ADOPTED RULES An agency may take final action on a section 30 days after a proposal has been published in the Texas Register. The section becomes effective 20 days after the agency files the correct document with the Texas Register, unless a later date is specified or unless a federal statute or regulation requires implementation of the action on shorter notice. If an agency adopts the section without any changes to the proposed text, only the preamble of the notice and statement of legal authority will be published. If an agency adopts the section with changes to the proposed text, the proposal will be republished with the changes. TITLE 1. ADMINISTRATION Part V. General Services Commission Chapter 123. Facilities Construction and Space Management Division Prevailing Wage Rate Determination sec.123.32 The General Services Commission adopts an amendment to sec.123.32 concerning prevailing wage rate surveys, without changes to the proposed text as published in the April 5, 1994, issue of the Texas Register (19 TexReg 2347). The amendment provides for the establishment of prevailing wage rates by adoption of rates from United States. Department of Labor surveys under the David Bacon Act, in accordance with Texas Civil Statutes, Article 5159a, and clarifies the procedure for using wage rate information from outside survey area when the survey area does not provide sufficient data. The proposed amendment permits determination of prevailing wage rates in a given area by adoption of a Davis Bacon Act survey that is not more than three years old. The proposed amendment permits the entity conducting the survey to look to a larger or adjacent political subdivision for the limited purpose of acquiring information on wage rates for specific classifications of work for which the primary survey area does not provide sufficient data. The Independent Electrical Contractors of Texas made a comment against the amendment. The comment asserted that the amendment would allow the the political subdivision conducting the survey to look for the survey area that would provide the lowest cost for each class of work. The comment further asserted that the small numbers of certain laborers in rural areas does not mean that there is no prevailing wage rate for such labor in those areas. The amendment addresses prevailing wage rate surveys conducted by the General Services Commission, not those conducted by political subdivisions. The amendment only permits looking to data outside the relevant political subdivision when the data within the political subdivision is insufficient to establish a prevailing wage rate for a specified class of labor. Even if the pool of data within the relevant political subdivision is small, if it is sufficient to determine the prevailing wage, it is to be used. The amendment is adopted under Texas Civil Statutes, Article 601b, sec.5. 15(d), which authorize the General Services Commission to promulgate rules necessary to accomplish the purpose of the Article. 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 31, 1994. TRD-9447420 Judith Monaco Porras General Counsel General Services Commission Effective date: September 21, 1994 Proposal publication date: April 5, 1994 For further information, please call: (512) 463-3960 TITLE 7. BANKING AND SECURITIES Part V. Office of Consumer Credit Chapter 85. Rules of Operation for Pawnshops 7 TAC sec.sec.85.21, 85.31, 85.41, 85.51, 85.61, 85.71, 85.81 The Office of Consumer Credit Commissioner adopts new sec.85.21, sec.85.31, sec.85.41, sec.85.51, sec.85.61, sec.85.71, and sec.85.81, concerning the operation of pawnshops, are adopted with changes to the proposed text as published in the June 14, 1994, issue of the Texas Register (19 TexReg 4606). Adoption of the new rules is necessary to provide safeguards for consumers and their property deposited with pawnbrokers; to provide better disclosures of loan terms and applicable law to consumers; to provide better information for law enforcement agencies concerning personal property pledged to pawnbrokers; to provide specific recordkeeping to permit the commissioner to determine whether a pawnbroker is complying with the Texas Pawnshop Act, Texas Civil Statutes, Article 5069-51.01 et seq; to provide that certain procedures be followed in the day to day operation of pawnshops; and to provide for dissemination of consumer credit education information through pawnshops. Comments of a general nature which did not directly address specific proposed rules were received from Bruce and Joyce Parker (Parker), Golden Pawn Shop, Big Spring; Mary Ann and George E. "Pete" Dix (Dix), Action Loans, Inc., El Paso; January's Ft. Sam Pawn (Ft. Sam), San Antonio; Marion E. Hallmark (Hallmark), H & F Pawn Inc., Killeen; Johnny Frederick, President, Central Texas Pawnbrokers Association (CTPBA), Killeen; Curt Sutherland, President, Austin Area Pawn Brokers Association (AAPBA), Austin; Larry Atwood (Atwood), Atwood Finance, Inc., Jacksonville; and Agustin Estrada (Estrada), Estrada's Pawn Shop, Lubbock. Specific written comments on the proposed rules were received from John Smock (Smock), Houston County Pawn & Jewelry, Crockett; Jerry D. Anglin (Anglin), O. K. Pawn & Salvage Co., Huntsville; Gary P. Trial (Trial), Old Fort Trading Post, San Antonio; The Honorable Bill Sims (Sims), State Senator, 25th Senatorial District, San Angelo; Billy G. Haley (Haley), Local Loan & Investment Corp. of Sweetwater, Sweetwater; Darrell W. Logsdon (Logsdon), Alamo Pawn Shops of Texas, Inc., Odessa; Norris Mealer (Mealer), Grand Street Pawn Shop, Amarillo; Leo Wilson (Wilson), Unified Loans, Inc., El Paso; Bob Owens (Owens), Owens Jewelry, Dallas; Carl F. Fairchild (Fairchild), Carl's Pawn and Trading Co. and Olde Royal Jewelry and Loan, Mesquite; Richard D. Camp, Sr. (Camp), Dallas; Kenneth M. McGee (McGee), Ken's Pawn & Jewelry, Lufkin; George Dziedzic (Dziedzic), Shaw's Jewelry & Loan, Houston; Robert L. Furr (Furr), Cowtown Cash, Inc., Fort Worth; Mary Ann Dix, President, El Paso Pawn Brokers Association (EPPBA), El Paso; Lisa M. Walters (Walters), Unigoal Corporation, Ft. Worth; Texas Pawn Brokers Association (TPBA), Austin; Terry Charping (Charping), Top Loan Inc., Killeen; Craig A. Langford (Langford), D's Pawn, Killeen; Mac McCommas (McCommas), CJM Enterprises Incorporated, Killeen; Larry E. Nuckols (Nuckols), Pawn Management, Inc., San Antonio; Eugene Jezek (Jezek), A-1 All-American Pawn Shop, Pasadena; John Wood (Wood), Joe's Pawnshop, El Paso; Hugh Simpson (Simpson), Cash American International, Inc., Ft. Worth; Concho Valley Pawn Brokers Association (CVPBA), San Angelo; Wichita Falls Area Pawn Brokers (WFAPB), Wichita Falls; Kathy Brisbin (Brisbin), Gem Pawn Shop, Temple; Mike Konczak (Konczak), Konczak Pawn and Loan, Baird; Gregory M. Cervenka (Cervenka), Doc Holliday's Pawnbrokers & Jewellers, Austin; Bill French (French), Hines Blvd. Pawn Shop, Inc., Dallas; Kathie Goode (Goode), Goode's Pawn Shop, Alvin; and Matt Pace (Pace), Tricoast Insurance Services, Houston. The following persons appeared and made oral comments at the public hearing on June 27, 1994: The Honorable David Counts (Counts), State Representative, 70th District, Knox City; Roy Santoscoy (Santoscoy), Irving Pawn Brokers Association, Irving; Philip Whitaker (Whitaker), Hugh Whitaker Co., Inc., Paris; Glenna Grisaffi (Grisaffi), Atascosita Jewelry and Loan, Humble; Paul Edge (Edge), Associated Pawn, Inc., Houston; Mark Buchanan (Buchanan), Sonitrol Management Corporation, Austin; Johnny Fredrick (Fredrick) , H & F Pawn and Central Texas Pawn Brokers Association; and Cathy Gregory (Gregory), ANCO Insurance, Bryan. The following persons appeared and made oral comments in addition to their written comments: Haley; McCommas; Nuckols; and Dale Huggins, Texas Pawn Brokers Association (TPBA), Austin. After hearing all oral comments and reading all written comments filed with the commissioner, Al Endsley, Commissioner, Office of Consumer Credit Commissioner, is of the opinion that pledgors, the pawn industry, and the general public would be best served by the adoption of these rules with the changes. Further justification for the rules as adopted are contained in the following paragraphs which set forth the comments and the reasons why the commissioner agrees or disagrees with the comments. These responses should be considered as part of the rules' reasoned justification. The rules define required documentation of and recordkeeping for regulated transactions; provide for pawnbrokers to assist property crime victims; provide minimum requirements for security of persons and pledged goods; specify procedures and standards to be followed to make the consumer whole when pledged goods are lost or damaged; prohibit false, misleading, or deceptive advertising and provide for examination of advertising; provide for self-examination and corrective action and reporting; and establish standards of conduct relating to various aspects of the daily operations of a pawnshop. The rules provide comprehensive guidance to pawnbrokers in their day to day lending activities supplementing the provisions of the Texas Pawnshop Act; formally delineate many practices, procedures, and policies previously established informally and followed voluntarily; and prescribe other related practices and procedures that the commissioner deems to be in the public interest, many of which are now voluntarily followed by numerous businesslike pawnbrokers. Section 85.21 BUSINESS RECORDS (a)MINIMUM RECORDS; LOCATION OF RECORDS Trial, Mealer, and Konczak requested that the commissioner change "... records relating to all business transacted in the pawnshop." to "...records relating to all pawn loan business transacted in the pawnshop." These commenters as well as others contend that Texas Civil Statutes, Article 5069-51.17B(r) prohibits the commissioner from adopting rules that deal with any activity of a pawnbroker other than the making of pawn loans. That objection will be abbreviated in the comments that follow as "17B(r)." Wilson opined that the words "relating to all business transacted in the pawnshop" was like a snake in the grass just waiting to strike. He then observed that many independent pawnbrokers engage in check cashing, liquor sales, gun shop, and surplus sales businesses within pawnshops in order to cut down on overhead and better utilize employees. Fairchild observed that the proposal would add at least eight disposition files and then asked if the files were required even when a pawnbroker did not experience a problem or situation for which a particular file was mandated and if so were negative entries required and at what frequency. Response: The commissioner disagrees with the commenters', interpretation of 17B(r). The commissioner believes it is his duty to adopt rules where the legislature has specifically directed the commissioner to do so such as rules relating to hold periods and to crime victim assistance and that it was not the intent of the legislature to negate such directives with the adoption of 17B(r). There is a general principle of statutory interpretation that when there is apparent conflict between a general provision and a specific or explicit provision, the specific or explicit provision is to be interpreted to prevail over the general. Likewise, the commissioner believes that 17B(r) does not prohibit the commissioner from adopting rules in areas where the legislature has specifically authorized the commissioner to do so such as those mentioned in 17B(n), (o), and (p). In order to avoid legal entanglements of other proposed rules, the commissioner has removed or modified provisions objected to which do not relate to pawn loans. These adopted rules do not mandate the establishment and maintenance of new, separate files. The proposal spoke to certain specific files in order to call attention to information that the rules would require to be retained by the pawnbroker. The information to be retained relative to compliance with the Texas Pawnshop Act will be permitted to be maintained by the pawnbroker in a manner of his or her choosing provided the information is readily identifiable and available for examination. (1) LOAN TRANSACTIONS (A) PAWN TICKET (i) PRESCRIBED FORM AND CONTENT Mealer objected to the itemization of the amount financed as being unnecessary. He also objected to the disclosure of renewal or extension options or lack thereof suggesting if this disclosure is required many pawnbrokers will issue tickets saying that they may not be renewed or extended. He suggested an alternative statement or disclosure "While we may offer renewal and (or) extension options on this loan we reserve the right to refuse those options at our sole discretion. You assume the risk of forfeiting your pledged goods if you fail to redeem them on or before the Last Day of Grace shown on this ticket." Owens objected to showing the last day of grace on the pawn ticket and to the notice regarding renewal or extension options, if any, and suggested that any change in pawn ticket format may be opening a can of worms. The commenter also suggested that the size of the space for describing pledged goods may require the making of multiple loans and that multiple loans meant higher charges to the customer. Fairchild declared that the new pawn ticket form proposed was not user friendly primarily in reclarifying the last day of grace. He further asserted that forecasting the last day of grace would require a unique program for each computerized shop. He also questioned the value of the itemization of amount financed and asked how to properly handle disclosure when all or part of the amount finance was used to pay on or start a layaway, make a purchase, or a combination of several transactions. The commenter also stated that renewals or extensions had always been at the option of the pawnbroker and should remain that way. Camp stated that requiring pawnbrokers to compute the last day of grace will require restyling the pawn ticket, the addition of another program to their computers, and to cause others to compute the date on hand written tickets daily. Furr stated that the person providing support for the Pawn-Moore computer system, which commenter uses, told him it would cost $300-$500 for software changes to accommodate the last day of grace on the new ticket form. EPPBA observed that there was a smaller space on the proposed pawn ticket for description of pledged goods and that the commissioner was wanting more information in the descriptions. The commenter asked if pawnbrokers using computers were required to post payments to the fourth part of the pawn ticket and if the pawn ticket form is being changed. TPBA objected to the requirement to show the "last day of grace" on the pawn ticket. The commenter suggested that it be made optional with the pawnbroker, stated that it was spelled out quite clearly in the Pawnshop Act and further defined in Truth in Lending and Regulation Z, and to redefine by rule would contradict existing law. The commenter objected to any change to the front of the original pawn ticket as shown on Appendix A for the following reasons: cost of forms replacement and computer programming, insufficient room to describe pledged goods, placement of redemption signature on back of ticket interfered with signature comparison and customer knowledge of transaction, and lack of space for an itemization of the amount paid by the customer. The commenter also objected to the new disclosures of itemization of amount financed, renewal options or lack thereof, payment schedule, and notice reprepayment as of no benefit, unnecessary, and/or beyond the commissioner's authority. The commenter also suggested that the preprinted text of the front of the pawn ticket not be required on the copy made available to the local law enforcement agency so that any misalignment of a form in a computer printer would not cause data entered on the ticket to be printed on top of the text and thereby made illegible. Charping asserted that the proposed ticket will create confusion, that having the ticket signed on the back at redemption or renewal will prevent signature comparison, and that the person will not know what he or she signed. Langford expressed his feeling that the proposed changes in the pawn ticket will not significantly help the consumer. He cited cost of ticket replacement, difficulty in comparing signatures, limited space for describing pledged goods, last day of grace - time consuming for the pawnbroker and of little help to the consumer, and renewal option needed to be left open to meet changes in the market. McCommas declared that requiring the last day of grace on the pawn ticket will only further the confusion of the customer. He expressed personal confusion due to perceived inconsistencies among sec.85.21(a)(1)(A)(i), (B)(i), and sec.85.81(a)(1) and (3)(B). The commenter also expressed the view that the itemization of amount finance served no useful purpose and objected to the pawnbroker being required to determine, when a loan is made, if the loan may be renewed. He suggested that most pawnbrokers will probably mark the box indicating that the loan may not be renewed but actually agree to renew if the customer asks to renew and that the consumer would be further confused by the disclosure. Nuckols objected to the proposed redefinition of the last day of grace to ensure that the date disclosed was a day on which the pawnshop would be open. He expressed belief that it would be confusing to the customer and next to impossible to program computers to compute the date as defined. He also stated that he believed that this final due date has already been defined by Truth in Lending Laws and Regulation Z. He further observed that he had never known a bank to calculate due dates on loans taking into consideration the dates on which the bank would not be open. The commenter objected to any change to the existing pawn ticket citing reasons expressed by others relating to signature comparison, limited space for describing pledged goods, and lack of space to itemize the late charges collected at renewal or redemption suggesting that such information was important to the consumer's understanding of the transaction. He also objected to the disclosures related to itemization of the amount financed and the eligibility of the loan for renewal saying that they serve no useful purpose and use space that could be used for description of pledged goods. Wood stated that the space for description of pledged goods should be larger than on the prescribed form in Appendix A. Simpson stated that the calculation of the alternative date was an unnecessary administrative burden and inconsistent with sec.85.81(a)(3)(B). The commenter submitted an alternative suggested form for the front of the pawn ticket and indicated strong opposition to the requirement for a "prescribed form." The commenter argued that a pawnbroker should have the flexibility to develop better formats and include contractual language more favorable to the customers. Brisbin expressed strong dislike for the proposed pawn ticket form citing customer familiarity with the term "forfeit date" and suggesting that the term "last day of grace" would be less clear and more confusing. Objection to the reduced size of the space for describing pledged goods was stated. Konczak requested that there be no change in the current ticket form citing the itemization of amount financed as unnecessary and providing no information that is not already easily determinable, the last day of grace as being confusing and difficult to compute, the space for description of pledged goods as being inadequate, and the cost to change computer software as being an extreme hardship. Finally, Goode opposed any changes in the pawn ticket. She expressed belief that the new form will confuse customers who have been accustomed to the form now in use. Response: The commissioner finds that the addition of the itemization of the amount financed, the payment schedule, and the notice regarding prepayment are essential to having a pawn ticket which meets the federal disclosure requirements of Truth in Lending and Regulation Z promulgated by the Board of Governors of the Federal Reserve System. While the disclosure of the itemization of the amount financed may be handled different ways, the proposed format would the simplest and adequate for most loans. A commenter has proposed an alternative ticket format for adoption as the standard. The commissioner finds that ticket to be acceptable but not conducive to completion except by machine and does not adopt that proposed alternative. The commissioner has retained the traditional Texas sized pawn ticket of four inches by six inches to avoid the cost of new filing equipment for pawnbrokers and regrets the resulting crowding or required and necessary information on the front of the ticket. The rule has been revised to authorize pawnbrokers and their printers to modify the spacing on the ticket to best accommodate their equipment and procedures. Spacing modifications may provide more space for the description of pledged goods. Revisionists should be careful to avoid changes which would cause the ticket to fail to comply with Regulation Z. If reduced space for adequate descriptions of pledged goods results in the use of multiple tickets, increased charges to the consumer is not automatically required. The commissioner disagrees with the commenters concerning confusing customers and believes that although some initial confusion may arise, the long term benefits from inclusion of the "last day of grace" on the pawn ticket will be helpful to consumers and to the pawn industry. There are two areas of consumer complaints to the commissioner's office that regularly and continually have much larger numbers of complaints than the next most frequent problem. One of the two primary complaint generators is confusion or alleged confusion relative to the last day on which the customer must act to insure retention of a right in his or her pledged goods. The commissioner believes disclosure of the last day of grace provides consumers with meaningful information and eliminates the chance that the consumer will not understand or correctly compute that date due to varying numbers of days in months and the common reference to a "two-month" grace period, a three-month loan, etc. The computation of the last day of grace is not burdensome in that pawnbrokers must now compute the date in order to avoid violations of the Act when taking unredeemed goods into their inventory; disclosure of the date to the customer when the loan is made will help reduce conflicts with customers and complaints to the commissioner. The commissioner agrees with commenters who opposed proposed provisions relative to computation of a last day of grace on which the shop would be open and has deleted that requirement. The commissioner disagrees with the commenter who suggested that the term "forfeit date" was more familiar to customers and that the "last day of grace" would be less clear and more confusing. The commissioner disagrees with commenters opposing the notice to consumers as to whether their loan is eligible to be renewed. The notice is being required because the commissioner finds that many pawnbrokers advertise, offer, and promote the renewal or extension of loans while others may not generally permit the renewal of loans. The commissioner also has found that pawnbrokers may permit a customer to renew a loan several times and then when an additional renewal is requested by a consumer who does not have the funds to pay the loan in full the pawnbroker refuses. Where the consumer has complained to the commissioner the circumstances often indicate that the pawnbroker may be attempting to trigger the forfeiture of goods of significant value. The commissioner believes that if this disclosure is given at the time a loan is made the consumer may select a pawnbroker who will renew the loan if that is desired or will have notice that he or she must plan to repay the loan in full on or before the last day of grace or the pledged goods will be lost. The commissioner disagrees with commenters who opposed the signature placed on the pawn ticket at redemption being on the back of the ticket. Placing the signature on the back of the ticket will prevent the pledgor signing in the wrong space when the loan is made and will prevent the person redeeming the goods from being able to look at and copy the signature placed on the ticket at the time the loan is made. The top of the back of the first part is be printed opposite the bottom of the front part. After the second signature is placed on the back of the ticket, a pawnbroker will be able to easily fold over the top of the ticket and position one signature immediately above the other which may make comparisons more accurate. The commissioner agrees with the commenter who suggested that the ticket copy designated for delivery to the local law enforcement agency not have the preprinted text appear on that copy and has added an affirmative statement to that effect. The commissioner does not agree or disagree with a comment asserting that pawn customers rely on a space on pawn tickets currently used for detailing "additional charges." The commissioner believes there is merit in some record systems to having the pawnbroker write the total amount paid by the customer on the ticket. The commissioner chooses not to change the proposed ticket recognizing that pawnbrokers have the option of asking for approval of a modification to the adopted ticket form or of detailing those charges on a receipt given to the consumer. The commissioner disagrees with the commenter who opposed a "prescribed form." The commissioner believes that a prescribed form is desirable in that many pawnbrokers lack the technical and legal expertise to develop and utilize a form that complies with applicable laws and rules. In addition the commissioner believes that consumers will be better served and better able to understand the terms of each pawn loan if all pawnbrokers utilize a prescribed form or approved variation. The commissioner will not stand in opposition to a pawnbroker who develops a better format for his or her specific use or who wants to incorporate contractual language more favorable to the consumer. (ii) DISTRIBUTION OF COPIES Brisbin expressed confusion as to the distribution and filing of pawn ticket copies in connection with computerized records systems. Specific guidance in the rules for computerized systems was requested. Response: The distribution and filing of ticket copies is to be according to these rules except where a exception has been granted in connection with a specific computerized recordkeeping system. Specific guidance relative to exceptions for computerized systems should be handled through the written approval of each system based on the features and capabilities of that system. (B) MEMORANDUM OF EXTENSION (i) PRESCRIBED FORM AND CONTENT Simpson stated opposition to a "prescribed form" for the reasons given relative to the pawn ticket. The commenter also opposed mandating the form be the same size as the pawn ticket. An alternative suggested form was also submitted which addressed two alleged deficiencies in the proposed form; the blanks in lines (b) and (c) in the Amount Due At Redemption portion cannot be filled in at the time the memorandum is initiated and the footnote about daily charges does not address the possibility of a refund if a loan is extended prior to the original maturity date and is subsequently paid in full prior to the original maturity date. Another commenter expressed concern that specifying that the last day of grace was one month plus 60 days after the date of the memorandum could be deemed abusive to the consumer and a hardship on the pawnbroker since the consumer was not required to pay the accrued finance charge up to the date of the memorandum. Response: The commissioner's response relative to "prescribed form" is as given relative to the pawn ticket. The commissioner does not view the fact that the blanks in lines (b) and (c) of the memorandum cannot be filled in at the time of the memorandum as a problem or deficiency. The format proposed was viewed as a "worksheet" the consumer could use or follow to compute the amount the consumer would owe at redemption when the consumer was considering a particular redemption date. The commissioner agrees with the comment relative to the footnote and has changed the prescribed form accordingly. The commenter's suggested form also provided for the incorporation and disclosure of the last maturity date and the new maturity date in the memorandum. The commissioner does not oppose inclusion of that information in a memorandum but does not believe it is helpful to the consumer. The commissioner has removed language specifying the size of the memorandum. The commissioner believes that the size of the form may be dictated by the filing system utilized and that many pawnbrokers will prefer the memorandum be the same size as the pawn ticket. The specification of the last day or grace has been modified based on the comment. (iii) PROCEDURAL DETAILS Konczak wrote extensively expressing the belief that this subparagraph would interfere with the commenters practice of granting informal and verbal extensions of loans not to exceed ten days when requested by the customer and at no charge to the customer. Response: The clause was not intended to affect the commenter's business practice and has been reworded for clarity. (C) RECORD OF PAYMENTS Wilson expressed his opinion that the subparagraph and the four clauses were bureaucratic overkill but such was the norm. Response: The commissioner has experienced problems with pawnbrokers who do not make a written record of payments at the time received. While the text is somewhat detailed, it authorizes a simple, consistent manner of keeping minimal records under various circumstances without mandating any new forms or procedures. (D) WRITTEN RECEIPT Sims and Wood stated that receipts should only be required when requested by a customer. Haley expressed the view that a receipt was appropriate when a partial payment was made on an ongoing balance, but to require a receipt on every renewal or payment in full would be expensive and time consuming. Further, on a renewal the new pawn ticket has been self explanatory for years and if a customer was paying a loan in full the customer's concern was the return of their pledged goods, not a receipt. Logsdon asked what information will be required on the receipt. Mealer urged dropping the proposed language regarding the receipt or alternatively require the posting of a sign in each pawnshop which reads "This establishment is required by the Consumer Credit Commissioner's Office to provide receipts, upon request, at the time of payment, for any amounts paid in connection with a pawn transaction." Mandating unwanted receipts would be a waste of time and resources and contribute to the litter problem. EPPBA requested that the mandatory language concerning giving receipts be changed to "should" and expressed a willingness to give receipts upon request. In addition, the commenter requested clarification as to whether subparagraphs (D)-(J) applied to stores maintaining their records on a computer system. TPBA requested that written receipts be required only upon request stating that most customers did not want one and that unwanted receipts were an unnecessary cost and a waste of paper and natural resources. In addition to urging that receipts only be required upon request, the Langford stated that receipts are now available on that basis. Konczak urged striking the proposal or modifying it to only require receipts upon request of the customer. Fredrick stated that he had only had customers ask for receipts on two occasions in the past year. Response: The commissioner accepts the collective comments of the commenters and revises the language to require receipts upon request with a sign regarding receipts being available, if not given automatically. (E) RECORD OF FORFEITURE AND REDEMPTION OR RENEWAL OPTIONS Wilson asserted that this section lacks the virtue of common sense and that any contract is expired when the limits have run, and unless extended or renewed and attested thereto it has run and is commonly known in law as an executed contract. The commenter "wondered" if he sent the commissioner a bill for $1,000 and if the commissioner did not reply whether the commissioner created a $1,000 liability. The commenter then asserted that "unilateral or mere silence does not create an agreement" and that one does not extend an individual contract by operation of the law. EPPBA requested clarification as to whether the proposed language applied to both manual records system shops and to computerized records shops. The commenter observed that computerized systems automatically exercise the pawnbroker's option to take unredeemed goods as the pawnbroker's property. Konczak asserted that the subparagraph was totally unnecessary, the cost tremendous, made obsolete by computers, the information requested is maintained in computer memory, and that there is absolutely no reason for the time, trouble, and expense of additional paper copies. Response: The subparagraph formally establishes the operating policy of the commissioner and of Texas pawnbrokers generally that has been in effect for more than 20 years. The Act does not provide that the pledged goods automatically become the property of the pawnbroker at the expiration of the grace period on a loan but that such goods "may" become the property of the pawnbroker. Pursuant to that statutory language, the commissioner deems a pawn loan to be an open loan until the pawnbroker lawfully exercises his option to take the unredeemed pledged goods to be his property. The subparagraph is applicable to pawnshop with manual as well as computerized records. The required record of exercise of option may be a computerized record. The comment relative to time, trouble, and expense of additional paper copies is based on a misunderstanding of the proposal in that no additional paper copies are required and the subparagraph simply mandates, in a formal rule, procedures that the commissioner has required for many years. (F) ALPHABETICAL INDEX Wilson wrote "More of the S.O.S." Konczak asserted that the rule is obsolete in today's computer age and that the information on any customer can be looked up alphabetically with the touch of a few computer keys. Response: The first comment does not merit a response. The subparagraph makes formal the informal recordkeeping requirements in existence for over 20 years. The second commenter failed to take into consideration that the proposed subparagraph was written in the context of a manual records system with provisions in the proposal for variations as warranted by particular computerized records systems. Such a system must not only be able to produce the information on a particular pledgor but to produce information on all open loans arranged alphabetically by pledgor's name. (G) NUMERICAL INDEX OF LOANS Wilson wrote "More of the S.O.S." Response: The comment does not merit a response. The subparagraph makes formal the informal recordkeeping requirements in existence for over 20 years. (H) NUMERICAL FILE OF REDEMPTIONS AND RENEWALS Wilson wrote "More of the S.O.S." Response: The comment does not merit a response. The subparagraph makes formal the informal recordkeeping requirements in existence for over 20 years. (I) NOTICE OF LOST PAWN TICKET Wilson wrote "More of the S.O.S." TPBA requested that the commissioner provide an example of a standardized form for this purpose. Response: The first comment does not merit a response. The Act provides that a pawnbroker is bound to refuse to permit redemption of pledged goods upon presentation of a pawn ticket and the appropriate funds when the pawnbroker has received written notice of loss of the pawn ticket from the pledgor. Pledgors often give oral notice of loss of a pawn ticket and pawnbrokers will generally mark their records to indicate the loss. Such a written record has been construed as a record under the Act by the commissioner and the commissioner has bound pawnbrokers who made such a record. The commissioner believes it behooves responsible, ethical pawnbrokers to inform pledgors who have lost their pawn tickets of the appropriate action to protect their pledged goods. The commissioner will provide a suggested form for this purpose. (J) POWER OF ATTORNEY Wilson wrote "More of the S.O.S." EPPBA suggested that the subparagraph be changed to provide that a power of attorney may be attached to the fourth part of the pawn ticket. TPBA proposed that filing of powers of attorney be permitted in a manner of the pawnbroker's choosing that made them readily available for inspection. Langford stated that he currently has a file for "miscellaneous items" which works very well. Wood stated that the power of attorney should be stapled to the lost pawn ticket statement. Response: The first comment does not merit a response. The commissioner agrees generally with the other commenters and adopts the suggestion of the third commenter which will accommodate all. (2) TITLED GOODS Wilson wrote "This one is a short and sweet `DUPLICITY.'" Response: The term "duplicity" does not appear to relate to the subject. (C) TITLED GOODS DOCUMENTS FILE TPBA requested in lieu of the special file proposed that the pawnbroker be permitted to establish a filing method where documents would be readily available for inspection. Langford asserted that currently his "miscellaneous items" file works very well for this. Response: The commissioner agrees with the commenters and modifies the language to authorize retention of documents in a manner of the pawnbroker's choice which makes the documents readily identifiable and available for examination. (D) PROHIBITED FEES Striking the entire subparagraph was proposed by TPBA as duplicative of the Pawnshop Act, Articles 51.12 and 51.16(a)(6). Langford stated that "This is already covered." Response: The commissioner agrees with the commenters and struck the entire subparagraph. (3) STANDARDS FOR DESCRIBING GOODS Trial, Mealer, and Konczak called for deletion of all references to "purchases."(17B(r)) Wilson wrote "This has been going on for years." Response: The commissioner deleted references to "purchases" for reasons previously stated. The second comment does not merit a response. (B) JEWELRY Konczak suggested that the rule should be redrafted to make it clear that "weight" referred to the entire piece of jewelry including both metal and stone(s). Response: The commissioner agrees with the commenter and modified the wording accordingly. (D) REQUIRED SEQUENCE Trial, Mealer, and Konczak called for deletion of all references to "purchases"(17b(r)) or deletion of the entire subparagraph. EPPBA proposed deletion of the subparagraph asserting that compliance would be difficult especially for pawnbrokers using handwritten records and that the commissioner should not have the right to tell pawnbrokers how to write pawn tickets. TPBA objected to this subparagraph at this time due to the many unanswered questions about electronic reporting to law enforcement agencies. Wood stated that, based on many years experience, a pawnbroker could not get employees to follow a specific sequence due to their different thought processes. Response: The commissioner determined the subparagraph to be premature and struck it. (4) LOST OR DAMAGED GOODS DOCUMENTATION FILE Smock questioned whether lost or damaged goods was a major industry problem and observed that in seven years of doing business he had never lost a pledged item or had one damaged. Anglin expressed the view that the five categories of information required by the proposed rule would be difficult to keep in the "information space" in pawnbroker's computerized record keeping systems and that pawnbrokers maintaining handwritten records would really have a problem recording the required information. Wilson wrote "To this ad infinitum topic, I would say 'if it works, don't fix it;' common sense tells you if there is a disagreement the person would complain to the O.C.C." Owens objected to the record keeping saying we have enough files as it is. EPPBA expressed the view that "the commissioner should not get involved in this ... if a compromise cannot be reached between a customer and a pawnbroker, at that time, the commissioner may be contacted." TPBA proposed the elimination of the paragraph expressing belief that the Act, Article 51.16(a)(5) covered the matter adequately and asserting that expanding the Act with the paragraph would create costly and unnecessary paperwork. Langford stated that he did not see any benefit for this paragraph stating that if the pawnbroker did not make a fair and equitable solution for the customer the customer can then contact the commissioner's office. Jezek asserts that he has satisfied every customer whose goods were lost or damaged during his seven years in business, that having a file will not change that, and the paragraph would only create additional work which small business owners do not have enough time for. Santoscoy asked why the file was needed, why the information was required if the matter was satisfactorily resolved with the customer, and could the information potentially affect the pawnshop license. The commenter also expressed concern about the multiplicity of specific files required by the proposed rules citing the fear of many pawnbrokers that they would make a mistake and fail to comply with all requirements. Response: Complaints about pawnbrokers who have not satisfactorily replaced lost goods or repaired damaged goods is the second major category of complaints against pawnbrokers. Texas Civil Statutes, Article 5069-51.16(a)(5) makes the commissioner responsible to approve or reject all replacements of goods. While the commissioner has and will continue to permit pawnbrokers to resolve problems with lost or damaged goods without notice to the commissioner and without routine intervention on the part of the commissioner, the statute clearly gives the commissioner certain responsibilities that go beyond responding to consumer complaints of lack of satisfaction with the pawnbroker. The commissioner generally disagrees with the commenters who suggest that the commissioner's position should reflect the status quo and that the commissioner should only be concerned with complaints he receives. The number and nature of losses and damage to pledged goods and the resolution of such losses and damages is clearly and closely associated with the qualifications for license. The commissioner believes it appropriate to require each pawnbroker to maintain, for examination, the nominal records specified on each instance of loss or damage to pledged goods. The text has been modified to avoid the requirement of a special file for this information. The paragraph does not require any new record per se and only requires the recording of basic facts relative to the incident and retention of same in a readily identifiable and accessible manner. (5) RECORD OF GOODS IDENTIFIED AS STOLEN Mealer urged insertion of "if reasonably determinable" following "the true owner of the goods." Wilson wrote "You can find these records in the Court House after prosecution." EPPBA stated that the records proposed to be required by the pawnbroker were not necessary, that pawnbrokers usually do not learn the identity of the true owner of stolen goods, that police records should be sufficient, and that the words "terms and conditions" in the proposal were ludicrous as stolen goods were turned over to the police. TPBA stated that information required in the proposed paragraph is often time unavailable to the pawnbroker and suggesting that the only required information be the number of items and the dollar amount of loans seized per year by law enforcement. Jezek asserted that the information is already in his computer and that creation of another file will only create additional work for which small business owners do not have time. Wood declared that to create a log of stolen merchandise is unworkable. The commenter continued saying that the police officer gives the pawnbroker a property receipt whenever an item of stolen property is picked up, that a right-to-possession hearing is scheduled, and a person attending the hearing may or may not learn the identity of the owner of the property. The commenter asserted that terms under which the pawnbroker releases the property is always the same, i.e. an armed individual, representing the city, takes the item away from the pawnbroker. Konczak urged insertion of "if reasonably determinable" after "the true owner of the goods." The commenter also requested clarification of the word "determination" and specifically asked if it referred to a conviction or only a charge. He also asked the meaning of "terms and conditions." The following comments were referenced to this paragraph and to sec.85.21(a)(7)(F). Cervenka stated that these provisions relate to law enforcement issues and should be resolved by trained professionals, that communication between the commissioner's office and law enforcement officials was needed, and that these provisions would be overkill. He further asserted that less than one-half of one percent of merchandise passing through a pawnshop is stolen. Response: The commissioner believes it is important from a regulatory viewpoint to be able during an examination to identify and review the various circumstances under which a pawnshop was found to be in possession of goods not lawfully possessed by a pledgor. The wording has been modified so that information required is known to the pawnbroker in all instances. Comments about standard terms and conditions of relinquishing property reflected specific local police policies and procedures which are not applicable statewide. The wording regarding terms and conditions under which the pawnbroker relinquished the goods have been expanded to show as examples common terms and conditions that may apply in various jurisdictions. The proposed recordkeeping is not contingent on a person being charged on convicted therefore records "in the court house" are not sufficient for the purpose stated. If, as one commenter asserted, the information is already in his computer, the paragraph does not require any additional work by the pawnbroker provided the information is readily identifiable and accessible. The paragraph is not a law enforcement issue per se but an administrative matter relative to the operation of each pawnshop. Pawnbrokers assertions concerning the nominal amount of stolen merchandise identified in pawnshops indicate that the rule will not require any significant effort on the part of the pawnbroker. The examination of the records will permit the commissioner to validate the claims of pawnbrokers as to the insignificance of stolen property and to, if applicable, address situations where particular pawnbrokers are found to receive a volume of stolen property that greatly exceeds the norm. (6) ACCOUNTING RECORDS AND SYSTEMS Haley asked: if the accounting control system was for him to look after his business and who sets the rules for accounting principles. The commenter then stated that these items are broadly confusing and seemed to be of more interest to the owner rather than the examiner. Mealer asserted that Article 51.09(a) specifies the books and records to be kept by a licensee and that he finds no statutory delegation to the commissioner to amend Article 51.09(a). The commenter asserts a 17B(r) objection and urges deletion of the paragraph or amendment to specify exactly what accounting system, directly related to pawn transactions, would be required. Wilson asserted that this proposal as well as the next paragraph is a redundancy. EPPBA opined that the commissioner has no right to tell pawnbrokers how to keep their books and that the commissioner is not entitled to this information. The commenter expressed a lack of understanding of the language "that can be relied upon to produce accurate financial information and to safeguard assets." The commenter then acknowledged that pawnbrokers are required to show that they have enough assets to meet their respective asset requirements, although some have a zero requirement, and that they should not have to do any more than that. Alternative language was proposed by commenter TPBA as follows: "Each pawnbroker shall establish and maintain an internal accounting control system that can be relied upon to produce accurate financial information and to safeguard assets." The following comments were referenced to both this paragraph and paragraph (7) on computerized records. WFAPB stated that the proposed requirement would impose an undue hardship on pawnbrokers. Comments indicated that pawnbrokers believed the proposal would require reports certified by a certified public accountant. They expressed the view that current records were adequate and that some of the information would be a breach of pawnbroker privacy. Santoscoy expressed concern that the proposal would require the continuing retention of an accountant preparing monthly financial statements at a cost of perhaps $500 per month. Response: The commenter referencing Article 51.09(a) is apparently ignoring Article 51.08(b) and apparently other commenters are ignoring that provision which clearly, though indirectly, requires that a pawnbroker maintain books and records "using generally accepted accounting principles" and has done so since 1981. Such principles are established by the Financial Accounting Standards Board. While the paragraph has been changed to remove the reference to such principles, the Act requires adherence. A pawnbroker could conceivably obtain published information on accounting principles and set up a record system without consultation with a certified public accountant, however, for purposes of business management many pawnbrokers already utilize the services of CPA's. It behooves any business person to consult with an accountant to ensure compliance with financial and tax laws and to have records that accurately inform the owner of the financial condition of the business at all times. The paragraph does not impose an undue hardship on pawnbrokers in that it simply supplements the Act. The paragraph does not require continued use of a CPA to produce certified or audited statements. The commissioner disagrees with the commenter who asserts that there is redundancy in paragraphs (6) and (7). The commissioner reminds pawnbrokers that the Act gives the commissioner or his duly authorized representatives unlimited access to all records relating to the regulated business. The commissioner agrees with the commenter suggesting alternative language and adopts same with the retention of the start up period for compliance included in the proposal. (7) RECORDS MAINTAINED ON ELECTRONIC DATA PROCESSING (EDP) SYSTEMS Sims asked if the state was really interested in what software a small business utilizes and who would review software for the commissioner's approval. The commenter further stated that if a specific type of software would benefit the state the commissioner might have a case but that the commenter had a problem with spending state dollars on the micro-management of businesses that don't need the state's intervention. Wilson asked how many systems have been filed with and approved by the commissioner. Santoscoy expressed concern that although the proposed rules did not require computerization some of his members fear that computerization will be required in the future. They like small businesses that know their customers by name and not by numbers. Response: From a regulatory viewpoint the state is reasonably interested in the computer software used to compile and retain records of regulated business transactions. The consumer protection section of the commissioner's office has reviewed and approved computerized recordkeeping systems proposed by licensees and vendors of software to licensees for more than 20 years to ensure that the commissioner's examiners are able to carry out their statutory duty to examine a licensee's records for compliance with applicable statutes and rules. The commissioner does not believe this review constitutes micro-management of business. The commissioner does not believe this is the appropriate place to discuss systems previously filed with and approved by the commissioner. The third comment does not seem to require a response as it calls for speculation. (B) FILING OF AMENDMENTS TPBA observed that a pawnbroker may get many little upgrades in a pawnshop system in the course of a year, many of which have no bearing on the pawn loan program, and suggested that the last sentence be changed to read "All substantial changes which constitute upgrades of a system shall be filed within 14 days after the close of each calendar year." Simpson proposed deletion of the second sentence suggesting that if a system is upgraded and continues to provide the information on which the commissioner originally approved the system the administrative burden of filing upgrades was unnecessary. Response: The commissioner agrees with both commenters and adopts the second commenter's proposed deletion. (E) ASSOCIATED HARD COPY RECORDS EPPBA requested clarification of the meaning of the subparagraph. Response: Upon reconsideration the commissioner concluded that the subparagraph was not essential and struck it. (F) REPORTING PROPERTY TRANSACTIONS TO LAW ENFORCEMENT Trial stated that he has been working with local law enforcement in this area and has a system working but that compatibility problems with different pawn systems and among law enforcement systems make such report not economically feasible. Mealer asserts a 17B(r) objection as to purchased goods. Commenter expressed agreement with the commissioner's premise for the proposal but found it to be discriminatory as between pawnbrokers using computers and those who do not because of the potential expense to pawnbrokers to convert or replace existing, approved computer systems in order to accomplish electronic reporting. The commenter urged deletion of the proposal until an electronic reporting process can be standardized for every licensed pawnshop and urged continued efforts to develop such a process through voluntary collaboration by the commissioner, pawnbrokers, software vendors, and interested law enforcement agencies. Owens asserted that electronic reporting just will not work and that the City of Dallas had told pawnbrokers that they did not have the money or manpower to do programming necessary to be compatible with all the numerous systems just around Dallas. TPBA expressed no philosophical opposition to electronic reporting but cited knowledge of abuses by law enforcement agencies or personnel in other states and expressed a desire to protect the rights and privacy of customers. The commenter proposed that only descriptions of property acquired by the pawnshop be transmitted to law enforcement agencies who, if they identified stolen property, could then obtain the name and other information on the person from whom the property was obtained. Concern was expressed that law enforcement agencies or personnel would treat pawnbrokers differently depending on whether the pawnbroker had handwritten records or computerized records. WFAPB