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 XVI. State Council on Competitive Government Chapter 401. Administration Subchapter F. Monitoring of Services 1 TAC sec.401.104 The Council on Competitive Government ("Council") adopts an amendment to sec.401.104, concerning Historically Underutilized Businesses (HUBs) without changes to the proposed text published in the November 7, 1995, issue of the Texas Register (20 TexReg 9237). The amendment is adopted to conform with the Legislative direction set forth in the General Appropriations Bill, House Bill 1, Article IX, sec.111, Acts, 74th Legislature (1995) by making a good faith effort to increase purchases and contract awards to historically underutilized businesses. The amendment provides that the Council assist Historically Underutilized Businesses (HUB) in contracts to be awarded by the Council to meet or exceed the procurement utilization goals set forth in the Texas Administrative Code (1 TAC Chapter 111) No comments were received regarding adoption of the amendment. The amendment is adopted under Government Code, Title 10, Subtitle D, sec.2162.101 (formerly Texas Civil Statutes, Article 601b, Article 15, subsection 15.06(1)), which invests the Council on Competitive Government with the authority to promulgate rules necessary to administer its functions. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the council's authority to adopt. Issued in Austin, Texas, on March 20, 1996. TRD-9604542 David Ross Brown Assistant General Counsel State Council on Competitive Government Effective date: April 22, 1996 Proposal publication date: November 7, 1995 For further information, please call: (512) 463-3960 TITLE 16. ECONOMIC REGULATION Part II. Public Utility Commission of Texas Chapter 23. Substantive Rules Certification 16 TACsec. 23.32 The Public Utility Commission of Texas adopts an amendment to sec.23.32, without changes to the text as published in the November 21, 1995, issue of the Texas Register (20 TexReg 9627). The amendment creates an additional circumstance when the operation of an automatic dial announcing device (ADAD) will be considered in compliance with the requirement that certain information be included in an ADAD message. The amendment also requires that an ADAD, when used for solicitation purposes, has a message shorter than one minute or the capability of terminating the call within one minute when the call is answered by a telephone answering device. The primary public benefit anticipated as a result of enforcing the section will be the less intrusive use of ADADs, particularly eliminating those situations where an ADAD message of extreme duration causes a person's line to remain off-hook, preventing other incoming calls or disabling the recipient's answering machine by using up the machine's message storage capacity. The Commission conducted a public hearing on this rulemaking under Texas Government Code, sec.2001.029 on November 30, 1995 at the Commission offices. Ms. Phyllis Cowgill with Southwestern Bell Telephone, and Ms. Barbara McWhirter with AT&T Communications, Inc. appeared to monitor the proceedings. No oral comments were presented. The Commission received written comments from the Texas Telephone Association (TTA) in response to the November 21, 1995 Texas Register publication. TTA stated that the amendment conforms the existing rule to the provisions of the Public Utility Regulatory Act of 1995, sec.3.653, which regulates the operation of an ADAD. TTA recommended no changes to the rule as published. This amendment is adopted under Public Utility Regulatory Act, sec.1.101, which provides the commission with the authority to make and enforce rules reasonably required in the exercise of its powers and jurisdiction; sec.3.051, which provides that new rules, policies, and principles be formulated and applied to protect the public interest and to provide equal opportunity to all telecommunications utilities in a competitive market place; and specifically, sec.3.653, which establishes the requirements for operation of automatic dial announcing devices. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on March 28, 1996. TRD-9604364 Paula Mueller Secretary of the Commission Public Utility Commission of Texas Effective date: April 18, 1996 Proposal publication date: November 21, 1995 For further information, please call: (512) 458-0100 Part IX. Texas Lottery Commission Chapter 402. Bingo Regulation and Tax 16 TAC sec.402.541 The Texas Lottery Commission adopts the repeal of sec.402.541, concerning notification to the Commission, without changes to the proposed text as published in the January 23, 1996, issue of the Texas Register (21 TexReg 563). This section is being repealed because it expired by operation of law on April 1, 1995. Pursuant to House Bill 2771, 73rd Legislature, Acts 1993, the administration and regulation of bingo transferred from the Texas Alcoholic Beverage Commission to the Texas Lottery Commission, effective April 1, 1994. Further, pursuant to House Bill 2771, sec.29(d), before the first anniversary of the effective date of the transfer of functions, the Texas Lottery Commission shall review each rule adopted by the Texas Alcoholic Beverage Commission under the Bingo Enabling Act and may specifically adopt any rule. A rule that is not specifically adopted expires on the first anniversary of the effective date of a transfer of functions. Since the effective date of the transfer of functions was April 1, 1994, the first anniversary of such date was April 1, 1995. This rule was not adopted by April 1, 1995, and, therefore, expired on April 1, 1995. No comments were received regarding adoption of the repeal. The repeal is adopted under Texas Civil Statutes, Article 179d, sec.16(a) and (d), and under Texas Government Code, sec.467.102, which provide the Texas Lottery Commission with the authority to adopt new rules for the enforcement and administration of the Bingo Enabling Act. