for both real estate owned (oREOo) and First Time Participants. The Department also received favorable comments with regards to the continuation of the practice of establishing set-asides. Two commenters raised concerns about limitations to developer and contractor fees in instances where there is an identity of interest between the two parties. The commenters stated that each individual component of the development process contained its own risk and return and as such, a developer performing two separate functions should not be penalized. One commenter requested that the Department expand its selection criteria for management experience to include management agents which can supply evidence of previous experience along with professional certifications from appropriate trade organizations. Two commenters requested that the Department adopt either a statewide average or national average median income to assist very-low median income communities with creating projects under this program. The basis for the respondents comments was that the low median income in certain Texas counties precluded the development of affordable housing due to the low level of rents which may be charged under the tax credit program. One commenter requested that the Department automatically allocate tax credits to developments which received an award of HOME funds from either a state or local source. Two commenters requested that the Department increase the set-aside for qualified non-profit organizations. Commenters opposed the Department's proposal to issue additional selection criteria points for those developments located outside of the Dallas, Fort Worth and Houston metropolitan areas. The Department also received favorable public comments on the issue of diversifying the allocation of tax credits to other communities within the state. Two commenters requested that the Department prioritize those developments which agree to offer mixed-income housing. One commenter requested that the Department exempt those developments which received Community Development Block Grant or Rental Rehabilitation financing in the position of either a second or third lien from providing an environmental assessment. One commenter questioned the need to prioritize projects located within communities which have recently been awarded state prisons. One commenter requested that the Department allow for the transfer of a tax credit development to the tenants upon the completion of the compliance period as opposed to the extended use period. With regards to types of HUB participation, it is the intention of the Department to clearly specify the level of activity which would constitute HUB participation. This information will be contained within the Application Submissions Procedures Manual as well as the Cost Certification Procedures Manual. With regards to any priority issued as a result of HUB participation, it is the Department's intent that the project owners institute a good-faith effort to utilize HUBs in the development process. In response to the issues raised about set-aside categories, it is the Department belief that there is still a large quantity of REO properties held by various institutions. The REO set-aside specifically identifies projects held by failed financial institutions, a receiver or conservator of such an institution, Fannie Mae, Freddie Mac, federally chartered banks, or by a federally-approved mortgage company or savings and loan corporation as qualifying under this set- aside criteria. Consequently, there are a number of alternative projects which would qualify under this set-aside criteria, and the Department has historically received a sizable amount of prospective developments under the REO set-aside. With regards to the set-aside for First-Time Participants, it is the Department's belief that the adoption of this set-aside criteria will increase the likelihood of new developer participation in the tax credit program. With regards to the allowance of fees for those parties which have an identity of interest between the project owner and general contractor, the Department has adopted the National Council of State Housing Agencies standards for developer and contractor fees, which are 15% of eligible basis and 14% of construction costs respectively. It is not the Department's intention to reduce the level of fees below this limit if an identity of interest exists between the developer and general contractor. However, in the instance where these fees exceed the aforementioned limits, then the Department will consider the reduction in the overall fees. The Department concurs with the public comment concerning the elimination of the requirement that management experience include affordable rental housing and as such incorporated this change in the adopted rule. With regards to the request by the commenters regarding the Departments adoption of either a statewide or national average median income, it is beyond the ability of the Department to change the manner in which is determines median income within a community. Such an amendment to the tax credit program would require statutory revisions from the Federal government. With regards to the commenters request that the Department is give priority to those developments which are utilizing either local, state or federal funds, the Department is currently giving increased priority to those developments which will utilize local, state or federal funds. The automatic approving those developments which have HOME funds would circumvent the policies and priorities set down by this Department for the tax credit program. Currently, the Department is proposing for adoption a required set-aside of 10% of the available tax credit authority for specific non-profit utilization. Should the Department determine in the future that this level of set-aside is insufficient, then the prospects of increasing the set-aside beyond the current 10% level will be considered. With regards to the opposition to the Departments prioritization away for developments outside of the Dallas, Fort Worth or Houston area, the Department has historically received a large number of tax credit applications from the metropolitan areas of Dallas, Fort Worth and Houston. In turn, the Department has allocated a large share of its tax credits to these areas. By incorporating this provision within the selection criteria, the Department is not precluding the development of a tax credit project in one of these areas, but instead, is giving priority to those developments which are located in areas that have historically been under served. The Department concurs with the request that mixed-income developments be given additional priority and incorporated this change into the adopted rules. In consideration of the commenters request that the Department expand upon the exceptions to those developments which must file an environmental assessment, the Department feels that the current exemptions of The Farmers Home Administration financed developments and those projects less than four units in size, are the only allowable exemptions to the requirement to submit an environmental assessment. Further, the Department is allowing those properties which have first lien financing from HUD to submit HUD's environmental assessment. Currently, a majority of those communities which have been awarded a state prison are experiencing severe housing shortages. Further, it is only through permanent housing for the new prison employees that these communities will be able to fully benefit from the economic activity generated by these prison facilities. The Internal Revenue Code disallows project owners from disposing of the property, and in doing so, cease the low-income nature of the development prior to the termination of the extended use period. Consequently, this issue is a statutory requirement and not subject to the Departments modification. The new section is adopted pursuant to the authority at Texas Government Code, Chapter 2306; Acts of the 73rd Legislature; Acts of the 73rd Legislature Chapter 725, which provide the Texas Department of Housing and Community Affairs with the authority to adopt rules governing the administration of the Department and its programs; and Executive Order AWR 91-4, which provides this Department with the authority to make housing credit allocations in the State of Texas. sec.49.1. Scope. The rules in this chapter apply to the allocation by the Texas Department of Housing and Community Affairs of certain low-income housing tax credits authorized by applicable federal income tax laws. The Internal Revenue Code of 1986, sec.42, as amended, provides for credits against federal income taxes for owners of qualified low-income rental housing projects. That section provides for the allocation of the available tax credit amount by state housing credit agencies. Pursuant to Executive Order AWR-91-4, the Texas Department of Housing and Community Affairs was authorized to make housing credit allocations for the State of Texas. As required by the Internal Revenue Code, sec.42(m)(1), the Department developed a Qualified Allocation Plan which is set forth in sec.49.6 and sec.49.7 of this title (relating to Threshold Criteria; Evaluation Factors; Selection Criteria; Final Ranking; Credit Amount; Tax Exempt Bond Financed Projects; and Compliance Monitoring). Such Qualified Allocation Plan has, at this time, not been signed by the governor. Sections in this chapter establish procedures for applying for and obtaining an allocation of the low-income housing tax credit, along with insuring that the proper threshold criteria, selection criteria, priorities and preferences are followed in making such allocations. It is a goal of this Department, through these provisions, to encourage diversity through broad geographic allocation of tax credits within the state and to promote maximum utilization of the available tax credit amount, consistent with ensuring that the tax credits are allocated to owners of projects that will serve the Department's public policy objectives and federal requirements to provide housing to persons and families of very-low and low income. It is the policy of the Department to encourage the use of historically underutilized businesses in all of the Department's programs. In response to this policy, the Department has established a minimum goal of 30% participation of historically underutilized businesses in the low-income housing tax credit program. Project owners are encouraged to achieve these minimum goals. sec.49.2. Definitions. The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise. Ad Hoc Tax Credit Committee-That committee comprised of members of the Board of the Texas Department of Housing and Community Affairs charged with the direct oversight of the Low-Income Housing Tax Credit Program. Agreement and Election Statement-A document in which the project owner elects, irrevocably, to fix the applicable credit percentage with respect to a building or buildings, as that in effect for the month in which the Department and the project owner enter into a binding agreement as to the housing credit dollar amount to be allocated to such building or buildings, which such Agreement and Election Statement shall be executed by the project owner no later than five days after the end of the month of execution of the agreement as to housing credit dollar amount. Applicable fraction -The fraction used to determine the qualified basis of the qualified low-income building, which is the smaller of the unit fraction or the floor space fraction, as defined more fully in the Code, sec.42(c)(1). Applicable percentage -The percentage used to determine the amount of the low-income housing tax credit, as defined more fully in the Code, sec.42(b). Application-An application in the form prescribed by the Department, including any required exhibits or other supporting materials, filed with the Department by a project owner requesting a low-income housing tax credit allocation. Application Submission Procedures Manual-That certain manual produced by the Department which sets forth procedures, forms, and guidelines for the filing of applications for low-income housing tax credits, which said manual may be amended from time to time by the Department. Board-The governing body of the Texas Department of Housing and Community Affairs. Building in default project-A building in a project which is acquired from an insured depository institution in default (as defined in the Federal Deposit Insurance Act, 12 United States Code sec.1813(x), as may be amended from time to time) or from a receiver or conservator of such an institution. Carryover allocation -An allocation of current year tax credit authority by the Department pursuant to the provisions of the Code, sec.42(h)(1)(E). Carryover allocation document-A carryover allocation document issued by the Department to a project owner pursuant to sec.49.4(k) of this title (relating to Applications; Environmental Assessments; Market Study; Reservations; Notification; Commitments; Extensions; Carryover Allocations; Agreements and Elections; Extended Commitments.). Carryover Allocation Procedures Manual-That certain manual produced by the Department which sets forth procedures, forms, and guidelines for the filing of carryover allocations for low-income housing tax credits, which said manual may be amended from time to time by the Department. Code-The Internal Revenue Code of 1986, as the same may be amended from time to time, together with any applicable regulations, rules, rulings, revenue procedures, information statements or other official pronouncements issued thereunder by the United States Department of the Treasury or the Internal Revenue Service relating to the Low-Income Housing Tax Credit Program authorized by the Code, sec.42, and as may be amended from time to time. Commitment notice -A commitment notice issued by the Department to a project owner pursuant to sec.49.4(h) of this title. Compliance period -With respect to a building, the period of 15 taxable years beginning with the first taxable year of the credit period with respect to the building, during which the project owner is required by the Code, sec.42, to maintain building as a qualified low-income building pursuant to the Code, sec.42(c)(2). Contractor-One who contracts for the construction, or rehabilitation of an entire building or project, rather than a portion of the work. The contractor hires subcontractors, such as plumbing contractors, electrical contractors, etc., coordinates all work, and is responsible for payment to the said subcontractors. This party may also be referred to as the "general contractor." Cost Certification Procedures Manual-That certain manual produced by the Department which sets forth procedures, forms, and guidelines for the filing of requests for IRS Forms 8609 for projects placed into service under the Low- Income Housing Tax Credit Program, which said manual may be amended from time to time by the Department. Credit period-With respect to a building within a project, the period of ten taxable years beginning with the taxable year the building is placed in service or, at the election of the project owner, the succeeding taxable year, as more fully defined in the Code, sec.42(f)(1). Department-The Texas Department of Housing and Community Affairs, a public and official governmental Department of the State of Texas created and organized under the Texas Department of Housing and Community Affairs Act, Texas Government Code, Chapter 2306 and Texas Civil Statutes, Article 4413(501) as amended by the 73rd Legislature, Chapter 725 and 141. Development team -Any individual, joint venture, partnership, corporation, cooperative, trust, or other person or entity involved in the development, construction, rehabilitation, management and/or continuing operation of the subject property, which may include any consultant(s) hired by the applicant for the purpose of the filing of an application for low income housing tax credits with the Department. Eligible basis -With respect to a building within a project, the building's eligible basis as defined in the Code, sec.42(d). Extended Low-Income Housing Commitment Agreement-An agreement between the Department, the project owner and all successors in interest to the project owner concerning the extended low-income housing use of buildings within the project as provided in the Code, sec.42(h)(6). This period shall commence on the first day of the compliance period and end on the date which is 30 years after said commencement date. A sample copy of this is provided in the Reference Manual. First Time Participant -A project owner who has not previously been awarded a low-income housing tax credit allocation from any housing credit agency, and is not affiliated with or controlled by a person or organization which has previously received an allocation of low-income housing tax credits from any housing credit agency. FmHA-The Farmers Home Administration. Grace period-That period of time during a published application cycle in which an applicant whose application is presented to the Department, may supply corrected and/or additional documentation in support of the application and be considered in accordance with sec.49.6 of this title (relating to Threshold Criteria; Evaluation Factors; Selection Criteria; Final