does not oppose reporting of purchased property but complained of the lack of mandatory reporting by persons in business as garage sales, flea markets, antique stores, buy and sell shops, auto dealers. auto repair shops, welding shops, tire dealers, jewelry stores, coin shops, book shops, etc. Response: The commissioner has deleted references to purchased goods for reasons previously stated. The commissioner believes that the comments concerning the problems of incompatibility are unfounded based on previous information that the commissioner has received. The commissioner believes that the cost per pawnshop to modify software to produce a standardized report of transactions to law enforcement is not substantial. The information related concerning the City of Dallas is not consistent with previous information received from Dallas Police Department personnel. (G) SYSTEM ACCESS AND CONTROL TPBA stated that "We feel that this is just common sense. We would like this rule stricken on the grounds that common sense cannot be dictated by the rule process." Response: The commissioner believes quite strongly that EDP systems which are not designed with adequate protections against misuse cannot be accepted and the commissioner will hold the licensee responsible for the integrity of data related to regulated transactions. The suggestion of the commenter that the subject matter is a common sense issue that cannot the dictated by rule is a trite, oversimplification that suggests a view that common sense is universally held. The commissioner does not believe that common sense is universally held by all systems designers and pawnbrokers and that a rule can be effective for its obvious purpose, however, the commissioner strikes the subparagraph. (8) RECORDS RETENTION EPPBA and Wood objected to the possibility that the commissioner could require books and records be made available for inspection at any time other than normal business hours. Response: The commissioner has revised the language to remove the objection. (9) CONSUMER CREDIT COMMISSIONER FILE Konczak observed that no time limits are established for retention of documents in this or other files established by the proposal and suggested an "audit to audit" limit on retention. Response: The commissioner believes the statutory provisions on record retention are applicable to most records required by the proposal, however, information required to be retained in the consumer credit commissioner file will be useful and valuable to pawnbrokers for a period of time that is longer than "audit to audit." The commissioner does not believe it appropriate to establish a retention period for this file at this time and will not object to the discard of documents when they obviously are of no further value to the pawnbroker. SECTION 85.31 CRIME VICTIM ASSISTANCE Mealer objected to the proposal as making unreasonable demands on the resources of a licensee to be made a conscripted branch of law enforcement. Commenter points out that the Article 51.17B(q) uses the word "permit" rather than "require" and suggests that the legislature did not intend to mandate that the pawnbroker assist crime victims. The commenter suggested rejection of the entire section or revision to clearly provide that any action by the pawnbroker was voluntary. The commenter recommended that the commissioner provide pawnbrokers with a pamphlet to be distributed to inquiring victims which included explanation of the importance of timely and accurate reports of thefts to law enforcement agencies, the responsibilities of pawnbrokers to report property transactions to law enforcement agencies, and the legal procedure for recovering stolen property that is found in the possession of a pawnshop. Wilson simply wrote "Let the Police or the Pawn Detail do their jobs. " Owens stated that this is really not needed, we have enough files, victims do not usually have any numbers on anything, and this would be a complete waste of time. McGee urged the commissioner to let the police handle this. He stated that when victims come into his shop now he does check through his computer to see if he has the stolen item. He asserts that "These people will run you nuts looking for stolen stuff." EPPBA declared "We are not the police! " Commenter asserted that the proposed section created a negative image of pawnbrokers in the eyes of the public. Commenter suggested that the police should continue to do their job and the pawnbrokers would continue to cooperate with the police. Charping stated that the law enforcement agency that recorded the crime had the experience to investigate the offense, pawnbroker's records were already open to the police, the victim is not protected by investigating his own crime, and criminal investigations are best left to those who are trained to handle the job. Langford stated that he did not feel the section would be of drastic help to a crime victim or the consumer. He also asserted that the section would cost the pawnbroker an astronomical amount of resources and as proven year after year the amount of stolen property (in pawnshops) is minimal. Wood expressed belief that the proposed section could lead to law enforcement personnel sending victims to pawnshops, law enforcement personnel making unwarranted remarks that will lead victims to believe they are likely to find stolen property in pawnshops, and that victims so lead will cause confrontations and disruption of business in pawnshops. The commenter also expressed concern about the term "could be the property of the victim" and what sort of burden would be imposed on a pawnbroker faced with a report of stolen property which was not described sufficiently to identify the item stolen. Simpson urged an additional subsection to read as follows: "A pawnbroker who uses his good faith efforts to comply with the subsections (b) and (c) shall not be subject to fines or penalties under Texas Civil Statutes, Article 5069-51.01 et seq or liable to any third party for a failure to meet all of the technical requirements in those subsections, and evidence of failure shall not be admissible in any subsequent proceeding concerning an alleged owner's right to own or possess the subject property or damages from the loss of such property." CVPBA urged striking the entire section based on pawnbrokers current recordkeeping requirements and close rapport with local law enforcement. Brisbin stated that he opposed the section entirely and went into a dissertation covering current reporting to police, lack of similar requirements on others persons and businesses buying and selling used merchandise, inadequate property descriptive information from victims now seeking assistance who the pawnbroker may now try to help, limited extent of stolen property found in pawnshops today, procedures followed now to avoid taking stolen property, and the desire to avoid requiring a sales receipt on everything taken in pawn and making their loan customers feel like the customer must prove that the merchandise is his or hers and is not stolen. Konczak urged deletion as an unreasonable demand on the pawnbroker or alternatively making it permissive rather than mandatory. Commenter urged some alternative to mandating compliance with law enforcement instructions citing witnessing numerous occasions where police officers gave unlawful and unconstitutional instructions. Cervenka asserted that this section may be the most poorly thought through of all the new rules. Commenter made general comments about pawnbrokers not being trained to do police work, reports of finding stolen property should only be to the police, and generally that pawnbrokers should cooperate with the police but each should handle their respective jobs. French expressed he had no objection to giving victims information upon presentation of a report but felt that it was unnecessary work on the part of the pawnshop except for prompt reporting to police of the finding of stolen property. Fredrick stated that pawnbrokers report property transactions to the local police and that it made no sense for the pawnbroker to be doing the job of the police. Response: Many of the commenters seem to be unaware of the statutory provisions concerning crime victim assistance and the directive to the commissioner to adopt rules on this subject even though it was cited in the proposal. Even more are apparently unaware that the statutory provision was adopted in compromise to avoid legislation that would have required public display of pledged goods so that crime victims could look for their missing property. Although the statutory provision uses the term "request" rather than "require", the commissioner was present at the compromise and believes that this was not intended to be a substantive distinction. The commissioner further finds that if, as has been suggested by one commenter, the section made crime victim assistance absolutely voluntary on the part of pawnbrokers it would constitute an evasion of the legislative intent and to strike the section would be a dereliction of duty. The commissioner believes the forecast of an avalanche of crime victims upon pawnbrokers is without merit as the statute has been in effect for almost three years with negligible effect on pawnbrokers. Other fears expressed by commenters concerning the possible future actions of police and victims will not be caused by the rule but if they arise they are matters of a local nature to be dealt with locally. The commissioner will consider development of a pamphlet for the benefit of victims if future events seem to warrant it. This does not inhibit the pawnbrokers from development of such information. The commissioner lacks the authority to adopt the broad hold harmless provision suggested by a commenter. The commissioner has agreed with the concerns of some commenters as to the specificity of stolen property descriptions, the time within which pawnbrokers are to respond, and recordkeeping and has modified the text to accommodate those concerns. (a) VICTIM'S REQUEST FOR ASSISTANCE TPBA requested that victim or victim's personal representative be required to present their request in person. CVPBA stated that the pawn ticket copy furnished the police department should be adequate proof of property taken in by a pawnshop due to the sufficient description and that the local police are satisfied with the current arrangement. Commenter also expressed the belief that 90% of the people that pawn merchandise do not have personal records with serial numbers and other identifying information of the goods. Response: The commissioner finds that the first commenter's request is consistent with the proposed legislation that resulted in the related statutory provisions and revises the language accordingly. The second comment is inconsistent with the statutory requirements. (b) SEARCH BY PAWNBROKER Logsdon stated that a specific definition of "second business day" is required, that some specific identification of stolen property must be contained in the crime report, and asked how one determines "property that might be, etc.?" The commenter also suggested that a minimum dollar value should be established. Dziedzic stated that he is concerned that the proposed subsection leaves a loop hole for local police departments to transfer time consuming record searches to pawn shops which could equate to countless man hours. TPBA requested that the required search be limited to items with serial numbers or of distinct or unique character stating that a real burden could be forced on pawnbrokers if they were required to such for items commonly found in pawnshops but which have such general descriptions that the victim's item, if in the pawnshop, cannot be distinguished from other like items. Commenter also requested that specific time requirements be replace with "in a timely manner. " CVPBA asked how a pawnbroker is supposed to identify stolen property without sufficient identification of the property. As to subsections (b) and (c), WFAPB stated that pawnbrokers should not have to act as policeman on a one to one basis. Commenter stated that pawnbroker already does more to assist in controlling crime by providing copies of pawn tickets and buy tickets to law enforcement and asked if the pawnbroker is to do police work as well as the commissioner's work while they are getting paid with the pawnbroker's tax dollars. Another commenter expressed concern that pawnbrokers would have difficulty complying with the proposed rule because victims would not be able to provide sufficiently specific descriptions of their stolen property to permit identification. Response: The commissioner has recognized the validity of the comments relative to descriptions of property and has revised the wording to clarify the responsibility of the pawnbroker. The commissioner does not believe that a dollar value of property should be incorporated in the rule due to the further belief that victims will not pursue property of insignificant value. The commissioner disagrees with removing the specificity of the response times for pawnbrokers believing that pawnbrokers will be better served when a specific, reasonable response time is provided by rule and all parties know what that time is. Victim's definition of "timely manner" would in all likelihood differ from that of a pawnbroker and create friction which many commenters obviously want to avoid. Response times have been extended due to comments. (c) PAWNBROKER'S REPORTS OF FINDINGS Logsdon made some general comments about this subsection to the effect that he expected confrontations between victims and pawn brokers and that the rule amounted to rabbit hunting with an elephant rifle. Dziedzic expressed the view that this could turn into a paperwork nightmare and that it might be necessary to hire a person specifically to handle stolen reports. He expressed that the "90 day hold period on loans" was sufficient for any police agency to identify stolen property in a pawnshop and that he felt he could cope with searches of "buys" if he didn't have to do duplicate work with the police on loans. TPBA asserted that the proposed time requirements place an unreasonable burden upon pawnbrokers and they would find it difficult to remain in compliance. Commenter also requested that specific time requirements be replaced with "in a timely manner." CVPBA stated that sometimes it is practically impossible during the course of a busy day to comply with the four-hour notification requirement. Response: The comments have appeared under preceding sections and have been responded to previously except to observe that there is no such thing as a "90 day hold period on loans." (d) PAWNBROKER'S RIGHT TO PRIVACY Commenter asked how a victim would be able to identify his property without looking at pledged goods. Response: The purpose of the subsection was to clearly establish that a pawnbroker was not required to permit victims to browse through pledged goods. The subsection does not prohibit any action permitted by the pawnbroker. (e) CRIME VICTIM ASSISTANCE FILE; RECORDKEEPING CVPBA suggested that the requirement was just another unnecessary burden on the pawnbroker. Smock and Anglin asserted that pawnbrokers do not need to maintain a file for this. One observed that the information was available in his computer system as well as those of law enforcement agencies. Haley observed that this subsection plus other files required in the proposal amounted to seven separate files that will be of little benefit because of the low incidence of the activities these files relate to. Dziedzic stated that the proposal to require a file and documentation will surely cost every pawnbroker thousands of dollars. He suggested that pawnbrokers should be able to charge a fee of $20 per hour for searches. TPBA requested that the proposed subsection be deleted expressing belief that it would require every pawnshop to have a copy machine in it. Commenter asserted that keeping the records does not accomplish anything and that a copy of the police seizure form is sufficient to show that an item was recovered. Jezek asserted that maintaining a file like this would serve no useful purpose. He also expressed the understanding the purpose of the file was for pawnbrokers to check the file when considering making a new loan to see if a proposed pledge had been reported stolen and that such a procedure was too burdensome. Response: The original proposal failed to explicitly indicate that the basic recordkeeping involved the retention of the offense report delivered to the pawnbroker. There is obviously no significant cost associated with retention. Retention of the records and the information required to be written by the pawnbroker will provide the pawnbroker and the commissioner factual information on which to base any amendments to this section or to recommend any appropriate statutory revision. The records will also provide information to pawnbrokers that they may use to demonstrate the extent of their service to their community in this area and may provide factual evidence regarding the amount of stolen property that is found in pawnshops and deemed by pawnbrokers to be insignificant. SECTION 85.41 SECURITY OF PERSONS AND PLEDGED GOODS Trial stated that how protection of pledged goods is accomplished must not be mandated by rule or in any particular fashion and that the section must be deleted. Charping and Whitaker stated that the insurance proposed to be required would be difficult or impossible to obtain. McCommas suggested that the commissioner may be proposing insurance that insurors will not provide or at a premium highly detrimental to the profitability of a pawnshop. The commenter further suggested that unless the commissioner could mandate the writing of the proposed insurance at a reasonable premium he should not adopt a rule on insurance. WFAPB stated that their insurance carriers have stated that they will not provide the proposed level of coverage. Brisbin objected to subsections (a)- (d) asserting that statutory provisions already establish pawnbroker's responsibility to the pledgor and his pawned items. Counts stated that the commissioner would be denying consumers loans if the commissioner required a pawnbroker to assume a liability of perhaps $100,000 if a person pledged merchandise of such a value on a $2,000 loan. Santoscoy stated that most pawnbrokers would like to have insurance but that many insurance companies would refuse to quote a premium when they learned the business was a pawnshop. Commenter also stated that several members were concerned about insurance as it related to safes. He stated a belief that the requirements for insurance and for safes should be interrelated and exclusionary. Pace suggested that the requirement for insurance to be obtained from "companies authorized to do business in Texas" be changed to "companies with an A. M. Best Rating of A or better." Commenter suggested that a significant amount of insurance is currently being provided to pawnbrokers by financially sound non-admitted carriers and the rule as proposed would severely restrict the market. Response: The commissioner disagrees with the commenters who urged striking the section and insisted that the statutory provisions were adequate. The commissioner has specific statutory duties concerning insurance that are appropriately carried out by rulemaking and the other areas are subject to the commissioner's general rulemaking authority. Responses relative to insurance will follow. The commissioner agrees with the comment that the proposal restricting insurers to those authorized to do business in Texas will disrupt significant amounts of insurance currently being provided. The commissioner agrees with the commenters' suggestion that a surplus liens company with an A. M. Best Rating of A or better would be a suitable alternative. (a) GENERAL LIABILITY INSURANCE Smock wrote that he "Approved of" the proposal. Logsdon just asked questions: whether the coverage applied to any person on the premises, if so, what is the availability and cost, and what total coverage does $500,000 per occurrence relate to and at what cost. Owens stated that this may be too costly for some shop owners and may run some of them out of business. McGee asked why pawnbrokers need $500,000 liability insurance asserting that he has been in business for 32 years and has never been sued for anything. Dziedzic stated that the proposed insurance requirement is obtainable and does not present a problem for his business. EPPBA stated opposition to this being a rule. Walters submitted a copy of part of her insurance policy showing coverage in excess of that proposed to be required. TPBA wrote "We feel that the pawnbroker be given options concerning liability insurance. That he has coverage to equal that of his net assets, or be able to show financial responsibility that would allow for the protection of his customers. We are aware of instances where the pawnbroker has made a determined effort to obtain liability insurance and was unable to do so. Provisions should be made for such cases." Nuckols urged reconsideration of the requirement for $500,000 coverage citing demonstration of fiscal responsibility by proving $150,000 assets when obtaining a license. The commenter also suggested authorizing some type of alternate proof of financial responsibility and urged that the commissioner amend the subsection to require liability insurance in an amount equal to the pawnbroker's net asset requirement. CVPBA stated there was no definition of "occurence." Response: The commissioner believes that the proposed coverage represents the minimal financial responsibility in this area and carries out the commissioner's statutory duty to require general liability insurance and to assure that pawnbrokers meet the financial responsibility requirement for licensing. Surveys being done as part of the pawnshop examination process indicate many pawnbrokers carry this amount of protection or more although the examiners report pawnbrokers with no coverage as is apparently the case with the fourth commenter. Cost figures cited by examiners would not put any pawnbroker out of business. Although one commenter stated that he knew of instances where a person could not obtain insurance for a pawnshop, no pawnbroker submitted a comment as to his or her inability to obtain insurance. While commenters have suggested that alternative methods of meeting financial responsibility be authorized, no specific proposal has been put forward and the commissioner declines to attempt to develop one in this adoption process. The commissioner has been unable to conceive of any basis for correlating the amount of liability insurance required to a pawnbroker's net asset requirement associated with a particular shop. The proposal to make the insurance amount equal to the net asset requirement is ludicrous because numerous licenses exist where the net asset requirement is zero and the Act permits the transfer of those licenses without assets to a new owner who receives the license with the zero requirement. The commissioner believe that it is not appropriate to define "occurence" in these rules but recognizes the term to mean an incident which gives rise to a financial liability. (b) FIRE INSURANCE Smock and Anglin stated that the proposed amount of insurance was too much, would be difficult to obtain, and too costly. Haley asked such questions as what the insurance would cost, who would provide it, is it to be mandated without compensation to the pawnbroker, and in light of the proposal "what is the purpose of 'financial stability' as provided by that part of our license for?" Logsdon asked from whom and at what cost would this coverage be obtained and declared that there is a definite limit as to the expense load that a shop can handle. Owens stated that most of his loans on jewelry are kept in a safe, he does not know of any company that will insure beyond the loan value, and he does not think a company can be found that will provide the amount of coverage proposed. McGee expressed doubt that insurance companies would provide the level of insurance proposed and asserted that it is hard to find a company that will write any type of insurance for a pawnshop. Dziedzic explained that over 90% of his loans were on jewelry and would, in the event of fire, be protected by safes with a higher rating than is required in the proposed rules. He stated that he has inquired of three named insurance companies about coverage at the level proposed and had been told that they could not provide it. He said that he had been advised that normal fire insurance excludes jewelry. Furr stated that subsection contradicts sec.85.51(b) last sentence. Walters urged consideration of reducing the proposed coverage amount citing her current coverage and referring the commissioner to her agent as a source of information. TPBA and Nuckols urged reduction in the amount of insurance to one and one-half times the amount financed on open loans. Commenter cites industry statistics that show that unredeemed items generate less than 50% markup. Langford stated that if the commissioner produced insurance as proposed that was not cost prohibitive he would gladly buy it, but that he had been unable to find any insurance with this type of coverage. Jezek stated that the proposed amount of insurance was excessive in his circumstances because a large percentage of his loans were secured by jewelry and were protected by a fireproof safe and consideration should be given to such pawnbrokers. Simpson stated that the amount of coverage is excessive and should be lowered and suggests an alternative to the second sentence as follows: "Notwithstanding the above, a pawnbroker who furnishes the commissioner with credible evidence of available resources other than fire insurance to protect pledgors may carry a lesser amount. If the commissioner questions the resources indicated in the information furnished by the pawnbroker, commissioner may require certification by an independent certified public accountant as to the accuracy of such information concerning available resources." CVPBA expressed belief that lack of availability and/or excessive cost made the proposal unreasonable and suggested that a pawnbroker would sometimes loan up to 60% of the value of a gun. Brisbin stated that more research and documentation needs to be done as to whether this insurance can be obtained. Cervenka urged fire insurance only be required in an amount equal to the amount financed citing commenter's loan to value ratios and the commissioner's presumption of a total loss including jewelry protected in fire proof safes. French stated that insurance on jewelry is cost prohibitive from most carriers. Counts suggested that the common coverage of one and one-half times the amount financed should be adequate unless experience dictates otherwise. Santoscoy expressed concern as to the amount of insurance being proposed and stated that on some repeat loans a pawnbroker would loan the full resale value of the pledged goods and never would the value of the goods exceed one and one-half to two times the amount loaned. Whitaker stated that based on his experience as an insurance agent that insurance was often unavailable especially in small towns, that insurance companies did not know the pawn business and were therefore leery of liability, but that the rule needed to be more specific to be certain that bailee coverage was included in policies. Gregory, who in 1986-1987 put together an insurance program for the Texas Pawn Brokers Association and sells insurance to pawnbrokers, stated that the standard insurance market will not write property insurance for some pawnshops. She also stated that her agency represents 40 standard companies who will not write for pawnbrokers and that her only source for property insurance is American Empire, a surplus lines company with an A+ rating. In response to questions the commenter indicated that underwriters consider such factors as location, alarm system, and age of building. She offered to obtain and provide underwriting guidelines from the carrier (but this was subsequently denied as proprietary information). Commenter also stated that it was harder to place insurance for a pawnbroker in a large city and that the carrier preferred small towns. They do not obtain financial information on pawnbrokers who apply for insurance. Responses: Based on the various complaints concerning the amount of insurance proposed, the commissioner has reduced the amount to that provided under the insurance program developed for the Texas Pawn Brokers Association. The Act mandates fire insurance in an amount determined by the commissioner. There are no exceptions in the statute. The commissioner believes this to be a reasonable amount of insurance because the amount is that provided in an insurance program developed by and for pawnbrokers and purchased by large numbers of pawnbrokers. There is no evidence that the required amount of insurance is unobtainable and no evidence that the cost is unreasonable. The statute does not provide additional compensation for a pawnbroker who obtains required insurance and does not attempt to correlate "financial stability" (sic) (a licensing requirement) directly with insurance. The commissioner adopts commenter's suggested language for showing alternative resources other than fire insurance to protect pledgors which may include safe protection. The commissioner disagrees with the comment regarding contradiction. Neither the requirement of an amount of fire insurance which is determined by the amount of the loans secured by insured property nor the amount of any loan is intended to have any direct and absolute correlation with determining the value of pledged goods which have been lost or damaged while in the possession of a pawnbroker. (c) ALARM SYSTEMS Smock "approved of" the proposed subsection. Mealer urged rejection of the subsection noting no authority to amend or expand the statutory provision relating to alarm systems. The commenter also makes a broad and general assertion that there are no monitoring facilities for alarm systems to signal via radio waves when no telephone line connection exists. Owens suggests that the subsection be amended to provide that the alarm company "calls a person in charge" when wires are cut or power is lost. McGee stated that alarm system or not there is no way to completely burglar proof a building and then described his 32 year experience of only "one little breakin" 28 years ago. Dziedzic wrote that he switched to armed guards in lieu of a typical alarm system in 1980 and has avoided the expenses associated with burglaries and false alarms that they had suffered previously (there have been no attempted breakins since 1980). Guards do have cellular phones for backup. Furr provided a brief statement of his education in electrical engineering and work experience in telecommunications and then provided cost information that had been quoted to him by two alarm system companies in his city to provide redundant or standby systems as follows: 1. National Guardian-radio-battery package which networks with a Motorola/IBM communication system. $2,000 installed cost $25/month additional monitoring fee 2. Sonitrol-a cellular radio-battery package which networks with the telephone company. $2,000-$3,000 to upgrade a system over three years old and add the cellular radio-battery package $700 to add cellular radio-battery package to a newer system $30/month additional monitoring fee $15/month cellular line fee TPBA requested that the subsection be rejected citing the specificity of Article 51.17B(e). Commenter stated that the type alarm proposed was very expensive, that outdoor alarms were prone to false alarms, and that an adequately fenced outdoor storage area was sufficient because items kept outdoors were not the type items typically taken by burglars. Langford observed that he had tried several alarm systems since he had been in the business and updated and improved whenever available but that a telephone connection at all times was cost prohibitive. McCommas stated that there are many areas of the state where the proposed type of alarm system is not available and that to require it be obtained from another part of the state is unreasonable and cost prohibitive. Simpson urged that the subsection be struck. Commenter drew attention to the differences between various sections of Article 51.17B which grant the commissioner express authority for rulemaking and 51.17B(e) which does not authorize rulemaking concerning alarm systems. He further suggested, as written, the rule would pose an unwarranted burden on pawnbrokers as to outdoor coverage and the possibility of a third party's unavailability causing a pawnbroker to violate the rule. Konczak urged rejection of the subsection citing a lack of authority to amend or expand on the statute. Buchanan stated that he was not a consultant but that he was employed by an alarm system company doing business with many pawnshops. He indicated that the proposed rule would mean increased revenue to his company but that he wanted to point out that the type of alarm system being proposed was not available in some rural areas and that the requirement was more strict than required of banks and jewelry stores. In response to questions he stated that most alarm systems would initiate a local, loud audible alarm when phone wires were cut and that some banks, jewelry stores, and pawnshops in rural areas had no alarm systems. Response: The commissioner disagrees with the commenters who challenge the commissioner's authority to adopt a rule relating to alarm systems. The commissioner recognizes the comments relative to cost and some lack of availability of the type of system specified in the proposal and declines to adopt any subsection at this time relative to alarm systems. The commissioner notes that this decision does not affect the statutory provision and pawnbrokers found to lack a minimal alarm system that meets the statutory criteria can expect a disciplinary action. Signaling as used in the Act is deemed to mean transmission of a signal to a place at which a person is always on duty who can immediately go to the pawn shop to investigate the cause of the signal or cause a law enforcement or security officer to go to the pawnshop to investigate the cause of the signal or the signaling may mean the sounding of a loud bell or other noise which would alert persons passing by the pawnshop. The commissioner also recognizes that the self-interest of many large pawnshops would be well served by obtaining a very high quality system. The commissioner also take note of the definition of "pawnshop" in the Act and finds that the alarm system required by the Act for a pawnshop must include exterior storage areas. (d) APPROVED SAFE Smock "approved of" the proposal. Logsdon asked "If, as mentioned above (regarding alarm systems), other resources are available is this necessary?" Mealer and Konczak urged rejection of the subsection on the grounds that it is not necessary in determining compliance with Article 51.17B(f), that there is no authority to expand on or amend this statutory provision, and that it threatens to violate 17B(r). The commenter also makes a broad and general assertion that "the simple fact that an underwriter has issued a policy supports the presumption that they have approved the insured's safe, if a particular type of safe is required." Owens asserted that there are some old safes that are a lot better than any TL-15 safe and asks how the commissioner will determine if such a safe is approved and who will make approval. Dziedzic stated he has TL-30 safes. EPPBA stated "Problem is with TL-15 or better. Safes in conjunction with alarm systems should be adequate protection. Everyone is going to have a problem with this." TPBA urged that the subsection be deleted citing Article 51.17B(f) as requiring an appropriate safe. Commenter declared that issuance of an insurance policy is proof of a pawnbroker's safe being in compliance with the statute and that having a pawnbroker stop writing loans on jewelry without due process is in violation of the Pawn Act. Langford stated that he had a fireproof safe inside a vault and asked who would approve this arrangement. He also stated that if he had to add a safe in the vault the construction cost would be cost prohibitive. McCommas stated that the commissioner is asking for something that is not practical, following some discussion about insurance companies, approval of safes, and insuror's liability after having approved a safe. Jezek stated that the insurance industry was having a hard enough time insuring small businesses let alone approving safes. He suggested that the commissioner's examiners approve safes. Wood suggested a combination of a safe or vault with an alarm system should be suitable safeguards for customer pledges. Simpson urged that the subsection be struck because while some provisions of Article 51.17B authorize rulemaking by the commissioner section (d) concerning safes does not. CVPBA stated that the larger insurance agencies in his city are not willing or interested in inspecting or approving pawnbroker's safes unless they qualify for jeweler's block insurance, which most do not. French expressed the view that many in the business for many years were security poor having enclosed their safes with metal walls. Santoscoy and Grisaffi expressed the view that the rule should address safes secured inside vaults and should consider the combined security offered. Edge stated that TL-15 and TL-30 safes are not necessary in some circumstances because of the requirement that a pawnbroker replace lost goods. Response: The commissioner disagrees with the commenters who urge that the commissioner lacks authority to make rules relative to safes where pledged goods are secured. The commissioner disagrees with the commenters who suggest that issuance of an insurance policy is proof of a pawnbrokers safe being in compliance with the Act. The commissioner believes that issuance of a fire insurance policy, the only type of insurance required by the Act, has no bearing on the security of a pawnbroker's safe and that an insurance underwriter who is not writing crime insurance is not concerned with the security of a pawnbroker's safe. It appears that virtually every pawnbroker is in violation of Article 51.17B(f) and cannot reasonably achieve compliance, thus it behooves the commissioner to adopt a rule that will attempt to accomplish the intent of the statute. The commissioner does not believe that the statutory provision for safes is concerned with the fire protection qualities of safes but with their resistance to unlawful entry. The commissioner agrees that there are unrated safes which are more secure than a TL-15 rated safe and that there are vaults that provide better security than a TL-15 rated safe. The commissioner also agrees that a combination of a vault and a safe may provide better security than a TL-15 rated safe. The commissioner's examiners are not trained in the area of security provided by different types of safes and vaults and cannot be reasonably expected to perform security evaluations and approval of this type. The commissioner will rely on experts in the field to provide credible evidence of the security provided by pawnbroker's vaults and unrated safes. The commissioner does not believe that any safe in conjunction with an alarm system is adequate having viewed a video showing persons with basic tools opening safes in less than one minute. Generally, old safes which only display some sort of fire rating are not difficult to open in very short periods of time. The commissioner believes that the fact that a pawnbroker is obligated to replace pledged goods that are lost does not have a direct correlation to the requirement for secure safes. The pawnbroker's first obligation is to provide adequate security for pledged goods and secondarily, if that security fails, to provide for replacement. SECTION 85.51 PLEDGED GOODS LOST/DAMAGED-LIABILITY OF PAWNBROKER (a) RESPONSIBILITY FOR LOSS OR DAMAGE Whitaker expressed a desire for some sort of limitation of liability for the pawnbroker for pawned items lost or damaged. He stated that there did not appear to be any limitation in the rules and that if there were it could help pawnbrokers obtain insurance. The commenter stated that Oklahoma pawnbrokers have no liability and that Texas miniwarehouse owners have no liability for tenant's goods. Grisaffi expressed concern about dealing with unreasonable customers over lost and damaged goods citing two recent instances where a customer complained about a scratch on an electric lawn blower with a $39.95 new retail price and where a customer refused $2,000 for a lost ring with a $995 new cost at Mission Jewelers and after three months settled for a 27" TV and some electric tools. The pawnbroker expressed belief that "little" customers mostly complain because the commissioner's position is that the pawnbroker must satisfy the customer. Response: The Act establishes a limitation of liability to the extent of replacement with like goods. The commissioner has no authority to establish a limitation of the sort apparently desired by the first commenter. The commissioner cannot eliminate unreasonable customers. While the commissioner and his staff may speak generally that a pawnbroker must satisfy the customer, that is not the guiding principle in resolving disputes concerning lost or damaged pledged goods. The guiding principle is making the customer whole through repair or replacement with like kind of goods. (b) COMMUNICATIONS WITH PLEDGORS EPPBA expressed disagreement with last sentence of the subsection. TPBA proposed an amendment to the second sentence by striking the words "or to renew or extend a loan" and to change "must" to "shall." Commenter urged that the last sentence be deleted. Simpson urged striking the last sentence lest it be binding on the parties in any judicial determination. Cervenka stated that he believes loan amount should be considered in determining market value. Response: The commissioner strikes the last sentence in response to commenters. The commissioner disagrees with the commenter's request to strike the reference to renewal or extension in the second sentence. The commissioner believes that a pawnbroker who accepts funds to renew or extend a loan when the pawnbroker knows that the pledged goods are lost or damaged would be guilty of violating the state Deceptive Trade Practices Act. Use of the word "must" is in keeping with Texas Register Form and Style Manual governing administrative rules. The commissioner disagrees with the views of commenter number four as being inconsistent with the Act. (c) NOTICE OF SUBSTANTIAL LOSSES Cervenka expressed belief that this type of reporting was unwarranted and expressed understanding that if the customer alleged a loss in excess of $1, 000 such would have to be reported. Santoscoy took exception to the rule generally suggesting that no reporting should be required if the customer is satisfied with the settlement citing the new language on the pawn ticket informing the pledgor of his or her rights. He also commented that losses and damage should not be held against the pawnbroker. When questioned the commenter suggested perhaps a requirement to report losses of $5,000 to $10, 000 or more not resolved in 30 to 60 days. Response: The commissioner viewed the proposal as an "early warning system" that would alert the commissioner's staff to multiple losses before consumers contacted the commissioner's office and would better equip them to respond to the consumers. Upon further consideration the commissioner determined that the benefits may not be as great as initially presumed and strikes the subsection. (d) ACCEPTANCE OF PAYMENTS; ACCRUAL OF PAWN SERVICE CHARGE Trial asked that a provision be added where a pawnbroker can recoup, from the pledgor, the moneys loaned on property subsequently picked up by the police as stolen. TPBA urged that the subsection be deleted noting that the interest being paid is for the use of the money loaned and that the pawnbroker is required to make the pledgor whole as required by Article 51.16(a)(5). Simpson pointed out that subsections (d) and (e) fail to address the question of time within which settlements must be made. Response: The commissioner lacks the authority to make a rule concerning a pawnbroker's recouping monies from a person who pledged stolen property. The pawnbroker has a right and a venue to seek such monies at this time. The commissioner does not agree that the "interest" being paid is exclusively for the use of the money loaned. A portion of the pawn service charge is to compensate the pawnbroker for the cost of safekeeping of pledged goods and for compensating the consumer when he fails in that duty. It appears reasonable to the commissioner to stop the accrual of the pawn service charge until the pawnbroker has satisfied his responsibility to the consumer. The commissioner believes it inappropriate to set a time in which settlements must be made as such could work to the detriment of either party. Any time the commissioner is involved in a dispute the commissioner will continually urge prompt settlement so that the file may be reflect prompt resolution and disposition. (e) PLEDGOR DISCLOSURE Owens wrote "Enough files! This is totally not necessary. ... This would be a waste." EPPBA asked "Why should we provide pledgor with his rights-there is an attorney on every corner ready, willing and able to do this." TPBA urged deletion of the penultimate sentence. Wood suggested that there are plenty of lawyers to advise pledgors of their rights, that Texas is the most litigious state in the union, and asked why create more problems. Response: The commissioner believes that because lost and damaged goods is one of the top two complaint generators that an informed consumer is better able to reach an equitable settlement with a pawnbroker as provided in the Act than one who has no idea what his or her rights are and who is free to use his or her imagination to conjure up and demand unreasonable settlements. The commissioner also believes that a pawnbroker who communicates responsibly and fully about lost or damaged merchandise will prevent that customer from seeking the assistance of an attorney or the commissioner. The commissioner has eliminated the requirement for retention of evidence of delivery and the reference to a "file." SECTION 85.61 ADVERTISING Sims declared that regulating advertising was ludicrous and that such a regulation vastly exceeded the regulatory power mandated by the legislature, posed an undue burden on business that was already stressed, and contributed nothing in return for significant regulatory investments. EPPBA declared "We don't agree with this but feel that protesting will have no effect." WFAPB stated that "we know of no other business that has its advertising censored. We sure need some more of this." Response: The proposal was patterned after advertising rules adopted over 21 years ago for consumer loan companies. The proposal clearly does not attempt to censor advertising and censorship has never been an issue with the 21 year old rule. (a) PROHIBITION-FALSE, MISLEADING OR DECEPTIVE Walters expressed appreciation for the proposal. TPBA urged that the subsection be amended to permit a person who has applied for a license to advertise so long as no business of any sort is conducted. Commenter specifically suggested that license applicants may desire to contract for yellow page advertising before a license is approved because of the lead time between contract deadline and publication. Simpson asserted that the first sentence is too broad and exceeds the commissioner's authority and thus must be rewritten. WFAPB attached a copy of a page of yellow page advertising for "Pawnbrokers" on which there were three ads by unlicensed persons. Commenter stated that this showed how well the rule was being enforced and cited complaints to two members of the commissioner's staff as well as the local police department over the past two years. Response: The commissioner does not believe that under the statute he can grant the request of the second commenter. The commissioner has modified the scope of the subsection to limit it to the pawn loan business. While the fourth commenter may have a legitimate complaint concerning advertising it does not relate to the proposed subsection. (b) ADVERTISING COPY FILE Simpson cited his comment in re subsection (a) as applicable to this subsection also. Fredrick asserted that the advertising file was useless because it was not feasible for an examiner to look at and listen to advertising and determine if it was deceptive. Response: The commissioner has modified the scope of the language in response to the first commenter. The commissioner disagrees with the second commenter. (c) COMPLIANCE WITH FEDERAL LAWS AND REGULATIONS Simpson urged deletion of this subsection based on lack of authority to adopt. Response: The commissioner does not agree with the commenter's assertion as to authority but strikes the subsection as unnecessary. SECTION 85.71 EXAMINATIONS AND INVESTIGATIONS Simpson urged deletion of the references to federal law and regulations and suggested that due process required a procedure for an appeal such as in Article 51.17(l) and (n). Response: The commissioner has deleted the references to federal law and regulations in response to the comments, however, the commissioner believes that a pawnbroker who fails to correct violations of federal law and regulations when called to the pawnbroker's attention lacks the character and general fitness to retain a pawnshop license. The commissioner does not agree that an appeal procedure is needed in the section. It appears that the two commenters on this section failed to perceive that the section simply formalizes a procedure that the commissioner has routinely followed for more than twenty five years. (a) CORRECTIVE ACTIONS REQUIRED TPBA objected to the subsection stating that the vast majority of corrections are made at the time of the examination and that the proposal created additional paper work that is costly and unnecessary. Response: The commenter failed to perceive that the purpose of this section is to permit the commissioner or a duly authorized representative of the commissioner to instruct a pawnbroker concerning repetitive and frequent violations and to permit the pawnbroker to save money by locating and correcting those violations rather than paying for an examiner to locate each and every violation and bring each to the pawnbroker's attention for correction. This section has no application where the commissioner's examiner is satisfied with all corrective actions taken by a pawnbroker at the time of an examination. SECTION 85.81 MISCELLANEOUS OPERATING PROVISIONS (a) HOURS AND DAYS OF OPERATION (3) EFFECT OF CLOSING (B) ALL CLOSINGS TPBA stated that the last day of grace is spelled out quite clearly in Article 51.13 and that the day cannot be changed by rule. Response: The commissioner does not view the rule as changing the law, however, the commissioner acknowledges that the rule represents a change in the commissioners interpretation and application of the law. The commissioner has taken note that there are various occasions when legal due dates or deadlines are established in a similar manner as the pawn loan grace period and by chance fall on Saturdays or Sundays when a required filing cannot be made, the due date or deadline is extended to the next business day. It is the commissioner's opinion that the adoption of this subparagraph is reasonable in light of the assertions of many pawnbrokers that they give customers extra time at the end of the grace period to redeem their goods and in light of the fact that the pawnbroker is compensated for the additional time. The commissioner also believes the provision to be appropriate because many pawnshops operate seven days a week while others do not and a customer may be unfamiliar with the limited number of days of operation of the shop holding his or her pledged goods. The commissioner has testified in court that when the 60th day of the grace period fell on a Sunday and the pawnshop was closed, the customer was required to redeem his or her goods on or before the last day the shop was open prior to the 60th day. The commissioner then heard the judge rule in favor of the customer who attempted to redeem on the 61st day. The commissioner has revised the wording of the subparagraph to improve its clarity. (b) IDENTIFICATION OF PERSONS PRESENTING PAWN TICKETS TO REDEEM PLEDGED GOODS Mealer and Konczak urged deletion of the subsection or amendment to permit "a person known to the pawnbroker" to be exempt from presentation of identification documents asserting that to not do so would cause borrowers who had misplaced or lost their identification documents to forfeit their pledged goods. Response: The commissioner does not agree with the assertions of the commenters but revises the language to remove the burden of "carding" known pledgors. (c) PAWNSHOP PREMISES Trial, Mealer, McCommas, and Konczak stated that the subsection should be struck or all references not connected with pawn loans must be deleted vis-a-vis 17B(r). Response: The commissioner disagrees with the commenter in that the Texas attorney general in Opinion No. DM-253 has opined that the commissioner has been given the authority to regulate outdoor signs, displays, and storage. (1) OUTDOOR DISPLAYS AND STORAGE Trial asserts that as each pawnshop is unique this should be regulated only by local zoning laws. Simpson urged that the second sentence be struck as contradictory to a recent Texas Attorney General opinion. The commenter also stated that permissibility should be governed by the property lease and not by custom. Cervenka suggested that subject was currently addressed by local zoning laws and best left to the local jurisdictions. Commenter expressed belief that the proposed rule could be more restrictive than local ordinances and that there might be a constitutional problem with enforcing such. Response: The commissioner does not agree that this subject can be comprehensively addressed by enforceable local zoning laws but does agree that the proposed language may be contradictory of a recent opinion issued by the Texas attorney general. The commissioner finds that a rule lawfully adopted by a state agency which is more restrictive than a local ordinance is enforceable and does not create a constitutional problem. The commissioner has modified the wording of the paragraph in light of the collective comments and opinion DM-253. (2) SIGNS Trial asserts that as each pawnshop is unique its choice of signage should also be and that it only be regulated by local zoning laws. Response: The commissioner believes that it is in the public interest that each pawnshop be readily identifiable by a sign showing the legal, licensed name of the business. That issue is generally not covered by local law. (3) ANIMALS Trial asserts that as each pawnshop is unique it should be free in its choice of inhabitants regulated only by local zoning laws. Fairchild stated that he presumed that it would be permissible under the proposed text to keep vicious non-trained dogs or other animals that would not obey commands. He further stated his view that security measures should be left to business owners, that police authorities will verify that dogs are more effective than firearms, and that in his opinion not as many innocent pawnbrokers would have been victims of crime and violence during the last several years, had they employed trained attack dogs on premises. Response: The commissioner believe that while animals may be of some protection to pawnbrokers they may be a substantial liability. The commissioner had visited pawnshop where the presence of animals was so obnoxious that he would not do business with such an establishment. The commissioner has determined to strike the paragraph and hopes that health and safety ordinances and the marketplace will cure this problem in the near future. (d) IDENTIFICATION OF SOURCE OF GOODS IN PAWNSHOP Trial and McCommas urged that the subsection be struck or all references not connected with pawn loans must be deleted vis-a-vis 17B(r). Sims declared that regulation in this area was ludicrous and asserted that such vastly exceeded the regulatory power mandated by the legislature, posed an undue burden on business that was already stressed and contributed nothing in return for significant state regulatory investments. Mealer and Konczak urged rejection of the subsection finding no authority for the commissioner to amend or expand on Article 51.17B(h) and declaring that tagging merchandise is a business practice that does not require a pawnshop license and thus the subsection threatens to violate 17B(r). Konczak also cited the cost as unreasonable to tag several thousand items in several warehouses some of which have been in the possession of the pawnbroker more than 40 years. Owens stated "I can understand this for tracking merchandise out for sale from defaulted loans, but not for 'fixtures/furniture'." EPPBA stated that $10 figure is too low and that subsection should only apply to unredeemed pledged goods and merchandise purchased from individuals and not to purchases from wholesalers and distributors. Commenter asserted that the proposal goes beyond the scope of the law. TPBA declared that there are items such as diamonds that are not capable of being tagged and requested an exemption for new merchandise where the pawnbroker can produce an invoice identifying origin. Commenter also stated that these issues are covered by Article 51.17B(h). Langford stated that the rule would be hard to follow considering the volume of new merchandise purchased. Wood declared the $10 amount is too low and should be $50. Response: The commissioner has revised the language of the subsection to eliminate the 17B(r) objection. The second commenter is obviously not familiar with the explicit statutory provisions which give rise to this section. The language of 17B(h) is deficient in that it fails to define the nature and purpose of the tag. The adopted subsection cures that deficiency as to unredeemed pledged goods. Commenters speaking relative to the $10 amount and furniture and fixtures have obviously not read the proposal carefully and are not familiar with the statute. (e) HOLD PERIOD Trial, Mealer, McCommas, and Konczak urged that the subsection be struck or all references not connected with pawn loans must be deleted vis-a-vis 17B(r). Haley asked for the precedent for the proposed hold period and declared that it seemed unreasonable. He also commented on the lack of regulation of competitors in the business of buying and selling used merchandise. Logsdon requested a detailed accounting of complaints from law enforcement agencies concerning hold periods to include the number of pawnbroker violations and the populations of jurisdictions having such complaints or violations. EPPBA stated that El Paso pawnbrokers have an agreement with the local pawn detail for a 10-day waiting period. Langford stated "With the minimal help this would be to the consumer this rule would be a burden on the pawnbroker." Cervenka declared that a universal 20-day hold period was not necessary or desirable and that local authorities were better suited to determine the appropriate period and the type of goods to be subject to the hold period. Response: The commissioner has previously commented concerning the express directive of the legislature to adopt a rule of this nature and his belief that such directive supercedes 17B(r). This is not an appropriate forum to respond to comments that are requests for historical information from the commissioner's files. The commissioner has provided that chief law enforcement officers may approve pawnbrokers' requests for shorter hold periods under prescribed circumstances. The commissioner lacks the authority to establish hold periods for other than pawnbrokers. (f) MODIFICATION OF CHARACTER OF GOODS Trial, Mealer, and Konczak demanded deletion of all reference to hold period vis-a-vis 17B(r). Response: The commissioner has deleted reference to the hold period. (g) REDEMPTIONS BY MAIL EPPBA stated that subsection "Should be deleted-we never agreed to ship a pawned item when it was pawned." Response: The commissioner disagrees because the Act requires a pawnbroker to permit redemptions by mail. (2) SHIPPING, HANDLING, AND INSURANCE CHARGES Owens stated he had a problem with this concept and then recited a litany of questions as to charges for shipping and insuring goods redeemed by mail which were not directly related to the paragraph. Response: None required. (j)[h] MONITORING OF TRANSACTIONS AND CUSTOMERS Trial demanded that all references not connected with pawn loans must be deleted vis-a-vis 17B(r). Mealer and Konczak urged rejection of the subsection finding no authority for the commissioner to amend or expand on Article 51. 17B(j) and asserting a possible violation of 17B(r). Response: The commissioner revised the wording to eliminate the 17B(r) objection. (1) TYPES OF GOODS OFFERED Haley opined that this would be one of the most outstanding pieces of literature ever written. He then asked rhetorically about the percentage of stolen property turning up in pawn shops and declared that the commissioner should get off the back of the people who are trying to help control this problem and spend the necessary time and energy to provide legislation where it is most needed. Concerning the requirement for a written policy, Owens wrote "Why more policys (sic) or files." EPPBA suggested that the Texas Pawn Brokers Association should come up with a reasonable policy that all pawnbrokers can live with so every one has the same policy on file. TPBA urged striking all except the first sentence asserting that an undue burden was being place on pawnbrokers to produce a written policy which would not infringe on the civil liberties of their customers. Langford stated that writing a policy would open the door to lawsuits for discrimination but that he would use any policy written by the commissioner. McCommas expressed a lack of understanding of the phrase "... unless acting with the effective consent of the owner of the item" and asked if a person signing a pawn ticket, and thereby declaring he or she is the owner of the property, can be assumed to be the owner for this purpose and, if not, how do you determine the identity of the owner. Nuckols urged the commissioner write a policy, stating the small business man did not have the resources to do so and expressing concern of inability to write a policy that was not discriminatory or that violated a customer's civil rights. Wood opined that the commissioner is getting into law enforcement and that the proposed paragraph is clearly overkill as the losses from stolen items coming into a pawnshop is insignificant. Brisbin invited information from the commissioner on a definitive way of identifying stolen property. Cervenka stated that the required policy would burden the pawnbroker to produce it and the commissioner to review it and that such a policy did nothing to control stolen merchandise. French stated that some tools would have serial numbers obliterated through normal use and that others had stick-on labels which would often come off through normal use. Response: Pursuant to the state Penal Code, possession of goods without the effective consent of the owner and which have their serial numbers defaced, altered, or removed is a criminal offense. The paragraph is intended to inform pawnbrokers and prohibit pawnbrokers from such an offense. The commissioner previously attempted to provide specific guidance to pawnbrokers in avoidance of accepting stolen goods. The commissioner was attacked for so doing and declines to make another attempt believing that he will be attacked by other pawnbrokers for doing so. The commissioner now believes that pawnbrokers who are concerned with avoiding taking stolen property are best equipped to write a statement of their experiences, practices, and procedures followed to avoid taking into pawn goods that they believe may be stolen. This policy should be an essential basic training device for new pawnshop employees. The commissioner's staff will answer questions and provide other assistance to pawnbrokers in the development of such a policy. (2) ACCEPTANCE OF UNIQUELY MARKED GOODS Owens stated "Everybody knows that if we take a VCR that is rented, without a 'paid in full' receipt, we lose the vcr. I see no need in this. It is just more useless book work." TPBA urged amendment of the beginning of the first sentence to read "A pawnbroker must take reasonable precautions not to purchase, ...." Langford stated that "I think common or good business sense should take care of this rule." Jezek expressed distress at having to help the police and the rental company industry which he described as sellers disguised as rental companies. He suggested that rental companies should have no more protection than department stores who sell and finance their sales. He further stated "If we allow this to happen the next thing pawn shops will have to do is run a UCC-1 lien search prior to making a loan." French stated that some construction companies sell or otherwise dispose of older tools and equipment while some small companies sometimes borrow on their own tools. He also stated that receipts, after the fact of purchase, are hard to obtain and customers lose them or they are stolen just like pawn tickets. Commenter also observed that keeping the receipt with the merchandise was just one more thing for the pawnbroker to keep up with when the pawn ticket says the merchandise is the property of the pledgor. Response: The commissioner agrees with the commenter that this matter should be taken care of by common or good business sense, however, the commissioner's experience is that there are pawnbrokers who take uniquely marked goods. The commissioner believes it is important to the general public and to the pawnbroker industry that pawnbrokers be prohibited from taking goods marked to indicate that they do not belong to the person presenting them to the pawnbroker. (k)[i] OTHER BUSINESS ON PAWNSHOP PREMISES Trial, Mealer, McCommas, and Konczak urged striking the subsection or paragraph (1) or that all references not connected with pawn loans must be deleted vis-a- vis 17B(r). EPPBA asserted that this subject is none of the business of and beyond the authority of the commissioner. Wood asserted that he should have a constitutional right to rent space to others to engage in any legal business or to engage in any other business "without having to ask the commissioner for permission." He further asserted that he did not believe that the pawn license could be constitutionally tied to other legal business activities in the pawnshop. Response: The commenters expressed no awareness of Article 51.17B(g) and the correlation of the proposal with the statute. The commissioner strikes the subsection and will rely on the statute for any enforcement actions taken against pawnbrokers. Pawnbrokers should familiarize themselves with all provisions of the Act. (1) BY THE PAWNBROKER TPBA urged striking the last sentence stating that Article 51.17B(g) adequately covered the matter. Response: The commissioner strikes the entire subsection. (2) BY OTHERS TPBA urged striking the paragraph citing Article 51.17B(g) as adequately covering the matter. Response: The commissioner strikes the entire subsection. (m)[k] DUTIES AND RESPONSIBILITIES OF PAWNBROKERS (2) COMMUNICATIONS Mealer and Konczak urged rejection of the paragraph vis-a-vis 17B(r) and asserted that sufficient laws exist on this subject. TPBA urged insertion of the words "intentionally or knowingly" following the word "not." Response: The commissioner modifies the language to eliminate the 17B(r) objection and declines the suggestion of the third commenter. (3) RESPONSIBILITY FOR ACTS OF OTHERS Mealer and Konczak urged rejection of the paragraph asserting that this subject is a judicial matter, is beyond the authority of the commissioner, is not consistent with the Act, and does not address a business practice which requires a pawnshop license. EPPBA stated "Should not be responsible for unknown acts of people listed - after all the CCC does issue all of the licenses." TPBA urged that the paragraph be struck because it is already covered by Vernon's Civil Code and numerous other state and federal laws. Wood stated that if an employee participates in any criminal activities without the owner's knowledge the owner cannot be held responsible. Response: The paragraph uses the word "may" and not "will" and thus does not create liability but serves as a caution to pawnshop license holders of the importance of good management and supervision of the pawnshop business. (4) ARRESTS Owens wrote that the commissioner may be stepping on people's rights on this and that he could foresee a lawsuit over this. He also stated that he could see convictions, but not arrests. He then asked what would be exempt from reporting and stated that the commissioner should seriously consider dropping this subsection. Cervenka asked "What about old arrests?" Response: See response to following paragraph. (5) FEDERAL FIREARMS LICENSE Mealer and Konczak urged rejection of the paragraph on the grounds that the reports required deal, in part, with a business practice not within the commissioner's authority to regulate vis-a-vis 17B(r) and that it is, in part, inconsistent with the Act and redundant. EPPBA asserted that subject matter has nothing to do with CCC and is beyond the scope of the CCC's authority. TPBA urged that the first sentence in the paragraph be struck and that the words "also" and "proposed or" be struck from the second sentence. Wood stated since ATF governs gun licenses the commissioner is over extending his limits to create the power to fine or revoke a pawn license because of a failure to report. Simpson urged deletion as going beyond the authority of the commissioner referring to Article 51.17B(o). Cervenka stated that routine ATF investigations should be exclude from the proposed paragraph. Response: Paragraphs (4) and (5) related solely to matters of character and fitness of licensed persons and (5) had nothing to do with firearms or a federal firearms license per se. The two paragraphs have been combined under a caption of "character and fitness." Wording of the two paragraphs have been modified to eliminate any 17B(r) issue and to exclude duplicate reporting. The commissioner disagrees with commenters relative to authority and rejects the commenter's specific suggested modifications in (5). (6) ELECTRICALLY POWERED PLEDGED GOODS A total of fifteen persons commented on this paragraph. Anglin made general comments about normal deterioration of stored electrical goods and their procedures to inform customers of this in advance and show them how and where their property will be stored while in pawn thus achieving customer satisfaction. Trial stated that checking the operation of electrical goods should be the sole responsibility of the redeemer and that the pawnbroker should only be responsible for providing the electrical outlet and not for the condition of the inoperable pledged goods just redeemed. Haley made general comments about the deterioration of electrical goods and then stated "you can only dream (nightmare) of the abuse our industry will suffer from this rule when it is made public." Mealer and Konczak urged rejection of the paragraph noting no specific authority to expand upon or amend Article 51.16(a)(5). Camp stated he is agreeable to furnishing an electrical outlet but he objects to any liability regarding pawned electrical goods that are found to be inoperable when redeemed. He states that he won a suit pertaining to a video recorder that quit working after it left his store and wrote extensively about deterioration of electrical goods. EPPBA stated "If customer request testing merchandise before leaving store-fine-once the customer leaves the store, becomes customer's responsibility." TPBA urged that the paragraph be struck declaring that "We cannot be responsible for electronic merchandise that we have not damaged or abused for an indefinite time." Charping stated that the pawnbroker can not be held responsible for goods that leave his power or control. Langford urged that the paragraph be struck saying he cannot be held responsible for ones mistakes or stupidity on the mishandling of their merchandise after it leaves his possession. McCommas agrees to providing a power source for customers but asserts that most are in a hurry and will not let the pawnbroker test the goods. The commenter further states "Some items can not be tested and are so stated on the ticket when taken into pawn." The commenter then asked how one would determine "first use" and declared that the paragraph would create many more problems than it could possibly resolve. Wood stated that bank customers who walk away from the counter without counting their money cannot recover a shortage and that this is exactly the same situation and the customer has no recourse. Commenter declares that problems of inoperability of electrical goods after been in pawn storage is an act of God; is life and experience; that the pawnbroker has no control over it and the commissioner cannot dictate this. Simpson urged striking the second sentence of the paragraph as unfairly shifting the balance in favor of the consumer in the event of a dispute over normal deterioration of an electronic device which was not a breach of the pawnbroker's duty of due care. Brisbin stated the subsection should be struck and that the pawnbroker should not be held responsible for an item redeemed, accepted, and taken from the shop. Commenter further argued that pawnbroker should not be held liable as long as the goods have been protected from harm and use while in the shop. French declared that it is unacceptable to make the pawnbroker responsible for goods found to be inoperable after the pledgor left the shop with them. The commenter stated he had witnessed customers drop merchandise like television sets in the parking lot of the shop and expressed concern over normal deterioration and tampering with merchandise after it left the shop. Commenter concluded that the pawnbroker should accept responsibility for blatant mishandling of customers' merchandise but no further responsibility. Counts stated that it was a tough rule regarding requiring electronic goods to work when leaving the shop and that the proposed rule was unworkable and needed some escape clauses to level the playing field. Santoscoy expressed concern with the liability associated with electronic goods and commented about normal deterioration of goods such as the belts in video cassette recorders. Fredrick stated that customers take their goods home after redeeming them and do not try to use them. Response: The commissioner's office has had a longstanding enforcement policy that pledged goods are presumed to operate properly or the pawnbroker would not accept them as collateral on a loan and that such goods must operate when the pawnbroker returns them to the pledgor or other redeemer. That policy extends, for a reasonable time, to goods taken from the pawnshop without being tested. The paragraph as proposed would have eliminated liability as to goods tested before leaving the shop. The commissioner strikes the paragraph and gives notice that the enforcement policy remains intact. (8) TREATMENT OF CUSTOMERS Twelve persons commented on this paragraph. Trial stated that this is clearly out of the commissioner's realm of authority. Sims declared that regulation in this area was ludicrous and asserted that it exceeded the regulatory power mandated by the legislature, posed undue burdens on business that are already stressed, and contributes nothing in return for significant state regulatory investments. Haley stated that the successful pawnshop is dependent on repeat customers and opined that "this regulation made public will open new avenues for abuse previously unheard of." Mealer and Cervenka urged rejection of the paragraph on the grounds that it is extremely subjective. One added that only a licensed psychologist would be qualified in determining compliance/non- compliance. EPPBA asked if pawnbroker has to take abuse from customer and not respond. TPBA urged that the paragraph be struck citing competition and economic factors as sufficient to ensure fair treatment of consumers. Charping wrote that ties to the community, Better Business Bureau, and competition insure that consumers will be treated fairly with professionalism. Langford stated that good business sense should take care of this rule and asked who would define abusive and would the definition not depend on the situation. McCommas stated that the paragraph was ludicrous, abusive behavior was difficult to define, paragraph was offensive to pawnbrokers, and constituted governmental micro-management which is historically provable as expensive to taxpayers and incontrovertibly detrimental to the industry so managed. Commenter asserted it would be more beneficial to all if the commissioner concentrated on unfair credit practices and left the running of the business to the pawnbroker. Wood states if a customer becomes abusive toward him he may become abusive also and urged changing "must" to "should." Simpson urged striking the paragraph as overbroad, vague, ambiguous, and beyond the scope of the commissioner's authority. Response: The commissioner strikes the paragraph. (n)[l] CONSUMER EDUCATION Sims declared that regulation in this area was ludicrous and asserted that it exceeded the regulatory power mandated by the legislature, posed undue burdens on business that are already stressed, and contributed nothing in return for significant state regulatory investments. EPPBA declared that pawnbrokers are not employees of the state and should not have to display CCC printed materials. "CCC does not have right to do this without our permission -if we don't want it in our stores-there should be no display." Konczak urged rejection of this subsection citing it as a violation of the 10th Amendment to the United States Constitution. Cervenka suggested a small brochure display should be sufficient and would eliminate much of the reporting required by various parts of the proposed rules and should assist customers and the commissioner in identifying problem transactions, areas, or pawnbrokers. Response: The commissioner believes that two commenters are not knowledgeable of the legislative mandate contained in Article 51.17B(n). The commissioner fails to understand the relevance of the 10th Amendment which reads "The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people." The commissioner retains the paragraph unchanged. GENERAL COMMENTS In addition to the preceding comments on specific proposed provisions, the following is a summary of general comments which were not and could not be attributed to specific proposals: Counts urged the commissioner to consider the effect that the proposed rules would have on consumers and their ability to get loans and suggested that perhaps the commissioner should distinguish between cities and rural areas because "one size does not fit all." The commenter also urged that the commissioner not put in rules beyond those necessary. Smock expressed his thought that the proposal contained some very good rules that should be adopted, but that some put an undue burden on the pawnbroker without much in the way of positive benefit. Parker responded only generally asserting that pawn shop owners feel that "If it is not broke don't fix it." The commenter further opined that pawnbrokers received new proposals about every two years which accomplished nothing except causing pawnbrokers more paperwork and expense and requested that the commissioner reconsider the proposals and help make the business better by supporting the pawnbrokers. Anglin stated that some of the rules are very necessary and good for the industry, however, several would put undue hardship on the pawnbroker. Trial and Mealer commented that the commissioner has only the power to regulate those activities that require a pawnshop license pursuant the Texas Civil Statutes, Article 5069-51.17B(r) and then made specific requests for changes or total deletions of various parts of the proposal. In the interest of brevity the notation "17B(r)" will be used to explain the basis for such requests as they are enumerated herein. Sims, speaking on behalf of several pawnbrokers, indicated that he questioned both the motivation and rationalization for the implementation of the proposed regulations. He further asserted that several of the proposed regulations address problems that really don't exist stating that with law enforcement already working closely with pawn shops, using computers to inventory pawn items he felt the public's interest was already represented. The commenter expressed the belief that further regulation would unfairly tax financial and human resources that the small businesses could not afford. The commenter also stated that another of the proposed regulations was unfair in that resale of used merchandise occurs in a wide range of businesses other than pawnshops and asked if this type of regulation should be mandated among Goodwill stores, too. The commenter asserted that the codes approved by the legislature are addressing the needs of both the state and the commission in regulating the pawn industry and that any special considerations that justify such unprecedented interventions in business practices as the proposed rules represent should be addressed by the legislature. After referring to tremendous increases in bureaucratic action by the ATF and many cities, Sims expressed his belief that the proposed rules would cost pawnbrokers a great deal of time and money and that they are, at best, of dubious benefit to the consumers of this state. The commenter then requested a listing, as complete as the commissioner is permitted to give, of the complaints, known violations, convictions or any other reasons used to justify the proposal. The commenter then requested delay in the implementation of any rules requiring pawnbrokers to expend additional time and/or money until the Legislature increased the rates allowed to be charged on pawn loans. After a series of specific comments Owens concluded by saying that the commissioner's office has done a very good job in the past of protecting both the consumer and the pawnbroker. He also stated that some of the proposed rules are a little too much, but some are good. Fairchild expressed his first impression of the proposed rules as a whole as "if it ain't broke, don't try to fix it." He concluded by urging that the commissioner allow the state and national associations to study the proposed changes and submit written recommendations prior to enactment. He urged that the commissioner not enact regulation that hurt business and do not appreciably help the consumer. Dziedzic stated that he had no objection to the rules except for the fire insurance and the crime victim assistance provisions. Furr requested the commissioner consider the cost vs. benefits of each proposed rule. EPPBA requested information as to the reasons and/or complaints that prompted this latest set of proposed rules and expressed concern about excessive government intervention in private business. Commenter declared that some of the rules pertained to information that the commissioner will be able to receive from pawnshops and that the information would ultimately become a public record and commenter opposed that. Dix expressed support for and concurrence with the comments of a local association and attached a copy of same. The commenter then expressed the view that more regulations would adversely effect the pawnshop industry and that they would particularly impact the small, independent pawnbroker to a greater degree than the public companies who operate on their stockholder's money. A request was made for a listing of complaints, violations, convictions, and any other reasons the commissioner was using to justify the proposal. The commenter expressed a desire to avoid further problems and urged a compromise in light of the burden on small operations. Walters stated that personally she had no problem with the proposed rules and that she had heard of no pawnbrokers in her area protesting them. She then expressed concern only about the amount of fire insurance proposed to be required. Ft. Sam expressed the view that the proposal would increase the cost of operation in the long run and that they could be adhered to by the large chains but not by the smaller businesses. The commenter then stated "So as for our vote on the proposed new rules, our answer would have to be NO." TPBA opined that there had existed a proper balance in Texas between the interests of pawnbrokers and consumers since pawnbrokers were first regulated by the commissioner in 1967 but that parts of the proposal would disturb that balance. The commenter expressed concern that insufficient time was being allowed for the industry to respond to the proposed rules specifically stating that pawnbrokers were not allowed enough time to determine specific cost amounts related to the proposal and its effect on the industry. The commenter stated that before additional rules were adopted, the following questions needed to be adequately answered. What problems exist in the industry today and to what extent? How are the existing regulations inadequate to deal with existing problems? Many of these rules are restatements of existing law, what is gained by repeating them as rules. Hallmark spoke only generally and the comments are summarized as follows: the pawnshop business is one of the most tightly regulated businesses in Texas, customers are being treated fairly and reliably, government regulation is seldom cost effective and the proposed rules will not be, attempted micro-management through the proposed rules will cause degradation of services to consumers, some proposed language is common sense and questioned whether common sense should be regulated by the government, cost to implement the rules is believed to be $10,000 per pawnshop and that is an unwarranted burden on a business not shown to be operating to the detriment of the consumers. Charping expressed belief that any additional rules are unwarranted and expressed support of the position and comments of his local association. Langford wrote that he felt that a lot of the proposed rules have good intentions but in reality they are not reasonable and that the commissioner had the tools needed to control any shop in violation of the law. The commenter expressed belief that the commissioner should not have any interest in any other business conducted in the pawnshop unless possibly it coincided with the pawn business. McCommas before making specific comments on parts of the proposal dealing with pawn loans, the commenter cited 17B(r) as prohibiting the commissioner from adopting any language dealing with purchases, merchandise for sale, sale displays, accounting practices, and non-pawn business activities conducted in the pawn shop. Nuckols expressed general concern over the effect of the proposal on day to day operations of a pawnshop and as well as the cost of implementation. He requested that the commissioner research the costs and effects before adoption through use of a task force including commissioner's staff and industry members. CTPBA commented that the proposed rules are basically the same as had been objected to at two previous hearings and requested the commissioner consider written comments made in connection with previous proposals "as being hearwith reiterated." The commenter expressed the belief that the commissioner's examiners examined each and every loan made by every pawnbroker at least every other year and that the commissioner had the tools and power to stop the operations of any pawnshop in violation of the law without additional rules which would increase enforcement costs and not add meaningful value to the consumer. The commenter also submitted a letter from his local police department stating that stolen property was identified on 522 pawn tickets out of 124,688 in 1993 and that only 198 of the 522 involved local area crimes. The letter also stated that the 1994 rate through May was similar to 1993. AAPBA endorsed the comments of the state pawnbrokers association. Jezek citing seven years experience in the pawn business expressed the view that the proposed changes in the rules appear to fix problems that do not exist. He stated that the changes will create numerous problems and hardships on his shop. After making specific comments on six specific area of the proposal he asserted that as a pawnbroker that owned and operated one store he did not have time to address all the problems the proposed changes would have on his store. The commenter suggested that hours of operation be more limited than in the Act, i.e. 9:00 a.m. to 6:00 a.m. (apparently intended "6:00 p.m.") Monday through Saturday and urged no more rule changes leaving the industry to work for its own improvement. Wood suggests that if there was an annual report, a number of things in the rules would be redundant and that he did not believe that pawnbrokers needed more rules and so many files to keep track of. Atwood only spoke generally asserting that the proposal was "to the extreme; " extra files, bookwork, and time required would be required that could be better spent with the customers; that the proposal needed a lot of study; and that most parts of the proposal needed to be done away with. Estrada made brief, general comments in opposition of rules that we do not need, insurance that will cost more than what we already got, and stated that he has not experienced any problems whatsoever in dealing with his customers over many years. The commenter also expressed opposition to a requirement that his children and grandchildren must have a pawnshop employee license to work in his shop. Before making specific comments on various parts of the proposal, Konczak asserted the meaning and effect of 17B(r) to the extent that he believes enforcement of any regulation, on any act that does not require a pawn license to complete, would be a willful violation of 17B(r). Cervenka expressed the belief that sometimes rules are written to address minor or nonexistent problems and any rules should be cost effective. Santoscoy expressed concern that the proposed rules indicated that the commissioner did not recognize the contributions that pawnbrokers made to their respective communities. Whitaker advised that his pawn business was conducted in three small towns, that small town operators had tight profit margins and could be forced out of business by excessively burdensome rules, and that would deny access to credit for residents of the small towns whose wealth was tied up in personal property. Edge asserted that some of the proposed rules would go against the consumer and that government was supposed to be by and for the people. The commenter also asserted that the proposed rules would create tremendous cost increases for pawnbrokers with the various filing systems being proposed and also possibly computer systems. Commenter expressed hope that the commissioner would work with pawnbrokers before proposing rules, indicated that there was a groundswell of opposition, and urged the commissioner to "reconsider if we need any rules." Fredrick decried the burden being placed on small pawnbrokers by rules from all federal and state mandates such as ATF, the Texas Comptroller on sales taxes, the TEC, and the proposed pawn rules. Response: The immediately preceding comments address the proposed rules in general rather than focusing on specific proposed language. In large part these comments address the frustration of pawnbrokers being required to abide by legislative restrictions which they do not deem either necessary or wise. The commissioner is not unmindful of the philosophical differences between the goals of protecting the interests of the citizens of the state of Texas and the interest of the industry being regulated by these rules, both interests having been expressed in the purpose clause of the Texas Pawnshop Act. The commissioner has determined that each and every rule adopted is necessary to ensure a sound system of making pawn loans, acquiring and disposing of tangible personal property by and through pawnshops and to prevent unlawful property transactions. The new sections are adopted under Texas Civil Statutes, Article 5069-51.09, which provides the commissioner of the Office of Consumer Credit Commissioner with authorization to adopt rules necessary for ensuring compliance with Texas Civil Statutes, Article 5069-51.01 et seq. sec.85.21. Business Records. (a) Minimum records; location of records. Each pawnbroker must keep adequate books and records relating to all business transacted pursuant to Texas Civil Statutes, Article 5069-51.01 et seq. The following records are the minimum required records and must be kept in the pawnshop. The commissioner may grant system specific approvals of variations, exceptions, and alternatives for pawnbrokers who maintain equivalent business records on an electronic data processing (EDP) system, as provided in paragraph (7) of this subsection. (1) Loan transactions. (A) Pawn Ticket. (i) Prescribed form and content. In a manual records system, the pawn ticket must be a four-part form, unless otherwise approved by the commissioner, on which entries to the top part are legibly and simultaneously reproduced on the remaining parts. The form must measure four inches vertically by six inches wide and in addition must provide a perforated stub to be utilized in tagging pledged goods. All parts of the ticket form must be sequentially numbered by the printer who produces the ticket form. The stub shall be simultaneously numbered with the same sequential number. The ticket must contain all the information required in Texas Civil Statutes, Article 5069-51.10 and satisfy the requirements of the Truth-in-Lending Act and Regulation Z. The pawn ticket must disclose the date which is 60 days following the maturity date, which shall be captioned "Last Day of Grace." The pawn ticket or the electronic data processing system used to write and store information about pawn transactions must include alphabetical or numerical characters sufficient to identify the person writing the pawn ticket and handling the renewal or redemption of the loan. The second part of the ticket may, with the approval of the local law enforcement agency receiving it, omit the preprinted text of the ticket. The fourth part of the ticket must provide appropriately designated spaces for posting amounts paid on the loan. See subsection (b) of this section (Appendix A) for the prescribed front of the original pawn ticket. See subsection (b) of this section (Appendix B) for the prescribed back of the original pawn ticket. See subsection (b) of this section (Appendix C) for the prescribed back of the third and fourth parts of the pawn ticket. Any person may modify the spacing of the forms prescribed in Appendixes A and C. Any other modifications to the prescribed forms must be approved, in advance, by the commissioner. (ii) Distribution of copies. The original must be given to the pledgor when the loan is made. The second part must be made available to a local law enforcement agency and may be retained by the agency. An alternative method of reporting transactions to a local law enforcement agency may be approved by the local law enforcement agency and the commissioner which permits the omission of the "second part" from the pawn ticket form. The third and fourth part must be maintained as provided in subparagraphs (F) and (G) of this paragraph. (iii) Voided tickets. Voided tickets must be clearly marked "VOID." The original and third parts of voided tickets must be retained and filed with the fourth part of the ticket. The second part must be made available to a local law enforcement agency and may be retained by that agency. (B) Memorandum of extension. (i) Prescribed form and content. If a pawnbroker makes a charge for an extension of a pawn loan, a written memorandum must be used to document the extension of the maturity date. The extension must be by agreement between the pledgor and the pawnbroker. Acceptance of pawn service charges at the date of the memorandum constitutes evidence of agreement. The memorandum must be at least a two part form on which entries to the top part are legibly and simultaneously reproduced on other part(s). See subsection (b) of this section (Appendix D) for the prescribed memorandum form. "Last Day of Grace" as used in the memorandum means the date no earlier than one month and 60 days after the date to which the finance charge was paid on the date of the memorandum. Modification of the form prescribed in subsection (b) of this section (Appendix D) must be approved in advance, by the commissioner. (ii) Distribution of copies. The original of the memorandum must be given to the pledgor or must be mailed to the pledgor if the transaction is negotiated by mail. The copy must be retained by the pawnbroker. The memorandum copy may be filed in any systematic manner that permits ready retrieval of all memorandum copies relating to a particular pawn ticket. (iii) Procedural details. The daily rate of finance charge is 1/30th of the finance charge shown on the pawn ticket. The number of days for which a pledgor pays in connection with an extension is the total amount paid divided by the daily rate. The pledgor and pawnbroker are free to negotiate the payment of any amount of finance charge or the payment of the accrued finance charge to a particular date when negotiating an extension. If a pledgor negotiates an extension and subsequently pays a loan in full prior to the original maturity date, the pawnbroker must compute the earned pawn service charge as if the extension had not been made and must credit the pawn service charge paid for the extension against the earned pawn service charge and may only collect the difference. (C) Records of payments. A written record of every amount collected in connection with a pawn loan must be made immediately upon receipt. An entry of payment made in the electronic records of the loan may satisfy the requirements of this subparagraph. (i) If a payment is made in connection with the redemption of pledged goods or the renewal of a loan and the original pawn ticket is returned to the pawnbroker, the pawnbroker may satisfy the record of payment requirement if the pawnbroker posts, to the front of the original pawn ticket, the date of the transaction and the amount of money actually received and retained by the pawnbroker. If the amount of money received includes any costs for packing, shipping, or insuring goods redeemed by mail, the amounts of such costs must be itemized. (ii) If a payment is made in connection with the redemption of pledged goods or the renewal of a loan and the pawnbroker uses a separate Lost Ticket Statement form, the pawnbroker may satisfy the record of payment requirement if the pawnbroker posts, to the front of the Lost Ticket Statement, the date of the transaction and the amount of money actually received by the pawnbroker. The pawnbroker must file the Lost Ticket Statement with the original pawn tickets. If the amount of money received includes any costs for packing, shipping, or insuring goods redeemed by mail, the amounts of such costs must be itemized. As an alternative, the pawnbroker may use the third part of the pawn ticket to record the transaction and then file the third part in the Numerical File of Redemptions and Renewals. (iii) If a payment is made in connection with the extension of a loan, the pawnbroker may satisfy the record of payment requirement through completion of a memorandum of extension which is filed in accordance with subparagraph (B)(ii) of this paragraph. (iv) If a payment is made in connection with a pawn loan under circumstances which are not covered in clauses (i)-(iii) of this subparagraph, the record of payment must be made on the back of the fourth part of the pawn ticket. If the amount of money received includes any costs for packing, shipping, or insuring goods redeemed by mail or for a lost ticket statement, the amounts of such costs must be itemized. (D) Written receipt. A pawnbroker must give a payor a written receipt for any payment on a loan, unless the pawnbroker posts a notice furnished by the commissioner, readily visible to customers, which reads "Notice to Loan Customers: This pawnshop will provide you a receipt for any amount paid on a loan transaction, if you request it at the time of payment. Texas Consumer Credit Commissioner Phone 1 (800) 538-1579." A properly completed memorandum of extension form may serve as a receipt for payment of charges. (E) Record of forfeiture and redemption or renewal options. When a pawnbroker exercises his option to take pledged goods as his property, the pawnbroker must make a notation of the action and the date of action on the fourth part of the pawn ticket or in the electronic records of the loan. If a notation has not been so made, a loan is considered open even if the grace period has expired. The pledged goods on any open loan may be redeemed by payment of the amount financed and pawn service charges accrued to the actual date of redemption. Any open loan may be renewed by payment of pawn service charges accrued to the date of renewal or may be extended, unless the pawn ticket provides that the loan is not eligible for renewal or extension. (F) Alphabetical index. The third part of each pawn ticket issued must be promptly filed alphabetically by the name of the pledgor. The index must be maintained in alphabetical order and tickets promptly removed when the corresponding loans are closed. The commissioner may approve an index contained in an EDP system and permit the omission of the "third part" from the pawn ticket. (G) Numerical index of loans. The fourth part of each pawn ticket must be promptly filed in numerical sequence by the sequential number on the ticket. (H) Numerical file of redemptions and renewals. The original of each pawn ticket returned to the pawnbroker must be promptly filed in sequential number sequence. Any separate lost ticket statement forms or third parts of pawn tickets used to document a redemption or renewal when the original ticket is lost must be filed with the original pawn tickets according to the sequential number of the related ticket. This file may be maintained separately or may be merged and combined with the Numerical Index of Loans. (I) Notice of lost pawn ticket. When a pawnbroker receives oral notification from a pledgor that the pledgor's pawn ticket has been lost or stolen, the pawnbroker must instruct the pledgor to put such notice in writing. If the pledgor is present in the pawnshop at the time of giving oral notice, the pawnbroker must provide the pledgor with a form or other materials on which to give written notice. (J) Power of attorney. In the event that the original pledgor desires to designate another person to redeem the pledged goods and the original pledgor has lost the pawn ticket, a proper power of attorney is required from the original pledgor designating the person for redemption. Powers of attorney must be filed in a systematic manner which makes them readily available for examination. (2) Titled Goods. (A) Negotiation. A pawnbroker may accept as goods pledged on loans, a motor vehicle and other property having a certificate of title. The pawnbroker must not permit or require the owner to endorse the title to effect transfer to the pawnbroker. (B) Limited power of attorney. When a pawn loan involves titled property, the pawnbroker may require the owner sign a power of attorney form appointing the pawnbroker as his attorney-in-fact for the sole purpose of transferring the ownership of the property to the pawnbroker in the event the pledgor fails to pay the loan. (C) Titled goods documents. The pawnbroker must establish a systematic method for the retention of all powers of attorney, certificates of title, and registration receipts which makes the documents readily available for examination. (3) Standards for describing goods. Pledged goods and purchases must be accurately and fully described. All serial numbers including vehicle identification numbers and boat hull numbers that are reasonably available must be accurately entered on required documents. Any visible owner applied number or other identifying marks must be recorded. As applicable, the item type, brand, make, model number, engraving, inscriptions, color, size, length, unique markings, and design must be recorded. In addition, the pawnbroker must record the additional descriptors in subparagraphs (A)-(C) of this paragraph, as applicable. (A) Firearms. Descriptions of firearms must also include caliber, if known, and type of firearm such as handgun or pistol, rifle, shotgun, airgun, black powder weapon, etc. (B) Jewelry. Descriptions of jewelry must also include weight; type of metal including the purity of gold, if indicated or determined; gender, if determinable; style; and stones, if any. Stones must be described as to type, if determinable including determinations by use of electronic testing devices; color; shape; number; size; and approximate weight. Class ring descriptions must include school name and class year. (C) Motor vehicles. Descriptions of motor vehicles must also include the year model of manufacture, body style, license plate number, and state of registration. (D) Required sequence. The commissioner may prescribe a required sequence in which primary descriptive information is required to be entered on pawn tickets and on agreements to purchase to facilitate communication of property transaction information to law enforcement agencies. (4) Lost or damaged goods documentation. Each pawnbroker must establish a systematic method for the retention of certain information concerning pledged goods that have been lost or damaged. The information may be recorded on the fourth part of the pawn ticket or in the electronic records of the loan, must be readily identifiable and available for examination, and shall include the following information: (A) the date of discovery; (B) the pawn ticket number; (C) identification of the lost or damaged property; (D) evidence of delivery of the disclosure required in sec.85.51(d) of this title (relating to Pledged Personal Property); (E) the date of resolution; (F) the manner in which the matter was resolved. (5) Goods not lawfully possessed by the pledgor. Each pawnbroker must establish a systematic method for the retention of certain information concerning pledged goods that the pledgor did not have the right to possess. The information may be recorded on the fourth part of the pawn ticket or in the electronic records of the loan. Records shall be readily identifiable and available for examination. The record must include: (A) the pawn ticket number; (B) the specific goods concerned; (C) the person to whom released; (D) the terms and conditions under which the pawnbroker relinquished possession of the goods, e. g. redeemed by owner, voluntarily returned by pawnbroker without compensation, seized by law enforcement officers, awarded to another following a judicial hearing, etc. (6) Accounting records and systems. Each pawnbroker must establish, within 150 days of the effective date of these rules, and maintain an internal accounting control system that can be relied upon to produce accurate financial information and to safeguard assets. (7) Records maintained on electronic data processing (EDP) systems. (A) Filing of description of systems and programs. Records and accounting systems maintained in whole or in part by EDP systems may be used in lieu of the books, files, and records required by these rules if they contain equivalent information. Each system must receive prior written approval from the commissioner. Pawnbrokers seeking approval must file a complete and detailed written description of the system proposed to be utilized, including an enumeration of any features that do not meet the requirements of these rules and a full explanation as to how the equivalent information will be maintained in the proposed system. A pawnbroker must specify whether a system will be used in its entirety. Filings must include operating manuals and instructions and, if requested, a copy of the software as used by the pawnbroker. Printed user instructions must provide a clear and concise section of procedures which must be followed to operate the system as contemplated by the commissioner in approving the system. Such instructions must clearly inform the user as to any printed reports required by the commissioner to be produced and retained for examination and the frequency at which they must be produced. Within 30 days after the effective date of these rules every pawnbroker using an EDP system must file notice of such use with the commissioner on a form provided by the commissioner. All systems in place on the effective date of this rule shall be deemed approved if previously reviewed and approved by the commissioner. Notwithstanding this de facto approval, existing systems will require modifications to comply with the new requirements of this section. (B) Filing of amendments. All changes to a pawnbroker's electronic data processing system which cause the system to provide less information must be filed with the commissioner at least 14 days in advance of use by a pawnbroker. (C) Who must file. Each pawnbroker is responsible for filings as described in this subsection; however, a vendor may make filings on behalf of pawnbrokers provided such filing identifies each pawnshop represented by the filing. (D) Withdrawal of approval by the commissioner. If, based on examinations and practical experience with an EDP system and its records, the commissioner finds that the system and its records do not function and provide information as anticipated at the time of approval of the system or do not comply with this section, the system shall be deemed unsatisfactory, and approval withdrawn by the commissioner. A pawnbroker may have 90 days to make modifications directed by the commissioner to achieve a satisfactory record system. (E) Reporting property transactions to law enforcement. The commissioner may require pawnbrokers who maintain their records by use of an EDP system to report their loan transaction information to an appropriate local law enforcement agency directly or through the commissioner's office. The commissioner may do this by publication of a bulletin setting forth the technical criteria and directions developed through consultation with interested pawnbrokers, law enforcement agencies, and vendors of EDP systems. (8) Records retention. All required books, records, instruments, and papers must be available for inspection during normal business hours by the commissioner or his authorized representative for a minimum of two years from the date of the last recorded transaction. (9) Consumer credit commissioner file. Each pawnbroker must maintain a separate file for all communications from the commissioner and for copies of correspondence and reports addressed to the commissioner. This file must include, but not be limited to, copies of the Texas Pawnshop Act, examination reports, and any bulletins, orders, or rules issued by the commissioner. (b) The prescribed front and back of the original pawn ticket are shown in Appendixes A and B. The prescribed back of the third and fourth parts of the pawn ticket is shown in Appendix C. The prescribed memorandum form is shown in Appendix D. Appendixes A-D are as follows. Figure 1: 7 TAC 85.21(b), Figure 2: 7 TAC 85.21(b), Figure 3: 7 TAC 85.21(b), and Figure 4: 7 TAC 85. 