Ranking; Credit Amount; Tax Exempt Bond Financed Projects). Handicapped person -A person having a physical or mental impairment that is expected to be of long, continued and indefinite duration, is a substantial impediment to his or her ability to live independently, and is of a nature that the ability to live independently could be improved by a stable residential situation, as more fully defined in 24 Code of Federal Regulations, sec.841.1, and as may be amended from time to time. Historically underutilized businesses-Pursuant to Texas Civil Statutes, Article 601b, sec.sec.1.02-1.04, entitled State Purchasing and General Services Act, a business in the form of a corporation, partnership or joint venture which is at least 51% owned, or a sole proprietorship which is 100% is owned by a person or persons who have been historically underutilized due to their identification as a member of a certain group. These individuals must regularly, continuously and substantially participate in the activities of the entity. The following are the groups which will be considered pursuant to this definition: (A) Black Americans-persons having origins in any of the Black racial groups of Africa; (B) Hispanic Americans-persons of Mexican, Puerto Rican, Cuban, Central or South American, or other Spanish or Portuguese culture or origin, regardless of race; (C) Asian-Pacific Americans-persons whose origins are from Japan, China, Taiwan, Korea, Vietnam, Laos, Cambodia, Philippines, Samoa, Guam, U.S. Trust Territories of the Pacific and the Northern Marianas; Native Americans -persons who are American Indians, Eskimos, Aleuts, or Native Hawaiians; or (D) Women-includes all women of any ethnicity. Homeless person -An individual or family that lacks a fixed, regular, and adequate nighttime residence as more fully defined in 24 Code of Federal Regulations, sec.841.1, and as may be amended from time to time. Housing credit agency-An agency charged with the responsibility of allocating low income housing tax credits pursuant to the Code, sec.42. Housing credit allocation-An allocation by the Department to a project owner of a low-income housing tax credit in accordance with sec.49.8 of this title (relating to Housing Credit Allocations). Housing credit allocation amount-With respect to a project or a building within a project, that amount the Department determines to be necessary for the financial feasibility of the project and its viability as a qualified low income housing project throughout the compliance period. HUD-The United States Department of Housing and Urban Development, or its successor. Identity of interest-An identity of interests exists if: (A) any general or limited partner, shareholder, director, officer, employee or authorized representative of the project owner is also a general or limited partner, shareholder, director, officer, employee or authorized representative of the contractor or vice versa; and/or (B) the project owner (or any general or limited partner, shareholder, director, officer, employee or authorized representative of the project owner) can directly or through one or more intermediaries control or influence the decisions or policies of the contractor, including apparent control or influence over the decisions or policies, or vice versa. Apparent control or influence means any relationship that exists between the project owner and contractor (or any general or limited partner, shareholder, director, officer, employee or authorized representative of the project owner and contractor) by blood or marriage. IRS-The Internal Revenue Service, or its successor. Local tax-exempt organization-A project owner which is described in the Code, sec.501(c)(3) or (4), or as these cited provisions may be amended from time to time, and which has a scope of business operation limited to the State of Texas or the governmental unit wherein the project will be situated. Other projects -Any project which would not be considered as either a Rural, REO, First-Time Participant, Small Development, Special Needs Project or could not qualify for an allocation from of the non-profit set-aside. Project-A low-income rental housing project the owner of which represents it to be a qualified low-income housing project within the meaning of the Code, sec.42(g). With regards to this definition, the project is that property which is the basis for the application for low-income housing tax credits. May also be referred to as the subject property. Project owner-Any individual, joint venture, partnership, corporation, cooperative, trust, or other person or entity that owns a project or expects to acquire a project pursuant to a purchase contract satisfactory to the Department. Qualified Allocation Plan-An allocation plan which sets forth the threshold criteria, selection criteria, priorities, and preferences as provided in the Code, sec.42(m)(1) and as further provided in sec.49.6. Qualified basis -With respect to a building within a project, the building's eligible basis multiplied by the applicable fraction, as more fully defined in the Code, sec.42(c). Qualified market analyst-An individual or organization which has a background in either market or economic analysis and can supply the Department with dependable current data on the demand for and marketability of a project. The individual or organization must have at least five years of experience in the analysis of multifamily rental housing development. Qualified nonprofit organization-An organization that is described in the Code, sec.501(c)(3) or (4), as these cited provisions may be amended from time to time, that is exempt from federal income taxation under the Code, sec.501(a), that is not affiliated with or controlled by a for-profit organization, and includes as one of its exempt purposes the fostering of low-income housing, as more fully defined in the Code, sec.42(h)(5)(C), and Temporary Treasury Regulation, sec.1.42-1T(c)(5)(ii). Qualified nonprofit project-A project with respect to which a qualified nonprofit organization is to own an interest (directly or through a partnership) and materially participate (within the meaning of the Code, sec.469(h), or as may be amended from time to time) in its development and operation throughout the compliance period. REO projects-Any property, which includes both land and existing dwelling units permanently attached to the land, that is owned or that is being sold by an insured depository institution in default, or by a receiver or conservator of such an institution, or is a property held by Fannie Mae, Freddie Mac, federally chartered banks, or by a federally-approved mortgage company or savings and loan association. Vacant land without structural improvement will not satisfy the requirements of this definition even if it is held by one of the above mentioned institutions or entities. Reference Manual -That certain manual, and any amendments thereto, produced by the Department which sets forth reference material pertaining to the Low- Income Housing Tax Credit Program. Rehabilitation expenditure -Amounts incurred in connection with the rehabilitation of a project the owner of which represents it to be "rehabilitation expenditures" within the meaning of the Code, sec.42(e) . Reservation notice -A reservation notice issued by the Department to a project owner pursuant to sec.49.4(f) of this title. Rules-The Department's low-income housing tax credit rules, sec.sec.49.1- 49.14 of this title (relating to Low-Income Housing Tax Credit Rules). Rural project-A project located outside the boundaries of any Metropolitan Statistical Area (MSA) and any Primary Metropolitan Statistical Area (PMSA) or located within the boundaries of an MSA or a PMSA which is designated by the FmHA as an eligible area for purposes of FmHA housing assistance programs. Selection criteria -Criteria used to determine housing priorities of the Department which are appropriate to conditions in the state. Small development -A project consisting of not more than 25 units, which is not a part of, or contiguous to, a larger project, and which has or will apply to the Department for a tax credit allocation. This definition excludes those projects which would otherwise qualify as rural projects. Special housing project-Any project developed specifically for special housing need groups, including mental health/mental retardation projects, group homes, housing for the homeless, transitional housing, and congregate care facilities. State housing credit ceiling-The limitation imposed by the Code, sec.42(h), on the aggregate amount of housing credit allocations that may be made by the Department during any calendar year, as determined from time to time by the Department in accordance with the Code, sec.42(h)(3). Sustaining occupancy -The figure at which occupancy income is equal to all operating expenses and debt service requirements for a project. Threshold criteria -Criteria used to determine the project's qualifications which are the minimum level of acceptability for consideration under the Low- Income Housing Tax Credit Program. Total housing development cost-The total of all costs incurred by the project owner in acquiring, constructing, rehabilitating and financing a project, as determined by the Department based on the information contained in the project owner's application. Unit-Any residential rental unit in a project consisting of an accommodation containing separate and complete physical facilities and fixtures for living, sleeping, eating, cooking and sanitation; including single room occupancy housing used on a non-transient basis. sec.49.4. Applications; Environmental Assessments; Market Study; Reservations; Notification; Commitments; Extensions; Carryover Allocations; Agreements and Elections; Extended Commitments. (a) Any project owner requesting a housing credit allocation for a project must submit an application to the Department which application shall be originally executed by the project owner. This application shall contain full and complete information as to each item specified in the Application Submission Procedures Manual, as amended. The Department will require, as a part of a completed application, information to be submitted by the project owner which identifies the number of historically underutilized businesses to be used in the development and/or continuous operation of the project, in a form specified within the Application Submission Procedures Manual. Further, the Department will require the project owner to supply sufficient documentation which will represent the means by which these historically underutilized businesses were or are to be selected. The project owner is also advised that the Department will be requesting information pertaining to the use of historically underutilized businesses in the actual development of the project at the time of final allocation of tax credits, pursuant to sec.49.8(c) of this title (relating to Housing Credit Allocations). When any item is marked "not applicable," the project owner shall explain in detail why such item is "not applicable." The Department is authorized to request the project owner to provide any additional information it deems relevant as an addendum to the application. (b) As part of the complete application the applicant must submit a Phase I Environmental Assessment of the subject property, dated not more than six months from the date of application to the Department. In the event that a Phase I Environmental Assessment on the project is older than six months, the project owner may supply the Department with an update letter from the person or organization which prepared the initial assessment; provided, however, that the Department will not accept any Phase I Environmental Assessment which is more than 12 months old. This environmental assessment should include, but is not limited to, a review of records, interviews with people knowledgeable about the property, an inspection of the property, the building(s), and the fence line, adjoining properties, as well as any other industry standards concerning the preparation of this type of environmental assessment. If the report establishes that environmental hazards currently exist on the property, or are originating off-site but would nonetheless affect the property, the project owner must provide either a plan for the abatement of the hazard or an operation and maintenance plan for the control of the hazard. The environmental assessment shall be conducted by an individual who has been properly certified to perform this analysis and be prepared at the expense of the project owner. For projects which have had a Phase II Environmental Assessment performed and hazards identified, the project owner is required to maintain a copy of said assessment on-site, available for review by all persons which either occupy the property or are applying for tenancy. Properties financed through the FmHA, or properties with four units or less will not be required to supply this information; however, the project owners are hereby notified that it is their responsibility to ensure that the property is maintained in compliance with all state and federal environmental hazard requirements. Those projects which have or are to receive first lien financing from HUD may submit HUD's environmental assessment report, provided that it conforms with the requirements of this subsection. In order for an environmental assessment to be considered as acceptable under this subsection, it must be complete at the time of submission and not submitted to the Department in a fragmented form. (c) The Market Study required by the application shall comply with paragraphs (1)-(6) of this subsection. (1) A Market Study prepared by a qualified market analyst, who is independent of the development team, and is not dated more than six months prior to the date of application, is required as part of the complete application when the project is either new construction or the rehabilitation of an existing project which is, at the time of application, below 70% occupancy. Projects which are comprised of ten units or less in size are not required to provide the Department with a market study. In the event that a Market Study on a project is older than six months, a project owner may supply the Department with an update letter from the person or organization which prepared the initial report; provided, however, the Department will not accept any Market Study which is more than 12 months old. The Market Study shall be prepared at the expense of the project owner and shall include, at a minimum, the following information: (A) an evaluation of the existing occupancy rates in comparable multifamily rental residential developments in the same market area as the proposed project; (B) project absorption rates for at least one year from the date of the study for units in comparable multifamily rental residential developments in the same market area as the project. Further, provide a projection of the time necessary for the project to achieve sustaining occupancy; (C) an evaluation of the current physical condition of existing low-income rental housing units in the market area; (D) an evaluation of the need for affordable housing within the project market area, which includes an analysis of any existing federal, state and/or locally subsidized rental housing units in the market area; (E) an evaluation of the appropriateness of the unit size, in terms of number of bedrooms, for the low-income housing market area; (F) an evaluation of the appropriateness of the location and total development cost of the project for the low income target population; (G) an evaluation of appropriateness of the proposed rehabilitation plan and budget to adequately address the current physical deficiencies at the properties and bring the project up to or above current conditions of competing properties in the submarket; (H) an evaluation of the appropriateness of the anticipated operating costs of the project for the housing market in which the project is located; (I) an evaluation of the appropriateness of the existing or proposed physical amenities at the project for the low-income target population; (J) a summary of qualifications for the individuals who participated in the development of the Market Study; (K) a statement from the qualified market analyst concerning any identity of interest in the development of the property; and (L) such other matters as the Department, in its discretion, may determine to be relevant to the Department's evaluation of the need for the project and the allocation of the requested housing credit allocation amount. (2) The Department may require the project owner obtain a Market Study for a project to be rehabilitated even if current occupancy is above 70%. (3) A written certification is required, from the qualified market analyst who prepared the Market Study required under paragraph (1) of this subsection, stating that: (A) the projected total housing development costs of the proposed project do or do not appear to be reasonable. The qualified market analyst must provide the Department with sufficient documentation to support his/her conclusion with regards to the reasonableness of the development costs; (B) the projected total operating costs of the proposed project do or do not appear to be reasonable. The qualified market analyst must