21(b). (c) Implementation dates. Pawnbrokers must begin using a pawn ticket form prescribed by or approved pursuant to this section no later than six months following the effective date of this section. Any pawnbroker who uses any other pawn ticket more than three months following the effective date of this section shall provide each pledgor the information required on the prescribed pawn ticket. Pawnbrokers must begin using a memorandum of extension form prescribed by or approved pursuant to this section no later than three months following the effective date of this section. sec.85.31. Crime Victim Assistance. (a) Victim's request for assistance. As required in Texas Civil Statutes, Article 5069-51.17B(q), a crime victim may make inquiry of a pawnbroker to determine if personal property belonging to the victim has come into the possession of the pawnbroker. The crime victim or the victim's personal representative may make an inquiry by presenting the pawnbroker a copy of a law enforcement agency offense report which described the stolen property in a manner that would permit identification by the pawnbroker. The loss must have occurred within 30 days prior to presentation of the report. The person requesting assistance shall provide the pawnbroker with a telephone number at which the person can be contacted or shall arrange an appropriate time to contact the pawnbroker to determine the results of the search. (b) Search by pawnbroker. A pawnbroker who receives a victim's request for assistance must make a search of all records of purchases and loans made on or subsequent to the date of the burglary or theft. The search shall determine whether the property described in the offense report had come into the possession of the pawnbroker. The pawnbroker must make the search prior to opening for business on the second business day following receipt of the offense report. From the time of receipt of the request until the pawnbroker completes the records search, the pawnbroker must not release any property of the type described in the offense report without examining the property to determine if it is the property of the victim. (c) Pawnbroker's reports of findings. If the pawnbroker determines that the property has come into the pawnbroker's possession, the pawnbroker must attempt to notify the law enforcement agency which originated the report within one hour after closing the pawnshop on the day of the determination. The pawnbroker must request instructions of the law enforcement agency as to holding the property for their inspection and must comply with the instructions. The pawnbroker shall not be liable to any person for damages relating to holding property pursuant to law enforcement agency instructions. The pawnbroker must within twelve hours thereafter attempt to notify the victim or the victim's personal representative that contact should be made with the law enforcement agency or officer handling the stolen property complaint. If, after a diligent and thorough search, the pawnbroker finds no evidence that the property has come into the pawnbroker's possession, the pawnbroker must within twelve hours of such determination attempt to notify the victim or the victim's personal representative. (d) Pawnbroker's right to privacy. No pawnbroker may be required to permit a victim or a victim's personal representative to examine the records of the pawnshop, the pledged goods of the pawnshop, or any property purchased by the pawnshop which is not on public display. (e) Crime victim assistance recordkeeping. The pawnbroker must keep each offense report copy delivered to the pawnbroker by a victim or victim's representative. The records must be retained in a systematic manner which makes the reports readily available for examination. The pawnbroker must mark on the offense report, or on an attachment to the report, a record of the pawnbroker's reports of findings as required in subsection (c) of this section to include the person to whom the report was given, the date and time of giving the report or attempting to give the report, and the nature of the report. sec.85.41. Security of Persons and Pledged Goods. (a) General liability insurance. A pawnbroker must obtain and maintain general liability insurance with a company having an A. M. Best Rating of A or better in an amount not less than $500,000 per occurrence. (b) Fire insurance. A pawnbroker must obtain and maintain fire insurance coverage on pledged goods with a company having an A. M. Best Rating of A or better in an amount not less than two times the amount financed plus the finance charge on open jewelry loans and not less than one and one-half times the amount financed plus the finance charge on all other loans. Alternatively, a pawnbroker who furnishes the commissioner with credible evidence of available resources other than fire insurance to protect pledgors may carry a lesser amount. If the commissioner questions the financial resources indicated in the information furnished by the pawnbroker, the commissioner may require certification by an independent certified public accountant as to the accuracy of such information concerning available resources. (c) Approved safe. A pawnbroker who has loans on jewelry must have a safe sufficient to provide security for pledged jewelry. A pawnbroker shall within 30 days of the effective date of these rules request, in writing, the written approval of the pawnbroker's safe by the pawnbroker's insurance underwriter. If the insurance underwriter issues a written approval of the pawnbroker's safe, the approval must be placed in the Consumer Credit Commissioner File. If the insurance underwriter fails or refuses to issue a written approval of the pawnbroker's safe within 60 days of the pawnbroker's request for approval, the pawnbroker must possess or must immediately acquire a safe that provides a level of security not less than that provided by a safe with an Underwriters Laboratory rating of TL-15. If a pawnbroker does not have an approved safe or a safe with a TL-15 or better rating, the pawnbroker shall provide credible evidence to the commissioner that the pawnbroker's safe and/or vault provides security for pledged jewelry that is equivalent to or exceeds the security provided by a TL-15 rated safe. (d) Exterior storage of pledged goods. If a pawnbroker accepts pledged goods that cannot be stored inside the pawnshop, i.e. motor vehicles, boats, trailers, construction equipment, etc., the goods must to be stored within close proximity to the pawnshop and must be securely enclosed by protective fencing. (e) Use of pledged goods prohibited. A pawnbroker must not use or permit any other person to use pledged goods. (f) Public display of pledged goods prohibited. A pawnbroker must not place pledged goods in a public area of the pawnshop. sec.85.51. Pledge Personal Property Lost or Damaged -Liability of Pawnbroker. (a) Responsibility for loss or damage. A pawnbroker is liable for any loss or damage to pledged goods to the extent provided in Texas Civil Statutes, Article 5069-51.16(a)(5). (b) Communications with pledgors. A pawnbroker must not post in a pawnshop and must not make oral statements or do any other acts that would mislead a pledgor as to the liability of the pawnbroker. When a pledgor attempts or offers to redeem pledged goods or to renew or extend a loan and the pawnbroker knows or learns that the pledged goods have been lost or damaged, the pawnbroker must accurately inform the pledgor of the facts of the situation and of the pawnbroker's responsibility under the Texas Pawnshop Act. The pawnbroker must promptly attempt to satisfy the pledgor by repairing or replacing the lost or damaged goods. A pawnbroker shall not advise a pledgor that the replacement of lost or damaged pledged goods will be accomplished in any manner which is more limited than replacement with like kind and quality goods or restoration of damaged goods to their condition at the time pledged. A pawnbroker, who has informed a pledgor of the pawnbroker's liability under the Act, may, at the pawnbroker's option, offer a pledgor a cash settlement as an alternative. (c) Acceptance of payments; accrual of pawn service charge. When a pawnbroker knows that pledged goods have been lost, and not replaced, or damaged, and not restored to their condition at the time pledged, or are unavailable for redemption, the pawnbroker must not accept any payment from the pledgor. A partial, proportionate payment may be negotiated and accepted for redemption of goods pledged on a loan which are not lost or damaged and are available for redemption. No pawn service charge shall be earned by the pawnbroker after a pledgor offers to redeem pledged goods on which the pawnbroker is prohibited from accepting payment and no pawn service charge shall be earned by a pawnbroker after a pledgor requests to renew or extend a loan on which the pawnbroker is prohibited from accepting payment until such time as pledged goods or their equivalent replacements are available for redemption. (d) Pledgor disclosure. In each instance when a pawnbroker must refuse payment by a person under this rule, the pawnbroker, must, at that time, provide the person with a notice of the rights of the pledgor and of the pawnbroker. The required notice must be in a form prescribed by the commissioner. sec.85.61. Advertising. (a) Prohibition-False, misleading or deceptive. A pawnbroker must not advertise or cause to be advertised, in any manner whatsoever, any false, misleading or deceptive statement or representation relating directly to the making, arranging, or negotiating of a loan subject to Texas Civil Statutes, Article 5069-51.01 et seq. No person may advertise the availability of pawn loans or suggest by use of any sign or other advertisement that a place of business is a pawnshop unless that person holds a pawnshop license for that place of business. Use of the words or phrases "unredeemed merchandise," "loan outlet," or "pawn outlet" or advertising under a heading, category, or title of "pawnbroker" or "pawnshop" or similar words shall constitute prohibited advertising under this section if the person does not hold a pawnshop license for that place of business. No pawnbroker may advertise under any name that is not on that pawnbroker's pawnshop license for the location advertised. (b) Advertising copy file. A pawnbroker must maintain at the licensed pawnshop, or other location designated in writing to the commissioner, a complete record of all printed and other advertising material used to promote the business of making loans subject to Texas Civil Statutes, Article 5069-51. 01 et seq. If this record is maintained at a site other than a pawnshop, it shall be subject to examination as if in a pawnshop. Printed text or audio cassette recording of any audio advertising and a VHS video tape copy of any television advertising must be included. If any language other than English is used in any advertising material, a true and correct English translation must be made and attached. (c) Use of state agency name. It shall be permissible for a licensed pawnbroker to publicly display or advertise the following statement: "Licensed and examined by the Texas Consumer Credit Commissioner, 2601 North Lamar Boulevard, Austin, Texas 78705-4207." In addition, any pawnbroker must include the commissioner's Austin telephone number and each telephone number that provides toll free calling to the commissioner's office from the trade area in which the advertising is used. The authorized statement and telephone numbers must both be used if any reference is made to licensing or regulation. sec.85.71. Examinations and Investigations. (a) Corrective actions required. If the commissioner or the commissioner's representative determines that a pawnbroker has violated the Texas Pawnshop Act or any rule promulgated thereunder, either may direct the pawnbroker to review his records to determine the extent of the violations and to make appropriate refunds or take other corrective actions. (b) Report of corrective action. The pawnbroker must prepare a written report documenting the scope and results of the review and related actions. The commissioner or the commissioner's representative may specify the content and format for the report. The pawnbroker must comply with the directive within a reasonable period of time as specified by the commissioner. sec.85.81. Miscellaneous Operating Provisions. (a) Hours and days of operation. (1) Public posting. Each pawnbroker must post the days and the hours of each day that the shop will normally be open for business. Normal hours may include regular periods of closing during a day such as a lunch time closing. The pawnshop must be open for business during the posted hours. Any pawnshop may be closed on New Year's Day, Memorial Day, July 4th, Labor Day, Thanksgiving Day, and Christmas Day without notice. A pawnbroker may close a pawnshop for other state, national, and religious holidays after posting notice of the intended closing for five calendar days prior to the closing. If a pawnshop is closed during regular posted hours due to an emergency, a notice of closing must be posted. The notice must include the date and the time that the pawnshop will reopen for business. All postings must be easily visible to a person outside all public entrances. (2) Temporary, non-emergency closings. All pledgors must be adequately advised through use of posted notices prior to the planned date of the temporary closing. Any closing in excess of three business days require notification of the commissioner in advance. A notice shall be posted as in paragraph (1) of this subsection. (3) Effect of Closing. (A) Non-holiday closings. The amount of pawn service charge scheduled to accrue on each pawn loan, during emergency or non-emergency closings of one or more full days, must be waived for any person who states that he or she made an unsuccessful effort to redeem goods during the closing. (B) All closings. If a pawnshop is closed on the Last Day of Grace of any pawn loan, the pledgor or holder of the pawn ticket shall have until the close of business on the next business day the pawnshop is open during its regular hours to redeem the pledged goods or renew or extend the loan. (b) Identification of persons presenting pawn tickets to redeem pledged goods. Texas Civil Statutes, Article 5069-51.14, requires that the person presenting a pawn ticket to the pawnbroker for redemption properly identify himself. The pawnbroker must identify the person by requiring the person to produce an acceptable form of identification. A pawnbroker must record on the original pawn ticket the type of identification and the identifying number presented by any person other than the pledgor. A person who is known and recognized as the pledgor, by the pawnbroker transacting the redemption, is not required to present identification. (c) Pawnshop Premises. (1) Outdoor displays and storage. All outdoor displays of merchandise for sale and outdoor storage of personal property must be compatible with surrounding properties. Outdoor displays and storage must not be established unless permitted by local ordinances for dealers in used merchandise of the types customarily found in pawnshops. (2) Signs. Each pawnshop must have at least one readily visible, permanent, exterior sign clearly stating the trade name of the business as shown on the pawnshop license issued by the commissioner. All signs must be in compliance with local ordinances. (d) Identification of source of goods in pawnshop. Every item of forfeited pledged goods located in a pawnshop must be tagged or otherwise marked to identify the pawn loan on which the item was forfeited. This section applies to all goods forfeited to the pawnbroker on and after its effective date and which have a retail value of or are offered for sale at a price in excess of $10. (e) Hold period. Each item of personal property purchased or otherwise acquired from the general public by a pawnbroker, other than forfeited goods, must be held at the pawnshop by the pawnbroker for a period of at least 20 calendar days from the date of acquisition before being modified, changed, sold, or disposed of in any manner. Upon application to and investigation by the commissioner, the commissioner may reduce the hold period requirement for a particular pawnshop in a specific jurisdiction. Such reduction may only be granted when a pawnbroker and the chief law enforcement officer who receives reports of property transactions from the pawnshop have adopted a reporting system that minimizes the elapsed time between the recording of property transactions by the pawnbroker and access by the law enforcement agency to the transaction data in a useable, machine readable form. The application for a reduced hold period must be approved in writing by and submitted through the chief law enforcement officer. (f) Modification of character of goods. A pawnbroker must not modify or change the characteristics of any goods in his possession in connection with any open pawn loan. (g) Redemptions by mail. (1) Persons authorized. As mandated in Texas Civil Statutes, Article 5069- 51.17B(i), any pledgor must be permitted to redeem by mail. A pledgor may do so by mailing to the pawnbroker the pawn ticket, a photocopy of the identification used in making the loan or, if not available, a photocopy of any identification acceptable for redeeming pledged goods, and a request to redeem by mail. Provided the pawnbroker has not received prior written notice that the pawn ticket has been lost, destroyed or stolen, the pawnbroker must honor the request within five business days. The pawnbroker may require payment by cashier's check, certified check, or money order of all principal and pawn service charges due on the loan and the charges authorized in paragraph (2) of this subsection. A pawnbroker may ship goods collect, i.e. the recipient pays the carrier for shipping and insurance charges. Shipments of firearms may only be made to a holder of a federal firearms license. (2) Shipping, handling and insurance charges. The pawnbroker shall be entitled to recover the reasonable and necessary expenses involved in the packaging and shipping of the goods and any additional charge to insure the goods. Goods must be insured during shipment for an amount determined by the pledgor. Shipment must be by United States mail, any authorized parcel delivery service, or any common carrier. (h) Monitoring of transactions and customers. (1) Type of goods offered. A pawnbroker must not accept in pawn any item on which the serial number has been defaced, altered or removed unless acting with the effective consent of the owner of the item. A pawnbroker must establish a written policy to be followed when accepting pledged goods. The policy must describe the types of situations which may be indicative of goods being stolen and shall define the procedures to be followed to avoid acceptance of stolen goods. The policy must be established in written form, communicated to all persons working in the pawnshop, and a copy filed in the Consumer Credit Commissioner File within 60 days of the effective date of this rule. (2) Acceptance of uniquely marked goods. A pawnbroker must not accept in pawn any item that is marked in a manner that indicates ownership by a rental company, motel, training school, construction company, governmental body, or any other person or firm other than the person offering the item to the pawnbroker, unless the pledgor produces a valid receipt or other evidence of ownership of the item, which must be attached to and retained with the goods while pledged. (i) Unclaimed funds. A pawnbroker must maintain a record of any amounts due a pledgor and not paid. (1) Proof of attempt to pay refund. Evidence of a bona fide attempt to pay monies due a pledgor must be maintained. The minimum acceptable evidence is an unopened envelope addressed to the last known address of the pledgor and returned as undeliverable by the United States Post Office. (2) Use of unclaimed monies. Use of unclaimed monies within the business until such time as paid to the pledgor, the estate of the pledgor, or to the State of Texas is not prohibited. (3) Payment of unclaimed funds to treasurer. A pawnbroker must pay the unclaimed funds to the state treasurer, as required by the Property Code. (4) Preservation of records. The records shall be preserved according to applicable law or rule of the state treasurer. (j) Duties and responsibilities of pawnbrokers. (1) Examinations. When a representative of the commissioner appears at a pawnshop to make an examination, the pawnbroker must provide the examiner with a desk or table providing adequate working space. The pawnbroker must also provide a suitable chair, adequate lighting, and convenient access to a 110 volt electrical outlet in an area reasonably suited to the type of work to be performed. (2) Communications. A pawnbroker must not misrepresent to any examiner or peace officer any information regarding activities in or about the pawnshop relating to the status of any pledged goods which may have come into the pawnbroker's possession. (3) Responsibility for acts of others. Any person who holds a pawnshop license may be held responsible for the acts of its officers, directors, employees, and agents in the conduct of the pawnshop business. (4) Character and fitness. A pawnbroker must report to the commissioner within three business days after having knowledge of any arrest, charge, indictment, or conviction of any person named on a pawnshop or pawnshop employee license or application filed with the commissioner. Any action previously reported to the commissioner or that would not require reporting on a pawnshop employee license application form in use at that date is excepted from this reporting requirement. A pawnbroker must report to the commissioner any known special investigation of alleged violations of the federal laws or rules relating to firearms. A pawnbroker must also report any adverse action proposed in writing or taken by the Bureau of Alcohol, Tobacco and Firearms against the federal firearms license held by the pawnbroker or used in the pawnshop. Reports must be made within three business days of the pawnbroker's knowledge of information or action. (5) Alcoholic beverages and other drugs. A pawnbroker must not use or possess or permit the use or possession of any drugs or other chemicals in or around the pawnshop if use or possession violates any law or ordinance. A pawnbroker must not operate the pawnshop while under the influence of alcohol or other drugs. A pawnbroker may operate the pawnshop while taking medication or drugs prescribed by an authorized medical practitioner if his ability to operate the pawnshop properly is not impaired. (6) Consumer education. Every pawnbroker must provide a suitable space in a public area of each pawnshop for a display of printed materials designed to educate and inform customers of their duties, rights, and responsibilities in pawn loan transactions. The display and printed materials will be furnished by the commissioner. The pawnbroker must assist the commissioner by refilling the display as 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 authority. Issued in Austin, Texas, on August 31, 1994. TRD-9447448 Al Endsley Consumer Credit Commissioner Office of Consumer Credit Effective date: Octobe 1, 1994 Proposal publication date: June 14, 1994 For further information, please call: (512) 479-1280 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 (the Department) adopts the repeal of sec.sec.49.1-49.14 without changes to the proposed text published in the May 20, 1994, issue of the Texas Register (19 TexReg 3859). The repeal of sec.sec.49.1-49.14 are adopted in order to enact new sections conforming to the requirements of new regulations enacted under the Internal Revnue Code for 1986, as amended, which provide for credits against federal income taxes for owners of qualified low-inome rental housing. The activities formerly performed under this section are now performed under new sec.sec.49.1-49.14, which was adopted by the Department's governing board on July 7, 1994, and published in final form in the Texas Register on August 19, 1994, (19 TexReg 6558). The effective date of the adopted new rule was September 1, 1994. No comments were received regarding adopion of the repeals. The repeals are adopted pursuant to the Texas Government Code, Chapter 2306; Acts of the 73rd Legislature Senate Bill 45, Chapter 141, effective May 16, 1993; and Acts of the 73rd Legislature Senate Bill 1356, Chapter 725, effective September 1, 1993, which provides the Department with the authority to adopt rules governing the administration of the Department and its programs and Executive Order AWR-91-4 (June 17, 1991), which provides this Department with the authority to make housing credit allocations in the State of Texas. This agency hereby certifies that the repeal 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 September 1, 1994. TRD-9447491 Henry Flores Executive Director Texas Department of Housing and Community Affairs Effective date: September 22, 1994 Proposal publication date: May 20, 1994 For further information, please call: (512) 475-3800 TITLE 16. ECONOMIC REGULATION Part IV. Texas Department of Licensing and Regulation Chapter 78. Talent Agencies 16 TAC sec.sec.78.10, 78.70, 78.71, 78.75 The Texas Department of Licensing and Regulation adopts amendments to sec.sec.78.10, 78.70, 78.71, and new sec.78.75, concerning talent agencies without changes to the proposed text published in the July 19, 1994 issue of the Texas Register (19 TexReg 5574). The new definitions clarify terms used in the profession, the amendment to sec.78.70 defines the way in which a talent agency may act in concert with an out-of-state agency, the amendment to sec.78.71 clarifies requirements for schedule of fees or commissions and adds a requirement to give a signed copy of the contract to the artist, and the new sec.78.75 simplifies and clarifies acts prohibited to the registrant. The justification for the new section and amendments is that the profession and the public need clarification of requirements and acts that are prohibited. The amendments and new section will function by increasing program integrity and consumer protection. No comments were received regarding adoption of the sections. The new section and amendments are adopted under Texas Civil Statutes, Article 5221a-9, which authorize the Texas Department of Licensing and Regulation to license and regulate talent 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 authority. Issued in Austin, Texas, on August 31, 1994. TRD-9447439 Jack W. Garrison Executive Director Texas Department of Licensing and Regulation Effective date: September 21, 1994 Proposal publication date: July 19, 1994 For further information, please call: (512) 463-7357 16 TAC sec.78.75 The Texas Department of Licensing and Regulation adopts the repeal of sec.78.75, concerning talent agencies, without changes to the proposed text as published in the July 15, 1994, issue of the Texas Register (19 TexReg 5443). The rule is repealed to adopt a new section covering the same subject matter in order to clarify and edit the rule. The adopted repeal will allow the adoption of a new rule which will increase understanding of the rules and clarify acts prohibited to the registrant. No comments were received regarding adoption of the repeal. The repeal is adopted under Texas Civil Statutes, Article 5221a-9, which authorize the department to license and regulate talent 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 authority. Issued in Austin, Texas, on August 31, 1994. TRD-9447440 Jack W. Garrison Executive Director Texas Department of Licensing and Regulation Effective date: September 21, 1994 Proposal publication date: July 19, 1994 For further information, please call: (512) 463-7357 TITLE 25. HEALTH SERVICES Part I. Texas Department of Health Chapter 295. Occupational Health Texas Asbestos Health Protection 25 TAC sec. sec.295.31-295.56, 295.58-295.62, 295.64, 295.65, 295.67-295. 71 The Texas Department of Health (department) adopts amendments to sec.sec.295. 31-295.40, 295.42-295.52, 295.54-295.56, 295.58-295.62, 295.64, 295.65, and 295.67-295.71; and new sec.295.41 and sec.295.53, concerning the Texas Asbestos Health Protection Rules (TAHPR). Sections 295.31-295.34, 295.36-295.38, 295. 40- 295.42, 295.44-295.47, 295.49-295.56, 295.58, 295.60-295.62, 295.64-295.65, 295.68, and 295.70 are adopted with changes to the proposed text as published in the May 3, 1994, issue of the Texas Register (19 TexReg 3336). The remaining sections are adopted without changes and will not be republished. The amendments and new sections include new requirements for licensing; a new license category; a state accreditation examination; new requirements for asbestos operations; new training requirements in compliance with the amended Model Accreditation Plan; and implements provisions in House Bill 1680, including a fee for notifications, and House Bill 1826, 73rd Legislature, 1993 which amended Texas Civil Statutes, Article 4477-3a, sec.12 (Texas Asbestos Health Protection Act) to provide an exemption from certain provisions for cities. These amendments and new sections implement the provision of the Texas Asbestos Health Protection Act and cover: general provisions; definitions; federal standards; asbestos management in facilities and public building; licensing and registration (conditions, exemptions, abatement emergencies, conflicts of interests, applications and renewals, out-of-state applicants, insurance requirements); licensure/state accreditation examinations; registration of asbestos abatement workers; licensure requirements (asbestos operations and maintenance (O&M) contractor (restricted), asbestos O&M supervisor (restricted), asbestos abatement contractor, asbestos abatement supervisor, individual asbestos consultant, asbestos consultant agency, asbestos project manager, asbestos inspector, individual asbestos management planner, air monitoring technician, asbestos management planner agency, asbestos laboratory, asbestos training provider, and asbestos transporters); operations (general, O&M requirements, abatement practices and procedures, notifications, and recordkeeping); required asbestos training courses; approval of training courses; voluntary compliance; compliance inspections and investigations; reprimand, suspension and revocation; administrative penalties; and National Emission Standards for Hazardous Air Pollutants (NESHAP) compliance. The Department of Health is appreciative of everyone who took the time to attend the public hearings, who took the time to testify, and those who wrote to express their concerns. The recommendations have helped the department to better define requirements as well as the effects on the regulated community and the general public health. We have attempted to use all the recommendations, whether for these revised asbestos rules or for future revisions. Some comments received did not address the changes in the rules nor recommend changes. These were concerned with procedures within the asbestos programs and will be carefully considered for possible procedural changes. Several comments were received which did not address the revision of the rules. The following are addressed: COMMENT: Some commenters disagreed with the makeup of the membership of the advisory committee, stating that they are only special interests. RESPONSE: The advisory committee composition will be reviewed by the Board of Health at their September 1994 meeting, in accordance Texas Civil Statutes, Article 6252-33. COMMENT: One commenter stated that several sections conflict with the Miranda Act and the due process of law. It brings criminal rules into the civil arena. RESPONSE: House Bill 1680 specifically granted the authority for the department to enter any work site to inspect for violations of NESHAP and TAHPA. Civil authorities are separate from criminal authorities and therefore, there is no conflict as stated in the comment. Editorial comments regarding punctuation and grammar were made throughout the rules. The following comments were received concerning the proposed revised rules. COMMENT: Concerning sec.295.31(c) one commenter suggested the title in subsection (c)(1) be changed from "For the purposes of the Texas Asbestos Health Protection Act" to "For the purposes of Licensure and Procedures in Public Buildings." Another recommended that subsection (c)(1)(B) be deleted and subsection (c)(2) be revised to "(2) Federal National Emissions for Hazardous Air Pollutants (NESHAP) regulations in 40 CFR 61, Subpart M shall apply to all affected facilities". One commenter submitted language for subsection (c)(2) regarding the title of the subsection and additional sentences which would make this subsection more clear. Two commenters recommended wording for clarification of subsections (c)(1)(A) and (B) and for paragraph (2). The recommendation would not change the meaning and make the intent clearer. RESPONSE: The department has revised the subsection to provide a clarification which addresses the commenter's concerns. COMMENT: Concerning sec.295.31(c)(1)(A), several commenters stated that the use of the term "whether intentional or unintentional" is too broad and would require many persons to become licensed regardless of whether they will work with asbestos-containing materials or not. The result will be an increase in costs for all building owners. It also implies that any maintenance or custodial persons would be subject to licensing. RESPONSE: The intent is to impress upon the building owners the responsibility they have and to enforce the provisions of the state law as it affects public health. Building owners must become aware of asbestos in their buildings and plan for appropriate exposure control. The building owners have two possibilities available. They can arrange to manage their own asbestos materials or hire appropriately licensed persons to manage it for them. No change was made as a result to the comments. COMMENT: Concerning sec.295.31(c)(1)(B), a commenter thought the wording of this subsection meant that even NESHAP facilities were subject to the rules and stated that a clarification is needed. RESPONSE: The department agrees and has added wording to indicate that NESHAP facilities are exempt as listed in subsection (c)(2). COMMENT: Concerning sec.295.31(c)(2), a number of commenters stated that there is a conflict in the wording of subsection (c)(2) and sec.295.34. It appears that the Texas law applies to NESHAP facilities as well. RESPONSE: The department concurs and has revised all references in cases where clarity is in question. Some sections of the rules apply to both the Texas and the Federal asbestos requirements. Most sections of the rules only apply to public buildings where licensing is required. The referenced sec.295. 34(a), (b)(1)-(3), and (d) were revised to sec.295.34(a), (b)(1)-(3), (c), and (f). COMMENT: Concerning sec.295.31(e), one commenter suggested that the wording "asbestos work" should be changed to "asbestos-related activities." This will make the wording of the rules consistent. RESPONSE: The recommended change has been made. COMMENT: Concerning sec.295.31, a commenter stated that there appears to be a grace period for training and medical requirements. RESPONSE: A licensed person retains the responsibility of keeping their license current by getting the required training or physical whenever either is about to expire. COMMENT: Concerning sec.295.31, one commenter stated that an exemption should be added for an asbestos notification and mandatory survey if there is adequate documentation to indicate there is no asbestos in the building. RESPONSE: The NESHAP does not contain a provision for this. These rules must be in compliance with the current federal regulations. COMMENT: Concerning sec.295.32, specifically relating to the definition of asbestos-containing material (ACM), several commenters stated that the requirement to perform transmission electronic microscopy (TEM) analysis on floor tile which has been previously analyzed by polarized-light microscopy (PLM) would be extremely expensive and time consuming, would delay completion of projects which are being performed during periods of building vacancy, would result in redundant testing, and there is no established methodology for the performance of these tests. One suggestion was to eliminate the TEM requirement and substitute the scanning-electron microscope (SEM), which would provide a cost effective means of verification. RESPONSE: The department agrees, however, more research is required to substantiate the intent. Close coordination will be maintained with the Environmental Protection Agency (EPA) to ensure the state will be consistent with the federal regulations. The TEM requirement has been deleted. COMMENT: Concerning sec.295.32, specifically relating to the definition of asbestos-containing material (ACM), several commenters thought the definition should be modified or may need clarification. Another felt the term "unintentional" should be deleted because it would make someone in violation if they accidentally and unknowingly removed or disturbed ACM and whether this applies to storm damage, fire, or "Act of God?". Others recommended that the NESHAP definition be retained without change. RESPONSE: The term unintentional is to be kept due to the responsibility of the building owner to determine if there is asbestos in his/her building. Under the federal and state laws there is a requirement for the building owner to notify anyone who is to work in the building of the presence of asbestos. There is also the need for work practices in the vicinity of asbestos-containing materials which will not disturb them. If this responsibility is carelessly carried out, workers or the general public will then be needlessly exposed to asbestos. This is a direct impact on public health. No change was made. COMMENT: Concerning sec.295.32, specifically relating to the definition for asbestos-containing material, two commenters stated that the definitions including any one material component of a structure does not take into account the National Emission Standards for Hazardous Air Pollutants (NESHAP) criteria. The definition should clarify the department position regarding whether joint compound falls under this definition. RESPONSE: EPA and the department recognize that tape and joint compounds become an integral part of the wall. However, if this material delaminates from the wall, then it must be tested as a separate material. The definition was not changed. COMMENT: Concerning sec.295.32, specifically relating to the definition of asbestos abatement activity, one commenter believes the definition for asbestos abatement activity is redundant with asbestos-related activity. RESPONSE: Asbestos abatement is one of the asbestos-related activities. Therefore, both definitions are needed. No change was made as a result of the comment. COMMENT: Concerning sec.295.32, specifically relating to the definition for asbestos consulting activities, commenters recommended this addition to define the various activities for which the consultant is responsible. RESPONSE: The definition was included in the rules as a means of defining the various activities of the licensed asbestos consultant. COMMENT: Concerning sec.295.32, specifically relating to the definition of asbestos-related activity, three commenters questioned the need for bidding to be an asbestos-related activity. Did this mean individuals in business development/marketing need to be licensed, and if so which license? Also, is the owner required to comply with the 10 working day notification before securing bids? One commented that bidding does not represent a health hazard and recommended that the rules be changed. RESPONSE: The intent is to prevent someone from getting an asbestos project without having become properly licensed. If someone bids and gets this contract without having the license previously, there may be delays in the start of the project while awaiting the license application to be processed and properly investigated before granting of the license. The pressure is then present to begin without receiving the license or meeting the requirements of state and federal laws. The definition was not changed. COMMENT: Concerning sec.295.32, specifically relating to the definition of asbestos survey, a commenter recommended that "taking samples for analysis and visual inspection" be added to the definition for inspection. The definition as written could add costs and delays to projects. The original definition should be retained. Another commenter stated that the definition of asbestos survey should read "An [A comprehensive] inspection ...by taking samples for analysis "or" (not and) by visual inspection." RESPONSE: There currently is no definition in the rules for inspection, however, this will be considered for future action. The recommended word change of the second commenter was made to this definition. COMMENT: Concerning sec.295.32, specifically relating to the definition for "designated person," a commenter recommended that the definition for "designated person" include minimum qualifications and that enclosure include requirements for labeling. RESPONSE: The requirements for the qualifications are too long to be included, but are included in other applicable sections. COMMENT: Concerning sec.295.32, specifically relating to the definition of EPA Regulations, some commenters recommended the format of references to federal regulations be changed from "40 Code of Federal Regulations" to "Title 40 code of Federal Regulations" and others be changed accordingly. RESPONSE: The accepted convention, which is also legally binding, is as currently listed in the rules. No changes were made. COMMENT: Concerning sec.295.32, specifically relating to the definition for "facility," a commenter suggested the definition of "facility" should be changed to delete "industrial", which would clearly indicate that such facilities are not regulated by the department's asbestos program. Another commenter stated that the definition for facility is confusing and recommended that the federal definitions for facility, public building, and commercial building be used. RESPONSE: The department concurs that the definition may be confusing even though it is the definition used in NESHAP. Currently the Texas Asbestos Health Protection Act (TAHPA) applies to some facilities also regulated by NESHAP, for instance, public buildings and apartments. Where the term "facility" is used in these sections, the provisions apply to those installations which are covered by NESHAP. The "facility" definition is revised to keep the same wording, but the sentences were reorganized to avoid confusion. COMMENT: Concerning sec.295.32, specifically relating to the definition of a facility owner, a commenter recommended the addition of this definition to explain who is considered the owner. RESPONSE: The department agrees the definition is needed in conjunction with the definition of facility. A definition was added. COMMENT: Concerning sec.295.32, specifically relating to the definition for independent third-party monitor, three commenters recommended that the definition be changed from a building to a facility and that this person must be a licensed air monitoring technician. Additionally he/she recommended that the definition for third-party air monitor be deleted as it is redundant with independent third-party air monitor. One commenter thought that the wording indicated that the air monitor could collect samples but not analyze final clearance samples or personal samples. They could only collect samples before or after abatement. RESPONSE: Other sections of the rules explain the requirement that this person must be licensed to work in a public building. Work practices are listed elsewhere in the rules. The definition for third-party air monitor will be combined with the definition of independent third-party monitor. COMMENT: Concerning sec.295.32, specifically relating to a recommendation to add new definitions, commenters recommended that definitions for approved acceptable/accepted, asbestos workers, and asbestos consultant activities be added. RESPONSE: Asbestos consultant activities was added. The other recommended definitions were not added and will be considered for future action. COMMENT: Concerning sec.295.32, specifically relating to operations and maintenance (O&M) contractor, one commenter stated that the definition for O&M activities was replaced by the definition for O&M contractor and that the definition for asbestos abatement was replaced by asbestos abatement activity. The commenter recommended that the original definitions be retained. RESPONSE: The other definitions are still valid. This additional definition is to define who the O&M contractor is and basic responsibilities. The new definition is retained. COMMENT: Concerning sec.295.32, specifically relating to the definition of an operations & maintenance manual, a commenter recommended the addition of this definition to explain the requirements as listed in various sections of the rules. RESPONSE: The department agrees and has included a definition as recommended. COMMENT: Concerning sec.295.32, relating to OSHA Regulations, a commenter recommended that the reference for 29 Code of Federal Regulations, sec.1926.58 be deleted as other regulations apply. Included was a recommendation that if the permissible exposure limit (PEL) is defined, that the Short Term Exposure Limit (STEL) of 29 CFR, sec.1926.58 be added. RESPONSE: The definition was revised accordingly to delete the reference. The STEL definition is included in the reference only, as the department does not enforce OSHA regulations, only those OSHA procedures which are a part of these rules. COMMENT: Concerning sec.295.32, specifically relating to "public building, subparagraph (F)," Two commenters state that the need for a professional engineer (P.E.) to assess the soundness of a building in danger of imminent collapse is in conflict with NESHAP and could allow demolition without the removal of the asbestos. Commenters also stated the sentence should be deleted, because if the building is structurally unsound the asbestos does not have to be removed. Requiring a P.E. to make that determination is inconsistent with sec.295.61 which also allows a registered architect to make that determination. RESPONSE: The department agrees that this requirement may be too restrictive and that an inconsistency has been identified. A need exists to define who can determine the building to be in danger of imminent collapse, not just a danger to health and safety. The rule was modified to contain the NESHAP provision for the determination to also be made by a city or state agency. Buildings from which the asbestos has not been removed in these cases require special handling in compliance with 40 CFR Part 763, Subpart M. COMMENT: Concerning sec.295.32, concerning the definition of regulated area, a commenter recommended that a definition for "regulated area" be used in the amended rules. RESPONSE: The suggested definition has been included in the final adoption of the rules. COMMENT: Concerning sec.295.32, regarding the definition of start date/stop date (completion date), one commenter stated the definition for start and stop dates were confusing and asked what the trigger activities would be. Another commenter recommended that "whichever is later" be added to the stop date definition. One commenter stated that a completion date cannot be accurately predicted and that it would lead to numerous amendments. It was suggested that a change in the wording would read "the date upon which the scope of work is completed and the first visuals are conducted." RESPONSE: The definitions were revised to specify what constitutes a start or stop date for abatement, renovation and demolition. COMMENT: Concerning sec.295.32, specifically relating to the definition of "working days," several commenters recommended that the definition of working days be left as it is defined in NESHAP. RESPONSE: The department concurs and will retain the original definition. COMMENT: Concerning sec.295.33(a), one commenter felt that the department should not list any references it will not enforce. Another commenter stated a concern about adopting references from a regulatory program which can be incorrectly applied to other programs, such as the reference to Asbestos Hazard Emergency Response Act (AHERA). RESPONSE: The department lists references which are closely associated with activities regulated under Texas Asbestos Health Protection Act (TAHPA) and the National Emission Standards for Hazardous Air Pollutants (NESHAP). They constitute regulations applying to those who work with asbestos. The department will enforce those laws of the state and those for which it has received delegation, such as NESHAP. In addition, it will enforce those provisions of other regulations which are applicable to its licensees as authorized by TAHPA. COMMENT: Concerning sec.295.33(a)(1), a commenter noted that under NESHAP, notification is required for renovation as well as demolition. RESPONSE: Notification is not required for buildings in which the asbestos- containing materials will not be disturbed. COMMENT: Concerning sec.295.33(a)(4), a commenter stated that it appears a licensed person is required for all asbestos abatement control options. This does not allow for an option of using accredited personnel located in manufacturing sites. The commenter recommended the following of the Model Accreditation Plan (MAP). RESPONSE: The department has listed the MAP as a reference and is following it. The required training for accreditation of asbestos workers, supervisors, etc. are listed in the MAP. These requirements exist for anyone working in all buildings in Texas. Licenses are required only in public buildings as listed in the TAHPA. COMMENT: Concerning sec.295.33(a)(10), commenters stated that 29 CFR sec.1910. 134 is incorrectly titled "Occupational Exposure to Asbestos, Tremolite, Anthophylitte, and Actinolite." The title should be "Respiratory Protection." RESPONSE: The department disagrees as the reference is correctly titled. COMMENT: Concerning sec.295.33(a)(8)-(10), a commenter stated that the Occupational Safety and Health Administration has issued new regulations. The commenter suggested that the new references should be used. RESPONSE: Paragraph (8) has been changed to use the new number of the reference and the effective date. Paragraph (9) has been deleted since OSHA has deleted the referenced appendix. The date of paragraph (10) has been changed to use the new reference, and paragraphs (10)-(13) have been renumbered accordingly. COMMENT: Concerning sec.295.33(a)(11), a commenter stated that if the TEM requirement remains, that an analytical protocol should also be specified. RESPONSE: The department disagrees as the requirements for TEM are contained in the reference. COMMENT: Concerning sec.295.33(b), a commenter recommended that the subparagraph for on-site enforcement activities be reworded. The recommended language is "(d) a complete and legible copy of these regulations is available to any licensee during normal business hours at the office of the department; and (e) a compliance official of the department will have a reference copy of all applicable regulations in his possession during any compliance investigation." RESPONSE: The comment was compared to other sections in the rules for inclusion, but no other applicable location was found. Copies of all referenced documents are not available to be given to any licensee, however, reference copies are available for review as stated. The recommended language will be taken into account in defining departmental inspection procedures. COMMENT: Concerning sec.295.34(b), a commenter suggested the addition of the word "facility" to better explain who is responsible. RESPONSE: The department concurs and has made the addition to the subsection. COMMENT: Concerning sec.295.34(b)(1), one commenter recommended the language read "Title 40 CFR Part 61." A commenter stated that the requirement be changed to read NESHAP "and" comply with sec.295.60 of this title. The wording presented implies this is a choice, not a requirement. RESPONSE: The department agrees the subsection is confusing and revised the language to indicate the different requirements for facilities and public buildings. All subsections in this section were revised to make this consistent throughout. The department concurs and added the word "and" in place of "or" as recommended. The title of the federal reference will be kept as it is the accepted legal convention. COMMENT: Concerning sec.295.34(b)(4), one commenter asked if the department can enforce a requirement that is in conflict with state law? Specifically, there are more options for worker protection insurance than "Workers' Compensation" or "Self Insured." Proof of coverage equal to or better than the statutory limits should be accepted. Another commenter recommended a change to ..."if required by the specifications." and that the state does not require employers to carry workers' compensation insurance. One commenter stated that the state should not be able to require a building owner to have worker's compensation insurance. RESPONSE: The wording was revised to conform with TAHPA. The Texas Asbestos Health Protection Act directs the requirement for Workers' Compensation Insurance issued by a company authorized to do business in Texas, written on the Texas form, when such insurance is required by contract specification or other agreement. The department does not have the legal authority to accept an equivalent. COMMENT: Concerning sec.295.34(c), commenters recommended the wording "This survey must be produced upon request by the department and must be conducted in accordance with the procedures specified in Title 40 CFR 763, subpart E, AHERA" be added. AHERA is currently the only nationally accepted protocol. A commenter noted that subsection (c) does not provide for an exception to the requirement for a mandatory asbestos survey if it can be proven the building does not have any asbestos. An exemption should be provided. The commenter also stated that the requirement for notification and surveys needs some clarification, such as are they required for painting a wall with asbestos-containing materials contained in it? Several commenters mentioned the required survey is not being done for renovation and demolition projects in most communities. Other commenters suggested that the requirement for response to a request from the department be 60 to 150 days. One commenter suggested an explanation of the requirement for accreditation of inspectors in a facility. RESPONSE: TAHPA requires an inspection to be performed and does not provide an exemption. The only protocol which exists for an inspection is AHERA. The department does not have the authority to allow an exemption to the inspection requirement but will discuss this with EPA to see if it can be incorporated later in other revisions of the rules or policy if EPA changes their requirements. The department agrees the accreditation reference is needed and has changed it to explain the requirements. COMMENT: Concerning sec.295.34(d)(2), commenters stated that the subsection needs clarification. They noted that the requirement for utility contractors to be licensed as Operations and Maintenance (O&M) contractors (restricted) conflicts with sec.295.35(a). One statement was that a license should not be required if asbestos will not be disturbed. Another commenter stated that the subsection would mean that any repair activity must be done by a licensed O&M contractor to avoid unintentional disturbance. One commenter inquired as to the requirement for a license to inspect or sample. The commenter also asked if building owners/management firms are exempt from the requirement for Errors and Omissions Insurance and if the department has considered licensing firms involved in abatement/O&M activities. A commenter stated that building owners should not be allowed to conduct their own asbestos inspections; that should be performed by licensed inspectors and consultants whose livelihood depends upon their experience. RESPONSE: The department feels that a public building owner has two options. First, they may hire a licensed person to remove the asbestos prior to a utility contractor performing their work. The other option is that a licensed utility contractor removes the asbestos materials which affect its utility work. The rules were revised to ensure consistency between sections. Building owners are required to obtain an O&M contractor's (restricted) license. COMMENT: Concerning sec.295.34(d)(4), a commenter recommended that a prohibition be added against "designing and abating" the same project. One commenter stated that the use of an independent licensed consultant would prohibit the use of organizational personnel to perform consulting services for organization owned buildings. RESPONSE: Subsection (d)(4) has been changed to clarify the concern of both commenters. The prohibition has been added as well as the removal of the word "independent" so that the intent will be clearer. COMMENT: Concerning sec.295.34(d)(5), one commenter suggested that the regulations for inspection, management, and lab analysis is unclear if it extends to industrial facilities. Licensing in this case would be overwhelming. Another commenter believes that there would be less confusion if the department removed the term "facilities" and used the EPA for public and commercial buildings. RESPONSE: The department has deleted subsection (d)(5). COMMENT: Concerning sec.295.34(e), a commenter stated that the requirement in subsection (e) puts a burden on building owners to use licensed persons in performing asbestos work. The person may have a suspended license, which the building owner would not know about. RESPONSE: The owner of a public building is only required to use due diligence in asking to see the license of the contractor. They are not required to do any research to ensure the license is current. Anyone may call the department on its 800 number and inquire about the current license status of the person and whether there are any violations which have been assessed. COMMENT: Concerning sec.295.34(f), several commenters were concerned about an inconsistency with NESHAP in the ten-day notification and exclusion of economic concerns, and the inconsistencies with the Occupational Safety and Health Administration (OSHA), which has a more flexible rule. RESPONSE: The department revised its notification requirements to use the NESHAP requirements in sec.295.61. COMMENT: Concerning sec.295.34(f), a commenter suggested that the notification responsibility be given only to the lead agency. RESPONSE: This has already occurred as of April 1, 1994. The only asbestos notification requirement is to the health. COMMENT: Concerning sec.295.34(f), one commenter suggested language which would separately address the notification requirements associated with public buildings and facilities. RESPONSE: The wording was modified to better explain the requirements. Enforcement of both the TAHPA and NESHAP requirements are met by the department. The notification requirements are the same except for the licensing requirement. One form which meets all requirements became effective on April 1, 1994. COMMENT: Concerning sec.295.34(f)(2), a commenter felt the requirement for notification of any amount of asbestos is excessive and that the department should use the reporting threshold in NESHAP. One commenter recommended that someone other than the building owner should be allowed to sign the notification form as that person is not always available. Another commenter stated that floor tile removal will create many emergency notifications. One commenter noted that NESHAP requires notification for renovation as well as demolition. RESPONSE: The TAHPA requirement for notification may be met with an annual O&M notification. NESHAP requirements were added to this subsection for clarity. The building owner may delegate the signature responsibility to a person within the organization or to a consultant, but not to the abatement contractor. COMMENT: Concerning sec.295.34(h), a commenter felt this gives the department considerable subjective judgment. Criteria should be based on federal action levels and also provide an appeal process for building owners. The requirement for management plans to be in the possession of employees in charge of building O&M is ambiguous. Another commenter stated that the O&M annual should be in the possession of anyone doing O&M work. One commenter felt that persons performing O&M for their employers in employer-owned industrial settings should be required to be licensed. A commenter recommended the addition of a sentence after the first sentence which would state "The asbestos survey and management plans are to be completed and submitted to the department within 90 days of notification by the department." Another commenter asked about the requirement for the management plan to be in the possession of the employee in charge of building O&M. It was unclear to the commenter as to who the specific person was for which the requirement exists. RESPONSE: The recommended sentence was added. This subsection was reworded to specify the supervisor as the one who must have the O&M manual in his possession. If a person disagrees with the direction to perform a survey and produce a management plan, he/she may request a hearing from the director, Occupational Health Division, Texas Department of Health. COMMENT: Concerning sec.295.34(i), one commenter recommended the addition of subsection "(i) Mandatory Project Design. Anytime RACM are anticipated to be disturbed in a project designed by a licensed asbestos consultant, the building owner shall employ a licensed project manager (sec.295.49) to be present at all times such activities are underway." Since most abatement projects fail because of poor supervision, it is imperative that this person be on-site during abatement activities. RESPONSE: The department is unable to incorporate this suggestion in this revision of the rules at this time, but will consider it as part of the next revision. COMMENT: Concerning sec.295.35(h), a commenter thought that penalties should be listed for a state employee threatening a member of the regulated community if penalties are listed for the threatening of a state employee. RESPONSE: The department has procedures to respond to complaints from the public regarding the conduct of its employees. The inclusion of the penalties for the regulated public is to make them aware of other laws which affect the enforcement and other regulated activities. COMMENT: Concerning sec.295.35(i), one commenter felt that the only reason to have a state examination is to generate funds. RESPONSE: The examination proposed by the department is intended as a check on the quality of the instruction of the training providers and to ensure the regulated persons who are licensed are proficient in the requirements of TAHPA. COMMENT: Concerning sec.295.36(a), a few commenters agreed that outside contractors who might come into contact with ACM be licensed. One commenter expressed a concern this would greatly increase costs. Another commenter questioned how the commissioner could let the legislature pass the exemption for floor tile. One commenter thought that the exemption should also extend to roofing material. RESPONSE: The Commissioner of Health provides the best advice possible to the legislature when it is considering a bill which could affect the public health. A final determination is made by the legislature that directs the Commissioner to develop regulations in compliance with the applicable law which has been signed by the governor. The Texas law only addresses the interior of public buildings. NESHAP covers all buildings not private residences, to include the exterior. The management of asbestos must be addressed. There will be no difference in costs with good planning. COMMENT: Concerning sec.295.36(a)(1), two commenters stated that the subsection should be modified with the addition of "or assumed to contain asbestos." RESPONSE: This section was not open for comment; however, the department will consider it with the next revision. COMMENT: Concerning sec.295.36(a)(2), several commenters stated that the department should recognize the 1992 Resilient Floor Covering Institute (RFCI) work practices. RESPONSE: The reference was added. COMMENT: Concerning sec.295.36(a)(5), several commenters thought requiring TEM would be very costly and time consuming without an increase of protection for the public health. Many felt the breakage requirement is in conflict with the provisions of House Bill 79. The breakage of floor tile as stated is ambiguous and would be difficult for all to properly interpret. It might require dedicated persons to maintain an extensive record keeping process in order to ensure they were not in violation. The commenters recommended that the department retain the NESHAP definition. Some commenters thought that the use of infra-red heat should be investigated and approved for use. Also, there are no real physical parameters. Many commenters suggested that the rules should be revised to prohibit powder-creating activities which have been identified by EPA. One commenter recommended that after the words "floor covering" to add the words "and adhesives." A concern was expressed that TEM would result in greater costs and encourage illegal activity. One commenter suggested that after the requirement for TEM that a sentence should be added. "The resilient flooring cannot be subjected to sanding, grinding, cutting, or abrading or become friable as those terms are defined in 40 CFR, Part 61, Subpart M." Further, a commenter suggested deleting the sentences referring to the size of floor tile pieces. One commenter stated that the PEL must be changed to the action level (.1 f/cc) and that floor tile found to be less than 1.0% asbestos could be assumed to be ACM or analyzed by TEM. Several commenters did not believe that TEM analysis is appropriate for floor tile. It would be both costly and time consuming. RESPONSE: The department agrees that some additional research is needed and has deleted this requirement. Wording in this subsection was revised to address the comments. COMMENT: Concerning sec.295.36(b), several commenters stated a concern as to how a building owner would know if the department had received the notification form. There are few options available, one being the use of certified mail. Some commenters thought the wording implied that a building owner would have to verify receipt. It was also suggested that the use of FAX should be allowed as it would be faster. One commenter stated that the notification requirement could delay the start of asbestos projects. RESPONSE: The ten working day notification requirement is required under NESHAP. Since the state is enforcing both the state and federal law, the notification requirement is consistent between both sets of regulations. NESHAP specifies that the postmarking of the notification 10 working days before the start of any asbestos activities provides ample notification and permits the planning of enforcement activities. FAX has not been determined to be reliable enough at this time as often the copies are illegible. There is also a need for an original signature on the form to make it an official document. The rule will be modified to state the postmark. COMMENT: Concerning sec.295.36(c), a commenter suggested that all penalties should be listed in sec.295.70. RESPONSE: The department concurs and will work to incorporate this in the next revision. COMMENT: Concerning sec.295.36(d), a commenter wanted to know how to get an emergency approved when the department is closed. Two commenters stated that all should be licensed and that there should be no provision for waiving the license requirement and that there should be a definition for abatement emergency. RESPONSE: The rules are being modified to state that the department must be notified within 24 hours or the next work day, whichever is sooner. In the case of a natural or manmade disaster, there may not be sufficiently licensed persons to respond immediately to resolve a major health hazard. This situation could follow a hurricane, flood, tornado, or major explosion at a refinery. The department will develop guidance to better explain what constitutes an emergency. COMMENT: Concerning sec.295.37(a), one commenter sees a problem if owners are allowed to perform their own background air sampling for asbestos projects. The results might be arranged to show the area to be cleaner than it is. This supports the reason to have third party air monitoring. Other commenters thought that organizations should still be allowed to do area and personal samples and to do clearance outside containment. There would be a cost savings if allowed to perform this way. One commenter suggested the addition of the word air in the title of this subsection so as to be consistent with the definitions in sec.295.32. RESPONSE: Third-party air monitoring helps to provide integrity to asbestos projects by supplying a disinterested check on the reliability of the project and its procedures. The title changes were made throughout the section as recommended. COMMENT: Concerning sec.295.37(a)(3), two commenters stated that under this requirement they can no longer collect air samples for analysis during abatement. It will cause a significant increase of in-house abatement projects. Another commenter stated that persons holding restricted licenses are limited to small scale-short duration projects and therefore are exempt from air monitoring. Therefore, this subsection is not needed. One commenter supported the third-party air monitoring requirement. RESPONSE: A building owner doing his own abatement is required to use an independent third-party air monitor for area and clearance sampling in order to avoid a conflict of interest. Persons performing small scale-short duration O&M work might be required to perform personal sampling or other air monitoring. COMMENT: Concerning sec.295.37(b), several commenters recommended that this subsection should be expanded to state that a contractor and a consultant on any project can not have a financial connection in any way. The commneters also disagree with the state interpretation which allows a university to not be in conflict if the design and abatement functions are handled in two separate departments. Some commenters thought it inappropriate for a qualified trainer to be required to be trained by a competitor. One commenter thought a trainer should not also train their own employees. RESPONSE: A trainer training his/her own personnel have a vested interest in the quality of the training as they are the ones who would face administrative penalties if work is being done improperly. The department agrees that an instructor may attend a class taught by another instructor, however, he/she must meet the same requirements as any student. Wording will be added to specify no financial interest between a consultant and an abatement contractor. COMMENT: Concerning sec.295.37(c), a number of commenters stated that the municipal exemption should also be extended to schools, counties and state agencies, or that the exemption should be deleted for everyone. One commenter thought the rule was unclear in that it if a consultant cannot design and abate the same project then the reverse should also be true. RESPONSE: The exemption being added into the rules is that which was in House Bill 1826. No other exemptions were authorized. The health hazard of asbestos requires a careful check and balance to ensure proper handling. Any change in the exemption will need to be in a change to the asbestos law as passed by the legislature. COMMENT: Concerning sec.295.37(d), one commenter recommended that a new subsection (d) be added. This would state "A person contracted to perform an asbestos-related activity for a building owner shall not take any bulk or wipe samples of any material within the facility without the written permission of the building owner, and under the observation of the building owner's representative. Any material suspected of containing asbestos should be brought to the attention of the building owner." The involvement of the building owner will aid in the integrity of the advice received. RESPONSE: This is a requirement which may be placed into a contract between the parties. Anyone hired to perform an inspection should be allowed to perform according to the applicable regulations. An owner placing severe restrictions on an inspector, whom they have hired, is risking improper handling of asbestos- containing materials, thus possibly harming the public health. The addition will not be included. COMMENT: Concerning sec.295.38(e)(1), several commenters stated that they are extremely concerned with the 30 days allowed by the rules to process applications, particularly for workers. All requested that this time limit be changed to one to five days. RESPONSE: The time periods to process license/registration applications, provided for by the rules are reasonable, particularly considering the complexity of verifying the documentation and information required to qualify for some of the licensing categories. COMMENT: Concerning sec.295.38(e)(2), a commenter stated that all fees should be reimbursed when applications are not processed within five working days. RESPONSE: Fees will only be reimbursed if applications are not processed within the time constraints provided by sec.295.38(e)(1), when payments exceed the actual required fee, or in the case of a double payment. COMMENT: Concerning sec.295.38(f), one commenter stated a concern regarding renewal notices. Concern was expressed regarding the requirement that workers must notify the department each time they change employers. RESPONSE: This is a reasonable requirement since the Asbestos Professional Licensing staff has only two ways of knowing how to contact licensees/registrants regarding renewal of their registrations; one is by the current address of their employer, the other is by their home address. COMMENT: Concerning sec.295.38(g)(6), several commenters questioned the requirement that the same training certificate used to qualify for a previous year's application cannot be used again for the current year's renewal application. Commenters interpreted this to mean that the same training certificate could not be used to qualify for multiple licenses. For example, an air monitor training certificate could not be used to qualify for both an upgraded air monitor license and an individual consultant license. The commenters thought that in this case the applicant would have to take the same air monitor course twice in the same year and submit two separate training certificates, one for the air monitor application and a different one for the individual consultant application. RESPONSE: If a training certificate has not expired, it will be accepted to qualify for licensure/registration. The same training certificate can be used to qualify for multiple licenses. For example, a photocopy of a current air monitor technician training certificate can be submitted to qualify for both an individual consultant and upgraded air monitor technician original or renewal license applications. The rules do not require an applicant to take two separate air monitor technician courses in the same year to qualify for two different licensing categories. COMMENT: Concerning sec.295.40(4), a commenter stated that the addition contradicts a previous statement in this same paragraph. This paragraph first states, "without any lapse in coverage," but later goes on to state that no licensee will be uninsured for more than 30 days. RESPONSE: The statement, "In no event shall a licensee be uninsured for more than 30 days," was deleted as it contradicts the previous statement that "the policy shall promptly be replaced or renewed without any lapse in coverage." COMMENT: Concerning sec.295.41(a), several commenters were confused with regard to the purpose of the state accreditation examination and others expressed that the examination is redundant and there are other less costly and burdensome ways to achieve the purpose of the examination, such as: having the training providers administer the examination; increasing the audit presence and enforcement activities; and levying fines on counterfeiters. RESPONSE: The state examination is proposed for the following reasons: to promote and protect public health and the environment by ensuring asbestos professionals are properly trained and prepared to work in the asbestos industry; ensure that asbestos training courses are being conducted in compliance with applicable state and federal regulations; strengthen and improve asbestos-related training programs; and minimize the number of fraudulent certificates in circulation. The department has not seen these objectives achieved through the current process of having only the training providers administer the examinations. The department believes it will be beneficial to the public and the environment if a pro-active approach (prevention) is adopted to minimize fraudulent activities rather than a reactive approach (cure) as suggested by several commenters. Furthermore, the level of on-site audits of asbestos training courses will increase even with the implementation of a state examination. COMMENT: Concerning sec.295.41(a), one commenter suggested that the state examination be studied in-depth, especially since having to wait 30, 60, or 90 days to take it will cause a high failure rate. RESPONSE: Once an individual successfully completes and passes an asbestos training course, he/she can register for the state accreditation examination. The department has not established any length of time that an individual is required to wait before he/she can take the examination. COMMENT: Concerning sec.295.41(a), several commenters stated that providing the registration form for the state examination and assisting the students in completing this form should not be the responsibility of the training providers. RESPONSE: The student should have the registration and schedule forms for the state accreditation examination readily available following a training course. The department intends to provide training providers with all necessary information that a student will need in order to make a comfortable transition from the training process to the licensing and examination processes. Through a cooperative effort between the department and training providers, this objective can be achieved. COMMENT: Concerning sec.295.41(b), two commenters stated that training providers should not be held responsible if a student is incapable of learning or has a problem with his/her level of comprehension. RESPONSE: If a training provider feels a student is incapable of learning or has a poor level of comprehension, then there is the possibility that the student could have difficulty with his/her attempt to successfully pass the examination administered in the asbestos training course and therefore would probably not be eligible to take the state examination. The department intends to use questions similar to those contained in examinations administered by training providers. If an individual successfully passes the examination administered by a provider then he/she should similarly pass the state accreditation examination. COMMENT: Concerning sec.295.40(b), many commenters suggested that asbestos abatement workers be excluded altogether from taking the state examination. RESPONSE: There has been opposition to the requirement that asbestos abatement workers take a state accreditation examination. One of the main concerns has been that many of these individuals are non-English speaking and/or illiterate and an extensive effort would be necessary in order to test them orally. After taking this and various other factors into consideration, the department has decided to exempt asbestos abatement workers from taking the state accreditation examination and increase the efforts to audit worker courses. COMMENT: Concerning sec.295.41(b), one commenter requested clarification where the proposed rules state that "no examinations will be required for persons licensed before September 1, 1994, until September 1, 1997." RESPONSE: The department shall require an individual applying for an asbestos license (except worker) on or after September 1, 1994, to take and pass the state accreditation examination. If an individual is issued an asbestos license by the department before September 1, 1994, he/she will be required to take and pass the state accreditation examination on or before September 1, 1997. COMMENT: Concerning sec.295.41(c), several commenters stated examination fees, travel costs and time constraints associated with the state examination would be burdensome to employees and companies. These commenters also felt that the state examination would deny many individuals the right to work and/or would frustrate those who do not test well. RESPONSE: The cost of the examination should be minimal compared to costs which could result from inadequately prepared workers, such as: increased health risks to employees and the public; fines due to state and federal violations; and the threat of liability. Moreover, the cost of the examination over a three-year period for one individual is less than 0.70 cents per month. The department accepts that financial burdens and time constraints are important and intends to consider utilizing the Texas Department of Health regional offices located throughout the state as testing sites. Time constraints should be minimal since the state accreditation examination is not directly linked to licensing and therefore individuals will not be denied the right to continue working. After an asbestos license has been issued, individuals will be given three opportunities within a one-year period to take and pass the examination. As for those who do not test well, the state examination is not designed to frustrate anyone, but instead test individuals on topics they have already learned and, hopefully, been tested on in order to ensure that they are adequately prepared to safely perform in the asbestos industry. COMMENT: Concerning sec.295.41(c), a commenter felt that the department should allow for examination fees to be paid at test sites. RESPONSE: The department shall require a processing period to determine whether or not an individual is eligible to take the state examination, therefore fees cannot be accepted at test sites. COMMENT: Concerning sec.295.41(d), a commenter suggested that there has been no validation process for the exam. RESPONSE: The department will have a validation period of one year, in which the test will be evaluated to ensure it is fair and effective. During this validation period, beginning September 1, 1994, the examination will be offered with state level accreditation contingent on its validation. COMMENT: Concerning sec.295.41(d), several commenters stated that the state examination is an excellent idea that should raise the level of professionalism in this industry; however there was concern that the examination schedule and testing locations may be insufficient in accommodating all individuals. RESPONSE: The department intends to maintain a flexible schedule for the examination (quite similar to those offered by training providers) in order to reasonably accommodate as many individuals as possible. Furthermore, the department intends to consider utilizing the Texas Department of Health regional offices located throughout the state as testing sites. COMMENT: Concerning sec.295.41(f), a commenter asked how long the waiting period is between re-examinations. RESPONSE: The department has not implemented a waiting period for those requiring re-examinations. COMMENT: Concerning sec.295.42(d), many commenters questioned whether the rules are referring to accreditation or registration regarding the required documentation for worker registration renewal. They noted an error regarding the statement "the required license fee" is required for worker registration; it should state, "the required registration fee." The commenters recommended deletion of the first reference to the "department" and stated that it should read, "current physician's written statement on the specified department form. " RESPONSE: The rules are referring to the registration certificate in this reference. However, this referenced portion is being deleted from the rules, and by definition in Section 295.32, the term, "license," is "any license or registration issued under this chapter." The first reference to "department" will be deleted from the sentence as recommended by one commenter. COMMENT: Concerning sec.295.42(e)(1)-(2), a commenter questioned the requirement that the same training certificate used to qualify for a previous year's application cannot be used again for the current year's renewal application. Several commenters interpreted this to mean that the same training certificate could not be used to qualify for multiple licenses. For example, an air monitor training certificate could not be used to qualify for both an upgraded air monitor license and an individual consultant license. The commenters thought that in this case the applicant would have to take the same air monitor course twice in the same year and submit two separate training certificates, one for the air monitor application and a different one for the individual consultant application. RESPONSE: If a training certificate has not expired, it will be accepted to qualify for licensure/registration. The same training certificate can be used to qualify for multiple licenses. For example, a photocopy of a current air monitor technician training certificate can be submitted to qualify for both an individual consultant and upgraded air monitor technician original or renewal license applications. The rules do not require an applicant to take two separate air monitor technician courses in the same year to qualify for two different licensing categories. COMMENT: Concerning sec.295.42(e)(2)(5), should be deleted as there will be no examination for workers. RESPONSE: The department deleted this subsection following the decision to delete the examination requirement based on the comments received for sec.41. COMMENT: Concerning sec.295.43, one commenter questioned what the state considers O&M activities? For example, do cable pulling contractors need O&M licenses when performing work in return air plenums? It should be a policy that if a subcontractor is performing any type of renovation or general maintenance activities in a building containing asbestos, they must possess an O&M contractor license. RESPONSE: According to sec.295.32 (relating to Definitions), "operations and maintenance" (O&M) activities are defined as activities that "are restricted to small-scale, short-duration work practices and engineering controls for tasks that result in the disturbance, dislodgment, or removal of asbestos in the course of performing repairs, maintenance, renovation, installation, replacement, or cleanup operations (Title 29, CFR, sec.1926.58, Appendix G, titled "Work Practices and Engineering Controls for Small-Scale, Short-Duration Asbestos Renovation and Maintenance Activities")". Subcontractors do not necessarily need operations and maintenance licenses since, before any O&M work can be performed, the building owner must have inspected and documented the location of any asbestos in a building. The building owner is responsible for notifying any person who is going to conduct O&M activities that asbestos is present, and this notification must be prior to commencement of any O&M activities. If the building owner or contractor determine, prior to commencing any O&M-type activities, that no asbestos will be disturbed, the rules do not require the person conducting such activities to be licensed. COMMENT: Concerning sec.295.43(e)(1), a commenter requested that the last sentence of this paragraph be changed to read, "This person must be in charge of asbestos operations and compliance with the asbestos regulations contained in this chapter at the applicant organization." The commenter suggests that it is redundant for the department to enforce all regulations it has incorporated by reference. One commenter questioned the need for the requirement for training not used for a previous license application. RESPONSE: The rule provides specific guidance regarding the responsibility of this licensed person. The requirement for training not used for a previous application has been deleted as only current training is required. COMMENT: Concerning sec.295.44(f)(3), a commenter requested that the term "full-scale" should be defined or replaced with "large-scale." RESPONSE: The term "full-scale" was removed as it doesn't provide specific guidance. COMMENT: Concerning sec.295.45(a), two commenters recommended that the proposed change be revised to read, "....to engage in asbestos abatement in a public building or facility. This requirement does not apply to the collection of sample materials suspected of containing asbestos taken during an inspection or survey by someone licensed to inspect." RESPONSE: The department disagrees since the requested revision doesn't significantly change the meaning of this referenced section. COMMENT: Concerning sec.295.45(a), a commenter recommended that because of restrictions placed on an asbestos consultant by sec.295.48(b)(4), that sec.295. 45 should delineate that a licensed contractor cannot perform consulting, inspecting, management planning, project designing, area or clearance air monitoring, or employing anyone licensed to perform these activities. RESPONSE: The department agrees that the same restrictions should be delineated in the asbestos contractor section that an asbestos contractor cannot perform any consultation or employ anyone licensed to perform any activities related to asbestos consultation. The rules have been checked for consistency. COMMENT: Concerning sec.295.45(e)(1), commenters questioned whether or not the "designated" individual can hold other licenses? Also, commenters expressed concern over not being able to use one training certificate to qualify for more than one license. Because of this interpretation, a licensed supervisor can no longer be the "designated" individual. RESPONSE: If a training certificate has not expired, it will be accepted to qualify for licensure/registration. The same training certificate can be used to qualify for multiple licenses. For example, a photocopy of a current air monitor technician training certificate can be submitted to qualify for both an individual consultant and upgraded air monitor technician original or renewal license applications. The rules do not require an applicant to take two separate air monitor technician courses in the same year to qualify for two different licensing categories. COMMENT: Concerning sec.295.47(a), two commenters request clarification on whether or not institutions will now need consultant agency licenses if institutions hire independent contractors, or will institutions only need individual consultant licenses if in-house staff is employed? Also, commenters suggest that individual consultants should be able to hire inspectors for in- house work on a temporary basis. RESPONSE: Institutions, acting as building owners, can hire contractors, individual consultants, etc., without being licensed. The rules don't require building owners to be licensed to hire other licensees. The rules do, however, require that any licensed individual consultant hiring inspectors must also hold a consultant agency license. COMMENT: Concerning sec.295.47(b)(3), several commenters expressed concern that the "only true NIOSH 582 training course is offered in Cincinnati, OH." They suggested that the wording be changed to "....health (NIOSH) 582 course or equivalent, submit..." There was an objection to new requirements for individual consultants to perform field analysis air monitoring. The commenters also had an objection with the requirement to submit a comprehensive quality control/quality assurance program. This requirement is much too expensive to have to be enrolled in both the AAR and PAT. Will individual consultants and air monitors now need to be licensed as a lab since PAT participation is now required to perform field analysis? RESPONSE: There are many NIOSH courses which are valid and follow the guidelines. An individual should not be required to be in both programs. The quality control/quality assurance requirement was deleted from this subsection. COMMENT: Concerning sec.295.47(e)(1), one commenter objects to the elimination of exemption for PEs, AIAs, CIHs, etc., to submit asbestos-related experience to qualify for individual consultant licensure. RESPONSE: The requirement has not been eliminated, because of legislative intent. COMMENT: Concerning sec.295.47(f)(1), a commenter requested clarification on what documentation is needed to show that all asbestos work was performed under the applicable rules and regulations. RESPONSE: Documentation consists of a letter from the applicant which lists work he/she has performed, dates, addresses, and supervisor information with which the department may verify the experience. COMMENT: Concerning sec.295.47(f)(3)(B), one commenter requested that the exemption that CIHs not having to take the modified three-day air monitoring course not be deleted. RESPONSE: The department will not require a CIH to attend the initial air monitoring course. However, he/she will be required to attend the air monitor refresher course. This is the only way he/she will become aware of changes in the law or new air monitoring procedures. COMMENT: Concerning sec.295.47(f)(3)(D), one commenter stated that this subsection was in conflict with the refresher requirements as listed in sec.295. 64. RESPONSE: This subsection was deleted as it does not comply with the Model Accreditation Plan delegation from the Environmental Protection Agency. COMMENT: Concerning sec.295.47(g), one commenter thought the term "performing work for hire" should be retained. This was because of the requirement as stated in the Texas Asbestos Health Protection Act. RESPONSE: The department concurs and has retained the wording in the first sentence. It has been deleted elsewhere in the paragraph as it was redundant. COMMENT: Concerning sec.295.48(b)(4), commenters recommended that this provision should be enforced as the rules state that consultants must not engage in contractor activities. The policy of exception that an individual can be licensed as both a consultant and contractor, but not perform both functions on the same project should be abolished. Additionally, the rules should stipulate in the contractor section that contractors may not engage in asbestos consulting. RESPONSE: The conflict of interest which prohibits the same person from performing as a consultant and the abatement contractor in the same building is a provision in TAHPA. COMMENT: Concerning sec.295.50(a), commenters object to the wording, "for hire," being removed. Why can't an inspector work under contract for a building owner without being in the employ of an asbestos consultant agency or management planner agency? RESPONSE: The wording, "for hire" was removed to enforce the requirement that an inspector must be employed under an agency license whether for hire or in- house work. COMMENT: Concerning sec.295.50(d)(5), one commenter requested that "(A) and (B)" be changed to "(A) or (B)," so that the meaning is parallel. RESPONSE: This correction was made. COMMENT: Concerning sec.295.50(d)(5)(A), a commenter contends that this requirement will eliminate any possibility of school personnel conducting their own inspections. Even if school personnel had performed inspections in the past, they wouldn't have performed them under the supervision of a licensed inspector or management planner since these licensing categories didn't exist prior to 1/93. RESPONSE: A school with an licensed inspector, should consider having that inspector licensed as a management planner instead. The other option is to license the school as a management planner agency. Either of these options will give credit for experience and education. COMMENT: Concerning sec.295.51(b), a commenter questioned whether or not this licensing category is allowed to assess the condition of asbestos without an inspector license? RESPONSE: A licensed management planner is a combination license of both management planner and inspector. To qualify for licensure, management planner applicants will now be required to submit proof of professional liability insurance in the amount of $100,000 and a Physician's Written Statement Form completed by an occupational health physician. COMMENT: Concerning sec.295.52, a commenter mentioned a conflict in the rules and the requirements for qualification of an air monitor and a laboratory as regards the quality control procedures. The suggestion was to remove the air monitoring technician (upgrade) since only a person working for a laboratory could meet the required qualifications. RESPONSE: The department agrees and has deleted the reference in all locations of this title. COMMENT: Concerning sec.295.52(a), one commenter requested that the wording be changed so that an AMT can take personnel samples under the supervision of a consultant. RESPONSE: The wording was changed to read, "....or when employed by a contractor an AMT, is restricted to performing only personal sampling." COMMENT: Concerning sec.295.52(e)(2), a commenter requested that the phrase, "....or must comply with 295.54(e)(3)...." not be deleted. If an AMT is employed by a lab, then AAR shouldn't be a requirement. This AAR alternative should be only for those AMTs working for consultants or contractors. Another commenter makes comments referring to AMTs being required to be enrolled in the AAR. RESPONSE: The subsection was deleted as it was in conflict with other provisions. COMMENT: Concerning sec.295.54(a), a commenter suggested that each lab (branch offices included) should be individually licensed and requests that a distinction be made as to what capabilities each lab has or what type of testing each lab is licensed to conduct. RESPONSE: The subsection was changed to indicate that all laboratories, including branch laboratories, will be required to be individually licensed. Currently, all asbestos laboratory licenses indicate what type of analysis each is licensed to perform. COMMENT: Concerning sec.295.54(d)(2), one commenter suggested that this reference be changed to reflect that the lab must participate in the fiber component of the PAT program and be rated proficient in these analyses. RESPONSE: The current requirements are appropriate for laboratories to be able to provide the level of quality needed. COMMENT: Concerning sec.295.54(d)(3), a few commenters suggested that asbestos bulk sample program participation be required of all labs performing such analysis. They suggested the addition of NIOSH to the PAT program requirement. RESPONSE: The change was made as suggested. COMMENT: Concerning sec.295.54(d)(4), a commenter suggested that AAR enrollment should be required for each person performing fiber counting outside of the laboratory facility. RESPONSE: The current requirements are appropriate for laboratories to be able to provide the level of quality needed. COMMENT: Concerning sec.295.55(d)(9), one commenter requested clarification regarding any requirement for the location of sanitary facilities (restrooms). RESPONSE: The only requirement is that they be readily accessible to the student. COMMENT: Concerning sec.295.55(d)(10)(A), several commenters mentioned that EPA allows the combining of some courses and that the department should audit one of these to determine how well it is working. RESPONSE: The department has had several conversations with EPA and has concluded that the level of instruction for the various disciplines is different enough that the combining of courses should not be allowed. COMMENT: Concerning sec.295.55(d)(10)(C), a few commenters stated that the approved courses should follow the Model Accreditation Plan. RESPONSE: The subparagraph has been revised to prohibit the combining of hands- on training. COMMENT: Concerning sec.295.55(d)(11)(A), a commenter suggested that the rule be modified to state that "at least 50% of the classroom instruction will be conducted with instructors presenting the material." This was suggested because of the amount of hands-on training in the supervisor and worker courses. One commenter claims the department has not demonstrated that the use of a video is better or worse than an instructor providing the material. RESPONSE: The section was revised to include that 100% of the hands-on training will be conducted by the instructor. Audits of courses with considerable use of videos show the student loses interest when there is not an opportunity to ask questions without interrupting the video, or having the instructor talking while the video is in progress. COMMENT: Concerning sec.295.55(d)(11)(B), a commenter recommended a rewording of this subsection as it pertains to "interactive" videos. The recommended wording is "Training films and video tapes may be used to enhance understanding, but may not be used as a substitute for the formal class conducted by a certified instructor or the Model Accreditation Plan required hands-on training. Any of these materials must support and convey the understanding of the subject to the student." RESPONSE: The recommended change was made. COMMENT: Concerning sec.295.55(d)(12), commenters suggested that the department allow more flexible training hours beyond the Monday-Friday, 8:00 a. m.-5:00 p.m. time span. RESPONSE: Some flexibility was added in response to the comments. Generally, most of the courses are taught Monday-Friday in the 8:00 a.m.-5:00 p.m. time frame. The department is willing to allow training at other time periods. Notification is needed in order to plan the audit of courses; however, short notice courses are approved when the department is consulted. COMMENT: Concerning sec.295.55(e)(2), several commenters had several comments about the notification to the department prior to the teaching of courses. Many felt the 14-day advance notification is not practical and presents a hardship on training providers, contractors, and students. Some commenters were also concerned about the proposed penalty in sec.295.70(f)(3)(D) if they did not comply. RESPONSE: The department requires sufficient notice in order to plan its enforcement audits. A 14-day notification has proven to be workable (in the past). The department intends to work with the training providers to allow as much flexibility as possible. COMMENT: Concerning sec.295.55(f), a commenter requested clarification on the requirement for the addition and deletion of instructors. RESPONSE: The instructor list aids the department in determining the competency of the licensed training provider to continue to provide courses which are in compliance with the Model Accreditation Plan. COMMENT: Concerning sec.295.55(g), a few commenters queried if an instructor is accredited for the supervisor course if he/she can teach the worker course? One commenter also suggested the adding of an instructors license. RESPONSE: The instructor may teach both the initial and refresher worker courses. The instructor license may be valid; however, the department cannot address that in the current revision of the rules. This will be researched for any future revisions. COMMENT: Concerning sec.295.55(g)(1), several commenters asked why an instructor must be trained by a competitor. RESPONSE: The department agrees and has deleted the restriction. COMMENT: Concerning sec.295.55(h), commenters asked why an instructor must get references from peers in another company if those persons have never attended a course taught by the instructor. RESPONSE: The department began requesting no more than one reference from the current employer and requiring the other two to be from those who could attest to the applicant's teaching or technical expertise. This has not proven to be a problem based on the number of new training providers and instructors accredited in the past few months. COMMENT: Concerning sec.295.56(e)(7), one commenter requested that the referenced section should be amended to read, "deliver all asbestos-containing waste material for disposal to a facility from the approved list provided by the Texas Natural Resource Conservation Commission, P.O. Box 13087, Austin, Texas 78711-3087." RESPONSE: This statement was amended to read as requested. COMMENT: Concerning sec.295.58(b), a commenter stated that the decision to perform clearance monitoring should be based on professional judgement. The specified clearance would be very costly and time consuming. RESPONSE: The comment was in reference to subsections which are not open for comment. COMMENT: Concerning sec.295.58(b)(7), one commenter concurred with the recommended change. RESPONSE: No action is required. COMMENT: Concerning sec.295.58(e), a commenter stated that inspections in some sensitive areas may disrupt business and upset some tenants in various buildings. Reasonable notice should be given for former work sites. RESPONSE: The department is sensitive to disruption in former work sites. Prior coordination to the maximum extent possible will be made and reasonable accommodation provided. On-going projects will be inspected without notice. The building owner or contractor is expected to ensure rapid entrance of the inspector and not delay them. Department personnel desire to make inspections as much of an assistance as possible, but must enforce the state and federal laws. COMMENT: Concerning sec.295.58(f), a commenter suggested the addition of "during asbestos abatement activity," to the end of the sentence. RESPONSE: The change was made as suggested. COMMENT: Concerning sec.295.58(g), a commenter stated that the department should specify the facial hair and other requirements for respirator wear. RESPONSE: The department feels the OSHA requirements suffice for this purpose. COMMENT: Concerning sec.295.58(h), several commenters stated that previously any licensee could take a bulk sample. In the revised rules this is restricted. Why can't a worker take a sample? One commenter stated that under EPA regulations only an accredited inspector can take bulk samples from a school or public building. Another commenter stated this should be accomplished by anyone authorized by these rules. The subsection does not specify who can perform the visual clearance. RESPONSE: Workers are not trained in the taking of samples nor the specified handling of these samples. Supervisors and licensed inspectors are properly trained and have a higher level of responsibility. COMMENT: Concerning sec.295.58(i)(1)(A), many commenters suggested that there not be a minimum number of baseline samples required and that the project supervisor should be able to make the judgement as to how many samples are required and where to take them. One commenter stated that the volume should be at least 1200 liters. Another commenter suggested the air volume should be 1250 liters. Additionally, the correct size of the filter is 0.8 microns. RESPONSE: The filter size and the upper air volume limit have been incorporated as it complies with the published protocol. A licensed consultant may specify other than these requirements if it better serves to clear the project and continues to protect the public health. COMMENT: Concerning sec.295.58(i)(2), several commenters stated that to require ambient samples inside containment is not consistent with the normally accepted definition and that this should be retitled area monitoring. RESPONSE: The requirement will remain; however, a consultant may design an air monitoring scheme which is different, based upon his/her knowledge of the specific project. COMMENT: Concerning sec.295.58(i)(2)(B), some commenters recommended that this be changed to area samples. RESPONSE: The suggested change was not made. A licensed consultant may specify a different protocol based upon his/her judgement. COMMENT: Concerning sec.295.58(i)(3)(A), a commenter stated that glove bag operations currently do not require air clearance. Why are they now required? Another commenter felt that the wording in this paragraph would require air monitoring in all operations and maintenance activities. RESPONSE: There will be no requirement for air monitoring of glovebag operations, unless there is an unusual situation and it is specified by the consultant. The wording "except Operations & Maintenance" was added to the paragraph to explain that this section of the rules does not apply. COMMENT: Concerning sec.295.58(i)(3)(C), several commenters stated that currently air monitoring technicians with an upgrade can do a final clearance on a small project. It would be much more costly if the requirement is for this clearance to be issued by a laboratory as proposed. If TEM is specified the lower limit should be the small scale-short duration requirements. A commenter noted that the filter size is incorrect and should be 0.8 microns. One commenter suggested rewording of this subsection and provided the wording. Some commenters thought subparagraphs (C) and (D) were very similar and should be combined into one paragraph. RESPONSE: The filter size was changed as recommended. An AMT working for a laboratory will be able to perform on-site clearance. The air monitoring requirements were consolidated into subparagraph (C). COMMENT: Concerning sec.295.58(i)(3)(D), several commenters state that this requirement will add cost and delay projects. A commenter asked if a project manager would be able to do a visual inspection. One commenter noted that "foundation component" should be "facility component." Some commenters thought subparagraphs (C) and (D) were very similar and should be combined into one paragraph. RESPONSE: The word "foundation" was changed as recommended. The air monitoring requirements were combined into subparagraph (C). A licensed consultant may designate a project manager to perform the visual clearance. COMMENT: Concerning sec.295.58(i)(3)(E), several commenters stated that the requirement for TEM analysis of a floor tile project is overly expensive and time consuming and conflicts with House Bill 79. A few commenters recommended testing for greater than 160 square feet. RESPONSE: This subsection was deleted as it conflicts with the exemption allowed in sec.295.36 of this title. COMMENT: Concerning sec.295.58(j), several commenters recommended that the requirement for the posting of documents on the bulletin board be deleted or include those specified in House Bill 79. One commenter asked when the department poster will be issued and if any posters in Spanish will be provided. RESPONSE: Workers and other persons on a project must have information available to them which will protect their health and safety as well as to inform them of the applicable laws. The department requirement is consistent with those of the federal agencies which also enforce various regulations and penalties in the safety and environmental areas. Spanish language posters will also be required. COMMENT: Concerning sec.295.