provide the Department with sufficient documentation to support his/her conclusions with regards to the reasonableness of the projected operating costs; (C) the projected rehabilitation plan and budget is or is not reasonable to correct the current physical deficiencies and bring the project up to or beyond market standards. The qualified market analyst must provide the Department with sufficient documentation to support his/her conclusion with regard to the reasonableness of the rehabilitation plan and budget; (D) the proposed project, in light of the vacancy and absorption rates for the applicable market area, is or is not likely to result in an unreasonably high vacancy rate for comparable units within the market area (i.e., standard, well-maintained units within such market area that are reserved for occupancy by low- and very-low income tenants). The qualified market analyst must provide the Department with sufficient documentation to support his/her conclusion with regard to the effects of the project's development on the vacancy rates for comparable units within the market area; (E) the projected initial rents for the project are or are not reasonably affordable by low- and very-low income tenants and are or are not below the rental range for the comparable projects within the market area. The qualified market analyst must provide the Department with sufficient documentation to support his/her conclusion with regard to the reasonableness of the rents at the project. A simple statement from the qualified market analyst that project rents are within the Code, sec.42, limits will not on its own satisfy this requirement; and (F) project reserves are/are not adequate to cover operating shortfalls until the project achieves sustaining occupancy. The qualified market analyst must provide the Department with sufficient documentation to support his/her conclusions with regards to the adequacy of the project reserves. (4) If a project owner requests a waiver of the required Market Study, the project owner shall provide the Department a separate written document, with any support information attached thereto, setting forth the exact reasons why such waiver is justified. Such information should include at a minimum, a copy of the local Comprehensive Housing Affordability Strategy ("CHAS") report, if available, which clearly addresses the need for additional affordable rental housing as well as letters of support from local community officials such as the mayor, county judge, city manager or city planner, which also clearly express the need for additional affordable rental housing in the projects market area. Only upon the delivery of the documentation specified within this subsection will the Department consider the merits of the project owners request for a waiver of the market study requirements. The Department in its own discretion will accept or reject project owners request for a waiver of the market study requirements, and will inform the project owners in writing of such acceptance or rejection. (5) Projects which are located within either a qualified census tract or difficult development area as defined by the Secretary of Housing and Urban Development, in one of the targeted Texas counties, as set forth in the Department's Reference Manual, may submit, in lieu of the Market Study, a copy of the local CHAS report, if available, which clearly addresses the need for additional affordable rental housing and letters of support from local community officials such as a mayor, county judge, city manager or city planner, which also clearly express the need for additional affordable rental housing in the project's market area. The Department may require that the project owner supply a Market Study, in conformance with the provisions of this subsection, even if the project is located within one of the aforementioned areas. (6) The Ad Hoc Tax Credit Committee may, in its discretion, waive any of the provisions of this subsection. (d) A project owner may file an application at any time during the application acceptance cycle(s), as published from time to time by the Department in the Texas Register. (e) The Department may reject any application that is incomplete or that is not filed in accordance with the Application Submission Procedures Manual, as amended. (f) Within a reasonable amount of time after evaluation, ranking, and underwriting of an application, as provided in sec.49.6 of this title (relating to Threshold Criteria; Evaluation Factors; Selection Criteria; Final Ranking; Credit Amount; Tax Exempt Bond Financed Projects), the Department shall respond to the project owner in accordance with paragraph (1) or (2) of this subsection, as applicable. (1) Unless the entire state housing credit ceiling for the applicable calendar year has previously been reserved, committed or allocated in accordance with this chapter, applications which receive the highest number of points, in each set-aside category, as applicable, during any published application acceptance cycle, will be eligible for an evaluation by an Underwriter as provided in sec.49.6(b), if the required Threshold Criteria have been achieved and all necessary application documents have been received in accordance with the Application Submission Procedures Manual, as amended. If credits are available based upon the ranking of the project in accordance with sec.49.6. If such evaluation warrants, a reservation notice will be issued. The reservation notice: (A) shall confirm that the Department has received the project owner's application and has found the application to be in satisfactory form containing all required information or shall clearly specify any remaining conditions which are in need of being met prior to the presentation of the application to the Ad Hoc Tax Credit Committee; and (B) shall reserve to the project owner the housing credit allocation amount specified therein, subject to the feasibility determination described at sec.49.8(a) of this title (relating to Housing Credit Allocations) and compliance by the project owner with the remaining requirements of this title and such other conditions as the Department may set forth in the reservation notice, and subject further to approval by the Board of the project owner's application. The reservation notice shall expire on the date specified therein. (2) If the entire state housing credit ceiling for the applicable calendar year has been reserved, committed or allocated in accordance with this chapter, the Department shall place all remaining applications on a waiting list and shall issue to the project owner a written notice of that action. If at any time prior to the last business day of the applicable calendar year, one or more reservation notices, commitment notices or carryover allocation documents expire and a sufficient amount of the state housing credit ceiling becomes available, then the Department shall issue a reservation notice to the project owner in the manner and with the effect described in paragraph (1) of this subsection. In the event that the Department makes a reservation or offers a commitment within the last month of the calendar year, it will require immediate action by the applicant to assure that an allocation or carryover allocation can be issued before the end of that same calendar year. (g) Within five business days of the date an application is received, the Department shall notify in writing the mayor or other equivalent chief executive officer of the municipality, if the project or a part thereof is located in a municipality; otherwise the Department shall notify the chief executive officer of the county in which the project or a part thereof is located, to advise such individual that the project or a part thereof will be located in his/her jurisdiction and request any comments which such individual may have concerning such project. Such comments shall be part of the documents required to be reviewed by the Board under this subsection if received by the Department within 30 days after same is mailed to said individual; otherwise, if comments are received by the Department after 30 days, same may be reviewed at the discretion of the Board under this subsection. (h) As soon as may be practicable following issuance of a reservation notice the Department shall place the application on the agenda for review by the Board at the next meeting of the Board at which applications will be considered. Within 10 calendar days after the Board reviews the application, the Department shall act upon the application in accordance with either paragraph (1) or (2) of this subsection, as applicable. The Board's review shall be based upon its evaluation of the projects consistency with the criteria and requirements set forth at sec.49.6 and its compliance with the terms and conditions of the reservation notice. (1) If the Board approves the application, the Department shall issue a commitment notice to the project owner which commitment notice: (A) shall confirm that the Department has approved the application; and (B) shall state the Department's commitment to make a housing credit allocation to the project owner in a specified amount, subject to the feasibility determination described at sec.49.8(a), compliance by the project owner with the remaining requirements of this title, and any other conditions set forth therein by the Department. This commitment notice shall expire on the date specified therein, unless the commitment has been accepted and the conditions to receipt of an allocation set forth therein shall be met. (C) The commitment notice shall specify a 15-day timeframe, from the date of the commitment, for any final public comments either in support or opposition to the project. Said notice shall be made in writing to the mayor or other equivalent chief executive officer of the municipality in which the property is located. If such subsequent public comments warrant, the Department may, in its discretion, resubmit the application to the Board for further consideration or action at its next scheduled meeting. (2) If the Board disapproves or fails to act upon the application, the Department shall issue to the project owner a written notice so stating the reasons for the Boards disapproval or failure to act. (i) A project owner may request the Department to extend the expiration date of a commitment notice which has not expired, by submitting a written request for such action, accompanied by the extension fee specified in sec.49.11 of this title (relating to Program Fees). The request shall specify the term of the extension requested and the reason or reasons why the project owner has been unable to satisfy the requirements of this title prior to the original expiration date. The Department may consider and grant such extension requests in its discretion; provided, however, that in no event shall the expiration date of a commitment notice be extended beyond the last business day of the applicable calendar year. (j) A project owner must indicate acceptance of the Departments offer of a commitment of tax credit authority by executing the commitment notice and paying the commitment fee specified in sec.49.11 prior to the expiration date set forth in the notice. Together with or following the project owners acceptance of the commitment, the owner may request the Department to execute an Agreement and Election Statement, in the form prescribed by the Department, for the purpose of fixing the applicable credit percentage for the project as that for the month in which the commitment was accepted, as provided in the Code, sec.42(b)(2). Upon receipt of a duly dated and executed Agreement and Election Statement and the accepted commitment notice, if the project owner is in compliance with the rules of this title, the Department shall execute the Agreement and Election Statement and return a copy to the project owner. The Agreement and Election Statement may be executed by the project owner no later than five days after the end of the month in which the offer of commitment was accepted. (k) Prior to the expiration of the commitment notice a project owner who has been issued a commitment notice may request the Department to execute a carryover allocation document. The carryover allocation must be properly completed, signed, dated and notarized by the project owner and delivered to the Department along with any and all other documentation prescribed in the Carryover Allocation Procedures Manual, as amended. The commitment fee as specified in sec.49.11 must be received by the Department prior to the processing of any carryover allocation documentation. (l) Before a project owner can be issued a housing credit allocation, the owner must date, sign and acknowledge before a notary an extended low-income housing commitment agreement. The property owner shall then record said extended low-income housing commitment agreement, along with any and all exhibits attached thereto, in the real property records of the county where the project is located and return the original document, duly certified as to recordation by the appropriate county official, to the Department. Receipt of such certified recorded original by the Department is required prior to issuance of the housing credit allocation. sec.49.5. Set-Asides, Reservations and Preferences. (a) 10.0% of the state housing credit ceiling for each calendar year shall be set-aside exclusively for qualified nonprofit projects, which meet the requirements of the Code, sec.42(h)(5). (b) 90.0% of the state housing credit ceiling for each calendar year shall be available for all projects (including qualified nonprofit projects), subject to the set asides provided below, or as otherwise determined by the Department: (1) rural projects-10%; (2) first-time participant-15%; (3) REO projects-10%; (4) small development-4%; (5) special housing projects-1%; and (6) other projects-50%. (c) The Department may reduce or eliminate any and all set-aside requirements, as provided for in this section during an application cycle. Further, the Department may redistribute the set-aside requirements in the case where an over demand occurs in any particular set-aside while an under demand occurs in another set-aside category, during a published application cycle. At the end of an application cycle, the Department may group all other projects which have not received a reservation, commitment or allocation into a general pool, without regard to specific project set aside categories, from which the Department will select the highest-prioritized development, pursuant to sec.49.6 of this title (relating to Threshold Criteria; Evaluation Factors; Selection Criteria; Final Ranking; Credit Amount; Tax Exempt Bond Financed Projects). The provisions of this subsection do not pertain to the Departments mandatory set-aside of 10% for qualified non-profit project. The Department will provide information concerning the appropriate set-aside for each application cycle in the Texas Register. (d) No reservation notice or commitment notice shall be issued with respect to any project, of which the total development cost, as determined by the Department, or the acquisition, construction or rehabilitation cost, exceed the limitations established from time to time by the Board as more specifically provided for within the Reference Manual. The Department may reduce the applicant's estimate of developers and/or contractor fees in instances where these fees are considered excessive, as more specifically provided for within the Application Submission Procedures Manual, as amended. In the instance where an identity of interest exists between the project owner and the contractor, and both parties are claiming developers fees and contractors overhead, profit, and general requirements the Department may reduce the total fees estimated to a level that it deems appropriate. Further, the Department shall deny or reduce the amount of low-income housing tax credits on any portion of costs which it deems insupportable in order to make the project feasible. The Department also may require bids in support of the costs proposed by any applicant. (e) The Department may adopt and implement such other set-asides, reservations and preferences as the Department may deem appropriate in connection with the making of housing credit allocations. sec.49.6. Threshold Criteria; Evaluation Factors; Selection Criteria; Final Ranking; Credit Amount; Tax-Exempt Bond-Financed Projects. (a) Threshold criteria. To have an application considered for review by an underwriter, a project owner must have supplied all required information first and demonstrate that the project meets all of the requirements of the threshold criteria set forth as follows and as more specifically provided for in the Application Submission Procedures Manual, as amended. Only those applications meeting threshold criteria will be further considered. Project owners whose applications do not meet threshold criteria will be so informed in writing. (1) a description of the existing or proposed physical amenities to be provided at the project, as more specifically provided for in the Application Submissions Procedures Manual; (2) a detailed breakdown of the development costs associated with the proposed new construction or rehabilitation, in a manner consistent with that provided in the Application