(k), a commenter recommended the addition of a copy of the "Recommended Work Practices for the Removal of Resilient Floor Coverings," published by the Resilient Floor Covering Institute (1992). RESPONSE: The department agrees and has added this requirement as subsection (k)(3) for any floor covering removal which is performed in compliance with exemption for licensing under sec.295.36 of the title (relating to Licensing and Registration: Exemptions; Emergency.) COMMENT: Concerning sec.295.60(a)(4), several commenters recommended the addition of emergency personnel responding to an emergency and specialists the consultant needs for technical advice. RESPONSE: the department agrees and has made the recommended addition. COMMENT: Concerning sec.295.61(a), several commenters stated that a provision should be made to allow the designation of "To be determined by bid" to be provided in the abatement contractor, the waste transporter and the disposal site sections. This would allow the owner to file a ten-day notification and later submit the name of the contractor, transporter or waste site on an amended notification form. RESPONSE: All notifications are targeted (Top, High, Low) for inspections. The contractor, transporter and disposal site information are a key part of the targeting and must be included. The ability to verify whether a contractor or transporter is licensed and has had significant violations before the start of a project prevents unintentional and intentional violations. Also, stating the contractor, transporter and waste site in the notification is a NESHAP requirement and the form is used to notify in accordance with NESHAP. COMMENT: Concerning sec.295.61(a), some commenters stated that requiring that the fees be submitted with all notifications creates an accounting problem for agencies that use purchase orders. RESPONSE: The department agrees and has decided it will send an invoice for the fees after the notification has been received. The burden that would have been imposed on notifying entities persuaded a re-evaluation by the department. COMMENT: Concerning sec.295.61(a), several commenters stated that the paragraph is confusing as to the differing notification requirements of TAHPA and NESHAP and whether more than one notification is required. RESPONSE: The department agrees and the notification requirements of public buildings have been delineated from those of facilities. The paragraph has been rewritten to clarify that only one notification is required. COMMENT: Concerning sec.295.61(a), a commenter asked whether an owner has to notify when he/she is taking bids, since the definitions list the taking of bids as an asbestos abatement activity? RESPONSE: The owner does not have to notify when taking bids. The ten-day notification should be submitted ten working days before any activity which may disturb asbestos. COMMENT: Concerning sec.295.61(a), a commenter recommended that the notification of renovation or demolition should be improper unless it contains an original signature. RESPONSE: The department agrees. A statement has been added to the subsection to that effect. COMMENT: Concerning sec.295.61(a), a commenter recommended that there be a minimum threshold for notifications that is consistent with NESHAP. RESPONSE: The state chose to be more stringent than NESHAP when the TAHPA was first passed. An inspection to determine compliance may be performed on any project. An O&M plan should be developed for buildings in which small abatement projects are often being performed. The annual O&M notification will replace the individual or monthly notifications, as addressed in sec.295.61(g). COMMENT: Concerning sec.295.61(f), several commenters stated that the requirement to notify of a change in the stop date will be difficult to comply with because of unforeseen events that occur during an abatement project. Additional notifications will increase paperwork and cost. RESPONSE: This requirement is necessary because of the frequency that inspections have been attempted on projects that were completed early without an amended notification. Some flexibility has been allowed by only requiring notification for stop dates which change by more than 1 work day for each week. The contractor or consultant may submit the notification if he/she has been delegated in writing by the owner. COMMENT: Concerning sec.295.61(f), a commenter stated that it is unclear as to when is the exact completion (stop) date. RESPONSE: The "abatement" stop date is the date on which the containment is removed. This will correspond to the definition of the abatement start date. A demolition stop date and abatement stop date will be defined in the list of definitions as well as an abatement start date and demolition start date. COMMENT: Concerning sec.295.61(f), a commenter suggested that rather than amending the stop date to prevent inspectors from arriving on projects that were completed early, the inspectors should schedule the inspection on the start date or early in the project and call before arrival. RESPONSE: The inspectors often have so many projects to inspect that it is impossible to always inspect on the start date. Unannounced inspections are the only way to observe the true work practices of a contracting company. COMMENT: Concerning sec.295.61(g), several commenters stated that the requirement for a single, estimated, annual notification for O&M work is acceptable, but the section is confusing. RESPONSE: The department has edited the section. Clarification will be made in regard to amending the notification if the amount of asbestos that is abated exceeds the amount in the annual notification. Building owners will keep records of the O&M projects in an O&M manual, which will be reviewed during an inspection. COMMENT: Concerning sec.295.61(g), a commenter suggested deleting the portion of the section which mandates that all demolitions be updated because no such requirement is imposed by NESHAP. RESPONSE: This portion has been deleted. Demolitions are addressed in sec.295.61(j). NESHAP requires that notification be submitted for all demolitions, regardless of whether or not the building contains asbestos. COMMENT: Concerning sec.295.61(h), some commenters stated that economic concerns should be classified as an emergency. Incidents which involve a piece of equipment or process area that is crucial to the production of a facility should be considered as an emergency. RESPONSE: The section was rewritten to include economic concerns. Economic concerns will be considered for an emergency waiver of the ten-day if an unreasonable financial burden would be imposed and any prior planning and inspection, which could have been done, was in fact completed. Wording was added to include the protection of equipment, the structure or for the health, safety and well being of people in the building. COMMENT: Concerning sec.295.61(h), a commenter asked whether the department will have staffing on holidays, week-ends and after normal business hours to allow compliance with the 24-hour notification? RESPONSE: As proposed, the subsection requires that the notification be submitted no later than the following working day. COMMENT: Concerning sec.295.61(i), a commenter stated that notification and removal of RACM is also required under NESHAP for renovations. RESPONSE: This subsection was proposed only to clarify the notification requirements of demolitions. Renovations are discussed in other sections. The word "renovations" has been added to subsection of this section for clarification purposes. COMMENT: Concerning sec.295.61(i), one commenter requested to include economic and expediency concerns as criteria for emergency demolitions, and to retain the NESHAP definition and provisions of emergencies. RESPONSE: The section was changed to include economic concerns as a basis for granting a waiver from the 10-day notification requirement. Reasons of expediency will not be considered. The department believes that better planning and foresight will prevent the need for an emergency waiver based upon time constraints. States have the right by law to impose regulations which are more stringent than federal regulations. However, the department has determined that it would be appropriate to be consistent with NESHAP in the requirement that a governmental official be allowed to make the judgement that a structure is in danger of imminent collapse. COMMENT: Concerning sec.295.61(j)(2), several commenters stated that many agencies and school districts have billing procedures which would make them unable to comply with the requirement of sending the fee with the notification. RESPONSE: The wording was changed to reflect that invoice will be sent after the notification has been received. The invoice will be sent to the building owner. COMMENT: Concerning sec.295.61(j)(3), many commenters stated that the increase of fees from $20 per asbestos reporting unit (ARU) to $300 per ARU is extreme and will be a burden to building owners. The increase in fees will reduce a building owner's ability to abate asbestos. The commenter suggested that the fees should remain the same. RESPONSE: The section was changed to reflect an increase to $25 per ARU, instead of $30 per ARU. The department appreciates the concern over the increase in fees, but has determined that additional staff is needed to adequately enforce the requirements of TAHPA. The funds earned from the increase in fees will be spent in an increase in staffing, which will enable the department to increase the number of inspections, increase the speed and efficiency of the notification process, and increase the enforcement activity. COMMENT: Concerning sec.295.61(j)(3), several commenters stated that the subsection is confusing in regard to the minimum fee and whether a fee is required for the amount of asbestos less than one ARU. One commenter suggested the notification fee waived for less than one ARU. RESPONSE: An invoice for a minimum of $50 will be sent for each original notification that is submitted or any amendments that were not preceded by an original. This amount is an administrative fee. TAHPA, unlike NESHAP does not exempt abatement projects for less than one ARU. All costs associated with processing a notification will apply; therefore, the administrative fee will not be waived. Additional fee amounts will be added to the $50 for amounts of asbestos exceeding two ARUs. COMMENT: Concerning sec.295.61(j)(3), a commenter recommended that the request for fee refund be provided 15 days following completion of the project. RESPONSE: The fee will not be sent with the notification, so there should not be a need for a refund. New language has been added to paragraph (3) to reflect that if the amount of asbestos actually removed is less than the amount stated in the original notification, an amendment should be submitted no later than five working days after the completion of the project. A new invoice will be sent to the building owner that reflects the changed amount of asbestos. COMMENT: Concerning sec.295.61(j)(3), one commenter stated that fees should not be required for speculative O&M projects or if the fees are required, it should be on a flat rate rather than based upon ARUs. RESPONSE: The extensive amount of O&M work performed in a large building often results in a large quantity of asbestos that may be abated over a year's time. The amount is sufficient to be based upon ARU's. Also, basing the fee upon the amount of asbestos that is managed over a year will discourage renovation by the process of abating the asbestos in amounts less than one ARU. O&M work is not renovation. Provisions are made to amend the notification if the amount of asbestos is either overestimated or underestimated. COMMENT: Concerning sec.295.61(j)(4), a commenter recommended that the fees should be billed to the building owner. RESPONSE: The section was changed to reflect that an invoice for the fees will be sent to the building owner. COMMENT: Concerning sec.295.64(a), several commenters thought that training providers should not be required to provide or assist the student in completing the application form for the state examination. RESPONSE: The department considered the assistance necessary primarily if workers were to be tested. This will not be a requirement. However, the application forms will be provided to the training providers to give to the students. This is not considered to be a major burden to them. COMMENT: Concerning sec.295.64(a)(4), a commenter stated that the requirement for training accreditation which may not have been used for a previous license application is unclear. RESPONSE: Any valid training certificate may be used with a license application. COMMENT: Concerning sec.295.64(a)(6), several commenters recommended that the department reconsider specifying the number and length of breaks and that the one-hour lunch break be included as a part of the required eight hours of training. RESPONSE: The break policy was changed to 20 minutes of break time in each four-hour training period, and the timing will be left to the instructor. Most initial training courses last from 8:00 a.m. to 5:00 p.m. There is a considerable amount of material to be covered in each course. The lunch hour is not considered a part of the training period, as it would take away from the time needed to effectively cover the required material. COMMENT: Concerning sec.295.64(b)(5), a commenter suggested that it is impractical to have a field trip as a part of the three-day project designer course. RESPONSE: The field trip is a requirement in the Model Accreditation Plan delegation from EPA. COMMENT: Concerning sec.295.64(b)(15), a commenter suggested that the word "replacement" be changed to "non-asbestos-containing replacement materials." RESPONSE: The proposed revised rule complies with the requirements of the Model Accreditation Plan delegation from EPA. COMMENT: Concerning sec.295.64(f), one commenter suggested that the phrase "following the completion of the three day inspector course" be changed to "and has as a prerequisite, the three day asbestos inspector course." RESPONSE: The department concurs and the change was made. COMMENT: Concerning sec.295.65(f), several commenters suggested that the requirement to have the instructors signature on the training certificate is unnecessarily burdensome and does not add to the validity of the certificate. They suggested this requirement be deleted. RESPONSE: The trainers signature is an important requirement as it helps to prevent the fraudulent training certificates which are routinely found in certain specialties. It takes very little time for an instructor to sign a few certificates as the class is not that large. Many other types of courses have the instructors signature, so that it is routine in the training industry. COMMENT: Concerning sec.295.68(c), two commenters suggested the addition of documentation of current medical examination related to asbestos exposure, and current respirator fit test and training. RESPONSE: The department is responsible for the training and qualifications of its personnel. The persons inspected may assume that these requirements have already been met and regulated by the department. The only documentation which will be required for an inspector to present is the department identification card. COMMENT: Concerning sec.295.68(d), two commenters recommended the addition of "It is a violation ... to interfere with, deny, or delay an inspection.. by a department representative after the representative provides identification, documentation of current medical examination related to asbestos exposure, and current respirator fit testing and training." RESPONSE: The department is responsible for the medical examinations and the qualifications of its inspectors. An inspector is only required to show his/her identification to begin an inspection. The inspected can assume that all other documentation is current. COMMENT: Concerning sec.295.68(d), the commenters also recommended the deletion of "Neither the building owner, consultant, nor the contractor are responsible for the actions of the inspector nor his exposure to asbestos as long as the correct procedures are in use as specified in the appropriate reference." RESPONSE: The sentence has been deleted as suggested. COMMENT: Concerning sec.295.68(d), a commenter suggested the addition of "Prior to entry into an industrial facility the department representative will be provided site-specific training and information." RESPONSE: Inspectors may receive briefings on any special hazards to which they may be exposed. They will not be required to attend any training sessions which will delay their entry to an inspection site. Inspectors when available will welcome the opportunity to attend any sessions which a company may have at a time other than when an inspector is attempting to fulfill his/her legal obligation. The following organizations provided comment: Northside Independent School District (ISD); Texas A&M University-Safety and Health; Deal Enterprises, Inc.; Agroch Industries, Inc.; Natural Applied Sciences; University of Texas System; Resilient Floor Covering Institute; Industrial Hygiene and Safety Institute; General Services Administration; Texas Utilities; City of Fort Worth; UT Arlington; UTHC at Tyler; UTA/CERT; Teleion; Envorosess Consulting, Inc.; Dallas Building Owners and Managers Association; Mesquite ISD; TRIPRO Services, Inc; Telecon, Inc.; NATEC; EAG & AES; Enviro/Con; Environmental Advisory Group; UTHC Tyler; TTU Lubbock; TECI; Texas Chemical Council; St. Joseph Hospital; K&T Safety; Houston ISD; Asbestos Advisory Committee; Fugro-McClelland Environmental, Inc.; Astemp, Inc.; Micro Air of Texas, Inc.; HIH Laboratory, Inc.; RJ Lee Group, Inc.; The University of Texas MD Anderson Cancer Center; Envirotest, Inc.; AsTeCo, Inc.; CONOCO; US Department of Veteran Affairs; North East Independent School District; Industrial Hygiene and Safety Technology, Inc.; Environmental Compliance Group, Inc.; Parkland Memorial Hospital; The University of Texas at Arlington; Wichita Falls Independent School District; Natural and Applied Sciences; Scientific Investigation & Instruction Institute; Environmental Technologies, Inc.; Texas Utility Services; Enviro/Con Services Inc.; Fullbright & Jaworski; Texas Department of Criminal Justice; Texas Association of Counties; City of Austin; Seagull Environmental Management Services, Inc.; Steve Moody Micro Services, Inc.; Phillips Petroleum Company; Telion, Inc.; Houston Lighting & Power; TU Services; El Paso Electric Company; Envirotest, Inc.; Bell Helicopter; Exxon; Dallas Market Center; Shell Oil Company. The amendments and new sections are adopted under Texas Civil Statutes, Article 4477-3a, sec.12, which provide the Board of Health (board) with the authority to adopt rules covering asbestos removal, encapsulation or enclosure, including licensing and regulation; Senate Bill 1341 and House Bill 79, 72nd Legislature, 1991, House Bill 1680 and House Bill 1826, 73rd Legislature, 1993, which amended Article 4477-3a; and Health and Safety Code, sec.12.001, which provides the board with authority to adopt rules to implement every duty imposed by law on the board, the department, and the commissioner of health. sec.295.31. General Provisions (a)-(b) (No change.) (c) Scope. (1) For the purposes of licensure and procedures in public buildings. (A) Rules application. These sections apply to all buildings which are subject to public occupancy, or to which the general public has access, and to all persons disturbing, removing, encapsulating, or enclosing asbestos within public buildings for any purpose, including repair, renovation, dismantling, demolition, installations, or maintenance operations, or any other activity that may involve the disturbance or removal of asbestos-containing material (ACM) whether intentional or unintentional. Also included are the qualifications for licensure of persons, and requirements for compliance with these sections and all applicable standards of the United States Environmental Protection Agency and the United States Occupational Safety and Health Administration as adopted. (B) Exclusions. Private residences and apartment buildings with no more than four dwelling units are excluded from coverage by these rules. Except as provided in subsection (c)(2) of this section, industrial or manufacturing facilities, in which access is controlled and limited principally to employees therein because of processes or functions dangerous to human health and safety, federal buildings and military installations are excluded from coverage by these rules. (2) For the purposes of Federal National Emission Standards for Hazardous Air Pollutants (NESHAP) enforcement only: sec. sec.295.32; 295.34 (a), (b)(1)-(3), (c), and (f); 295.61; 295.67-68; 295.70; and 295.71 of this title (relating to Texas Asbestos Health Protection) apply to all facilities. These sections shall apply to the extent necessary to allow the department to adopt and enforce the federal NESHAP. For facilities which are not otherwise subject to this title as public buildings, the department will apply and enforce these sections in a manner consistent with the NESHAP. (d) Severability. Should any section or subsection in this chapter be found to be void for any reason, such finding shall not affect all other sections. (e) License possession requirements. Anyone engaged in asbestos-related activities in a public building must provide proof of a current license to any inspecting official from the Texas Department of Health (department), to an employer, or to a prospective employer upon request. All licensed individuals must have the Identification Card issued by the department on the work site at all times while engaged in any asbestos-related activity. For individuals, this is the only proof of a valid license. sec.295.32. Definitions. The following words and terms, when used with these sections, shall have the following meanings, unless the context clearly indicates otherwise. Asbestos-containing material (ACM)-Materials or products that contain more than 1.0% of any kind or combination of asbestos, as determined by Environmental Protection Agency (EPA) recommended methods as listed in 40 Code of Federal Regulations, (CFR) Part 763, Subpart F and 40 CFR 763 subpart E, Appendix A. This means any one material component of a structure. Asbestos abatement activity-Asbestos abatement, any on-site preparations or clean-up related to the abatement. Asbestos consulting activities-consulting activities in public buildings include: the designing of asbestos abatement projects; the inspection for asbestos-containing materials (ACM); the evaluation and selection of appropriate asbestos abatement methods and project layout; the preparation of plans, specifications and contract documents; the review of environmental controls, abatement procedures for personal protection employed during the project; the design of area and clearance air monitoring of the project; any inspection, management planning, air monitoring, or project management performed by or for the consultant or consulting agency; consultation regarding compliance with various regulations and standards; recommending abatement options; and representing the consultant agency or consultant in obtaining consulting work. Asbestos abatement contractor-A person who undertakes to perform asbestos removal, enclosure, or encapsulation for others under contract or other agreement, or who bids to undertake asbestos activities. Asbestos-containing waste material-Includes mill tailings or any waste that contains commercial asbestos and is generated by a source subject to the provisions of 40 CFR Part 61, Subpart M. This term includes filters from control devices, friable asbestos waste material, and bags or other similar packaging contaminated with asbestos. As applied to demolition and renovation operations, this term also includes regulated asbestos-containing materials, and materials contaminated with asbestos including disposable equipment and clothing. Asbestos-related activity -The disturbance (whether intentional or unintentional), removal, encapsulation, or enclosure of asbestos, including preparations or final clearance, the performance of asbestos surveys, the development of management plans and response actions, asbestos project design, the collection or analysis of asbestos samples, monitoring for airborne asbestos, bidding for a contract for any of these activities, or any other activity required to be licensed under the Texas Asbestos Health Protection Act. Asbestos survey -An inspection of a building or facility to determine the location, quantity, and condition of asbestos-containing material (ACM) therein by taking samples for analysis or by visual inspection. Building owner -The owner of record of any public building or any person who exercises control over a building to the extent that said person contracts for or permits renovation to or demolition of said building. Commercial asbestos -Any material containing asbestos that is extracted from ore and has value because of its asbestos content (NESHAP definition, 1990). Containment-A portion of the regulated area that has been sealed and placed under negative air pressure with high efficiency particulate air-filter (HEPA) filtered negative air machines. Designated person -The individual designated under Asbestos Hazard Emergency Response Act (AHERA) to oversee all asbestos activities to include compliance with all laws, regulations, and rules. Enclosure-The construction of an airtight, impermeable, semi-permanent barrier surrounding asbestos to prevent the release of asbestos fibers into the air. Environmental Protection Agency (EPA) regulations-Regulations found in 40 Code of Federal Regulations (CFR). Facility-Any institutional, commercial, public, industrial or residential structure, installation or building (including any structure, installation, or building containing condominiums or individual dwelling units operated as a residential cooperative, but excluding residential buildings having four or fewer dwelling units); any ship; and any active or inactive disposal site. Any structure, installation or building that was previously subject to 40 CFR sec.61.141, Subpart M is not excluded, regardless of its current use or function. Facility owner -The owner of record of any facility or public building or any person who exercises control over a facility or public building to the extent that said person contracts for or permits renovation to or demolition of said facility or pubic building. Independent third-party air monitor-A person retained to collect area air samples to be analyzed by and for the owner of the building or facility being abated. The person must not be employed by the abatement contractor to analyze any area samples collected during the abatement projects being monitored or the clearance samples. Installation-A building or structure, or group of buildings or structures, at a single demolition or renovation site controlled by the same owner or operator (NESHAP definition, 1990). License-Any license or registration issued under this chapter. Licensee-A person who meets all qualifications and has been issued a license or registration by the Texas Department of Health in accordance with these sections. Operations and maintenance (O&M) contractor-A person who holds an Asbestos Operations & Maintenance Contractor (Restricted) license for general asbestos O&M work in a public building for himself or herself, as a building owner or agent, or as a contractor, if working for others, and follows the guidance contained in the EPA "Green Book". A contractor working for others must have the specified insurance for an abatement contractor. Operations and maintenance (O&M) manual-A record of O&M activities in a public building. The building owner shall record each individual O&M activity in the manual, including the date of activity, the persons performing the activity, complete description of the activity, including methods used to prevent the emission of asbestos fibers, and the amount of asbestos removed. An updated total of the amount of asbestos abated shall be kept as a comparison to the amount estimated in the annual O&M notification. The manual will be made available to the department upon request. OSHA-The Occupational Safety and Health Administration of the United States Department of Labor. OSHA Regulations -Regulations found in 29 Code of Federal Regulations. PEL-Permissible Exposure Limit as defined by OSHA regulations (29 CFR sec.1926.58). Person-A person is: (A)-(C) (No change.) Public building -A building used or to be used for purposes that provide for public access or occupancy, including prisons and similar buildings. The term includes any building during a period of vacancy, including the period during preparations prior to actual demolition. The term does not include: (A) (No change.) (B) a federal building or installation (civilian or military); (C)-(E) (No change.) (F) a building, facility, or any portion of which has been determined to be structurally unsound and in danger of imminent collapse by a professional engineer, registered architect, or a city, county, or state government official. Regulated area -The demarcated area in which asbestos abatement activity takes place, and in which the possibility of exceeding the permissible exposure limits (PEL) for the concentrations of airborne asbestos exists. Start date-The dates defined as: (A) asbestos abatement activity start date-The date on which the removal of asbestos begins or any other asbestos abatement activity begins, such as site preparation which would break up, dislodge, or similarly disturb asbestos; (B) demolition/renovation start date-The date on which the demolition or renovation process begins. Stop date-The dates defined as: (A) asbestos abatement activity stop date (completion date)-The date upon which visual and/or air monitoring clearance of asbestos abatement activities has been completed or containment materials have been removed; (B) demolition/renovation stop date-The date on which the demolition or renovation is complete. Working days-Monday through Friday including holidays which fall on those days. sec.295.33. Adoption by Reference of Federal Standards. (a) Adoption by reference. The Texas Department of Health (department) adopts by reference the following federal requirements in the Code of Federal Regulations (CFR), as amended: (1) 40 CFR Part 61, Subpart M, titled, "National Emissions Standards for Hazardous Air Pollutants" (NESHAP), November 20, 1990; (2) 40 CFR Part 763, Subpart G, sec.sec.763.120-763.126, and Appendices A, C, D, and E, titled, "Asbestos Abatement Projects: Worker Protection Rule", February 25, 1987; (3) 40 CFR Part 763, Subpart E, sec.sec.763.80-763.99, and Appendices A and B, titled, "Asbestos-Containing Materials in Schools" (AHERA rules), July 1, 1992; (4) 40 CFR Part 763, Subpart E, Appendix C, titled, "Model Accreditation Plan", February 3, 1994; (5) 40 CFR Part 763, Subpart E, Appendix B, titled, "Work Practices and Engineering Controls for Small-Scale, Short-Durations Operations Maintenance and Repair (O&M) Activities Involving ACM", July 1, 1992; (6) 40 CFR Part 763, Subpart E, Appendix D, titled, "Transport and Disposal of Asbestos Waste", July 1, 1992; (7) 40 CFR Part 763, Subpart F, Appendix A, Section 1, titled, "Polarized Light Microscopy", July 1, 1992; (8) 29 CFR sec.1926.1101, titled, "Occupational Exposure to Asbestos, Tremolite, Anthophyllite, and Actinolite", October 11, 1994; (9) 29 CFR sec.1910.134, titled, "Occupational Health Standards for A Respiratory Protection Program", October 11, 1994; (10) 40 CFR Part 763, Subpart E, Appendix A, titled, "Transmission Electron Microscopy Analytical Methods", July 1, 1992; (11) 49 CFR Chapter 1, Part 172, Appendix A, Subchapter C, October 1, 1992; and (12) 49 CFR Chapter 1, Part 172, Appendix A, Subpart H, October 1, 1992. (b) Availability. Copies of the documents in subsection (a) f this section are available for review at any department licensed training provider or the Texas Department of Health, Division of Occupational Health, Austin, Texas, and may be reviewed during normal business hours. (c) (No change.) sec.295.34. Asbestos Management in Facilities and Public Buildings. (a) (No change.) (b) Statement of responsibility. The owner retains the primary responsibility for the presence, condition, disturbance, renovation, demolition, and disposal of any asbestos encountered in the construction, operations, maintenance, or furnishing of that building or facility, including: (1) the responsibility for the periods of vacancy, and for all preparations prior to actual demolition; all regulated asbestos-containing material (RACM) must be removed prior to demolition in accordance with the National Emission Standards for Hazardous Air Pollutants (NESHAP), and in a public building, comply with sec.295.60 of this title (relating to Operations: Abatement Practices and Procedures); (2) the obligation to inform those who enter the building or facility for purposes of construction, maintenance, installation, repairs, etc., of the presence and location of asbestos that could be disturbed by those activities, and to arrange for proper handling of any asbestos that would be disturbed or dislodged by such activity; (3) the responsibility for periods when the building or facility is under management by others; and (4) the responsibility for assuring that his/her contracts with licensees provide for workers compensation insurance as required under sec.295.39(e)(4) of this title (relating to Licensing and Registration: Out-of-State Applicants) and the licensing sections of these rules. (c) Conditions requiring a mandatory asbestos survey. Prior to any renovation or dismantling within a public building, including preparations for partial or complete demolition, as required by 40 CFR, sec.61.145 Environmental Protection Agency (EPA), owners must have the building surveyed by a licensed asbestos inspector; facility owners must have the facility surveyed by an accredited inspector if the facility is a public or commercial building as defined in the Asbestos School Hazard Abatement Reauthorization Act, 1990. The work area and all immediately surrounding areas must be surveyed prior to partial renovations or demolition. This survey must be produced upon request by the Texas Department of Health (department). (d) Asbestos control and abatement. A building owner has the following options for managing the asbestos found in his/her buildings. (1) (No change.) (2) Building owners may hire or retain a licensed asbestos abatement contractor or a licensed asbestos Operations and Maintenance (O&M) contractor to conduct small-scale, short-duration work activities or cleanup affecting asbestos. When utility work is to be performed, the building owner shall either have the affected asbestos-containing material removed prior to the work of a utility contractor, or require the utility contractor to be licensed to handle asbestos-containing materials. (3) Building owners may conduct asbestos O&M activities within public buildings with their own employees for their own account if they obtain an asbestos operations and maintenance contractor (restricted) license, according to sec.295.43 of this title (relating to Licensure: Asbestos Operations and Maintenance Contractor (Restricted)), have a licensed supervisor according to sec.295.44 of this title (relating to Licensure: Asbestos Operations and Maintenance Supervisor (Restricted)), and have registered workers according to sec.295.42 of this title (relating to Registration: Asbestos Abatement Workers). (4) Building owners may conduct asbestos abatement projects, including asbestos O&M activities, if they obtain an asbestos abatement contractor's license, as set forth in sec.295.45 of this title (relating to Licensure: Asbestos Abatement Contractor). Any projects larger than 160 square feet or 260 linear feet must be designed by a licensed asbestos consultant; (e) Prohibition. The owner of a public building and any other person who contracts with or otherwise permits any person without appropriate valid license, registration, accreditation, or approved exemption to perform any asbestos-related activity is subject to administrative or civil penalty under the Texas Asbestos Health Protection Act (Act), not to exceed $10,000 a day for each violation. (f) Mandatory notification. Notification is required under the following conditions. (1) Notification is required for any demolition of a facility or public building, whether or not asbestos has been identified. (2) A notification to abate any amount of asbestos must be submitted to the Texas Department of Health (department) by the building owner, or amounts described in NESHAP for the facility owner, at least 10 working days (not calendar days) prior to the start date of the abatement project, disturbance, renovation, or demolition in accordance with sec.295.61 of this title (relating to Operations: Notifications). All blanks on the notifications form are to be completed; if not applicable it must be so stated. (g) (No change.) (h) Requirement for inspection and management plan. If, in the opinion of the department following a site inspection of a public building, there appears to be a danger or potential danger from asbestos materials in poor condition to the occupants of a building, workers in a building, or the general public, the department shall require the building owner or authorized representative to complete an immediate survey and management plan for asbestos by a licensed asbestos inspector and licensed management planner and to send a copy of the management plan for review and approval to the department within 90 days of receipt of order. Copies of the plan shall be on file with the owner or management agency, and in the possession of the supervisor in charge of building operations and maintenance. sec.295.36. Licensing and Registration: Exemptions; Emergency. (a) Exemption. Those who remove resilient floor covering materials in public buildings are exempt from the licensing and registration requirements of these sections, provided that: (1) (No change.) (2) all those engaged in removal of resilient floor coverings shall have received training in an eight-hour course which covers the elements described in the document titled, "Recommended Work Practices for the Removal of Resilient Floor Coverings," published by the Resilient Floor Covering Institute (RFCI) in 1992; (3) employees of schools (kindergarten through 12th grade) who elect to use this exempt method must first complete the 16-hour custodial training, as required by federal regulations adopted under authority of the Asbestos Hazard Emergency Response Act of 1986 (AHERA). Possession of a valid worker registration or supervisor license eliminates the individual's need for the 16- hour training; (4) the actual removal of floor coverings and adhesive under this exemption is limited to the exempted methods of removal and must be conducted according to the work practices published for distribution by the RFCI, or as directed by the commissioner of health; and (5) the asbestos activity permitted by the exemption is limited to the removal of resilient floor covering and adhesives, and does not apply to any other asbestos-related activity, nor does the training or experience gained from such practices qualify for any other asbestos-related activity. The exemption is strictly limited to flooring materials maintained in a non-friable state. RFCI guidelines are to be used; however, the permissible exposure limit (PEL) may not be exceeded. If these conditions existed prior to the start of the removal or become the case due to the removal, then the person removing the floor covering is required to be licensed. (b) Notification required. The Texas Department of Health shall receive written notification that has been postmarked or hand delivered at least 10 working days prior to commencing any removal of floor coverings from public buildings permitted under the terms of this exemption, as required in sec.295. 61 of this title (relating to Operations: Notifications). Telephone facsimile (FAX) is not acceptable. (c) Failure to comply. Persons who intentionally fail to comply with subsection (a)(1)-(4) of this section are subject to a civil penalty of not more than $5,000. Persons who fail to comply with notification requirements, or other applicable sections of the Texas Asbestos Health Protection Act (Act) or rules, are subject to administrative, civil, or criminal penalties as provided by the act. (d) Abatement emergency. In an abatement emergency affecting public health or safety that results from a sudden, unexpected event that is not a planned renovation or demolition the department, on notification, may waive the requirement for a license. Call the servicing department regional office, environmental and consumer he/sheath division or (512) 834-6600 for consultation about emergencies. sec.295.37. Licensing and Registration: Conflict of Interests. (a) Independent third-party air monitoring. Third-party area monitoring and project clearance monitoring for airborne concentrations of asbestos fibers during an abatement project shall be performed by a person under contract to the building owner to collect samples by and for the owner of the public building or facility being abated. Such persons must not be employed or subcontracted by the contractor hired to conduct the asbestos abatement project, except that: (1) this restriction in no way applies to personal samples taken to evaluate worker exposure, as required by the Occupational Health and Safety Administration (OSHA) regulations; and (2) an air monitoring technician providing the service for the contractor meeting his/her responsibilities under OSHA regulations must also be licensed to perform that function; and (3) those who are licensed to perform asbestos abatement for their own account in their buildings shall employ an independent third-party air monitor for the purpose of obtaining area monitoring and final clearance. (b) Licensee conflict of interest. Any person licensed according to these sections to perform asbestos surveys, write management plans, or design asbestos abatement projects under a contract or other hire agreement shall not also engage in the removal of asbestos from those buildings or facilities, except for subsection (c) of this section. It is a conflict of interest for an individual instructor to train himself/herself in order to qualify for a license, or for an individual to give himself/herself a physical in order to qualify for a license. (c) Municipalities exemption. Municipalities are exempt from the conflict of interest requirement only for the purpose of retaining a licensed person who may perform asbestos inspections and surveys, write management plans, design abatement projects and abate asbestos from the same building or facility. This exemption does not include air monitoring which shall be performed by an independent third party. sec.295.38. Licensing and Registration: Applications and Renewals. (a) (No change.) (b) Inquiries. Potential applicants who wish to discuss or obtain information concerning qualification requirements may do so by calling the department's Asbestos Programs Branch at (512) 834-6610 or (800) 572-5548. (c) Denials. The department may deny an application for licensing, for the time periods specified below, to those who fail to meet the standards established by these sections, including, but not limited to: (1) past history of substantial violations of these sections by the applicant and/or the applicant's employees or agents -three years; (2) evidence that the applicant cannot be legally employed in the United States-90 days; (3) fraud, misrepresentation, or deception in obtaining, attempting to obtain, or renewing a license or registration -three years; (4) failure to submit the required information and/or documentation within 90 days of a written request by the department -90 days; (5) failure to submit the required fee-90 days; (6) failure to maintain or to permit inspection of the records required of all licensees-one year; (7) employing or permitting an unauthorized person or individual to work on any asbestos project or operation-one year; (8) engaging in or attempting to engage in an asbestos-related activity without a valid license-three years; (9) failure to comply with any rule adopted by the board or order issued by the department-three years; (10) failure to provide notice of an asbestos project or operation as required by these sections-two years; (11) conviction within the past five years of a felony or a misdemeanor related to conditions for which a person engaged in asbestos activities-three years; (12) failure of a licensee to complete their responsibilities during an asbestos project or operation due to insufficient financial resources-three years; (13) failure to protect workers from asbestos exposures in excess of the current permissible exposure limit (PEL)-three years; (14) failure to prevent asbestos contamination of areas adjacent to the abatement area-three years; (15) failure to decontaminate any part of a facility or its environment, or any persons inadvertently contaminated with asbestos as a result of the persons' actions while exercising their duties under these sections-three years; or (16) employing or permitting a qualified person to represent the company or firm applying for a license if the person already represents another company that is licensed, with the exception of instructors with licensed training providers-three years. (d) Administrative penalty. In accordance with sec.295.70 of this title (relating to Compliance: Administrative Penalty) an administrative penalty may be assessed, for fraud or misrepresentation in obtaining, attempting to obtain, or renewing a license or registration. (e) Processing applications and renewals. (1) Time periods. Applications for licensure shall be processed in accordance with the following time periods: the time from the receipt of a written application to the date of issuance of a written notice outlining the reasons why the application is unacceptable is 30 days; the license will be issued within 60 days of the applicant meeting all the licensing requirements and receipt of all acceptable documents at the department. (2) Reimbursement of fees. Initial application or renewal fees will be refunded only when the department does not process a completed application in the time period specified, or when fee amounts are in excess of the correct fee amount or there is a double payment. Otherwise, fees for applications and renewals are not eligible for refund. (A)-(B) (No change.) (3) Appeal. If the request for full reimbursement authorized by this section is denied, the applicant may then appeal to the commissioner of health for a resolution of the dispute. The applicant shall give written notice to the commissioner by writing to the administrator, asbestos licensing program, the designated representative of the commissioner, requesting full reimbursement of all filing fees paid because his/her application was not processed within the adopted time period. The program administrator shall submit a written report of the facts related to the processing of the application and good cause for exceeding the established time periods. The commissioner will determine the final action and provide written notification of his/her decision to the applicant and the program administrator. (4) Contested case he/shearing. If at any time during the processing of the application, a contested case proceeding arises, the time periods in the department's formal he/shearing procedures sec.1.34 of this title (relating to Time Periods for Conducting Contested Case Hearings) are applicable. (f) Renewal notices. At least 30 days before a license expires the department,as a service to the licensee, shall send a renewal notice to the licensee or registrant, by first-class mail to the last known address of the licensee. It remains the responsibility of the licensee to keep the department informed of their current address, or change of address for all license categories, and to take action to renew their certificate whether or not they have received the notification from the department. The renewal notice will state: (1) the type of license requiring renewal; (2) the time period allowed for renewal; and (3) (No change.) (g) Renewal requirements. No sooner than 60 days before the license or registration expires, it may be renewed for an additional one-year term providing that the licensee or worker: (1)-(2) (No change.) (3) submits to the department a renewal application on the prescribed form along with all required documentation; (4) completes successfully the requirements for renewal and examination, if required; (5) has complied with all final orders resulting from any violations of theses sections; and (6) submits the required current training certificates. (h) Prohibition. To practice with lapsed licenses and registrations is prohibited, regardless of when the renewal application is received. Also, licenses or registrations which have lapsed for a period exceeding 180 days cannot otherwise be renewed. A new application subject to current qualifications is required. (i) Replacements. A licensee or registrant may obtain a replacement certificate by submitting such request in writing along with the reissuance fee of $20. (j) (No change.) p>> sec.295.40. Licensing and Registration: Insurance Requirements. Persons required to have insurance must obtain policies for required coverage as specified in these sections, and in the amounts specified, which meet the following requirements. (1) (No change.) (2) The certificate of insurance must be complete, including all applicable coverage forms and endorsements, and must name the Texas Department of Health, Division of Occupational Health, as a certificate holder with at least a ten-day notice of cancellation; a Form #CG02051185 may be requested from the insurance provider and submitted with the application to the Texas Department of Health (department). (3) (No change.) (4) In the event of policy cancellation or expiration, the policy shall promptly be replaced or renewed without any lapse in coverage. A certificate of the renewal policy must be provided to the department upon receipt by the licensee. In no event shall a licensee fail to have the required coverage at the time of engaging in asbestos activities. Failure to become reinsured when required may result in the imposition of an administrative penalty and/or revocation of the license. sec.295.41. Licensure: State Accreditation Examination. (a) General. The Texas Department of Health (department) shall administer an examination to individuals seeking asbestos accreditation and who have successfully completed the required training from a training provider licensed or approved by the department. A copy of the training certificate shall be submitted with the application. All individuals, except workers, seeking accreditation in a specific category shall pass the examination for that category. For example, an individual seeking accreditation as an asbestos inspector must pass the department's inspector accreditation examination. Individuals receiving their training from training providers outside of Texas must complete the approved three-hour Texas law course prior to applying for the accreditation exam. (b) Testing requirements. Beginning September 1, 1994, an applicant for accreditation will be required to pass a state examination. Individuals licensed prior to September 1, 1994, shall take and pass the examination prior to September 1, 1995. Failure to pass the examination will be cause for denial of license renewal. The application for the examination and the required fee shall be included with the initial license application form. Examinations shall be based upon the requirements for the license category for which an individual has applied. The applicant shall be required to take the test within 60 days of applying for that license. If they fail the examination, they shall be required to take another examination within 30 days, as specified in subsection (f) of this section for re-examination guidance. The examination will cover the topics included in the training course for that license category. Out-of-state applicants must take the test for their respective category following completion of the required three-hour course in Texas law. Misconduct or dishonesty during the examination, or an individual taking the examination other than the individual scheduled, will constitute grounds for the issuance of a failing grade and revocation or denial of a license. Failure to pass the accreditation examination prior to license renewal shall constitute grounds for revoking or denying a license. (c) Fees. There will be an examination fee of $25 for the initial test or for any re-examination at department administered test locations. A fee of $50 shall be paid for examinations to be administered by the department at locations and times other than the published schedule. A request to the department must be submitted in sufficient time to permit scheduling and administration of the examination. Fees must be paid to the department prior to the taking of the examination. The required fee may not be paid at the examination location, but must be mailed to the department. (d) Scheduling and registration. Annually, a schedule of examination dates and locations will be published by the department, listing the schedule for the monthly testing. Each month, make-up examinations will be available in Austin, Texas at a location and time specified in the published schedule. Registration must be submitted by mail or phone and must be received by the department no later than five days prior to the desired test date. Walk-ins will be tested at any time at Department of Health regional offices listed in the examination schedule. Examinees will be required to call for an appointment to ensure availability of the examination and persons to administer it. Entrance into the test site will be allowed only upon presentation of a valid photo ID card from a training provider. Schedules will be provided by the training providers as a part of their instruction. Assistance is available by calling the department's asbestos training section. Companies with 30 or more individuals to be tested may call the department to arrange an additional examination date. (e) Grading and reporting of examination scores. A grade of 70% must be achieved in order to pass the examination. Scores will be reported only by mail; the notification will, if appropriate, contain information regarding re- examination. (f) Re-examination. An individual may take only two re-examinations after failing the initial examination. Following the third failure, the applicant must repeat the initial training course required for the license for which he/she is applying, submit a new application for the department test, and provide a copy of the training certificate for the additional training. Re-examination questions will be different from the initial examination. sec.295.42. Registration: Asbestos Abatement Workers. (a) (No change.) (b) Fee. The fee for an initial application and for the annual renewal of registration of an asbestos abatement worker shall be $30. (c) (No change.) (d) Annual renewal. Annual renewal may be accomplished by submitting the following documentation: (1) current workers refresher training certificate; (2) current physicians written statement on the specified Texas Department of Health (department) form; and (3) the required license fee. (e) Qualifications. Applicants for registration as asbestos abatement workers shall provide: (1) a certificate of training from a training provider approved by or acceptable to the department indicating successful completion within the past 12 months of the approved training course for abatement workers or the annual refresher training course, as described in sec.295.64 of this title (relating to Training: Required Asbestos Training Courses). Evidence of successful completion of the contractor/supervisor course may be substituted for the initial worker course. (2) an acceptable written opinion of a physical examination of the applicant within the past 12 months that was performed by a physician in accordance with Occupational Safety and Health Administration of the United States Department of Labor (OSHA) regulations in 29 Code of Federal Regulations (CFR), sec.1926.58(m), or Environmental Protection Agency (EPA) regulations in 40 CFR, sec.763.121(m), relating to medical surveillance. This opinion must be submitted on the Texas Department of Health (department) "Physicians Written Statement" form only, must be signed by the doctor and include certification of the following elements: (A) (No change.) (B) if applicant is employed, the employer must have provided, and a review made of, the description of the employee's duties as they relate to asbestos exposure, the anticipated exposure level, the personal protective and respiratory equipment to be utilized by the employee, and information from previous medical examinations of the affected employee that is not otherwise available to the physician; (C)-(F) (No change.) (3) a copy of the wallet-size photo-identification card from the training course, as required from all trainers in Texas in accordance with sec.295.65(f)(2) of this title (relating to Training: Approval of Training Courses). Persons submitting out-of-state training certificates with their applications may obtain the necessary photo-identification when attending the mandatory course on Texas asbestos rules, as required in accordance with sec.295.64(h) of this title; and (4) a one-inch by one-inch photograph of the face. (f)-(g) (No change.) sec.295.44. Licensure: Asbestos Operations and Maintenance Supervisor (Restricted). (a) Licensing requirement. Individuals employed by licensed operations and maintenance (O&M) or abatement contractors to directly supervise personnel and work practices limited to the conduct of O&M activities affecting asbestos- containing materials (ACM) shall be licensed as asbestos O&M supervisors (restricted). Such licenses are valid for a period of one year, and shall be renewable. (b)-(c) (No change.) (d) Qualifications. The applicant for an O&M supervisor (restricted) license shall provide: (1) a certificate of training from a training provider approved by or acceptable to the Texas Department of Health (department) indicating successful completion within the past 12 months of the approved training course for abatement contractors and project supervisors, or the annual refresher training as described in sec.295.64 of this title (relating to Training: Required Asbestos Training Courses); (2) a physician's statement of the required physical examination submitted on the department "Physicians Written Statement" form only done within the past year as described in sec.295.42(e)(2) of this title (relating to Registration: Asbestos Abatement Workers); (3) a copy of the wallet-size photo-identification card from the training course as required from all trainers in Texas in accordance with sec.295.65(f)(2) of this title (relating to Training: Approval of Training Courses). Persons submitting out-of-state training certificates with their application may obtain the necessary photo-identification when attending the mandatory course on Texas asbestos rules, as required in accordance with sec.295.64(h) of this title; (4) a one-inch by one-inch photograph of the face; and (5) proof of successfully passing the department examination, if required. (e) (No change.) (f) Restrictions and prohibitions. Licensing as an asbestos O&M supervisor is specifically restricted, as follows: (1)-(2) (No change.) (3) The licensee shall not supervise asbestos abatement projects, which are larger than small scale or which have the sole purpose of removing ACM, or act as a contractor. (4) (No change.) sec.295.45. Licensure: Asbestos Abatement Contractor. (a) Licensing requirement. Persons must be licensed as asbestos abatement contractors in compliance with these sections to engage in asbestos abatement or removal in a public building. This requirement does not apply to the removal of asbestos samples taken during an inspection or survey by someone licensed to inspect. (b) Licensee authorization. Asbestos abatement contractor licensees are specifically authorized to employ asbestos abatement supervisors and asbestos abatement workers who are currently licensed under these sections to carry out asbestos abatement or removal procedures. They may employ licensed operations and maintenance (O&M) supervisors for building O&M activities, or as workers. Licensees are cautioned to observe the prohibited acts in sec.295.37 of this title (relating to Licensing and Registration: Conflict of Interests). (c)-(d) (No change.) (e) Qualifications. Applicants for licensing as asbestos abatement contractors shall provide: (1) a certificate of training from a training provider approved by or acceptable to the department, indicating successful completion within the past 12 months of the approved training course for asbestos abatement contractors and project supervisors or the continuing annual refresher training, as described in sec.295.64 of this title (relating to Training: Required Asbestos Training Courses). An applicant shall designate at least one individual for the purpose of complying with this training requirement. This individual must be responsible for asbestos operations and compliance with all asbestos rules and regulations; (2) a certificate of good standing, issued by the Texas State Comptroller's Office, stating that all franchise taxes due from the applicant have been paid; (3)-(5) (No change.) (6) workers' compensation insurance issued by a company authorized and licensed to issue workers' compensation insurance in this state and written in this state on the Texas form, or evidence of self-insurance if workers compensation is required by the specifications or owner (see sec.295.34(b)(4) of this title (relating to Asbestos Management in Facilities and Public Buildings) for further guidance); (7)-(16) (No change.) (17) a list of inspections performed by other agencies; (18) copies of all citations issued; and (19) proof of successfully passing the department examination for asbestos contractors, if required. (f) (No change.) sec.295.46. Licensure: Asbestos Abatement Supervisor. (a)-(c) (No change.) (d) Qualifications. Applicants for licensing as asbestos abatement supervisors are required to provide: (1) work experience to qualify for an asbestos abatement supervisor license, verifiable written documentation must be provided of at least 90 days of legally qualifiable work experience as a trained and licensed worker performed over a period of not less than 12 months and within the past 24 months. Qualifiable experience includes: (A)-(I) (No change.) (2) a certificate of training from a training provider approved by or acceptable to the Texas Department of Health (department) indicating successful completion within the past 12 months of the approved course for abatement contractors and supervisors, or the current annual refresher training, as described in sec.295. 64 of this title (relating to Training: Required Asbestos Training Courses); (3) a physician's statement of the required physical examination done within the past year as described in sec.295.42(e)(2) of this title (relating to Registration: Asbestos Abatement Workers) and submitted on the department "Physician's Written Statement" form only; (4) a copy of the wallet-size photo-identification card from the training course as required from all trainers in Texas in accordance with sec.295.65(f)(2) of this title (relating to Training: Approval of Training Courses). Persons submitting out-of-state training certificates with their applications may obtain the necessary photo-identification when attending the mandatory course on Texas asbestos rules, as required in accordance with sec.295.64(h) of this title; (5) a one-inch by one-inch photograph of the face; and (6) proof of successfully passing the department examination for asbestos contractors and supervisors, if required. (e)-(f) (No change.) sec.295.47. Licensure: Individual Asbestos Consultant. (a) Licensing requirements. An individual must be licensed as an asbestos consultant to design asbestos abatement projects. Individual consultants may not hire an inspector, project manager, or an air monitor technician without obtaining an asbestos consultant agency license. (1)-(2) (No change.) (b) Scope: individual licenses. In addition to the design of asbestos abatement projects, individual asbestos consultants are licensed to provide: (1)-(6) (No change.) (c)-(d) (No change.) (e) Eligibility for licensing. Verifiable evidence of current eligibility must be submitted with all applications for licensing as an individual asbestos consultant, which includes any one of the following: (1) current registration in the State of Texas as an architect or professional engineer; or (2) current highest full-qualification memberships in a national professional organization devoted to technical proficiency in environmental or occupational health protection, which includes: (A)-(B) (No change.) (C) admission requirements that specify college courses and other training, a bachelor's or higher degree, at least three years' experience in specified fields, and a qualification examination (examples include the American Academy of Industrial Hygiene and the Board of Certified Safety Professionals); or (3) possession of a bachelor's degree in architecture, engineering, physical or natural science from an accredited four-year college or university, and including four years' experience in areas affecting environmental or occupational health matters. (f) Qualification for licensing. To qualify as an individual asbestos consultant, individuals shall provide: (1) verifiable documentation of their asbestos-related activity in conjunction with at least six asbestos abatement projects covering a period of at least a year within the past five years. All asbestos work must be documented as having been performed under the applicable licensed or accredited rules or regulations; (2) a physician's statement of the required physical examination done within the past year as described in sec.295.42(e)(2) of this title (relating to Registration: Asbestos Abatement Workers) and submitted on the Texas Department of Health (department) "Physician's Written Statement" form only; (3) proof of having successfully completed the following training courses or the necessary annual refresher training within the past 12 months at an approved training facility: (A) the approved training course for abatement project designers, or the current annual refresher, according to sec.295.64(b) of this title (relating to Training: Required Asbestos Training Courses), or for applications received prior to December 31, 1993, the contractor/supervisor training, according to sec.295.64(c) of this title (relating to Training: Required Asbestos Training Courses); (B) a modified three-day training course in sampling techniques and use of monitoring equipment, as required for air monitor technician, or the current annual refresher training according to sec.295.64(g) of this title (relating to Training: Required Asbestos Training Courses). The initial course is not required of certified industrial hygienists, however the refresher is required for license renewal; and (C) training in asbestos surveys, as required for both licensed asbestos building inspectors and management planners, or the current annual refresher, according to sec.295.64(e) and (f) of this title (relating to Training: Required Asbestos Training Courses); (4) a copy of the wallet-size photo-identification card from the training course as required from all trainers in Texas in accordance with sec.295.65(f)(2) of this title (relating to Training: Approval of Training Courses). Persons submitting out-of-state training certificates with their applications may obtain the necessary photo-identification when attending the mandatory course on Texas Asbestos rules, as required in accordance with sec.295.64(h) of this title (relating to Training: Required Asbestos Training Courses); (5) a one-inch by one-inch photograph of the face; and (6) proof of successfully passing the department examination for consultant/project designer, if required. (g) Insurance. A licensed individual asbestos consultant performing work for hire must obtain professional liability coverage in the amount of $1 million for errors and omissions, or be covered under the consultant's employer's policy, as specified in sec.295.40 of this title (relating to Licensing and Registration: Insurance Requirements). (h)-(i) (No change.) sec.295.49. Licensure: Asbestos Project Manager. (a)-(c) (No change.) (d) Qualifications. To qualify for a license, an applicant must provide: (1) (No change.) (2) a certificate of training from a training provider approved by or acceptable to the department indicating successful completion within the past 12 months of the approved course for abatement contractors and project supervisors or the annual refresher training as described in sec.295.64 of this title (relating to Training: Required Asbestos Training Courses); (3) a physician's statement of the required physical examination done within the past year as described in sec.295.42(e)(2) of this title (relating to Registration: Asbestos Abatement Workers) and submitted on the Texas Department of Health (department's) "Physician's Written Statement" form only; (4) a copy of the wallet-size photo-identification card from the training course as required from all trainers in Texas in accordance with sec.295.65(f)(2) of this title (relating to Training: Approval of Training Courses). Persons submitting out-of-state training certificates with their applications may obtain the necessary photo-identification when attending the mandatory course on Texas asbestos rules, as required in accordance with sec.295.64(h) of this title; (5) a one-inch by one-inch photograph of the face; and (6) proof of successfully passing the department examination for asbestos management planner, if required. (e) (No change.) sec.295.50. Licensure: Asbestos Inspector. (a) Licensing. An individual must be licensed as an asbestos inspector to conduct asbestos surveys in public buildings. An asbestos inspector must be employed by a licensed asbestos consultant agency or licensed asbestos management planner agency. The scope of duties include the collection of bulk samples of suspected asbestos-containing material (ACM); determining the location and condition of asbestos in a public building; and documenting survey results. (b)-(c) (No change.) (d) Qualification. To qualify for a license, an applicant must provide: (1) (No change.) (2) a certificate of training from a training provider approved by or acceptable to the department indicating successful completion of approved three- day training course for asbestos inspectors or the annual refresher training as described in sec.295.64 of the title (relating to Training: Required Asbestos Training Courses); (3) a physician's statement of the required physical examination done within the past year as described in sec.295.42(e)(2) of this title (relating to Registration: Asbestos Abatement Workers) and submitted on the department's "Physician's Written Statement" form only; (4) (No change.) (5) work experience: applicants for licensing as asbestos inspectors are required to submit verifiable written documentation of prior work experience, including professional references for subparagraphs (A) or (B) of this paragraph, with their application forms, as follows: (A) participation in at least five asbestos surveys performed under the direct supervision of a licensed management planner working for a licensed management planner agency or licensed asbestos consultant working for a licensed asbestos consultant agency; (B) current employment with and doing work under the supervision of a licensed management planner agency or asbestos consultant agency; (6) a copy of the wallet-size photo-identification card from the training course as required from all trainers in Texas in accordance with sec.295.65(f)(2) of this title (relating to Training: Approval of Training Courses). Persons submitting out-of-state training certificates with their applications may obtain the necessary photo-identification when attending the mandatory course on Texas asbestos rules, as required in accordance with sec.295.64(h) of this title; (7) a one-inch by one-inch photograph of the face; and (8) proof of successfully passing the department examination for asbestos inspector, if required. (e)-(f) (No change.) sec.295.51. Licensure: Individual Asbestos Management Planner. (a) Licensing. A person must be licensed under these sections to develop an asbestos management plan, which shall include a written schedule and procedures to protect occupants from asbestos health hazards in a public building. An individual management planner can not hire an inspector nor another management planner without becoming an asbestos management planner agency. (b) Scope. In addition to the development of management plans, a licensed management planner is licensed to perform surveys and assess the condition of asbestos-containing material (ACM), as provided in sec.295.50 of this title (relating to Licensure: Asbestos Inspectors). (c)-(d) (No change.) (e) Qualification. To qualify for a license as an asbestos management planner, an applicant must demonstrate in a manner acceptable to the Texas Department of Health (department) that they meet the following applicable qualifications. The applicant must: (1) have completed an Environmental Protection Agency (EPA) or state-approved inspector training course and the management planner course of instruction within the past 12 months, or has remained certified by completing annual refresher training for management planners and inspectors, as specified in sec.295.64 of this title (relating to Training: Required Asbestos Training Courses); (2) have an associates degree from an accredited college or university or successfully complete a minimum of 60 credit hours from an accredited college or university; (3) have participated in at least five management plans under the direction of a licensed management planner working for a licensed management planner agency or licensed asbestos consultant working for a licensed asbestos consultant agency; (4) provide a copy of the wallet-size photo-identification card from the training course as required from all trainers in Texas in accordance with sec.295.65(f)(2) of this title (relating to Training: Approval of Training Courses). Persons submitting out-of-state training certificates with their applications may obtain the necessary photo-identification when attending the mandatory course on Texas asbestos rules, as required, in accordance with sec.295.64(h) of this title (relating to Training; Required Asbestos Training Courses); (5) provide a one-inch by one-inch photograph of the face; (6) provide proof of successfully passing the department examination for an individual management planner, if required; and (7) if the applicant is an asbestos management planner working for hire, provide proof of professional liability insurance coverage in the amount of $1 million for errors and omissions, or be covered under an employer's policy as required by sec.295.40 of this title (relating to Licensing and Registration: Insurance Requirements). (f) (No change.) (g) Signature. All asbestos management plans must be signed by the licensed asbestos management planner or the licensed individual consultant preparing the plan. sec.295.52. Licensure: Air Monitoring Technician. (a) Licensing. An air monitoring technician (AMT) must be licensed to perform air monitoring services for an asbestos abatement project or related activity in a public building. An air monitoring technician may obtain baseline, area, personal, and clearance samples. For purposes of asbestos abatement, a licensed air monitoring technician shall be an employee of an asbestos laboratory or an asbestos consultant when taking area or clearance samples, or an asbestos abatement contractor, when taking personal samples. (b) Authority of air monitoring technicians. Air monitoring technicians may obtain baseline, area, personal and clearance samples, if qualified in accordance with subsection (e) of this section, and may perform the analysis of airborne fibers in the field if employed by a laboratory. An AMT employed by an abatement contractor is limited to taking personal samples for compliance with Occupational Safety and Health Administration (OSHA) regulations (29 Code of Federal Regulations sec.1926.58), which must then be sent to a laboratory for analysis. (c)-(d) (No change.) (e) Qualifications. An applicant, in order to qualify for an air monitoring technician license shall submit the following: (1) a high school diploma or GED certificate; (2) a certificate of training indicating successful completion within the past 12 months of the approved training course for air monitoring technicians or the current annual refresher training as described in sec.295.64 of this title (relating to Training: Required Asbestos Training Courses), (The initial course is not required of certified industrial hygienists, however the refresher is required for license renewal); (3) a physician's statement of the required physical examination done within the past year as described in sec.295.42(e)(2) of this title (relating to Registration: Asbestos Abatement Workers) and submitted on the Texas Department of Health (department) "Physician's Written Statement" form only; (4) a copy of the wallet-size photo-identification card from the training course as required from all trainers in Texas in accordance with sec.295.65(f)(2) of this title (relating to Training: Approval of Training Courses). Persons submitting out-of-state training certificates with their applications may obtain the necessary photo-identification when attending the mandatory course on Texas asbestos rules, as required, in accordance with sec.295.64(h) of this title (relating to Training: Required Asbestos Training Courses); (5) a one-inch by one-inch photograph of the face; and (6) proof of successfully passing the department examination for air monitoring technician, if required. (f) (No change.) (g) Limitations. Only a laboratory technician may perform the analysis of airborne fibers in the field in accordance with sec.295.54(e)(3) of this title (relating to Licensure: Asbestos Laboratory) and must also be employed by a licensed asbestos laboratory. sec.295.53. Licensure: Asbestos Management Planner Agency. (a) Licensing. An applicant desiring to be an asbestos management planner agency shall designate one or more individuals licensed as asbestos management planners, who shall have responsibility for the asbestos activity. (b) Scope. The agency may perform all those responsibilities allowed an individual management planner and may also perform inspections if the appropriate individuals are licensed to do so. (c) Fee. The initial and renewal fee for a management planner agency is $200. (d) Applications and renewals. Applications and renewals shall be submitted as required by sec.295.38 of this title (relating to Licensing and Registration: Applications and Renewals). Out-of-state applicants must comply with sec.295.39 of this title (relating to Licensing and Registration: Out-of-State Applicants) . (e) Qualification for licensing. Applicants for licensing as an Asbestos Management Planner Agency shall submit the following: (1) professional liability insurance coverage for errors and omissions in the amount of $1 million to cover the asbestos management planners and inspectors in its employ; and (2) evidence of insurance by a company authorized and licensed to issue workers' compensation insurance in this state and written on the Texas form, or evidence of self-insurance under Texas law, if workers compensation is required by the specifications or owner; and (3) a certificate of good standing issued by the State Comptroller of Public Accounts Office for the State of Texas for a corporation or other business entity; and (4) if the applicant is situated outside the State of Texas, a certificate of authority issued by the Texas Secretary of State, authorizing the corporation to do business in this state. (f) Responsibilities. A licensed asbestos management planner agency shall be responsible for: (1) employing generally accepted principles and practices in performing asbestos inspections and producing asbestos management plans; (2) complying with standards of operation, as described in sec.295.58 of this title (relating to Operations: General Requirements); and (3) complying with the responsibilities for the individual licenses as listed in sec.295.50 of this title (relating to Licensure: Asbestos Inspector) and sec.295.51 of this title (relating to Licensure: Individual Asbestos Management Planner). sec.295.54. Licensure: Asbestos Laboratory. (a) Licensing requirement. A person must be licensed in compliance with the provisions of this section to provide analysis of samples collected in public buildings for bulk asbestos or for final clearance of asbestos abatement projects. Branch offices, which perform laboratory analysis, must fulfill the same equipment and operational standards as the main office which has been licensed, and must be separately licensed. (b)-(c) (No change.) (d) Laboratory accreditation. To be eligible for licensure, applicants must submit evidences of accreditation, of at least one of the following: (1) (No change.) (2) accreditation as an industrial hygiene laboratory by the American Industrial Hygiene Association, which includes the National Institute for Occupational Safety and Health (NIOSH) PAT program; or (3) proficiency according to the standards of the NIOSH PAT Program, which includes quarterly sample tests for airborne fibers or bulk materials and a quality assurance/quality control program. (e) (No change.) (f) Qualifications. Applicants for licensing as an asbestos laboratory shall submit as applicable: (1) (No change.) (2) if the applicant is a Texas corporation, a certificate of good standing, issued by the Texas State Comptroller's Office; (3) if the applicant is situated outside the State of Texas, a certificate of authority issued by the Texas Secretary of State, authorizing the corporation to do business in the state; (4) -(5) (No change.) sec.295.55. Licensure: Asbestos Training Provider. (a)-(c) (No change.) (d) Qualification. To qualify for a license, an applicant must demonstrate to the department that they meet the applicable requirements. Documentation required of applicants for licensing as asbestos training providers is as follows. (1)-(5) (No change.) (6) Information requirements. The training provider shall discuss and inform each prospective trainee of the requirements for the type of license being sought, and of necessary qualifications he/she must have. The training provider shall refund any course-related fees a prospective trainee may have incurred due to a failure to provide this information to the student. Necessary qualifications include the following. (A)-(C) (No change.) (7)-(8) (No change.) (9) Training facilities. Training facilities used will be those commonly used and accepted as classrooms or conference rooms. Classrooms must have restrooms available for the students. Unacceptable classrooms are rooms which by their arrangement or contents would readily distract students, or rooms open to the general public. (10) Training requirements. A training provider must provide each course as a separate entity, as follows. (A) Initial training courses shall not be combined with refresher courses. (B) Courses shall be conducted in only one language and not combined with courses taught in another language, i. e. English or Spanish. (C) Basic or refresher courses shall be conducted in only one discipline and not be combined with courses of other disciplines, i.e. an abatement worker course and a contractor/supervisor course cannot be taught as a combined course. (11) Methods of instruction. Standard methods of instruction are as follows. (A) At least 50% of the classroom instruction and 100% of the hands-on instruction will be conducted with instructors presenting the material. (B) Training films and video tapes may be used to enhance understanding, but they may not be used as a substitute for the formal class conducted by a certified instructor or the Model Accreditation Program required hands-on training. Any of these materials must support and convey the understanding of the subject to the student. (12) Hours of operation. Classes will be conducted during scheduled hours as noted in subsection (e)(2) of this section. More than eight hours of training in a calendar day shall not be authorized. Exceptions to this rule must be obtained in writing from the department in advance. A facsimile (FAX) may be used for emergency or unusual situations. (13) The applicant must submit the following with the application: (A) publications listed in sec.295.65(d)(3) of this title (relating to Training: Approval of Training Courses); (B) if the applicant is a Texas corporation, a certificate of good standing issued by the Texas State Comptroller's Office must be submitted with the application for licensure; and (C) if the applicant is a resident outside the State of Texas, a certificate of authority issued by the Texas Secretary of State authorizing the corporation to do business in the state, must be submitted with the application for licensure. (e) Conditions of issuance. The following conditions and agreements shall apply to issuance of licenses under this section. (1) (No change.) (2) The department shall be furnished a copy of all scheduled courses and shall be advised at least 24 hours in advance of any scheduled course cancellations. Course schedules shall be provided to the department 14 days prior to the conduct of any course on the schedule. Exceptions may be made only with a complete justification being provided to the department and approval received. The department may consider variances with this rule. Requests for variances shall be submitted in writing to the Asbestos Programs Branch, Occupational Health Division. Approval will be granted, if appropriate, in writing. (3)-(4) (No change.) (f) Course instructors. The training provider shall submit a resume of each instructor and guest speaker who will participate in the conduct of any asbestos training course to be approved by the department. Prior approval of instructors and guest speakers is required. The training provider will notify the department of additions and deletions to their instructor roster within 15 days of actual occurrence. (g) Instructor qualifications. Training instructors shall be qualified in any one of the categories in paragraphs (1) -(5) of this subsection. Training qualifications must be fully documented, and verifiable by the department. Instructors shall have current accreditation training from an Environmental Protection Agency (EPA) approved course for the discipline in which the instructor desires to teach. The categories include: (1) at least two years of actual hands-on experience in asbestos-related activities (abatement or consulting) with current training accreditation from Environmental Protection Agency (EPA) asbestos courses for the subject which the instructor will teach, and a high school diploma and completion of at least one teacher education course in vocational or industrial teaching. (2) graduation from an accredited college or university with a Bachelor's degree in natural or physical sciences or a related field, with one year's hands-on experience in asbestos-related activities (abatement or consulting), and current accreditation in at least one EPA asbestos course; (3)-(5) (No change.) (h) Professional references. Each instructor application shall include three professional references attesting to teaching experience and asbestos-related qualifications. No more than one reference will be accepted from an employee of the same company as the applicant. References will be submitted on a form provided by the department which will be completed by the person providing the reference and mailed directly to the department for inclusion with the instructor application. (i) (No change.) (j) Responsibilities. The asbestos training provider shall be responsible for: (1)-(2) (No change.) (3) providing the environment, training, and testing of sufficient quality that the student retains the required elements of the course; (4) cooperating with department personnel in the discharge of their official duties to conduct inspections and investigations as described in sec.295.68 of this title (relating to Compliance: Inspections and Investigations); and (5) taking an aggressive approach in meeting the needs of the student to include providing course review in preparation for the examination and specialized attention to enhance comprehension. sec.295.56. Licensure: Asbestos Transporters. (a)-(c) (No change.) (d) Qualifications. To qualify for a transporter license, an applicant must submit the following: (1) if the applicant is a Texas corporation, a certificate of good standing, issued by the Texas State Comptroller's Office must be submitted with the application for licensure; (2) if the applicant is situated outside the State of Texas, a certificate of authority issued by the Texas Secretary of State authorizing the corporation to do business in the state, must be submitted with the application for licensure; (3)-(5) (No change.) (e) Responsibilities. An asbestos transporter shall: (1) comply with federal regulations in 49 Code of Federal Regulations (CFR), Parts 100-199 titled "Hazardous Materials Regulations", 40 CFR, Part 61 titled "National Emission Standards for Hazardous Air Pollutants (NESHAP)", specifically the provisions concerning asbestos transport, and, where applicable 40 CFR, Part 763, Subpart E, Appendix D, titled "Transport and Disposal of Asbestos Waste"; (2) qualify all employees who will be transporting, loading and unloading asbestos, in accordance with 49 CFR Parts 171-177; (3)-(4) (No change.) (5) comply with department personnel in the discharge of their official duties to conduct inspections and investigations, as set forth in sec.295.68 of this title (relating to Compliance: Inspections and Investigations); (6) train employees in compliance with OSHA regulations in 29 CFR, sec.1910.120(a)(v), in anticipation of possible spills of asbestos; and (7) in Texas, deliver all asbestos-containing waste material for disposal to a facility from the approved list provided by the Texas Natural Resource Conservation Commission, P.O. Box 13087, Austin, Texas 78711-3087. If transporting out-of-state, follow the regulations of the receiving state. sec.295.58. Operation: General Requirements. (a) (No change.) (b) Supervision. (1)-(6) (No change.) (7) All licensed supervisors are responsible for respirator fit testing, personal protection of the workers, security, and control of access at the job site. (8) (No change.) (c)-(d) (No change.) (e) Compliance inspections. Each licensee shall assist and cooperate with all properly-identified representatives of the department in the conduct of asbestos inspections or investigations at all reasonable or necessary times, with or without prior notice. Such inspections may be made at proposed, actual, or former sites of asbestos-related activities, or of the premises, records, equipment and personnel of licensees or applicants, or of those who have held active licenses previously. It is a violation to interfere with or delay an inspection or investigation conducted by a department representative. A licensee may not deny entry to a properly identified representative of the department. (f) Respirator program. Each employer licensee shall be responsible for establishing and maintaining a written respiratory protection program, as required by OSHA regulations in 29 Code of Federal Regulations (CFR) sec.1910.134, as amended. Respirators shall be properly worn at all times in containment during asbestos abatement activity. (g) Individual respirator fit. The licensee must maintain in safe working condition a sufficient number of respirators of the types and styles approved by the National Institute of Occupational Safety and Health/Mine Safety and Health Administration (NIOSH/MSHA) to meet all anticipated requirements of his/her employees; and any employee whose facial characteristics, hair, mustache/she, or beard preclude a tight fit of a negative-pressure respirator shall not be allowed to enter the containment area of an asbestos operation using this type of respirator. (h) Sampling for asbestos. Any licensed supervisor may obtain a bulk or wipe sample to determine or confirm the presence of asbestos prior to the beginning of an asbestos-related activity or before performing O&M activities wherever suspect material is encountered. (A survey by a licensed asbestos inspector is required for actual abatement). Only laboratories licensed by the State of Texas may be used to evaluate samples taken from within public buildings in Texas. (i) Project monitoring. (1) Baseline. (A) The consultant shall make a determination of the need to collect baseline samples. This determination shall be made a part of the specifications for an asbestos project. Air samples for analysis by Phase-contrast Microscopy will be collected under normal building conditions for any abatement activity prior to the disturbances of asbestos-containing material (ACM) as a part of the activity. A minimum of three samples shall be collected on 0.8 micron mixed cellulose ester (MCE) filters loaded in conducting cassettes with extension cowls. Sampling and analysis will be in accordance with the latest edition of NIOSH 7400 protocol, counting rules A. The minimum sample volume will be 1250 liters. (B) These samples may be analyzed or archived at the consultant's discretion. The samples shall be preserved for no less than 60 days following achieving clearance. (2) Ambient. (A) Ambient samples will be collected during the project and analyzed in accordance with the latest edition of NIOSH 7400 protocol, counting rules A. (B) Ambient samples will be collected: inside containment; outside containment but inside the building (if applicable); the negative air unit discharge; immediately outside the entrance to the decontamination facility (representative of the air being drawn into the facility); outside the bag out facility; and any other locations required by the specifications. (3) Clearance. (A) All project activities, except O&M, shall be cleared by using aggressive air sampling. The maximum levels of residual fibers shall be as cited in subparagraph (C) of this paragraph. (B) A visual inspection of the abatement area shall be made to determine if the project has been properly conducted in accordance with the specifications and with applicable state and federal regulations and all ACM has been properly removed, encapsulated, or maintained. (C) For all projects samples may be collected and analyzed by the latest edition of the NIOSH 7400 protocol, counting rules A, Phase-contrast Microscopy (PCM). Clearance samples shall be collected at a rate of one to less than (10) liters per minute on 0.8 micron mce filters in conducting cassettes with extension cowls. Minimum sample volume will be 1250 liters. Clearance will be achieved if no sample is reported greater than 0.01 f/cc by the analysis report from the licensed laboratory. Asbestos Hazard Emergency Response Act (AHERA) protocol will be used in schools. A licensed consultant shall design the air monitoring scheme and may deviate from this subsection if appropriate. (D) The visual inspection must be conducted by a properly licensed or accredited consultant. The consultant may delegate the visual inspection responsibility to a project manager considered experienced enough to properly perform this duty. (E) All samples, including clearance samples, may be collected by licensed air monitoring technicians or a licensed consultant. The sample pumps will be monitored during the sampling period by the person collecting the samples, or some other means of control will be established to ensure the integrity of the samples and prevent tampering. (j) Posting of documents. The following documents are required to be posted in a conspicuous spot on a bulletin board at the entrance to the regulated area and must not be covered by any other documents: (1) the asbestos information poster issued by the department; and (2) copies of any violations issued by the federal or state asbestos- regulating authorities within the preceding 12 months from any asbestos project. (k) Documents required to be on-site are as follows: (1) EPA "Green Book" for O&M work; and (2) appropriate publications as listed in sec.295.33 of this title (relating to Adoption by Reference of Federal Standards) for the asbestos activity which is being performed. (3) a copy of the "Recommended Work Practices for the Removal of Resilient Floor Coverings," published by the Resilient Floor Covering Institute, if removing floor coverings using this method. sec.295.60. Operations: Abatement Practices and Procedures. (a) General provisions. The following general work practices are minimum requirements for protection of public health, and do not constitute complete or sufficient specifications for an asbestos abatement project. More detailed requirements in plans and specifications for a particular abatement project, or requirements that address the unusual or unique circumstances of a project, may take precedence over the provisions of this section. The specifications written for the abatement project shall also include the required air clearance procedures. (1) Federal work practices for asbestos abatement are referenced in 40 Code of Federal Regulations (CFR), sec.61.145, Environmental Protection Agency (EPA) titled "Standard for Demolition and Renovation", as amended. (2) An asbestos project consultant who is licensed under sec.295.47 of this title (relating to Licensure: Individual Asbestos Consultant) may specify work practices that vary from the provisions of this section as long as the work practices specified are at least as protective of public health, and are described in the project notification submitted to the Texas Department of Health (department). (3) (No change.) (4) Only licensed persons, responding emergency personnel (police, fire, EMS, etc.), specialists required for assistance as determined by the consultant, or governmental inspectors may enter the regulated area. (b) Critical barriers. Regulated areas within which asbestos abatement is to be conducted shall be separated from adjacent areas by impermeable barriers such as plastic sheeting attached securely in place. All openings between containment areas and adjacent areas, including but not limited to windows, doorways, elevator openings, corridor entrances, ventilation openings, drains, ducts, grills, grates, diffusers, and skylights, shall be sealed. All penetrations that could permit air infiltration or air leaks through the barrier shall be sealed, with exceptions of the make-up air provisions and the means of entry and exit. (c) Movable objects. All movable objects shall be removed from the containment area. Cleaning of contaminated items shall be performed if the items are to be salvaged or reused. Otherwise, they shall be properly disposed of as asbestos waste. All non-movable objects that remain in the containment area shall be covered with a minimum of four-mil plastic sheeting, secured in place. (d) Floor and wall preparation. Floor she/sheeting shall completely cover all floor surfaces and consist of a minimum of two layers of she/sheeting of at least six-mil true thickness, or equivalent. Floor sheetings shall extend up sidewalls at least 12 inches and be sized to minimize seams. No seams shall be located at wall-to-floor joints. Sealing of all floor penetrations against water leakage is mandatory. Wall sheeting shall completely cover all wall surfaces and consist of a minimum of one layer of four-mil sheeting, or equivalent. It shall be installed so as to minimize joints and shall extend beyond wall/floor joints at least 12 inches. No seams shall be located at wall-to-wall joints. (e) Decontamination system. A worker decontamination enclosure system in the regulated area shall be used consisting of a clean room, shower room, and equipment room, each separated from the other and from the containment area by airlocks accessible through doorways. Except for the doorways and the make-up air provisions for the enclosure, the worker decontamination system shall be sealed against leakage of air. All personnel must exit the containment area through the shower before entering the clean room. No asbestos-contaminated individuals or items shall enter the clean room. (f)-(g) (No change.) (h) High-efficiency particulate air (HEPA) cleaning. Except with prior written approval from the department, cleaning procedures shall use wet methods and HEPA vacuuming, and visual inspections shall be performed in accordance with 40 CFR, Chapter 1, sec.763.90(i)(1). Exceptions shall be obtained by writing to the Texas Department of Health, Asbestos Programs Branch, Occupational Health Division, 1100 West 49th Street, Austin, Texas 78756. (i) (No change.) (j) Requirements for removal. The requirements for removing ACM are that: (1) (No change.) (2) asbestos covered components that are going to be removed from the building may either be stripped in place and cleaned (and pass a visual inspection by the consultant or O&M supervisor as appropriate), or the ACM may be thoroughly wetted and the entire component wrapped in two layers of six-mil plastic, labeled and sealed, providing that: (A)-(C) (No change.) (3) (No change.) (k)-(l) (No change.) (m) Safety requirements. The following safety requirements shall be in effect for an abatement project: (1)-(2) (No change.) (3) Air monitoring. Air monitoring shall include base line sampling, personal samples, area sampling, and clearance sampling according to 40 CFR Part 763, Subpart E. sec.295.61. Operations: Notifications. (a) General provision. The Texas Department of Health (department) shall be notified on a form specified by the department of any asbestos abatement activity, renovation or operations and maintenance (O&M) activity affecting asbestos-containing materials (ACM), or any demolition in facilities or public buildings. Notification shall be made to the department no less than ten working days (not calendar days) prior to commencement of the activity and shall be submitted on the form specified by the department. It is a requirement that the department notification form be filled out completely and properly. Blanks which do not apply shall be marked N/A. The designation of N/A will not be accepted for references requiring identification of the work site, building description, building owner, abatement and transportation companies, individuals required to be identified on the notification form, nor start and completion dates in compliance with 40 Code of Federal Regulations (CFR,) Part 61.145, and this section. National Emission Standards for Hazardous Air Pollutants (NESHAP) requirements apply equally to both the NESHAP and Texas Asbestos Health Protection Act (TAHPA) notification requirements. An original signature is required on each notification form. A copied signature is not acceptable. Beginning September 1, 1994, an invoice for the required fee for notifications will be sent from the department to the building owner. The notification shall be improper unless it contains an original signature. A separate notification will no longer be made to Texas Natural Resource Conservation Commission (TNRCC). (1) Public buildings. The department shall be notified of any demolition of a public building whether or not asbestos has been identified. The department shall be notified of other abatement projects, disturbances, or renovations involving the abatement of any amount of asbestos within a public building. (2) Facilities. For all facilities which are not otherwise subject to this title as public buildings, the department shall be notified of any demolition of a facility, whether or not asbestos has been identified. The department shall be notified of any abatement project, disturbance, or renovation involving the abatement of asbestos within a facility, as required by and in accordance with NESHAP. (b) Responsibility. It is the responsibility of the building owner to notify the department under this section. This task, but not the responsibility, may be delegated to a licensed asbestos abatement contractor or consultant in writing, however, this does not relieve the building owner of responsibility nor the payment of the required notification fee. In a demolition where a licensed abatement contractor or consultant are not required, the task may be delegated to the demolition contractor. It is the task of the person designated to file the notification on the form specified by the department. The notification shall have all information completed with no blocks left blank. (c) Timeliness of notification. Written notifications of asbestos abatement activity or demolition must be hand delivered, express mailed, or postmarked at least ten working days (not calendar days) before the start of activities which may disturb asbestos. Notifications must be delivered by United States Postal Service, commercial delivery service, or by hand delivery. Telephone facsimile (FAX) is not permitted. The start date for asbestos activity is considered to be the date when operations which might disturb asbestos begin. (d) Start-date change to later date. When asbestos abatement activity, demolition, renovation or O&M will begin later than the date contained in the notice, the department shall: (1) be notified (Asbestos Programs Branch or Regional Office) of the changed start date by telephone as soon as possible but prior to the original start date. An amended notification is required in writing immediately following the foregoing notification; and (2) be provided with a written notice of the new start date as soon as possible before, but no later than the original start date. Delivery of the updated notice by the United States Postal Service, commercial delivery service, or hand delivery is acceptable. (e) Start-date change to earlier date. When asbestos abatement, demolition, renovation, or O&M will begin on a date earlier than the date contained in the notice, the department shall be provided with a written notice of the new start date at least ten-working days before the start of work. (f) Start-date/stop-date (completion date) requirement. In no event shall asbestos abatement activity, demolition, Operations & Maintenance (O&M), or renovation, as covered by this section, begin or be completed on a date other than the date contained in the written notice. Amendments to start date changes are to be submitted as required in subsections (d) and (e) of this section. An amendment is required for any stop dates which change by more than one work day for each week (seven calendar day period) for which the project has been scheduled and notification submitted. The building owner, or his/her delegated agent, shall provide schedule changes to the department no less than 24 hours prior to the change or completion of the project. Emergency notification can be confirmed with the department telephonically and followed up in writing. (g) Consolidated notifications of small operations. Notifications involving a series of small, separate asbestos O&M or abatement operations (each less than 160 square feet or 260 linear feet or 35 cubic feet in size) may be combined by listing the information on a single notification form. Predict the combined additive amount of asbestos to be removed or stripped during a calendar year of January 1 through December 31. If the total amount is less than one asbestos reporting unit per subsection (j), and the facility is not a public building, a notification is not required. If the facility is a public building, a notification is required for any amount. The department shall be notified at least 10-working days (not calendar days) before the end of the calendar year preceding the