Submission Procedures Manual; (3) readiness to proceed as documented by: (A) evidence of site control in the form of a deed, contract for sale, or option to purchase; (B) evidence of current zoning from the appropriate municipal authority; (C) evidence of all necessary utilities extended to the site; and (D) evidence of project financing; (4) a statement signed by the project owner stating that he/she intends to enter into an extended low-income housing commitment (Declaration of Land Use Restrictive Covenants) with the Department as provided in the Code, sec.42(h)(6), prior to the allocation of tax credits to the project, in a form prescribed by the Department in its Application Submission Procedures Manual; (5) evidence that the pre-application notification (which includes a copy of the business plan and the application form, as specified in the Application Submission Procedures Manual) has been received by the office of the appropriate local public official as described in sec.49.4(g) of this title (relating to Applications; Environmental Assessments; Market Study; Reservations; Notification; Commitments; Extensions; Carryover Allocations; Agreements and Elections; Extended Commitments) in a form consistent with that provided in the Application Submission Procedures Manual; (6) a statement signed by the first lienholder stating that: (A) lienholder is aware of the Declaration of Land Use Restrictive Covenants and accepts the terms and provisions, contained therein, as a restrictive covenant on the property; and (B) lienholder agrees to subordinate its interest to the appropriate provisions of the Declaration of Land Use Restrictive Covenants; (7) nonprofit projects which are requesting tax credits from the nonprofit set-aside, must supply the following: (A) documentation evidencing that the applicant is a qualified nonprofit organization pursuant to the Code, sec.42(h)(5)(C); (B) documentation which evidences that the nonprofit will own an interest in the project (directly or through a partnership) and materially participate (within the meaning of the Code, sec.469(h)) in the development and operation of the project throughout the compliance period; and (C) a current listing of all directors and officers of the non-profit organization, along with information pertaining to their primary profession; (8) project owner must provide current financial statements of any and all project owners and/or its general partners, in accordance with the Application Submission Procedures Manual; (9) original copy of the completed and executed Personal Background Certification Form from any and all project owners and/or its general partners, in accordance with the Application Submission Procedures Manual; (10) a copy of the current project rent roll, prepared in accordance with the Application Submission Procedures Manual; (11) historical operating statements of the subject property or other such documentation in support for the proforma estimates provided by the applicant; (12) Market Study prepared in accordance with the provisions of sec.49. 4(c); and (13) environmental assessment prepared in accordance with the provisions of sec.49.4(b). (b) Evaluation factors. The Department will consider applications for a housing credit allocation using the evaluation and point system described herein and in the Application Submission Procedures Manual; (1) Applications will be evaluated against the threshold criteria as they are received in the Department during any application cycle. Applications not meeting the threshold criteria may be canceled and returned to the applicant without further review. (2) The applications will then be ranked according to the points scored in accordance with the Application Submission Procedures Manual. (3) Applications receiving the highest number of points, in each set-aside category, during any published application acceptance cycle, if a sufficient amount of state housing tax credits are available, will be eligible for an evaluation by an Underwriter. If such evaluation warrants, a reservation notice will be issued as provided in sec.49.4(f) of this title, and the application will be scheduled for review by Ad Hoc Tax Credit Committee and a recommendation by such Committee to the Board concerning the issuance of a commitment notice at the next scheduled Board meeting. The Department may have an outside third party perform the underwriting evaluation to the extent it determines appropriate. The expense of any third party underwriting evaluation shall be paid by the applicant prior to the commencement of the aforementioned evaluation. (4) Applications not scoring a sufficient number of points to be considered in a given application cycle, and therefore not receiving a reservation notice, will not be rejected, but, provided that a sufficient amount of state housing credit is available, will be held in reserve until such time as all other applications which scored more points have been considered. (5) Applications not receiving a reservation notice may be withdrawn, and the applicant may reapply to the Department, if so desired, during the next published application cycle. (c) Selection criteria. The selection criteria, and subcategories thereof, are as follows and are further described in the Application Submission Procedures Manual: (1) project location: (A) project is located in a difficult development area or qualified census tract as designated by the Secretary of HUD and qualifies for the 130% eligible basis allowance, pursuant to the Code, sec.42(d)(5)(C); (B) project is located in a city/county which was recently awarded a state prison, as more fully specified within the Reference Manual; (C) project is located outside of the Dallas, Fort Worth or Houston MSA's or PMSA's; (D) project contributes significantly to the economic development of the community and is within a targeted Community Development Block Grant area; (E) project is a rural project as such term is defined in the chapter; (F) project is located within one of the targeted Texas counties as more fully specified within the Reference Manual; (G) project is located within a designated state or federal enterprise zone; or (H) project represents new construction or substantial rehabilitation in an area in which there is a measurable need for additional affordable rental housing. (2) Housing needs characteristics: (A) project is located in a county in which a substantial percentage of the households are below the poverty level as defined in the Department's County Data Elements Guide located within the Reference Manual; (B) project is located in a county in which a substantial percentage of the renter households have incomes at or below 50% of the area median income as defined in the Department's County Data Elements Guide located within the Reference Manual; (C) project is located in a county in which a small percentage of the occupied housing units are renter occupied as defined in the Department's County Data Elements Guide located within the Reference Manual; (D) project is located in a county in which a substantial percentage of the rental units are occupied by tenants with a cost burden as defined in the Department's County Data Elements Guide located within the Reference Manual; or (E) project is located in a county in which a substantial percentage of the rental units are overcrowded as defined in the Department's County Data Elements Guide located within the Reference Manual. (3) Project characteristics: (A) project is a federally assisted building, within the meaning of the Code, sec.42(d)(6) (B); (B) project is a low-income building eligible for prepayment of mortgage as provided in the Code, sec.42(d)(6)(C); (C) property is owned by an insured depository institution in default, or by a receiver or conservator of such an institution, or is an REO property held by Fannie Mae, Freddie Mac, federally-chartered banks, federally-approved mortgage company or savings and loan association, or any other federal agency; (D) project composition offers a unit mix which is conducive to family housing; (E) project design and/or components promotes energy conservation; (F) project retains federal, state, and/or local subsidies; (G) project provides low-density housing; (H) evidence of low-income housing tax credit syndication on the subject property; (I) the application represents substantial rehabilitation of an existing project; (J) evidence of project owner's readiness to commence construction or rehabilitation; or (K) the project owner will set aside less than 100% of the available units for low- and very-low income tenants. (4) Sponsor ("Project Owner") characteristics: (A) the project owner has a track record in successfully developing and operating affordable rental housing under programs operated by HUD, FmHA, RTC's Affordable Housing Disposition Program, the Department's HOME and/or Housing Trust Fund Programs, the Low-Income Housing Tax Credit Program, or any other verifiable source of housing assistance; (B) the management agent designated by the project owner has successful previous experience in continuing management of rental housing; (C) the project owner has entered into a management agreement that specifies management requirements and procedures, the term of the agreement, the parties involved, and compensation for management services. This agreement must also outline the steps to be taken by the management agent in order to assure compliance with the income and rent restrictions pursuant to the Code, sec.42; or (D) the project owner offers a right of first refusal to the tenants of the project to purchase the project after the termination of the extended low income housing commitment period as more fully provided for in the Code, sec.42(h)(6) and sec.42(i)(7). (5) Participation of local tax-exempt organizations: (A) the project has a community based board, the majority of whose members live in the project's community, or the project is sponsored and developed by a Qualified Nonprofit Community Development Corporation; or (B) the applicant has an agreement between a local tax exempt organization and private developer for the operation, management, development, and/or provision of special supportive services. (6) Tenant populations with special housing needs: (A) the project is located in an area in which a substantial percentage of the population is over 65 years of age as indicated in the Department's County Data Elements Guide which is provided within the Reference Manual. The project must be designed and equipped for elderly tenants. This selection criteria only applies to senior rental housing applications; (B) the project provides units which are specifically equipped for persons with physical or mental disabilities. The project owner understands that these units must meet American National Standards Institute's building standards and requirements of the Americans with Disabilities Act; or (C) property provides transitional housing for homeless persons (including families with children), on a non-transient basis, with supportive services designed to assist tenants in locating and retaining permanent housing. (7) Public housing waiting lists: (A) project owner has committed in writing to the local public housing authority of the availability of units and agrees it will consider those households on the public housing authority's waiting list for the occupancy of such units. If there is no public housing authority in the locality, the project owner must utilize the nearest authority or the office responsible for administering the HUD sec.8 certificate/voucher program. Project owner has prepared a marketing plan to attract qualified tenants and has provided a copy to the local public housing authority and the Department. A fair-housing marketing plan will not satisfy this requirement on its own; or (B) the project owner has received a letter from the appropriate authority citing the need for additional affordable housing units within its jurisdiction as evidenced by existing housing waiting lists. (d) Final ranking. The Department will evaluate projects according to the strength of the project in meeting the threshold and selection criteria. The results of the evaluation will be determined by the Department and will not be subject to challenge or contest by any applicant. After evaluating and scoring all applications received, the Department will rank such applications according to the number of points received. In the event that two or more applications receive the same number of points in any given set-aside category, the Department will utilize the following factors in determining which project will receive a preference in being considered for a tax credit commitment: (1) which serve the lowest-income tenants; (2) which obligate the project owner (as evidenced by the Declaration of Land Use Restrictive Covenant Document) to serve qualified tenants for the longest period of time; (3) which have substantial community support as evidenced by the commitment of local funds towards the construction, rehabilitation or acquisition and subsequent rehabilitation of the project; (4) whose application demonstrates the highest readiness to proceed with the development as evidenced by the threshold criteria, as more specifically provided for in the Application Submissions Procedures Manual; (5) whose unit composition provides the highest percentage of two-bedroom or greater sized units; and (6) which provide for the most efficient usage of the low-income housing tax credit on a per unit basis. (e) In reaching the final ranking of an application, the Department will take into consideration the project owner's history of placing into service projects which have been awarded tax credits. The Department may deduct points from the final score where it determines that the project owner has a history of failing to place-into-service projects which tax credit carryover allocations have been issued. The Department may disqualify applicants, whom it has reason to be believe are involved in using the tax credit program not as a means of providing affordable housing, but as a vehicle for enhancing the value of land that is intended for disposal as evidenced by a pattern of selling tax credit projects prior to placement in service or within 1 year after placement in service. (f) Credit amount. The Department shall issue tax credits only in the amount needed for the financial feasibility and viability of a project throughout the compliance period. The issuance of tax credits or the determination of any allocation amount in no way represents or purports to warrant the feasibility or viability of the project by the Department. (g) Tax-exempt bond-financed projects. Tax-exempt bond-financed projects which will not receive tax credits through the state allocation authority are also subject to evaluation as to their compliance with the requirements for the allocation of a housing credit dollar amount under the Qualified Allocation Plan. sec.49.7. Compliance Monitoring. (a) The Code, sec.42(m)(1)(B) (iii), requires each State Allocating Agency to include in its "Qualified Allocation Plan" a procedure that the agency (or an agent or other private contractor of such agency) will follow in monitoring projects for noncompliance with the provisions of the Code, sec.42 and in notifying the Internal Revenue Service (the "Service"), or its successor, of such noncompliance of which such agency becomes aware. This procedure does not address forms and other records that may be required by the Service on examination or audit. (b) The Department will also monitor compliance with any additional covenants made by the project owner in the extended low-income housing commitment agreement. (c) The owner of a low-income housing project must keep records for each qualified low-income building in the project showing: (1) the total number of residential rental units in the building (including the number of bedrooms and the size in square feet of each residential rental unit); (2) the percentage of residential rental units in the building that are low- income units; (3) the rent charged on each residential rental unit in the building (including any utility allowances); (4) the number of occupants in each low-income unit; (5) the low-income unit vacancies in the building and information that shows when, and to whom, the next available units were rented; (6) the annual income certification of each low-income tenant per unit, in the form designated by the Department in the Compliance Reference Guide, as may be amended; (7) documentation to support each low-income tenant's income certification, consistent with the verification procedures required by HUD under the United States Housing Act of 1937, sec.8. In the case of a tenant receiving housing assistance payments under sec.8, the documentation requirement is satisfied if the public housing authority provides a statement to the project owner declaring that the tenants income does not exceed the applicable income limit under the Code, sec.42(g), as described in the Compliance Reference Guide; (8) the eligible basis and qualified basis of the building at the end of the first year of the credit period; (9) the character and use of the nonresidential portion of the building included in the building's eligible basis under the Code, sec.42(d), (e.g. tenant facilities that are available on a comparable basis to all tenants and for which no separate fee is charged for use of the facilities, or facilities reasonably required by the project); and (10) additional information as required by the Department. (d) Record retention provision. The owner of a low-income housing project is required to retain the records described in subsection (c) of this section for at least 6 years after the due date (with extensions) for filing the federal income tax return for that year; however, the records for the first year of the tax credit period must be retained for at least six years beyond the due date (with extensions) for filing the federal income tax return for the last year of the compliance period of the building. (e) Certification and review. (1) Certification. Annually, at the time and in the form designated by the Department, the owner of a low-income housing project must certify that for the preceding 12-month period: (A) the project met the minimum set-aside test which was applicable to the project; (B) there was no change in the applicable fraction of any building in the project, or that there was a change, and a description of the change; (C) the owner has received an annual income certification from each low- income tenant and documentation to support that certification; (D) each low-income unit in the project was rent-restricted under the Code, sec.42(g)(2); (E) all units in the project were for use by the general public and used on a non-transient basis (except for transitional housing for the homeless provided under the Code, sec.42(i)(3)(B)(iii)); (F) each building in the project was suitable for occupancy, taking into account local health, safety, and building codes; (G) either there was no change in the eligible basis (as defined in the Code, sec.42(d)) of any building in the project, or that there has been a change, and the nature of the change; (H) all tenant facilities included in the eligible basis under the Code, sec.42(d), of any building in the project, such as swimming pools, other recreational facilities, and parking areas, were provided on a comparable basis without charge to all tenants in the building; (I) if a low-income unit in the project became vacant during the year, reasonable attempts were, or are being, made to rent that unit or the next available unit of comparable or smaller size to tenants having a qualifying income before any units in the project were, or will be, rented to tenants not having a qualifying income; (J) if the income of tenants of a low-income unit in the project increased above the limit allowed in the Code, sec.42(g)(2)(D) (ii), the next available unit of comparable or smaller size in the project was, or will be, rented to tenants having a qualifying income; and (K) an extended low-income housing commitment agreement as described in the Code, sec.42(h)(6), was in effect for buildings subject to the Revenue Reconciliation Act of 1989, sec.7106(c)(1) (generally any building receiving an allocation after 1989). (2) Review. (A) At least annually, at the time designated by the Department, the owner of a low-income housing project must send to the Department for its review for compliance with the requirements of the Code, sec.42, the certification described in paragraph (1) of this subsection. (B) The Department will inspect, at a minimum, 20% of low-income housing projects each year, including inspection of each income certification, the documentation the owner has received to support that certification, the rent record for each low-income tenant and any additional information deemed necessary. The Department shall give reasonable notice to the owner that an inspection will occur; however, the projects and records to be reviewed will be chosen by the Department in its discretion. (C) The Department may, at the time and in the form designated by the Department, require the owners of low-income housing projects to submit for compliance review, information on tenant income and rent for each low-income unit, and may require an owner to submit for compliance review a copy of the income certification, the documentation the owner has received to support that certification and the rent record for any low-income tenant. (3) Exception. The Department may, at its discretion, enter into a Memorandum of Understanding with the FmHA, whereby the FmHA agrees to provide to the Department information concerning the income and rent of the tenants in buildings financed by the FmHA under its sec.515 program. Owners of such buildings may be excepted from the review procedures of paragraph (2)(B) or (C) of this subsection or both; however, if the information provided by FmHA is not sufficient for the Department to make a determination that the income limitation and rent restrictions of the Code, sec.42(g)(1) and (2), are met, the owner must provide the Department with additional information. (f) Inspection provision. The Department retains the right to perform an on site inspection of any low-income housing project through either the end of the compliance period or the period covered by any extended low-income housing commitment agreement, whichever is later. An inspection under this subsection may be in addition to any review under subsection (e)(2) of this section. (g) Notification of noncompliance. (1) Notice to owner. (A) The Department will provide prompt written notice to the owner of a low- income housing project if the Department does not receive the certification described in subsection (e)(1) of this section or discovers through audit, inspection, review or any other manner, that the project is not in compliance with the provisions of the Code, sec.42. (B) Unless the Department determines that noncompliance was of a nature that may not be corrected, the notice will direct the owner to correct any noncompliance as quickly as is practicable. The correction period shall not exceed 90 days from the date of the notice to owner. During the correction period, an owner must supply any missing certifications and bring the project into compliance with the provisions of the Code, sec.42. The Department may extend the correction period for up to six months if it determines there is good cause for granting an extension. (2) Notice to the Internal Revenue Service. (A) The Department is required to file Form 8823, Low-Income Housing Credit Agencies Report of Noncompliance, with the Internal Revenue Service no later than 45 days after the end of the correction period including any extension, and no earlier than the end of the correction period, whether or not the noncompliance or failure to certify is corrected. The Department will explain on Form 8823 the nature of the noncompliance or failure to certify and will indicate whether the owner has corrected the noncompliance or failure to certify. (B) The Department will retain records of noncompliance or failure to certify for six years beyond the Department's filing of the respective Form 8823. In all other cases, the Department will retain the certification and records described in this section for three years from the end of the calendar year the Department receives the certifications and records. (h) Notices to the department. (1) An owner of a low-income housing project must notify the Department in writing prior to any sale, transfer, exchange, or renaming of the project or any portion of the project. (2) An owner of a low-income housing project must notify the Department in writing of any change of address to which subsequent notices or communications shall be sent. (i) Liability. Compliance with the requirements of the Code, sec.42, is the sole responsibility of the owner of the building for which the credit is allowable. By monitoring for compliance, the Department in no way assumes any liability whatsoever for any action or failure to act by the owner including the owner's noncompliance with the Code, sec.42. (j) These provisions apply to all buildings for which a low-income housing credit is, or has been, allowable at any time. The Department is not required to monitor whether a building or project was in compliance with the requirements of the Code, sec.42, prior to January 1, 1992. However, if the Department becomes aware of noncompliance that occurred prior to January 1, 1992, the Department is required to notify the Service in a manner consistent with subsection (g) of this section. (k) The Department may amend this section at any time, provided however that reasonable notice has been given to existing project owners. sec.49.8. Housing Credit Allocations. (a) The housing credit allocation amount shall not exceed the dollar amount the Department determines is necessary for the financial feasibility and the long-term viability of the project throughout the compliance period. Such determination shall be made by the Department at the time of issuance of the reservation notice; at the time of review by the Board prior to issuance of commitment notice; at the time the Department makes a housing credit allocation; and/or the date the building is placed in service. Any housing credit allocation amount specified in a reservation notice, commitment notice, allocation and/or carryover allocation document is subject to change by the Department dependent upon such determination. Such a determination shall be made by the Department based on its evaluation and procedures, considering the items specified in the Code, sec.42(m)(2)(B), and the Department in no way or manner represents or warrants to any project owner, sponsor, investor, lender or other entity that the project is, in fact, feasible or viable. (b) When the project owner is in full compliance with the rules in this chapter, the commitment notice, the Carryover Allocation Procedures Manual and all fees as specified within sec.49.11 of this title (relating to Program Fees) have been received by the Department, the Department, if requested, shall execute a carryover allocation document which has been properly completed, executed and notarized by the project owner. The Department shall return one executed copy to the project owner. (c) The Department shall make a housing credit allocation to any project owner who holds a commitment notice which has not expired, and for which all fees as specified in sec.49.11 have been received by the Department. Satisfactory evidence must be received by the Department that one or more buildings within the project is completed and been placed in service in accordance with the provisions of the Department's Cost Certification Procedures Manual. The Department shall make each such housing credit allocation by mailing or delivering IRS Form 8609 (or any successor form adopted by the Internal Revenue Service) to the project owner, with Part I thereof completed in all respects and signed by an authorized official of the Department. The delivery of the IRS Form 8609 will only occur after the project owner has complied with all procedures and requirements listed within the Cost Certification Procedures Manual. A separate housing credit allocation shall be made with respect to each building within a project which is eligible for a housing credit. (d) In making a housing credit allocation, the Department shall specify a maximum applicable percentage, not to exceed the applicable percentage for the building permitted by the Code, sec.42(b), and a maximum qualified basis amount. In specifying the maximum applicable percentage and the maximum qualified basis amount, the Department shall disregard the first-year conventions described in the Code, sec.42(f)(2)(A) and sec.42(f)(3)(B). The housing credit allocation made by the Department shall not exceed the amount necessary to support the extended low-income housing commitment specified in the Code, sec.42(h)(6)(C)(i). (e) Project inspections may be required to show that the project is built or rehabilitated according to required plans and specifications. A copy of all project inspections required and accepted by the lender financing the project shall be acceptable to the Department as a certification that the project is built to plans and specifications if such inspections are required by the lender during the construction of the project. At a minimum, such inspections must include an inspection at the start-up phase and the interim phase, and a final inspection at the time the project is placed in service. If no project inspections are required by the lender financing the project, the Department may require inspections to be made of the project; such inspections may be at the start-up phase, the interim phase, or a final inspection at the time the project is placed in service, and shall be performed by an independent, third party inspector. The project owner shall pay all fees and costs of said inspections. (f) At the time each building in the project is placed in service, the project owner shall be responsible for furnishing the Department with documentation which satisfies the requirements as set forth in the Cost Certification Procedures Manual. The Department may require copies of receipts and statements for materials and labor utilized for the new construction or rehabilitation and, if applicable, a closing statement for the acquisition of the project. sec.49.9. Department Records; Certain Required Filings. (a) At all times during each calendar year the Department shall maintain a record of the following: (1) the cumulative amount of the state housing credit ceiling that has been reserved pursuant to reservation notices during such calendar year; (2) the cumulative amount of the state housing credit ceiling that has been committed pursuant to commitment notices during such calendar year; (3) the cumulative amount of the state housing credit ceiling that has been committed pursuant to carryover allocation documents during such calendar year; (4) the cumulative amount of housing credit allocations made during such calendar year; and (5) the remaining unused portion of the state housing credit ceiling for such calendar year. (b) Not less frequently than quarterly during each calendar year, the Department shall publish in the Texas Register each of the items of information referred to in subsection (a) of this section. (c) The Department shall mail to the Internal Revenue Service, not later than the 28th day of the second calendar month after the close of each calendar year during which the Department makes housing credit allocations, the original of each completed (as to Part I) IRS Form 8609, a copy of which was mailed or delivered by the Department to a project owner during such calendar year, along with a single completed IRS Form 8610, Annual Low-Income Housing Credit Agencies Report. When a carryover allocation is made by the Department, a copy of Form 8609 will be mailed or delivered to the project owner by the Department in the year in which the building(s) is placed in service, and thereafter the original will be mailed to the Internal Revenue Service in the time sequence referenced in this section. The original of the carryover allocation document will be filed by the Department with IRS Form 8610 for the year in which the allocation is made. The original of all executed Agreement and Election Statements shall be filed by the Department with the Department's IRS Form 8610 for the year a housing credit allocation is made as provided in this section. sec.49.10. Department Responsibilities. In making a housing credit allocation under this chapter, the Department shall rely upon information contained in the project owner's application to determine whether a building is eligible for the credit under the Code, sec.42. The project owner shall bear full responsibility for claiming the credit and assuring that the project complies with the requirements of the Code, sec.42. The Department shall have no responsibility for ensuring that a project owner who receives a housing credit allocation from the Department will qualify for the housing credit. The Department will reject, and consider barring the project owner from future participation in the Department's tax credit program as a consequence thereof, any application in which fraudulent information, knowingly false documentation or other misrepresentation has been provided. The aforementioned policy will apply at any stage of the evaluation or approval process. sec.49.11. Program Fees. (a) Each project owner that submits an application shall submit to the Department, along with such application, a non refundable application fee, as set forth in the Application Submission Procedures Manual. (b) For each project which is to be evaluated by an independent third- party underwriter in accordance with sec.49.6(b)(3) of this title, the project owner will be so informed in writing prior to the commencement of any reviews by said underwriter. The cost for the third-party underwriting will be set forth in the Application Submission Procedures Manual, and must be received by the Department prior to the engagement of the underwriter. The fees paid by the project owner to the Department for the third-party underwriting will be credited against the commitment fee established in subsection (c) of this section, in the event that a commitment notice is issued by the Department to the project owner. (c) Each project owner that receives a commitment notice shall submit to the Department, not later