year for which notice is being given. (1) The building owner shall keep records of the individual O&M projects in an O&M manual. An amendment of the annual notification shall be submitted if the amount of asbestos that is abated surpasses that amount of asbestos that was predicted in the original notification by 20%. Fees will be based upon the annual notification and any amendments. The fee that is calculated for the amended notification will only be for the amount of asbestos (number of ARUs) that increased from the original notification. The $50 administrative fee will not be reassessed. (2) The department during a routine inspection shall review the O&M manual for the amount of asbestos that has been abated and compare the amount to the amount estimated on the annual notification. If the amount of asbestos that has been abated exceeds the amount estimated in the annual notification by more than 20%, the notification will be improper. (h) Provision for emergency. In the event of emergency renovations made necessary by an unexpected or unplanned asbestos incident, notification will be made as soon as practicable, but not later than the following work day after the occurrence of the incident. Initial notification can be made by telephone, followed by formal notification on the department's notification form. Emergencies shall be documented to the extent that the need for the emergency is evident. An emergency renovation operation means a renovation operation that was not planned, but results from a sudden, unexpected event. This event if not immediately attended to, presents a public health or safety hazard, and is necessary to protect equipment from damage, or is necessary to avoid imposing an unreasonable financial burden. This term includes operations necessitated by non-routine failures of equipment. This term does not include immediate renovations resulting solely from a lack of adequate planning for foreseeable asbestos abatement activity. (i) Demolition notifications. The department shall be notified of all demolitions regardless of size. If the facility is being demolished under an order of a state or local government agency, issued because the facility is structurally unsound and in danger of imminent collapse, then the department notification must be delivered as early as possible before, but not later than, the following working day of the commencement of demolition. The judgement that a structure is in danger of imminent collapse or that it is unsafe for anyone to enter shall be made by a professional engineer, registered architect, or government official. Emergencies shall be documented to the extent that the need for the emergency is evident. Public health and safety or unavoidable economic concerns are the qualifications for an emergency rather than expediency. (j) Asbestos notification fees. (1) Applicability. The building owner shall remit to the department a fee that is based upon the amount of asbestos removed. (2) Payment. An invoice for the required fee will be sent to the building owner after the notification has been received by the department. Fee amounts, address, and fund numbers are included on the form. (3) Basis for fees. The fees shall be based on the total amount of the regulated asbestos-containing material reported to be removed as defined in 40 CFR sec.61.141. The fee shall be calculated at the rate of $25 per asbestos reporting unit (ARU). The number of ARUs associated with the removal activity is determined by dividing the number of linear feet by 260, the number of square feet reported by 160, and the number of cubic feet by 35 and adding these individual results. The sum of this addition, minus any fraction, shall then be multiplied by the $25 rate to calculate the notification fee. The minimum fee shall be $50 per original notification and the maximum fee shall be $10,000 per notification. The fee shall be assessed only for the amount of asbestos to be removed. If no asbestos is removed or if the amount of asbestos removed is less than two ARUs, only the minimum administrative fee shall be assessed. Annual notifications of maintenance activities subject to 40 CFR, Part 61, Subpart M, are included in the fee requirement. If less than the reported amount will be removed, a notification amendment should be provided to the department no later than five working days following the completion of the project. A refund request must be sent with the amended notification. A new invoice will be sent to the building owner which will reflect a new fee based upon the actual amount of asbestos that was removed. If the fee has been paid, refunds will be made, when appropriate, minus a $50 administrative fee. Revision of the form will require an additional fee only if the amount of reportable asbestos to be removed is increased. (4) Nonpayment of fees. Failure to pay the required fee after an invoice has been sent shall be considered a violation and may subject the building owner to administrative penalties as listed in sec.295.70 of this title (relating to Compliance: Administrative Penalty). The building owner and his agent may also be subject to criminal penalties if applicable. Governmental organizations may submit a copy of the interagency transfer document or a statement that a check has been requested and is in processing. Payment must then be received no later than 60 days following notification. sec.295.62. Operations: Recordkeeping. (a) Record retention. Records and documents required by this section shall be retained for a period of 30 years from the date of project completion unless otherwise stated. Persons ceasing to do business, shall notify the Texas Department of Health (department) in writing within 30 days of such event. The department, on receipt of such notification may instruct that the records be surrendered and may specify a repository for such records. The persons shall comply with the department's instructions within 60 days. (b)-(c) (No change.) (d) Analytical services. Licensed providers of asbestos analytical services shall maintain copies of all records and documents for 30 years, which are required by these sections and copies of all analyses performed, including the sample identification number and analytical results, and make such documents available to the department for inspection upon request. Samples which have been taken as part of an inspection are required to be retained by the analyzing laboratory for ten-days after the completion of the project or for 30 days, whichever is longer. (e) (No change.) sec.295.64. Training: Required Asbestos Training Courses. (a) General provisions. Applicants for licensing or renewal must submit evidence of fulfillment of specific training requirements acceptable to the Texas Department of Health (department) under these sections. Course content, hours of instruction, refresher training, etc., are subject to change or modification. At the conclusion of each training course, the instructor shall provide the student a copy of the registration form for the state accreditation examination and a copy of the examination schedule. The training provider shall also assist the applicant if needed to complete the application to include listing any special requirements of the student, such as the need for an oral test or a test in Spanish. (1) The revisions of the Environmental Protection Agency (EPA) Model Accreditation Plan (MAP) reaffirm the principle that each of the accredited training disciplines is distinct from the others, because each reflects a different functional job role. (2) Each initial and refresher training course offered for accreditation must be specific to a single discipline, and not combined with training for any other discipline. The past practice of combining the worker and supervisor training courses is not allowed as of April 4, 1994. (3) Training courses shall be conducted by training providers licensed by the department. Training within the confines of this State by unlicensed providers shall not be accepted by the department. (4) Valid training courses performed in other states, in the past 12 months, by EPA approved training providers shall be accepted by the department provided that applicants have completed an approved course in Texas asbestos law and rules from a training provider licensed by the department. (5) The one-year period of validity following the effective date of a required asbestos course may be extended by completing the appropriate annual refresher training. Failure to complete annual refresher training within two years of the most recent training shall require that the original course be repeated. (6) A day of training shall consist of eight hours of actual classroom instruction, hands-on practical training sessions, and field trips in any suitable combination, including break periods. A total of 20 minutes in breaks are authorized in each four-hour period of training as determined by the instructor. The one-hour lunch break is not a part of the required eight hours of training. No more than eight hours of instruction are authorized within a calendar day. (7) Courses requiring hands-on practical training must be presented in an environment that permits the trainees individually to have actual experience performing tasks associated with the appropriate asbestos activity studied. Hands-on training sessions shall maintain a student to instructor ratio of not more than 15 to one. Demonstrations and audio-visuals shall not substitute for required hands-on training. (b) Asbestos project designer training. The project designer training course shall be three days in length. Persons seeking to be licensed as an asbestos consultant under these sections shall complete the approved project design training course as described in this subsection. (See also the other training required for consultants in sec.295.47(f)(3) of this title (relating to Licensure: Individual Consultant)). Successful completion of the course shall be demonstrated by achieving a score of at least 70% on the course examination. The course shall adequately address: (1) background information on asbestos; (2) potential health effects related to asbestos exposure; (3) overview of abatement construction projects to include clearance of the project area; (4) safety system design specifications, including written sampling rationale for air clearance; (5) field trip; (6) employee personal protective equipment; (7) additional safety hazards; (8) fiber aerodynamics and control; (9) designing abatement solutions and written project design; (10) budgeting/cost estimation; (11) writing abatement specifications; (12) preparing abatement drawings; (13) contract preparation and administration; (14) legal/liabilities/defenses; (15) replacement; (16) role of other consultants; (17) occupied buildings; (18) how to accomplish a complete visual inspection; (19) relevant federal, Texas, and local regulatory requirements; and (20) course review. (c) Contractor/supervisor training. The contractor/supervisor course consists of five days of training. Persons seeking to be licensed as an asbestos abatement contractor, asbestos abatement supervisor, project manager, asbestos competent person (under Occupational Health and Safety Administration requirements), or operations and maintenance (O&M) (restricted) supervisor, shall successfully complete this approved contractor/supervisor training course as described in this subsection. The course may be substituted for the asbestos abatement worker course; this substitution also applies to annual refresher training. This training shall include lectures, demonstrations, audio-visuals and hands-on training, including individual respirator fit testing, course review, and a written examination of 100 multiple-choice questions. Each trainee must score at least 70% or better on this exam to successfully complete the course. The course shall adequately address: (1)-(10) (No change.) (11) 14 hours of hands-on training, including work area preparation, decontamination chamber construction, cleaning and disposal, and respirator fit testing and maintenance; (12)-(16) (No change.) (d) Asbestos abatement worker training. The worker training course consists of four days of training. Persons seeking registration as asbestos abatement workers shall successfully complete the approved training course, as described in this subsection. Successful completion of the contractor/supervisor training course shall also be acceptable as qualification for asbestos worker applicants. Worker training courses are required to have a classroom student-instructor ratio of not more than 25 to one (25:1). The worker training course shall include lectures, demonstrations, hands-on training including individual respirator fit testing, course review, and a written examination consisting of 50 multiple-choice questions. Successful completion of the course shall be demonstrated by achieving a score of at least 70% on the examination. The course shall adequately address: (1)-(10) (No change.) (11) 14 hours of hands-on training, including work area preparation, decontamination chamber construction, cleaning and disposal, and respirator fit testing and maintenance; and (12) course review and manual. (e) Asbestos inspectors. The inspector course shall consist of three days of training. Persons seeking to be licensed as asbestos inspectors shall successfully complete the approved training course as described in this subsection. The inspector training course shall include lectures, demonstrations, hands-on individual respirator fit testing, course review and a written examination consisting of 50 multiple choice questions. Successful completion of the course shall be demonstrated by achieving a score of at least 70% on the examination. The course shall adequately address: (1)-(16) (No change. ) (f) Management planners. The management planner course is two days long, and has as a prerequisite, the three-day asbestos inspector course. Persons seeking to be licensed as management planners shall successfully complete the training program for inspectors, as described in subsection (d) of this section, plus the approved asbestos management planner training course, as described in this subsection. The management planner course shall include lectures, demonstration, course review and a written examination consisting of 50 multiple choice questions. Successful completion of the course shall be demonstrated by achieving a score of at least 70% on the examination. The course shall adequately address: (1)-(12) (No change.) (g)-(h) (No change.) (i) Refresher training. All disciplines shall receive refresher training annually. Satisfactory completion of such training shall be a condition of renewal, and evidence of satisfactory completion shall be included in the annual renewal application. No refresher training can be accredited if the training course for licensure or registration was never completed. Refresher training courses for all disciplines shall be in accordance with the MAP and shall adequately address and include: (1) federal and Texas regulations; (2) state-of-the-art developments for the topic specialty of the course; and (3) review of the training manual and key aspects of the initial training course. sec.295.65. Training: Approval of Training Courses. (a) (No change.) (b) Contingent approval. Contingent approval of an asbestos training course shall be granted to an applicant after all required information and documentation submitted has been found to meet the requirements set forth in these sections for approval of the course by the department. Once the department grants contingent approval, a training provider license will be issued and its status will be regarded as contingent. The license will be valid for a one-year period after it has been issued. (c) Full approval . Full approval of an asbestos training course and the training provider license shall be granted for a period of one year after the department has granted contingent approval, has had the opportunity to conduct an on-site observation and evaluation of the training course, its instructors and its facilities, and has determined that the applicant's asbestos training course meets the requirements set forth in these sections. (d) Applications. An applicant for approval of an asbestos training course must submit an application in writing to the department. Within 30 working days after receiving an application, the department shall acknowledge receipt of the application and notify the applicant of any deficiency in the application. The department will approve or deny the application only upon receipt of the completed application which shall contain the following information: (1)-(2) (No change.) (3) a detailed outline of the course curriculum including the amount of time allotted to each topic, the name and qualifications of the individual developing the instruction program for each topic, and copies of all written materials to be distributed to the student; (4)-(5) (No change.) (6) administration of a written multiple choice examination at the conclusion of the course. If copies of the exam are required by the department, measures to protect the confidentiality of the exam as proprietary information will be maintained by the department to the extent authorized by law; and (7) (No change.) (e) Re-training (refresher) courses. For all disciplines except inspectors and air monitoring technicians, a state accreditation program shall include a one- day annual refresher training course for reaccreditation. Refresher courses for inspectors shall be a half-day in length. Management planners shall attend the inspector and management planner refresher courses. Consultants shall attend an approved two-day annual refresher training course, or four separate refreshers consisting of project designer, inspector, management planner, and air monitoring technician. The inspector, management planner, and air monitoring refresher courses shall each be four hours in length and include: federal, state and local regulations; state-of-the-art developments; and review of key aspects of the initial training course. (f) Issuance of certificates. All training certificates shall bear the name, address, and telephone number of the licensed training facility and the name of the instructor. The training provider shall: (1) issue certificates (with their social security numbers) to students who successfully pass the training course's examination. The certificate shall indicate the name of the student and the course completed, the date of the course and examination and include the signature of the instructor; (2)-(4) (No change.) (g)-(h) (No change.) sec.295.68. Compliance: Inspections and Investigations. (a) The Texas Department of Health (department) shall maintain the right to inspect or investigate the practices of any person involved with asbestos abatement or related activity in a facility or public building. (b) Advance notice of inspections or investigations by the department is not required. (c) A department representative, upon presenting the department identification (ID) card, shall have the right to enter at all reasonable times any area or environment, including but not limited to any containment work area, building, construction site, storage, vehicle, or office area to inspect and investigate for compliance with these sections, to review records, to question any person, or to locate, to identify, and to assess the condition of asbestos and asbestos- containing material. (d) A department representative in pursuance of his/her official duties is not required to notify or seek permission to conduct inspections or investigations. It is a violation of this chapter for a person to interfere with, deny, or delay an inspection or investigation conducted by a department representative. (e) Authority and responsibility for the qualifications, health status, and personal protection of department representatives resides with the department by law. A department representative shall not be impeded or refused entry in the course of his official duties by reason of any regulatory or contractual specification. (f) All persons engaged in asbestos-related activities must have the department-issued ID Card present at the worksite. sec.295.70. Compliance: Administrative Penalty. (a) (No change.) (b) The penalty shall not exceed $10,000 a day per violation. Each day a violation continues will be considered a separate violation. The total penalty will be the sum of all individual violation penalties. (c) -(e) (No change.) (f) Violations shall be placed in one of the following severity levels. (1) Critical violation. Severity Level III covers violations that are most significant and have a direct negative impact on public health and safety. The base penalty for a Level III violation, first occurrence will not exceed $10,000 per day, per violation. Examples of Level III violations include, but are not limited to: (A)-(B) (No change.) (C) working without a license or with improper (forged, altered, etc,) license; (D) failure to adequately prevent public entry to potentially contaminated areas; (E) failure to submit a notification; (F) submitting a forged or altered training certificate in order to obtain a training provider or other license; (G) training providers training without a license or with an improper license; (H) training providers providing training certificates to persons who have not attended the required training course as specified by the department and/or the Model Accreditation Plan; and (I) failure to submit a notification or to pay the required fee. (2) Serious violation. Severity Level II covers violations that are significant and which, if not corrected, could threaten public health and safety. The base penalty for Level II violations on a first occurrence will not exceed $1,000 per day, per violation. Examples of Level II violations include, but are not limited to: (A) failure to maintain material in a wet condition; (B) working with a lapsed or suspended license; (C) submitting an improper notification; (D) a training provider failing to conduct a training course for the specified time period as specified in sec.295.64 of this title (relating to Training: Required Asbestos Training Courses); (E) training with a lapsed training provider license. If this results in a suspension, the organization and principals will not be allowed to be licensed for a period of one year; and (F) failure of a licensed person to maintain current training or physical. (3) Significant violation. Severity Level I covers violations that are of more than minor significance and, if left uncorrected, could lead to more serious circumstances. This category shall include fraud and misrepresentation. The base penalty for Level I violations on first occurrence will not exceed $100 per day, per violation. Examples of Level I violations include, but are not limited to: (A) (No change.) (B) inadequate storage for clothing in the "clean room;" (C) failure to have worker certificate on a job site; (D) failure of a training provider to submit information to the department regarding training course schedules or to notify the department of cancellations within the specified time periods; (E) failure of a training provider to submit course completion information within the specified time period as described in sec.295. 65(f)(3) of this title (Training: Approval of Training Courses); and (F) a training provider exceeding the maximum trainee-instructor ratio. (g) The person charged with the violation will be given the opportunity for a he/shearing conducted in accordance with the applicable provisions of the Administrative Procedure Act, Texas Government Code, Chapter 2001, and the department's formal he/shearing procedures in Chapter 1 of this title (relating to the Board of Health). (h)-(i) (No change.) This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on September 1, 1994. TRD-9447505 Susan K. Steeg General Counsel Texas Department of Health Effective date: September 22, 1994 Proposal publication date: May 3, 1994 For further information, please call: (512) 834-6610 TITLE 30. ENVIRONMENTAL QUALITY Part I. Texas Natural Resource Conservation Commission Chapter 117. Control of Air Pollution From Nitrogen Compounds The Texas Natural Resource Conservation Commission (TNRCC) adopts amendments to sec.sec.117.451, 117.510, 117.520, 117.530, and 117.601, concerning Control of Air Pollution From Nitrogen Compounds. Section 117.510 is adopted with changes to the proposed text as published in the June 10, 1994 Texas Register (19 TexReg 4487). Sections 117.451, 117.520, 117.530, and 117.601 are adopted without changes and will not be republished. The changes have been adopted in order to extend the final compliance date of the Chapter 117 rule, which was previously adopted in response to a requirement by the United States Environmental Protection Agency (EPA) and the 1990 Federal Clean Air Act (FCAA) Amendments for states to apply reasonably available control technology (RACT) requirements to major sources of nitrogen oxides (NO point=4.02p [sub]x) by May 31, 1995. This extension delays the implementation of NO [sub]x RACT until May 31, 1997 in the following ozone nonattainment counties affected by Chapter 117: Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, and Waller (Houston/Galveston area); and Hardin, Jefferson, and Orange (Beaumont/Port Arthur area). For the Houston/Galveston and Beaumont/Port Arthur areas, the State Implementation Plan (SIP) for demonstration of attainment of the ozone national ambient air quality standard (NAAQS) will be developed in two stages. The first stage, to be completed by November 15, 1994, will be based on Urban Airshed Model (UAM) modeling using historical episodes. The second stage, now underway, will be completed between November 1995, and May 1996, using the UAM with the results of the Coastal Oxidant Assessment for Southeast Texas (COAST), an intensive 1993 field study. Preliminary results of base case UAM modeling indicate that, until large reductions in volatile organic compounds (VOC) have been made, NO [sub]x reductions do not contribute to ozone attainment in portions of the modeled ozone nonattainment areas and will actually increase ozone levels in portions of these areas. The TNRCC intends to make the implementation of NO [sub] x RACT contingent on the results of UAM modeling using data from the COAST study. Revisions are made to sec.sec.117.451 (relating to Applicability, Nitric Acid Manufacturing-1General), 117.510 (Compliance Schedule for Utility Electric Generation), 117.520 (Compliance Schedule for Commercial, Institutional, and Industrial Combustion Sources), 117.530 (Compliance Schedule for Nitric Acid and Adipic Acid Manufacturing Sources), and 117.601 (relating to Gas-Fired Steam Generation). References to the final compliance date of May 31, 1995 have been changed to May 31, 1997 in these sections. In addition, references to July 31, 1995 have been changed to July 31, 1997 in sec.117.510(5) and sec.117.520(4). Section 117.510 is adopted with language consistent with the previous adoption of Chapter 117 on May 25, 1994. A public hearing on this proposal was held July 6, 1994 at the TNRCC Austin offices. No oral comments were received at the public hearing, and written comments were received from 11 commenters. Amoco Oil Company, Exxon Chemical Company, Exxon Company, U.S.A., Houston Lighting & Power (HL&P), Pennzoil Company, and the Texas Chemical Council supported the proposed two-year extension of the Chapter 117 final compliance date to May 31, 1997, and recommended that UAM modeling using the COAST data be relied upon to guide the ozone control strategy. The staff acknowledges the support expressed by the commenters. The Galveston-Houston Association for Smog Prevention (GHASP) protested the delay of VOC and NO [sub]x controls and stated that a plan detailing the required reductions must be submitted by November 15, 1994 as required by the FCAA. The FCAA requires states to develop, adopt, and submit a Post-1996 Rate-of- Progress (ROP) SIP and accompanying rules to EPA by November 15, 1994. This submittal must demonstrate how the Houston/Galveston and Beaumont/Port Arthur areas will achieve continuing reductions in VOC and/or NO [sub]x emissions of 3.0% per year until 1999 for Beaumont/Port Arthur and 2007 for Houston/Galveston, or until attainment status is reached. The plan must also include an additional 3.0% of contingency measures to be implemented if the nonattainment area fails to meet a deadline. The TNRCC currently plans to submit to EPA by November 15, 1994 a SIP which will identify rules to achieve all or a portion of the first three years' VOC reductions (or 9.0% net-of-growth) and a commitment to submit any needed rules by January 15, 1995. This "down payment" approach is designed to meet the requirements for the years 1997-1999. The final SIP will be based on UAM modeling using the COAST study data. The TNRCC plans to complete this modeling in 1996, at which time the state will develop any further rules necessary to reach attainment as evidenced by the model. The TNRCC's planned strategy does not dismiss the potential effectiveness of NO [sub]x reductions, since the next round of UAM modeling using the COAST data may confirm the ozone benefits of NO [sub]x control. However, the present strategy does acknowledge that the timing of NO [sub]x reductions may be crucial. The modeling does not support the effectiveness of NO [sub]x controls if implemented by 1995; however, it does suggest that there may be ozone benefits from NO point=4.02p [sub]x reductions implemented as late as 2005, after further large VOC reductions have been made. The current rulemaking, being an interim measure, does not abandon the concept of NO [sub]x control as an effective element of the long-term ozone control strategy. The EPA Region 6 Office in Dallas commented that the 1990 FCAA amendments require implementation of NO [sub]x RACT by May 31, 1995, and suggested that the state consider submitting a NO [sub]x exemption petition as allowed under the FCAA, sec.182(f), in order to waive or delay this implementation deadline. The FCAA, sec.182(f) requires that RACT rules for major stationary sources of NO [sub]x in certain ozone nonattainment areas be implemented by May 31, 1995. In addition, federal rules developed in accordance with the FCAA, sec.176(c)(4) require that federally funded transportation projects must conform with the SIP regarding attainment of all NAAQS (transportation conformity). The FCAA, sec.182(f)(1)(A) provides that the requirement to implement NO [sub]x RACT, and, by extension, transportation conformity, shall not apply in an ozone nonattainment area if the Administrator of the EPA determines that additional NO point=4.02p [sub]x reductions would not contribute to attainment of the NAAQS for ozone in the area. The TNRCC is requesting a temporary exemption from NO [sub]x RACT and transportation conformity requirements until May 31, 1997 when the results of more detailed UAM modeling using the COAST study data are available to guide the ozone control strategy. The TNRCC's sec.182(f) temporary exemption petition for the Houston/ Galveston and Beaumont/Port Arthur areas will be submitted to EPA by mid-August, 1994. The petition contains results of base case modeling for the Houston and Beaumont areas and documents the state's position that NO point=4.02p [sub]x reductions by 1995 do not contribute to ozone attainment in these areas. The HL&P commented that sec.117.510(2)(A) and (B), concerning Compliance Schedule for Utility Electric Generation, should be revised to remain consistent with the corresponding sections of the adopted rule by substituting "equipment and software required pursuant to" in place of "units required to install CEMS pursuant to the requirements of" in the referenced paragraphs. The proposal to extend the Chapter 117 compliance date was published in the same issue (June 10, 1994, 19 TexReg 4487) of the Texas Register as the May 25, 1994 adoption of revised Chapter 117. As a result, some language which changed in the adopted version was not reflected in the current proposal. The commenter's suggested language for sec.117.510(2)(A) and (B) is already contained in the version of Chapter 117 adopted May 25, 1994 and, therefore, is incorporated in the present adoption of Chapter 117. An individual commented that delaying implementation of NO point=4.02p [sub]x RACT would be detrimental to air quality and human health. Another individual commented that adding highway capacity would lead to more NO [sub]x pollution, urban sprawl, water pollution, and ultimately, more injuries from automotive accidents. The impact upon public health has been an important element in the decision to delay NO [sub]x RACT. Preliminary UAM modeling indicates that reducing NO point=4.02p [sub]x could increase ozone levels in portions of the modeled areas. This means that NO point=4.02p [sub]x reductions could lead to increased population exposure to ozone. Therefore, delaying the implementation of NO [sub]x RACT may protect against elevated levels of ozone in populated areas. With regard to other environmental and safety factors which may be indirectly related to air quality issues, the rulemaking presently under consideration does not impact transportation projects. The TNRCC's requested temporary sec.182(f) exemption from NO [sub]x transportation conformity requirements only affects air quality considerations of the planned highway projects, and does not address the other factors listed by the commenter. The GHASP commented that, due to inaccuracies in the TNRCC emissions inventory for NO [sub]x and VOC, it is premature to draw conclusions about the effect of minor NO [sub]x reductions in the 10-15% range. The accuracy of emissions inventories has been the subject of considerable discussion. In its December 1992 report, "Rethinking the Ozone Problem in Urban and Regional Air Pollution," the National Research Council concluded that emissions inventories tended to underestimate VOC emissions and overestimate NO [sub]x emissions. This may be supported by the observation that some ambient measurements of VOC/NO point=4.02p [sub]x ratios are larger than would be expected from VOC and NO [sub]x emissions reported in the inventories. However, definitive conclusions cannot be drawn on the basis of this circumstantial evidence, especially if temporal and spatial distributions of emissions have not been taken into account. The COAST study will provide a refined profile of how VOC emissions vary over time and space. Another improved source of input data to the model will be the NO [sub]x testing results submitted by sources in their NO [sub]x RACT initial control plans. The UAM modeling with the COAST data may show that a site-dependent control strategy, with NO [sub]x reductions varying across the area, is the appropriate means to achieve the standard. Until these modeling data are available, the current preliminary UAM results are the best information upon which to base the short- term control strategy. For these reasons, the TNRCC believes that it is premature to implement NO [sub]x RACT until such a decision can be based on sound science. The Lone Star Chapter of the Sierra Club (Sierra Club) commented that there are indications that, while NO [sub]x reductions may result in increased ozone levels in the urban core, outlying areas might experience decreased ozone levels, thus justifying NO [sub]x controls now. The controlling day is of prime importance in determining the appropriate ozone control strategy for the modeled area. This is the day in a modeled ozone episode requiring the most stringent VOC or NO [sub]x reductions in order to attain the NAAQS. Therefore, results from a noncontrolling day should not be used to determine the control strategy for an area, since such a strategy would not move as expeditiously toward ozone attainment. On the controlling days for both Houston/Galveston and Beaumont/Port Arthur, the best evidence currently available indicates that NO [sub]x reductions do not create a corresponding ozone benefit until considerable VOC reductions have been implemented. The UAM results show that modeled NO [sub]x reductions slightly decreased ozone concentrations at two outlying ozone monitoring stations, Northwest Harris County and Mauriceville (located in the Houston and Beaumont areas, respectively) on one or more days leading up to the controlling day for each modeled episode. On the controlling days for both these sites, UAM results show that NO [sub]x reductions have less impact in lowering ozone levels than comparable VOC reductions. Furthermore, the modeling for controlling days shows that NO [sub]x reductions either have no impact or are counterproductive in lowering the highest ozone levels in the area. Sierra Club and GHASP commented that, in addition to the role of NO [sub]x in ozone formation, NO [sub]x's contribution to visible haze, acidic particulate, and acid rain is further reason to implement NO [sub]x RACT now. Although NO [sub]x emissions do play a minor role in the formation of visible haze, fine acid particulate matter, and acid rain, these effects have not been adequately quantified to the extent that would warrant NO [sub]x reductions independent of the ozone control strategy. For this reason, it is difficult to weigh these contributions against prematurely implementing a NO [sub]x control program which possibly would increase ozone levels, based on currently available air quality modeling data. Subchapter C. Acid Manufacturing Nitric Acid Manufacturing-General 30 TAC sec.117.451 The amendment is adopted under the Texas Health and Safety Code (Vernon 1992), the Texas Clean Air Act (TCAA), sec.382.017, which provides the TNRCC with the authority to adopt rules consistent with the policy and purposes of the TCAA. 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 31, 1994. TRD-9447510 Mary Ruth Holder Director, Legal Services Division Texas Natural Resource Conservation Commission Effective date: September 22, 1994 Proposal publication date: June 10, 1994 For further information, please call: (512) 239-1970 Subchapter D. Administrative Provisions 30 TAC sec.sec.117.510, 117.520, 117.530 The amendments are adopted under the Texas Health and Safety Code (Vernon 1992), the Texas Clean Air Act (TCAA), sec.382.017, which provides the TNRCC with the authority to adopt rules consistent with the policy and purposes of the TCAA. sec.117.510. Compliance Schedule For Utility Electric Generation. All persons affected by the provisions of the undesignated head (relating to Utility Electric Generation) in Subchapter B of this chapter shall be in compliance as soon as practicable, but no later than May 31, 1997 (final compliance date). Additionally, all affected persons shall meet the following compliance schedules and submit written notification to the Executive Director: (1) (No change.) (2) conduct applicable continuous emissions monitoring system (CEMS) or predictive emissions monitoring systems (PEMS) evaluations and quality assurance procedures as specified in sec.117.113 of this title (relating to Continuous Demonstration of Compliance) according to the following schedules: (A) (No change.) (B) for equipment and software not required pursuant to 40 CFR 75, no later than May 31, 1997; (3) install all nitrogen oxides (NO [sub]x) abatement equipment, implement all NO point=4.52p [sub]x control techniques, and submit the results of the CEMS or PEMS performance evaluation and quality assurance procedures to the Texas Natural Resource Conservation Commission no later than May 31, 1997; (4) for units operating without CEMS or PEMS, conduct applicable tests for initial demonstration of compliance as specified in sec.117.111 of this title (relating to Initial Demonstration of Compliance); and submit the results by April 1, 1994, or as early as practicable, but in no case later than May 31, 1997; (5) for units operating with CEMS or PEMS and complying with the NO [sub]x emission limit on a rolling 30-day average, conduct the applicable tests for the initial demonstration of compliance as specified in sec.117.111 of this title and submit the results of the applicable CEMS or PEMS performance evaluation and quality assurance procedures as specified in sec.117.113 of this title (relating to Continuous Demonstration of Compliance) no later than July 31, 1997; (6) for units operating with CEMS or PEMS and complying with the NO [sub]x emission limit in pounds per hour on a block one-hour average, conduct the applicable tests for the initial demonstration of compliance as specified in sec.117.111 of this title and submit the results of the applicable CEMS or PEMS performance evaluation and quality assurance procedures as specified in sec.117.113 of this title by May 31, 1997; (7) (No change.) (8) no later than May 31, 1997, submit a final control plan for compliance in accordance with sec.117.115 of this title (relating to Final Control Plan Procedures). 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 31, 1994. TRD-9447511 Mary Ruth Holder Director, Legal Services Division Texas Natural Resource Conservation Commission Effective date: September 22, 1994 Proposal publication date: June 10, 1994 For further information, please call: (512) 239-1970 Subchapter E. Gas-Fired Steam Generation 30 TAC sec.117.601 The amendment is adopted under the Texas Health and Safety Code (Vernon 1992), the Texas Clean Air Act (TCAA), sec.382.017, which provides the TNRCC with the authority to adopt rules consistent with the policy and purposes of the TCAA. 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 31, 1994. TRD-9447512 Mary Ruth Holder Director, Legal Services Division Texas Natural Resource Conservation Commission Effective date: September 22, 1994 Proposal publication date: June 10, 1994 For further information, please call: (512) 239-1970 TITLE 40. SOCIAL SERVICES AND ASSISTANCE Part I. Texas Department of Human Services Chapter 72. Memoranda of Understanding with Other State Agencies Memorandum of Understanding with the Texas Department of Commerce Regarding Economic Development 40 TAC sec.72.3001 The Texas Department of Human Services (DHS) adopts new sec.72.3001, concerning the memorandum of understanding with the Texas Department of Commerce regarding economic development, in its Memoranda of Understanding with Other State Agencies rule chapter, without changes to the proposed text as published in the July 26, 1994, issue of the Texas Register (19 TexReg 5698). The justification for the new section is to adopt by reference Texas Administrative Code Title 10, Community Development; Part V, Texas Department of Commerce; Chapter 195, Memoranda of Understanding; sec.195.3, which was proposed in the April 22, 1994, issue of the Texas Register (19 TexReg 3046) and was adopted without change in the June 17, 1994, issue of the Texas Register (19 TexReg 4748). This memorandum of understanding implements the requirement in the Texas Government Code, sec.481.028, enacted by the 73rd Legislature that the Texas Department of Commerce enter into memoranda of understanding with other state agencies involved in economic development to cooperate in program planning and budgeting. The new section will function by coordinating the workforce and economic development activities with involved state agencies in program and budget planning. No comments were received regarding adoption of the new section. The new section is adopted under the Human Resources Code, Title 2, Chapter 22, which provides the department with the authority to administer public assistance programs. The new section implements the Human Resources Code sec. sec.22.001-22.024. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on August 31, 1994. TRD-9447421 Nancy Murphy Section Manager (Media and Policy Support) Texas Department of Human Services Effective date: October 1, 1994 Proposal publication date: July 26, 1994 For further information, please call: (512) 450-3765 Part IV. Texas Commission for the Blind Chapter 159. Administrative Rules and Procedures 40 TAC sec.159.12 The Texas Commission for the Blind adopts new sec.159.12, concerning public access to agency documents and records and the charges, if any, the agency makes for copies of public records, with changes to the proposed text as published in the August 2, 1994, issue of the Texas Register (19 TexReg 5932). The Commission adopts the rule to comply with actions taken by the 73rd Legislature in House Bill 1009 in relation to Government Code, Chapter 552, which requires agencies to adopt rules specifying charges for copies of open records. Changes were made in subparagraph (b), paragraph (2) of the proposed text to correct cross references to the agency's rules on confidentiality and the Government Code. The rule provides the framework within which the Commission will recover the cost to provide copies of open records to persons requesting the copies and contains the charges persons must pay for copies. The rule also provides the public with the primary location where procedural documents may be viewed. The Commission received no comments regarding the proposed rule. The rule is adopted under the Human Resources Code, Title 5, Chapter 91, Subchapter B, sec.90.011, which provides the Texas Commission for the Blind with the authority to adopt rules prescribing the policies and procedures followed by the commission in the administration of its programs. sec.159.12. Public Access to Documents and Records. (a) Copies of the state plan, which is submitted by the state and approved by the federal government, internal procedural documents, manuals, guidelines of programs, and policies of the Board are maintained for public view and inspection at the central office on working days between the hours of 8:00 a.m. and 5:00 p.m. (b) Charges for Copies of Public Records. (1) General. Chapter 428, Acts, 73rd Legislature, Regular Session (1993), requires state agencies to adopt rules that specify the charges the Commission will make for copies of public records. State agencies are authorized to establish charges up to the full cost to the agency of providing the copies, unless the request is for 50 pages or less of readily available information in standard-size form. (2) Legal compliance. In the provision of records, the Commission complies with Government Code, Chapter 552, 34 Code of Federal Regulations, sec.361.59, and Texas Human Resources Code, Title 5, sec.91.059. Additional information on confidentiality of records is addressed in sec.161.5 of this title (relating to Confidentiality of Records). (3) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise. (A) Full cost-The sum of all direct costs plus a proportional share of overhead, or indirect costs. Full cost will be determined in accordance with generally accepted methodologies. (B) Nonstandard-size copy-A copy of public information that is made available to a requestor in any format other than a standard-size paper copy. Microfiche, microfilm, diskettes, magnetic tapes, CD-ROM, and nonstandard-size paper copies are examples of nonstandard-size copies. (C) Readily available information-Information that already exists in printed form, or information that is stored electronically and is ready to be printed or copied without requiring any programming, or information that already exists on microfiche or microfilm. Information that requires a substantial amount of time to locate or prepare for release is not readily available information. (D) Standard-size copy-A printed impression on one side of piece of paper that measures up to 8-1/2 by 14 inches. Each side of a piece of paper on which an impression is made is counted as a single-copy. A piece of paper that is printed on both sides is counted as two copies. (4) Copy charge. The charges in this paragraph are to cover the cost of materials onto which information is copied and do not reflect any additional charges that may be associated with a particular request. (A) Standard-size copy-The charge for standard-size paper copies reproduced by means of an office machine copier or a computer printer is $.10 per page. (B) Nonstandard-size copy-The charges for nonstandard copies are: (i) Diskette-$2.00; (ii) Computer magnetic tape -$15; (iii) VHS video cassette -$2.50; (iv) Audio cassette-$1.00; and (v) Paper copy-$.50. (5) Personnel charge. (A) The charge for personnel costs incurred in processing a request for public information is $15 an hour. (B) Where applicable, the personnel charge will be prorated to recover the cost for personnel time spent to take requests, locate documents, and reproduce requested information. (C) A personnel charge will not be billed in connection with complying with requests that are for 50 or fewer pages of readily available information. (D) A personnel charge will not be billed in connection with time spent by an agency attorney, legal assistant, or other employee who reviews the requested information: (i) to determine whether the governmental body will raise any exceptions to disclosure of the requested information under the Open Records Act, Subchapter C; (ii) to research or prepare a request for a ruling by the Attorney General's Office pursuant to the Open Records Act, Subchapter G; or (iii) to research or prepare a request for a ruling from the agency's federal oversight authorities. (6) Overhead charge. (A) An overhead charge will not be billed for requests for copies of 50 pages or less of readily available information in standard-size form. (B) In response to a request for information that is not readily available or for in excess of 50 pages of readily available information, an overhead charge will be billed in the amount equal to 20% of the personnel charge for the request. (7) Microfiche and microfilm charge. (A) A charge of $.10 per page for standard size paper plus a charge to cover any personnel time spent in making the paper copy will be billed for making copies from information that exists on microfiche or microfilm. (B) If the requestor prefers to have a copy of the microfiche or microfilm itself, a charge equivalent to the actual cost of having the copy made will be billed. (8) Remote document retrieval charge. (A) To the extent that the retrieval of more than 50 pages of readily available information in standard-size form stored in remote storage locations results in a charge to the agency to meet a request, the charge will be passed on to the requestor. (B) No additional personnel charge will be factored in for time spent locating documents. (9) Computer resource charge. (A) The computer resource charge is a utilization charge for computers based on the amortized cost of acquisition, lease, operation, and maintenance of computer resources, which might include, but is not limited to, some or all of the following: central processing units (CPUs), servers, disk drives, local area networks (LANs), printers, tape drives, other peripheral devices, communications devices, software, and system utilities. (B) According to the type of system from which information is requested, the following computer resource charges will be billed to the requestor: (i) Mainframe-$17.50 per minute; (ii) Midrange-$3.00 per minute; (iii) Client/Server-$1.00 per minute; and (iv) PC or LAN-$. 50 per minute. (C) The charge made to recover the computer utilization cost is the actual time the computer takes to execute a particular program times the applicable rate. The CPU charge is not meant to apply to programming or printing time; rather, it is solely to recover costs associated with the actual time required by the computer to execute a program. This time frame most frequently will be a matter of seconds. If programming is required to comply with a particular request, the appropriate charge that may be recovered for programming time is set forth in paragraph (10) if this subsection. No charge will be made for computer printout time. For example, the computer resource charge for a request that takes 20 seconds to execute on a mainframe system would be $5.83. (10) Charges for programming time. If a particular request requires a programmer to enter data in order to execute an existing program or to create a new program so that requested information may be accessed, a charge of $26 an hour will be billed to the requestor for the programmer's time. (11) Miscellaneous supplies. The actual cost of miscellaneous supplies, such as labels, boxes, and other supplies used to produce the requested information will be added to the total charge for public information. (12) Postal and shipping charges. Any related postal or shipping expenses which are necessary to transmit the reproduced information will be added to the total charge. (13) Fax charge. A charge of $.10 per page will be billed for a fax transmitted locally. A charge of $.50 per page will be billed for a fax sent within the agency's area code, and $1.00 per page for a fax transmitted to a different code. (14) Sales tax. Sales tax will not be charged for public information. (c) Access to information where copies are not requested. (1) Access to information in standard-size form. There is no charge for making available for inspection information maintained in standard form. (2) Access to information in other than standard-size form. In response to requests for access, for purposes of inspection only, to information that is maintained in other than standard-size form, the requestor will be billed for the cost of preparing and making available such information, unless the information is readily available. Preparation might involve retrieval of information from a database and deletion of confidential information. In such a case, the requestor will be billed the cost of personnel as set forth in subsection (d)(5) of this section. (d) Format for copies of public records. (1) To the extent possible, information will be provided in the format requested. The extent to which a requestor can be accommodated will depend largely on the technological capability of the agency and the medium in which the information is stored. For example, if the requestor asks for information on a diskette, and the requested information is electronically stored, the information will be provided on diskette. (2) To accommodate requests for public information from persons who are blind, copies of information will be provided in braille if the information is readily available in standard-size paper or stored on diskette. All provisions included in subsection (b) of this section apply when requests are made for information in braille. (e) Estimates and waivers of public information charges. (1) Where a particular request will involve considerable time and resources to process, the agency will provide an estimate of date of completion and the charges that may result. (2) Full disclosure will be made to the requesting party as to how charges are calculated. (3) The agency will furnish public records without charge if it determines that waiver or reduction of the fees is in the public interest. (4) A deposit may be required in the amount of the estimated charges if such charges exceed $100. 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 September 2, 1994. TRD-9447537 Pat D. Westbrook Executive Director Texas Commission for the Blind Effective date: September 23, 1994 Proposal publication date: August 2, 1994 For further information, please call: (512) 459-2611