than the expiration date on the commitment billing notice, a non-refundable commitment fee, as set forth in the Application Submission Procedures Manual. The commitment fee shall be paid by cashier's check. Projects located within one of the targeted Texas counties, as indicated in the Reference Manual, will be exempt from the requirement to pay a commitment fee, should a commitment notice be issued. (d) Each project owner that requests an extension of the expiration date of a commitment notice, reservation notice, or wait-list notice shall submit to the Department, along with such request, a non-refundable extension fee, as set forth in the Application Submission Procedures Manual and shall be paid by cashier's check. Such extension shall be granted at the discretion of the Department. (e) Upon the project being placed in service, the project owner will pay a compliance monitoring fee in the form of a cashier's check, as set forth in the Application Submission Procedures Manual. The compliance monitoring fee must be received by the Department prior to the release of the IRS Form 8609 on the project. (f) Public information requests are processed by the Department in accordance with the provisions of Government Code, Chapter 552, and as may be amended from time to time. The General Services Commission and the Department determine the cost of copying, and other costs of production. (g) The amounts of the application fee, commitment fee, compliance monitoring fee, administrative fees, extension fee, and other applicable fees as specified in the Application Submission Procedures Manual will be revised by Board resolution from time to time as necessary to ensure that such fees cover the Department's administrative expenses. sec.49.13. Withdrawals, Amendments, Cancellations. (a) A project owner may withdraw or amend an application prior to receiving a reservation, commitment, carryover allocation document or housing credit allocation, or may cancel a reservation notice or commitment notice by submitting to the Department a notice, as applicable, of withdrawal, amendment, or cancellation. (b) An amendment of an application that results in an increase in the requested housing credit allocation amount or increase in points, unless as provided for during the grace period, shall cause the application to be removed from consideration during the current cycle. The application will be eligible for consideration in the next cycle and will be subject to any amendments made during the intervening period as well as be subject to a new filing fee. In the event of other amendments to an application, the Department will determine whether such amendment is of a nature that requires the application be removed from the current cycle or that would permit the application to be considered within such cycle. sec.49.14. Waiver and Amendment of Rules. (a) The Board, in its discretion, may waive any one or more of these rules in cases of natural disasters such as fires, hurricanes, tornadoes, earthquakes, or other acts of nature as declared by Federal or State authorities. (b) For purposes of sec.49.8(b) of this title (relating to Housing Credit Allocations), the requirements for making a housing credit allocation, as set forth in the Cost Certification Procedures Manual, shall apply to all project owners which received an executed carryover allocation document from the Department on, before or after January 1, 1993. (c) The Department may amend this chapter at any time in accordance with the provisions of Government Code, Chapter 2001, and as may be amended from time to time. (d) The Department will waive the requirement for an application fee, as set forth in sec.49.11(a) of this title (relating to Program Fees), in the event of a resubmission of a project which received a conditional commitment of tax credits, but due to the lack of available tax credit authority was unable to issue a commitment notice. 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 August 10, 1994. TRD-9446440 Henry Flores Executive Director Texas Department of Housing and Community Affairs Effective date: September 1, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 475-3902 Part V. Texas Department of Commerce Chapter 187. Job-Training Partnership Act Subchapter A. General Provisions and Definitions The Texas Department of Commerce adopts new sec.sec.187.101-187.298, concerning rules to implement the federal and state Job Training Partnership Acts (29 United States Code sec.1501 et seq, as amended; Texas Labor Code, sec.301.001 et seq). Section 187.131 is adopted with changes to the proposed text as published in the March 25, 1994, issue of the Texas Register (19 TexReg 2118). Sections 187.240, 187.242 and 187.243 are adopted with changes to the proposed text as published in the May 24, 1994, issue of the Texas Register (19 TexReg 3993). Sections 187.101-187.105 are adopted without changes to the proposed text as published in the June 24, 1994, issue of the Texas Register (19 TexReg 4858). Sections 187.120-187.130 and sec.sec.187.132-187.134 are adopted without changes to the proposed text as published in the March 25, 1994, issue of the Texas Register (19 TexReg 2118). Sections 187.140-187.154 are adopted without changes to the proposed text as published in the May 13, 1994, issue of the Texas Register (19 TexReg 3614). Section 187.155 is adopted without changes to the proposed text as published in the June 24, 1994, issue of the Texas Register (19 TexReg 4859). Sections 187.160-187.165 are adopted without changes to the proposed text as published in the June 24, 1994, issue of the Texas Register (19 TexReg 4859). Sections 187.170-187.196 are adopted without changes to the proposed text as published in the May 13, 1994, issue of the Texas Register (19 TexReg 3616). Sections 187.200-187.237 are adopted without changes to the proposed text as published in the June 24, 1994, issue of the Texas Register (19 TexReg 4860). Sections 187.241 and 187. 244-187.249 are adopted without changes to the proposed text as published in the May 24, 1994, issue of the Texas Register (19 TexReg 3993). Sections 187.260-187.269 are adopted without changes to the proposed text as published in the May 24, 1994, issue of the Texas Register (19 TexReg 3996). Sections 187.280-187.298 are adopted without changes to the proposed text as published in the May 24, 1994, issue of the Texas Register (19 TexReg 3998). The Texas Department of Commerce adopts these sections to define the requirements of and establish procedures for a statewide delivery system for the Job Training Partnership Act (JTPA) programs. Section 187.131 has been amended to clarify that the address provided in the rule for administrative submissions or notices may also be used to request forms or information. Sections 187.240, 187.242 and 187.243 have been amended to include the Title IV-C Veteran's Program Documentation Log in the list of records and basic forms to verify eligibility. Sections 187.101-187.105 provide the title and purpose of these rules, define terms commonly used in the JTPA programs, and designate the entities for state administration. Sections 187.120-187.134 prescribe procedures and requirements for designation of service delivery areas and certification of private industry councils. Sections 187.140-187.155 define and facilitate the establishment of job training plans prepared by the local service delivery areas and substate areas. Sections 187.160-187.165 define and prescribe the performance measures by which JTPA programs shall be evaluated by the department. Sections 187.170- 187.196 define and facilitate the identification of subrecipients with compliance problems to timely address such problems through technical assistance or sanctions; and establish a comprehensive state and local monitoring system. Sections 187.200-187.237 establish uniform accounting and financial management rules for the administration of all JTPA programs funded through the Texas Department of Commerce. Sections 187.240-187. 249 establish standard procedures to comply with the eligibility criteria and documentation requirements for Titles II and III of the federal JTPA. Sections 187.260-187.269 implement state and local methods of administration to ensure compliance with the nondiscrimination and equal opportunity provisions of the federal JTPA. Sections 187.280-187.298 define and establish state procedures for resolving grievances regarding violations of the federal JTPA. No comments were received regarding adoption of the new rules. 10 TAC sec.sec.187.101-187.105 The new rules are adopted under the Texas Government Code, sec.481.0044(a), which authorizes the Policy Board of the Texas Department of Commerce to adopt rules necessary for the administration of department programs; and Texas Civil Statutes, Article 4413(52), sec.5A, (as amended by Senate Bill 405, sec.29, Acts 1993, 73rd Legislature), which gives the Policy Board of the Texas Department of Commerce the authority to adopt necessary rules for the implementation and management of the job-training program. The sections are also adopted pursuant to the Administrative Procedure Act, Texas Government Code, Chapter 2001, Subchapter B, which mandates the rulemaking procedures for state agencies. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on August 3, 1994. TRD-9446399 Deborah C. Kastrin Executive Director Texas Department of Commerce Effective date: September 1, 1994 Proposal publication date: June 24, 1994 For further information, please call: (512) 320-9630 Subchapter B. Program Delivery System 10 TAC sec.sec.187.120-187.134 The new rules are adopted under the Texas Government Code, sec.481.0044(a), which authorizes the Policy Board of the Texas Department of Commerce to adopt rules necessary for the administration of department programs; and Texas Civil Statutes, Article 4413 (52), sec.5A, (as amended by Senate Bill 405, sec.29, Acts 1993, 73rd Legislature), which gives the Policy Board of the Texas Department of Commerce the authority to adopt necessary rules for the implementation and management of the job-training program. The sections are also adopted pursuant to the Administrative Procedure Act, Texas Government Code, Chapter 2001, Subchapter B, which mandates the rulemaking procedures for state agencies. sec.187.131. Address for all Submissions, Notices, and Requests for Information or Forms. All nominations, related or required documents for private industry councils, or any requests for information or forms, must be submitted to the following address: Texas Department of Commerce, Work Force Development Division, Division Director, P. O. Box 12728, Austin, Texas 78711-2728. 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 August 3, 1994. TRD-9446400 Deborah C. Kastrin Executive Director Texas Department of Commerce Effective date: September 1, 1994 Proposal publication date: March 25, 1994 For further information, please call: (512) 320-9630 Subchapter C. Job Training Plans 10 TAC sec.sec.187.140-187.154 The new rules are adopted under the Texas Government Code, sec.481.0044(a), which authorizes the Policy Board of the Texas Department of Commerce to adopt rules necessary for the administration of department programs; and Texas Civil Statutes, Article 4413(52), sec.5A, (as amended by Senate Bill 405, sec.29, Acts 1993, 73rd Legislature), which gives the Policy Board of the Texas Department of Commerce the authority to adopt necessary rules for the implementation and management of the job-training program. The sections are also adopted pursuant to the Administrative Procedure Act, Texas Government Code, Chapter 2001, Subchapter B, which mandates the rulemaking procedures for state agencies. This agency hereby certifies that the rules 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 August 3, 1994. TRD-9446401 Deborah C. Kastrin Executive Director Texas Department of Commerce Effective date: September 1, 1994 Proposal publication date: May 13, 1994 For further information, please call:(512) 320-9630 10 TAC sec.187.155 The new rule is adopted under the Texas Government Code, sec.481.0044(a), which authorizes the Policy Board of the Texas Department of Commerce to adopt rules necessary for the administration of department programs; and Texas Civil Statutes, Article 4413(52), sec.5A, (as amended by Senate Bill 405, sec.29, Acts 1993, 73rd Legislature), which gives the Policy Board of the Texas Department of Commerce the authority to adopt necessary rules for the implementation and management of the job-training program. The sections are also adopted pursuant to the Administrative Procedure Act, Texas Government Code, Chapter 2001, Subchapter B, which mandates the rulemaking procedures for state agencies. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on August 3, 1994. TRD-9446402 Deborah C. Kastrin Executive Director Texas Department of Commerce Effective date: September 1, 1994 Proposal publication date: June 24, 1994 For further information, please call: (512) 320-9630 Subchapter D. Performance Standards 10 TAC sec.sec.187.160-187.165 The new rules are adopted under the Texas Government Code, sec.481.0044(a), which authorizes the Policy Board of the Texas Department of Commerce to adopt rules necessary for the administration of department programs; and Texas Civil Statutes, Article 4413(52), sec.5A, (as amended by Senate Bill 405, sec.29, Acts 1993, 73rd Legislature), which gives the Policy Board of the Texas Department of Commerce the authority to adopt necessary rules for the implementation and management of the job-training program. The sections are also adopted pursuant to the Administrative Procedure Act, Texas Government Code, Chapter 2001, Subchapter B, which mandates the rulemaking procedures for state agencies. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on August 3, 1994. TRD-9446403 Deborah C. Kastrin Executive Director Texas Department of Commerce Effective date: September 1, 1994 Proposal publication date: June 24, 1994 For further information, please call: (512) 320-9630 Subchapter E. State Monitoring and Sanctions Policies 10 TAC sec.sec.187.170-187.196 The new rules are adopted under the Texas Government Code, sec.481.0044(a), which authorizes the Policy Board of the Texas Department of Commerce to adopt rules necessary for the administration of department programs; and Texas Civil Statutes, Article 4413(52), sec.5A, (as amended by Senate Bill 405, sec.29, Acts 1993, 73rd Legislature), which gives the Policy Board of the Texas Department of Commerce the authority to adopt necessary rules for the implementation and management of the job-training program. The sections are also adopted pursuant to the Administrative Procedure Act, Texas Government Code, Chapter 2001, Subchapter B, which mandates the rulemaking procedures for state agencies. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on August 3, 1994. TRD-9446404 Deborah C. Kastrin Executive Director Texas Department of Commerce Effective date: September 1, 1994 Proposal publication date: May 13, 1994 For further information, please call: (512) 320-9630 Subchapter F. Financial Management Rules 10 TAC sec.sec.187.200-187.237 The new rules are adopted under the Texas Government Code, sec.481.0044(a), which authorizes the Policy Board of the Texas Department of Commerce to adopt rules necessary for the administration of department programs; and Texas Civil Statutes, Article 4413(52), sec.5A, (as amended by Senate Bill 405, sec.29, Acts 1993, 73rd Legislature), which gives the Policy Board of the Texas Department of Commerce the authority to adopt necessary rules for the implementation and management of the job-training program. The sections are also adopted pursuant to the Administrative Procedure Act, Texas Government Code, Chapter 2001, Subchapter B, which mandates the rulemaking procedures for state agencies. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on August 3, 1994. TRD-9446405 Deborah C. Kastrin Executive Director Texas Department of Commerce Effective date: September 1, 1994 Proposal publication date: June 24, 1994 For further information, please call: (512) 320-9630 Subchapter G. Eligibility Policies and Procedures 10 TAC sec.sec.187.240-187.249 The new rules are adopted under the Texas Government Code, sec.481.0044(a), which authorizes the Policy Board of the Texas Department of Commerce to adopt rules necessary for the administration of department programs; and Texas Civil Statutes, Article 4413(52), sec.5A, (as amended by Senate Bill 405, sec.29, Acts 1993, 73rd Legislature), which gives the Policy Board of the Texas Department of Commerce the authority to adopt necessary rules for the implementation and management of the job-training program. The sections are also adopted pursuant to the Administrative Procedure Act, Texas Government Code, Chapter 2001, Subchapter B, which mandates the rulemaking procedures for state agencies. sec.187.240. Purpose and Authority. This subchapter provides the rules implementing Texas Department of Commerce policies and procedures developed to comply with eligibility criteria and documentation for Titles II, III and IV-C of the Federal Act. sec.187.242. Record of Documentation to Verify Eligibility. (a) Prior to enrollment of an applicant in a JTPA program, the SDA or JTPA contractor must make a determination of the applicant's eligibility based on information in the applicant's statement and the documentation collected to verify eligibility. SDAs and JTPA contractors must maintain a listing of the documentation sources used to verify each applicant's eligibility. Such documentation listings must be maintained in each participant's file, along with copies of the documentation sources used for verification of eligibility. (b) The Documentation Logs for the Title II Programs, Title III/EDWAA Eligibility Programs, and the Title IV-C Veteran's Program, identified in sec.187.243 of this title (relating to Basic Forms for Eligibility Documentation), contain comprehensive lists of the appropriate documentation sources to verify eligibility criteria, and may be used as a standard log in each participant's official file. Unless otherwise specified, SDAs and JTPA contractors will satisfy documentation requirements by obtaining a file copy of any one document per criterion. sec.187.243. Basic Forms for Eligibility Documentation. (a) The following eligibility documentation forms have been developed by the department to facilitate and provide a standard format for client eligibility determination and to document the eligibility verification sources. (1) The JTPA Income Worksheet provides a basic format for establishing eligibility and compiling information that must be retained in a participant's official file. (2) The Telephone/Document Inspection Verification Form may be used to record information obtained to verify eligibility. (3) The Applicant Statement is available for use when eligibility information is not verifiable or may cause undue hardship for individuals to obtain. (4) The Title II Programs Documentation Log, JTPA Title III/EDWAA Eligibility Documentation Log, and the Title IV-C Veteran's Program Documentation Log may be used to identify the document sources used in verifying an applicant's eligibility. (5) The Defense Conversion Adjustment Eligibility Documentation Log may be used to identify the document sources used in verifying an applicant's eligibility for the Defense Conversion Adjustment Program described in Federal Act, sec.325. (b) All six forms described in subsection (a) of this section may be reproduced as needed, and are available from the address shown in sec.187.131 of this title (relating to Address for all Submissions, Notices, and Requests for Information or Forms). (c) SDAs may revise documents and forms required for eligibility verification without obtaining review and approval by the department, provided that such revisions do not restrict or expand the policies set forth in the Federal Act, the Federal JTPA Regulations or this title. The department retains the right to conduct audits and compliance reviews of such revised forms. 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 August 3, 1994. TRD-9446406 Deborah C. Kastrin Executive Director Texas Department of Commerce Effective date: September 1, 1994 Proposal publication date: May 24, 1994 For further information, please call: (512) 320-9630 Subchapter H. Nondiscrimination and Equal Opportunity 10 TAC sec.sec.187.260-187.269 The new rules are adopted under the Texas Government Code, sec.481.0044(a), which authorizes the Policy Board of the Texas Department of Commerce to adopt rules necessary for the administration of department programs; and Texas Civil Statutes, Article 4413(52), sec.5a, (as amended by Senate Bill 405, sec.29, Acts 1993, 73rd Legislature), which gives the Policy Board of the Texas Department of Commerce the authority to adopt necessary rules for the implementation and management of the job-training program. The sections are also adopted pursuant to the Administrative Procedure Act, Texas Government Code, Chapter 2001, Subchapter B, which mandates the rulemaking procedures for state agencies. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on August 3, 1994. TRD-9446407 Deborah C. Kastrin Executive Director Texas Department of Commerce Effective date: September 1, 1994 Proposal publication date: May 24, 1994 For further information, please call: (512) 320-9630 Subchapter I. JTPA Grievance Procedures 10 TAC sec.sec.187.280-187.298 The new rules are adopted under the Texas Government Code, sec.481.0044(a), which authorizes the Policy Board of the Texas Department of Commerce to adopt rules necessary for the administration of department programs; and Texas Civil Statutes, Article 4413(52), sec.5A, (as amended by Senate Bill 405, sec.29, Acts 1993, 73rd Legislature), which gives the Policy Board of the Texas Department of Commerce the authority to adopt necessary rules for the implementation and management of the job-training program. The sections are also adopted pursuant to the Administrative Procedure Act, Texas Government Code, Chapter 2001, Subchapter B, which mandates the rulemaking procedures for state agencies. This agency certifies that the sections as adopted have been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on August 3, 1994. TRD-9446408 Deborah C. Kastrin Executive Director Texas Department of Commerce Effective date: September 1, 1994 Proposal publication date: May 24, 1994 For further information, please call: (512) 320-1806 TITLE 19. EDUCATION Part I. Texas Higher Education Coordinating Board Chapter 5. Program Development Subchapter P. Testing and Remediation 19 TAC sec.5.314 The Texas Higher Education Coordinating Board adopts an amendment to sec.5. 314, concerning Testing and Remediation (Administration), without changes to the proposed text as published in the June 3, 1994, issue of the Texas Register (19 TexReg 4305). A number of institutions have concluded that they are unable to administer and score the campus form of the test for the $3.00 maximum fee that was set by the Board. Higher administrative staffing costs make the increase necessary. The amendment would allow institutions to charge students no more than $4. 00 for the administration and scoring of the campus form of the TASP test. No comments were received regarding the adoption of the amendment. The amendment is proposed under Texas Education Code, sec.51.306 and sec.61. 027, which provides the Texas Higher Education Coordinating Board with the authority to adopt rules concerning Testing and Remediation. 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 August 9, 1994. TRD-9446324 James McWhorter Assistant Commissioner for Administration Texas Higher Education Coordinating Board Effective date: September 2, 1994 Proposal publication date: June 3, 1994 For further information, please call: (512) 483-6160 TITLE 34. PUBLIC FINANCE Part I. Comptroller of Public Accounts Chapter 3. Tax Administration Subchapter S. Interstate Motor Carrier Sales and Use Tax 34 TAC sec.3.443 The Comptroller of Public Accounts adopts an amendment to sec.3.443, concerning imposition and tax after effective date for interstate motor carrier sales and use tax, without changes to the proposed text as published in the April 26, 1994, issue of the Texas Register (19 TexReg 3137). The amendment is necessary because of changes in certain definitions made by the 73rd Legislature, 1993. No comments were received regarding adoption of the amendment. The amendment is adopted under the Tax Code, sec.111.002, which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of the Tax Code, Title 2. The amendment implements the Tax Code, sec.157.001. 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 August 11, 1994. TRD-9446496 Martin E. Cherry Chief, General Law Section Comptroller of Public Accounts Effective date: September 1, 1994 Proposal publication date: April 26, 1994 For further information, please call: (512) 463-4028 34 TAC sec.3.444 The Comptroller of Public Accounts adopts an amendment to sec.3.444, concerning computation of the proportioned tax-interstate motor vehicles, without changes to the proposed text as published in the April 26, 1994, issue of the Texas Register (19 TexReg 3138). The amendment is necessary because of changes in certain definitions made by the 73rd Legislature, 1993. No comments were received regarding adoption of the amendment. The amendment is adopted under the Tax Code, sec.111.002, which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of the Tax Code, Title 2. The amendment implements the Tax Code, sec.157.001. 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 August 11, 1994. TRD-9446524 Martin E. Cherry Chief, General Law Section Comptroller of Public Accounts Effective date: September 1, 1994 Proposal publication date: April 26, 1994 For further information, please call: (512) 463-4028 34 TAC sec.3.445 The Comptroller of Public Accounts adopts an amendment to sec.3.445, concerning computation of the proportioned tax-trailers and semitrailers, without changes to the proposed text as published in the April 26, 1994, issue of the Texas Register (19 TexReg 3139). The amendment is necessary because of changes in certain definitions made by the 73rd Legislature, 1993. No comments were received regarding adoption of the amendment. The amendment is adopted under the Tax Code, sec.111.002, which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of the Tax Code, Title 2. The amendment implements the Tax Code, sec.157.001. 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 August 11, 1994. TRD-9446523 Martin E. Cherry Chief, General Law Section Comptroller of Public Accounts Effective date: September 1, 1994 Proposal publication date: April 26, 1994 For further information, please call: (512) 463-4028 TITLE 37. PUBLIC SAFETY AND CORRECTIONS Part V. Texas Board of Pardons and Paroles Chapter 145. Parole Terms and Conditions of Parole 37 TAC sec.145.22 The Texas Board of Pardons and Paroles adopts new sec.145.22, concerning the terms and conditions of parole which are currently found at sec.195.61, without changes to the proposed text as published in the May 6, 1994, issue of the Texas Register (19 TexReg 3431). This section lists both general conditions of parole which are applicable to all parolees and special conditions of parole which are ordered on an individual basis. The new section is adopted to more logically reposition the text of this rule within the Texas Administrative Code. One comment was received by the Committee on Corrections and Parole of the Texas Criminal Defense Lawyers Association regarding adoption of the new section. The commenter opposed several terms and conditions of parole in the proposed section as being vague. The commenter seems concerned that the terms as proposed might lead parole officers to believe that they, and not the Board of Pardons and Paroles, have the discretion to set terms and conditions of parole. The Board of Pardons and Paroles disagrees with the commenters, because statutory law found in Code of Criminal Procedure, Article 42.18, sec.1 and sec.7, specifies that the Board of Pardons and Paroles has exclusive authority to grant and set conditions of parole, which sec.2 specifies that a parolee contractually agrees to serve the remainder of his sentence under the supervision and control of parole officers. The Board of Pardons and Paroles feels that the proposed new section fairly comports with the intent of the statutory law cited previously and that considerations of vagueness do not require the board to adopt terms and conditions of parole which would require the board to micromanage parolees, so as to eliminate the need for parole officers. The Board is confident that the proposed new terms and conditions of parole are not vague in the context of parole based upon remarks made by the U.S. Supreme Court in Morrisey v. Brewer, 408 U.S. 471 at page 479, (1972). The new section is adopted under Texas Code of Criminal Procedure, Article 42.18, sec.8(g), which provides the Board of Pardons and Paroles with the authority to adopt such reasonable rules not inconsistent with law as it may deem necessary. 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 August 8, 1994. TRD-9446314 Michael F. Miller General Counsel Texas Board of Pardons and Paroles Effective date: August 30, 1994 Proposal publication date: May 6, 1994 For further information, please call: (512) 406-5613 TITLE 40. SOCIAL SERVICES AND ASSISTANCE Part I. Texas Department of Human Services Chapter 15. Medicaid Eligibility The Texas Department of Human Services (DHS) adopts amendments to sec.15. 441 and sec.15.501, concerning real property resources and vendor living arrangements, in its Medicaid Eligibility rule chapter, without changes to the proposed text as published in the June 17, 1994, issue of the Texas Register (19 TexReg 4736). The justification for the amendment to sec.15.441 is to allow the exemption of the value of home property placed for sale for clients in certain living arrangements. The amendment to sec.15.501 specifies that DHS will consider a client who has been discharged directly to any 1915(c) home and community-based waiver program before the client completes 30 consecutive days in a nursing facility to have met the 30-consecutive day requirement for Medicaid eligibility. The amendment to sec.15.441 will function by allowing clients to remain eligible for Medicaid until the sale of home property is final and proceeds are available to the client. The amendment to sec.15.501 will function by allowing Medicaid to pay nursing facilities for short-term stays by nursing facility waiver clients. The department received one comment regarding sec.15.501(b) from the Texas Health Care Association asking if the Health Care Financing Administration (HCFA) had approved the proposed policy. The department anticipates no comment from HCFA on this issue. Discharge from a nursing facility to a Medicaid 1915(c) home and community-based waiver program is similar to discharge to an acute care hospital, which does not affect the 30-consecutive day requirement for institutional eligibility. DHS is adopting sec.15.501(b) as proposed. Subchapter D. Resources 40 TAC sec.15.441 The amendment is adopted under the Human Resources Code, Title 2, Chapters 22 and 32, which provides the department with the authority to administer public and medical assistance programs and under Texas Civil Statutes, Article 4413 (502), sec.16, which provides the Health and Human Services Commission with the authority to administer federal medical assistance funds. The amendment implements the Human Resources Code, sec. sec.22.001-22.024 and sec.sec.32.001-32.042. 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 August 11, 1994. TRD-9446519 Nancy Murphy Section Manager, Media and Policy Services Texas Department of Human Services Effective date: September 1, 1994 Proposal publication date: June 17, 1994 For further information, please call: (512) 450-3765 Subchapter F. Budgets and Payment Plans 40 TAC sec.15.501 The amendment is adopted under the Human Resources Code, Title 2, Chapters 22 and 32, which provides the department with the authority to administer public and medical assistance programs and under Texas Civil Statutes, Article 4413 (502), sec.16, which provide the Health and Human Services Commission with the authority to administer federal medical assistance funds. The amendment implements the Human Resources Code sec. sec.22.001-22.024 and sec.sec.32.001-32.042. 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 August 11, 1994. TRD-9446518 Nancy Murphy Section Manager, Media and Policy Services Texas Department of Human Services Effective date: September 1, 1994 Proposal publication date: June 17, 1994 For further information, please call: (512) 450-3765 Chapter 90. Nursing Facilities and Related Institutions Subchapter G. Abuse, Neglect, and Exploitation; Complaint and Incident Reports and Investigations 40 TAC sec.90.215 The Texas Department of Human Services (DHS) adopts an amendment to sec.90. 215, concerning investigations of incidents and complaints, in its Nursing Facilities and Related Institutions rule chapter, without changes to the proposed text as published in the July 8, 1994, issue of the Texas Register (19 TexReg 5347). The justification for the amendment is to clarify that complaint investigations may include a visit to the resident's facility if DHS determines this is appropriate. The amendment will function by making this rule consistent with DHS's Personal Care Facility rules and by eliminating a mandatory facility visit to investigate complaints. No comments were received regarding adoption of the amendment. The amendment is adopted under the Health and Safety Code, Chapter 242 which provides the department with the authority to regulate long-term care nursing facilities and under Texas Civil Statutes, Article 4413(502), historical note (Vernon Supplement 1993), 72nd Legislature, which transferred all functions, programs, and activities related to long-term care licensing, certification, and surveys from the Texas Department of Health to the Texas Department of Human Services. The amendment implements the Health and Safety Code, sec. sec.242.001-242.186. 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 August 11, 1994. TRD-9446517 Nancy Murphy Section Manager, Media and Policy Services Texas Department of Human Services Effective date: September 15, 1994 Proposal publication date: July 8, 1994 For further information, please call: (512) 450-3765 Part III. Texas Commission on Alcohol and Drug Abuse Chapter 147. Approved Drug Offender Education Program General Provisions 40 TAC sec.147.1, sec.147.8 The Texas Commission on Alcohol and Drug Abuse adopts amendments to sec.147.1 and sec.147.8, concerning Approved Drug Offender Education Programs, without changes to the proposed text as published in the July 15, 1994, issue of the Texas Register (19 TexReg 5460). The amendment to sec.147.1 changes the legal citation for the penalties for driving while intoxicated formerly located at the Texas Civil Statutes, Article 6701l-l and now relocated at Penal Code, sec.sec.49.04-49.09 effective September 1, 1994. Section 147.8(e) is also being amended to correct the legal citation for the Administrative Procedure Act. These sections will enhance the quality programming in the Drug Offender- Education Programs approved by the commission. No comments were received regarding adoption of the amendments. The amendments are adopted under the Texas Civil Statues, Article 6687b, sec.24B, which provide the Texas Commission on Alcohol and Drug Abuse with the authority to promulgate written rules and regulations setting forth minimum standards for the operation of approved drug offender education programs for persons convicted of certain drug offenses and who must complete an approved drug offender education program in order to have the driver's license reinstated. The statute affected by the amendments is Texas Civil Statutes, Article 6687b, sec.24B. 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 August 15, 1994. TRD-9446627 Otis E. Williams Deputy Executive Director for Finance and Administration Texas Commission on Alcohol and Drug Abuse Effective date: September 5, 1994 Proposal publication date: July 15, 1994 For further information, please call: (512) 867-8720 Drug Offender Education Program Standards 40 TAC sec.147.33, sec.147.42 The Texas Commission on Alcohol and Drug Abuse adopts amendments to sec.147.33 and sec.147.42, concerning Approved Drug Offender Education Programs, without changes to the proposed text as published in the July 15, 1994, issue of the Texas Register (19 TexReg 5460). The amendment to sec.147.33 changes the legal citation for the penalties for driving while intoxicated formerly located at the Texas Civil Statutes, Article 6701l-l and now located in the Penal Code, Chapter 49, sec.sec.49.04-49.09 effective September 1, 1994. Section 147.42(b)(7) is also being amended to clarify the period of time in which the number of courses conducted by the instructors is reported. These sections will enhance the quality programming in the Drug Offender- Education Programs approved by the commission. No comments were received regarding adoption of the amendments. The amendments are adopted under the Texas Civil Statues, Article 6687b, sec.24B, which provide the Texas Commission on Alcohol and Drug Abuse with the authority to promulgate written rules and regulations setting forth minimum standards for the operation of approved drug offender education programs for persons convicted of certain drug offenses and who must complete an approved drug offender education program in order to have the driver's license reinstated. The statute affected by the amendments is Texas Civil Statutes, Article 6687b, sec.24B. 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 August 15, 1994. TRD-9446626 Otis E. Williams Deputy Executive Director for Finance and Administration Texas Commission on Alcohol and Drug Abuse Effective date: September 5, 1994 Proposal publication date: July 15, 1994 For further information, please call: (512) 867-8720 Chapter 152. Approved Alcohol Awareness Programs General Provisions 40 TAC sec.152.1, sec.152.6 The Texas Commission on Alcohol and Drug adopts amendments to sec.152.1 and sec.152.6, concerning Approved Alcohol Awareness Programs, without changes to the proposed text as published in the July 15, 1994, issue of the Texas Register (19 TexReg 5461). Section 152.1 is being amended to include the requirement that programs determine and collect the percentage of knowledge increase from the pre-course and post-course test scores. Section 152.6 is being amended to correct the legal citation for the Administrative Procedure Act. These sections will enhance the quality programming in the Alcohol Awareness Programs approved by the commission. No comments were received regarding adoption of the amendments. The amendments are adopted under the Alcoholic Beverage Code, Chapter 106, sec.106.115, which provide the Texas Commission on Alcohol and Drug Abuse with the authority to promulgate written rules and regulations setting forth minimum standards for the operation of Approved Alcohol Awareness Programs. The code affected by the amendments is Alcoholic Beverage Code, Chapter 106, sec.106.115. 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 August 15, 1994. TRD-9446625 Otis E. Williams Deputy Executive Director for Finance and Administration Texas Commission on Alcohol and Drug Abuse Effective date: September 5, 1994 Proposal publication date: July 15, 1994 For further information, please call: (512) 867-8720 Alcohol Awareness Program Standards 40 TAC sec.152.26, sec.152.31 The Texas Commission on Alcohol and Drug Abuse adopts amendments to sec.152.26 and sec.152.31, concerning Approved Alcohol Awareness Programs, without changes to the proposed text as published in the July 15, 1994, issue of the Texas Register (19 TexReg 5461). Section 152.26 is being amended to change the word handicap to disability. Section 152.31 is being amended to include the requirement that programs determine, collect, and report the percentage of knowledge increase from the pre-course and post-course test scores. These sections will enhance the quality programming in the Alcohol Awareness Programs approved by the commission. No comments were received regarding adoption of the amendments. The amendments are adopted under the Alcoholic Beverage Code, Chapter 106, sec.106.115, which provide the Texas Commission on Alcohol and Drug Abuse with the authority to promulgate written rules and regulations setting forth minimum standards for the operation of Approved Alcohol Awareness Programs. The code affected by the amendments is Alcoholic Beverage Code, Chapter 106, sec.106.115. 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 August 15, 1994. TRD-9446624 Otis E. Williams Deputy Executive Director for Finance and Administration Texas Commission on Alcohol and Drug Abuse Effective date: September 5, 1994 Proposal publication date: July 15, 1994 For further information, please call: (512) 867-8720 Chapter 153. DWI Education Program Standards and Procedures General Provisions 40 TAC sec.sec.153.2, 153.3, 153.6, 153.18 The Texas Commission on Alcohol and Drug Abuse adopts amendments to sec.153.2, 153.3, 153.6, and 153.18, concerning DWI Education Program Standards and Procedures, without changes to the proposed text as published in the July 15, 1994, issue of the Texas Register (19 TexReg 5462). The amendments to sec.153.2 and sec.153.3 provides the correct name for probation which is now referred to as community supervision. Section 153.6 is also being amended to correct the legal citation for the Administrative Procedure Act. The amendment to sec.153.18 changes the word handicap to disability. These sections will enhance quality programming in the DWI Education Programs approved by the Texas Commission on Alcohol and Drug Abuse. No comments were received regarding adoption of the amendments. The amendments are adopted under the Texas Code of Criminal Procedure, Article 42.12, sec.13h, which provide the Texas Commission on Alcohol and Drug Abuse with the authority to promulgate written rules and regulations setting forth minimum standards for the operation of the Texas DWI Education Programs which are designed to provide information on the effects of alcohol and other drugs and driving skills; and to help participants in developing a plan to reduce the probability that they will be involved in future DWI behavior. The code affected by the amendments is Texas Code of Criminal Procedure, Article 42.12, sec.13h. 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 August 15, 1994. TRD-9446623 Otis E. Williams Deputy Executive Director for Finance and Administration Texas Commission on Alcohol and Drug Abuse Effective date: September 5, 1994 Proposal publication date: July 15, 1994 For further information, please call: (512) 867-8720 Chapter 153. DWI Education Program Standards and Procedures DWI Education Program Standards 40 TAC sec.sec.153.33, 153.36, 153.37, 153.41 The Texas Commission on Alcohol and Drug Abuse adopts amendments to sec.sec.153.33, 153.36, 153.37, and 153.41 concerning DWI Education Program Standards and Procedures, without changes to the proposed text as published in the July 15, 1994 issue of the Texas Register (19 TexReg 5463). The amendment to sec.153.33 provides the correct name for probation which is now referred to as community supervision and corrects the legal citation for the penalties for driving while intoxicated, in the Texas Civil Statutes, Article 6701l-l is being replaced with the Texas Penal Code, sec.sec.49.04-49.08, effective September 1, 1994. The amendments to sec.153.36(10)(15) and sec.153. 37(b) also replaces references to probation which is now referred to as community supervision. The amendment to sec.153.36(14) adds a participant's driver's license number (or date of birth or social security number) to the class roster for tracking purposes. The amendment to sec.153.37 also allows the court to grant an extension of time to attend the DWI Education Program. The amendment to sec.153.41(b)(1) includes the date of birth or social security number to the annual report for more accurate reporting and sec.153.41(7) is added to require administrators to report the number of courses each instructor taught during the annual reporting period. These sections will enhance quality programming in the DWI Education Programs approved by the Texas Commission on Alcohol and Drug Abuse. No comments were received regarding adoption of the amendments. The amendments are adopted under the Texas Code of Criminal Procedure, Article 42.12, sec.13h, which provide the Texas Commission on Alcohol and Drug Abuse with the authority to promulgate written rules and regulations setting forth minimum standards for the operation of the Texas DWI Education Programs which are designed to provide information on the effects of alcohol and other drugs and driving skills; and to help participants in developing a plan to reduce the probability that they will be involved in future DWI behavior. The code affected by the amendments is the Texas Code of Criminal Procedure, Article 42.12, sec.13h. 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 August 15, 1994. TRD-9446622 Otis E. Williams Deputy Executive Director for Finance and Administration Texas Commission on Alcohol and Drug Abuse Effective date: September 5, 1994 Proposal publication date: July 15, 1994 For further information, please call: (512) 867-8720 Chapter 154. DWI Repeat Offender Program Standards and Procedures General Provisions 40 TAC sec.154.1, sec.154.6 The Texas Commission on Alcohol and Drug Abuse adopts amendments to sec.154.1 and sec.154.6 concerning DWI Repeat Offender Program Standards and Procedures, without changes to the proposed text as published in the July 15, 1994 issue of the Texas Register (19 TexReg 5464). Section 154.1 is added because the legal citation for the penalties for driving while intoxicated is being repealed in the Texas Civil Statutes, Article 6701l-l and replaced with the Texas Penal Code, sec.sec.49.04-49.09, effective September 1, 1994. Section 154.6(e) is being amended to correct the legal citation for the Administrative Procedure Act. These sections will enhance quality programming in the DWI Repeat Offender Programs approved by the commission. No comments were received regarding adoption of the amendments. The amendments are adopted under the Texas Code of Criminal Procedure, Article 42.12, sec.13(j), which provides the Texas Commission on Alcohol and Drug Abuse with the authority to publish rules and regulations for approved DWI Repeat Offender Programs. The code affected by this amendment is the Texas Code of Criminal Procedure, Article 42.12, sec.13(j). 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 August 15, 1994. TRD-9446621 Otis E. Williams Deputy Executive Director for Finance and Administration Texas Commission on Alcohol and Drug Abuse Effective date: September 5, 1994 Proposal publication date: July 15, 1994 For further information, please call: (512) 867-8720 DWI Repeat Offender Program Standards 40 TAC sec.154.28, sec.154.30 The Texas Commission on Alcohol and Drug Abuse adopts amendments to sec.154.28 and sec.154.30 concerning DWI Repeat Offenders Program Standards and Procedures, without changes to the proposed text as published in the July 15, 1994 issue of the Texas Register (19 TexReg 5464). Section 154.28 requires instructors to conduct a course a minimum of one time during the annual reporting period and to also allow instructors to team teach which will count toward this requirement. Section 154.30 would require administrators to report the names of all certified instructors employed by the program and the number of courses each conducted during the annual reporting period. These sections will enhance quality programming in the DWI Repeat Offender Programs approved by the commission. No comments were received regarding adoption of the amendments. The amendments are adopted under the Texas Code of Criminal Procedure, Article 42.12, sec.13(j), which provides the Texas Commission on Alcohol and Drug Abuse with the authority to publish rules and regulations for approved DWI Repeat Offender Programs. The code affected by these amendment is Texas Code of Criminal Procedure, Article 42.12, sec.13(j). 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 August 15, 1994. TRD-9446620 Otis E. Williams Deputy Executive Director for Finance and Administration Texas Commission on Alcohol and Drug Abuse Effective date: September 5, 1994 Proposal publication date: July 15, 1994 For further information, please call: (512) 867-8720 Texas Department of Insurance Exempt Filing Notification Pursuant to the Insurance Code, Chapter 5, Subchapter L (Editor's Note: As required by the Insurance Code, Article 5.96 and 5. 97, the Texas Register publishes notices of actions taken by the Department of Insurance pursuant to Chapter 5, Subchapter L, of the Code. Board action taken under these articles is not subject to the Administrative Procedure Act. These actions become effective 15 days after the date of publication or on a later specified date. The text of the material being adopted will not be published, but may be examined in the offices of the Department of Insurance, 333 Guadalupe, Austin.) The Commissioner of Insurance will hold a public hearing on October 3, 1994, at 9:00 a.m., under Docket Number 2111, in Room 100 of the Texas Department of Insurance Building, 333 Guadalupe in Austin, Texas, to consider a staff petition proposing adoption of two new endorsements, Endorsement Number FRO-421 to be attached to the Texas Farm and Ranch Owners Policy and Endorsement Number TFR- 080 to be attached to the Texas Farm and Ranch Policy, to provide coverage for greenhouses used for farming purposes for loss or damage caused by windstorm, hurricane, or hail. The petition also proposes new Texas Personal Lines Manual rules to govern the use of these endorsements and provide appropriate rates. The proposed endorsements and manual rules are necessary to restore windstorm, hurricane, and hail coverage for greenhouses located on a farm and ranch premises and used for farming purposes, which was inadvertently omitted when the Farm and Ranch Owners Policy and the Farm and Ranch Policy were revised into simplified easy-to-read language. The Commissioner has jurisdiction of this matter pursuant to the Insurance Code, Articles 5.35, 5.101, 5.96, and 5.98. Copies of the full text of the proposed endorsements and Texas Personal Lines Manual rules are available for review in the Office of the Chief Clerk, 333 Guadalupe Street, Austin, Texas 78714-9104. For further information or to request copies, please contact Angie Arizpe at (512) 322-4147 (refer to Reference Number P-0894-17-I). Comments on the proposal must be submitted in writing within 30 days after publication of the proposal in the Texas Register to the Office of the Chief Clerk, P.O. Box 149104, MC 113-2A, Austin, Texas 78714-9104. An additional copy of the comment should be submitted to Lyndon Anderson, Associate Commissioner for Property and Casualty Division, P.O. Box 149104, MC 103-1A, Austin, Texas 78714-9104. This notification is made pursuant to the Insurance Code, Article 5.96, which exempts action taken under Article 5.96 from the requirements of the Administrative Procedures and Texas Register Act (Administrative Procedure Act, 73rd Legislative, Regular Session, Chapter 268, sec.1, 1993 Texas General Laws 737 (codified at Government Code, Title 10, Subtitle A, Chapter 2001). This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas, on August 15, 1994. TRD-9446641 D. J. Powers General Counsel and Chief Clerk Texas Department of Insurance Earliest possible date of adoption: September 19, 1994 For further information, please call: (512) 463-6327