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604535 Kimberly L. Kiplin General Counsel Texas Lottery Commission Effective date: April 22, 1996 Proposal publication date: January 23, 1996 For further information, please call: (512) 323-3791 16 TAC sec.402.541 The Texas Lottery Commission adopts new sec.402.541, relating to definitions with changes to the proposed text as published in the January 23, 1996, issue of the Texas Register (21 TexReg 563). Specifically, the definitions of bingo premises, location, and place are changed to reflect that only one bingo premise, location, or place be allowed under a common roof or over a common foundation. Also, the definition of card-minding device is changed to reflect that a card-minding device is not a video lottery machine, as defined by House Bill 3021, sec.10. The new section sets out concise definitions of words contained, but not otherwise explained, in the Bingo Enabling Act ("Act"). The Texas Lottery Commission believes it is important that terms be defined so that persons affected by the bingo rules and the Act understand such terms. For example, the agency believes it is imperative to know at any given moment, the location of an organization's primary business office so the agency will know the physical location of the records for audit and investigative purposes. The new section defines material terms used throughout the bingo rules and Act. The agency received 17 written comments during the comment period and received eight oral comments during the February 6, 1996 public comment hearing. Generally, the commenters are opposed to the definition of "bingo premises", "location", and "place" because they do not contain language prohibiting more than one "bingo premise", "location", or "place" under a common roof. These commenters believe that by not including such restriction in these definitions the effect of the rule will be to eliminate smaller halls and encourage the commercialization of bingo in Texas. One commenter believed the definition of "primary business office" conflicts with the Texas Non-Profit Corporations Act, and, as such, exceeds the agency's statutory authority. This same commenter believes the rule should include a definition of "symbols" that can appear on an instant bingo ticket so that organizations will know beforehand what type of symbols appearing on an instant bingo ticket will be approved by the agency. One commenter wants the term "occasion" defined so that it is clear when an occasion begins and when an occasion ends. One commenter wants the definition of card- minding device to include the word "purchase". The commenter indicated that this word was in staff's draft rule and should be included in the adopted rule. Several commenters did not testify at the February 6, 1996 public comment hearing but did indicate support for or opposition to the rule. Two commenters requested the transcripts of the Bingo Advisory Committee meetings at which comments relating to one or more of the various versions of the staff's draft rule were received be incorporated into this rulemaking record. These particular Bingo Advisory Committee meetings occurred prior to the time the agency proposed the rule. The names of groups and associations making comments for and against the section. In favor of: Bingo Advisory Committee, River City Bingo, North Austin Foundation, Inc., Family and Bluebonnet Bingo, and VFW Post 6008. Against: Fort Worth Bookkeeping, Improved Order of Red Men, Boys and Girls Club of Pharr, Thompson Allstate Bingo Supply, Inc., Wigwam Council #8, Commanche Tribe #18, Kiva Tribe #26, American G.I. Forum, Cochise Council #9, Air Force Sergeants Association Chapter #1056, Merkel Chamber of Commerce, St. Andrews Episcopal Church, Huaco Tribe #48, I.O.R. White Mountain #12, Brownsville Jaycees, Zonta Club of Brownsville, I.O.R. Omaha #25, Boys and Girls Club of Brownsville, I.O.R. Ramona #5, I.O.R. War Eagle #5, I.O.R. Buffalo #13, I.O.R. Cheyenne #14, I.O.R. Blackcrow #16, and Bingo Advisory Committee. The agency agrees with the commenters who believe that only one "bingo premises", "location", or "place" be allowed under a common roof. Therefore, language was added to these terms which prohibits more than one bingo premises, location, or place under a common roof or foundation. The agency disagrees with the commenter who believes the definition "primary business office" conflicts with language in the Texas Non-Profit Corporations Act for the reason that no such definition exists in the Texas Non-Profit Corporations Act. The Texas Non- Profit Corporations Act does reference a "principal office" where the entity's records are located and such language is not inconsistent with this rule's definition of "primary business office". The agency believes it is imperative that a primary business office be designated so the agency knows, at any given moment, exactly where the organization's records are located for audit and investigative purposes. Finally, the agency disagrees with the commenter who wants to include the word "purchase" in the definition of card-minding device because such language conflicts with the Bingo Enabling Act, sec.11v. Pursuant to sec.11v, the device may not be used in payment for playing the bingo card. The agency disagrees with the commenter who wants the definition of "occasion" clarified to state when an occasion begins and ends because the definition of occasion in the Bingo Enabling Act needs no further clarification by rule. The agency disagrees with the commenter who wants the rule to include a definition of "symbols" so organizations will know beforehand the type of symbols the agency will approve for use on an instant bingo card. Organizations are not involved in the approval process of instant bingo cards, manufacturers are. The licensed manufacturers are familiar with the type of symbols which may appear on a instant bingo card because general guidelines are set out in 16 TAC sec.402.554. The agency disagrees with the commenters who want incorporated into this rulemaking record the transcript of the Bingo Advisory Committee meetings at which comments relating to one or more of the different versions of the staff's draft rule were received. These meetings occurred prior to the time the agency proposed the rule. The meetings were working meetings to discuss the draft language of the rule among the Bingo Advisory Committee members and, also, to negotiate with and/or ask questions of agency staff regarding the various provisions of staff's draft rule. At one Bingo Advisory Committee meeting, the Committee received public comments regarding the various provisions of staff's draft rule. As a result of the dialogue between the Bingo Advisory Committee and agency staff, language was revised in the draft rule. All of these events and actions occurred prior to the time the agency proposed the rule for adoption. The agency does not believe incorporating the transcripts of these meetings into this rulemaking record is appropriate. The discussion and comment related to a draft rule during the process of negotiation of language. Aspects of the dialogue and comment relate to provisions that may no longer exist or may have been revised. The new section is adopted under the provisions of Texas Civil Statutes, Article 179d, sec.16, which authorize the Texas Lottery Commission to adopt rules for the enforcement and administration of the Bingo Enabling Act and the provisions of Texas Government Code, sec.467.102, which authorize the Texas Lottery Commission to adopt rules for the enforcement and administration of Texas Government Code Chapter 467 and the laws under the Commission's jurisdiction. sec.402.541. Definitions. The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise. Bingo premises -The area subject to the direct control of, and actual use by, a licensed authorized organization for the purpose of conducting a game of bingo. Only one bingo premise shall be under a common roof or over a common foundation. The enactment of this definition shall not affect bingo premises in existence under a common roof before March 30, 1996. Break-open bingo ticket-An instant bingo card commonly known as an instant bingo ticket, pull-tab bingo game or instant bingo card as defined by 16 TAC sec.402.554 (relating to instant bingo). Calendar week-A period of seven consecutive days commencing with Sunday and ending with Saturday. Calendar year-A period of twelve consecutive months commencing with January 1 and ending with December 31. Conductor-A licensed authorized organization. Card-minding device -Any mechanical, electronic, electromechanical or computerized device, and including related hardware and software, that is interfaced with or connected to equipment used to conduct a game of bingo and which allows a player to store, display, and mark a bingo card face five spaces wide by five spaces long, the center space free, and the other spaces containing pre-printed numbers between 1 and 75, inclusive. A card-minding device shall not be a video lottery machine as defined by House Bill 3021, sec.10, 74th Legislature, Acts 1995. Commission-The Texas Lottery Commission, the agency created by House Bill 54, 72nd Legislature, 1st called session, as amended by House Bill 1587 and House Bill 1013, 73rd Legislature, Regular Session. Director-The director of the charitable bingo operations division, commonly known as the bingo division, of the Texas Lottery Commission. Executive Director -The Executive Director of the Texas Lottery Commission. Instant bingo card-An instant bingo ticket, pull-tab bingo game, break-open bingo ticket or instant bingo card as defined by 16 TAC sec.402.554 (relating to instant bingo). Instant bingo card-An instant bingo ticket, pull-tab bingo game, break-open bingo ticket or instant bingo card as defined by 16 TAC sec.402.554 (relating to instant bingo). Instant bingo ticket-An instant bingo card commonly known as a break-open bingo ticket, a pull-tab bingo game or an instant bingo card as defined by 16 TAC sec.402.554 (relating to instant bingo). Location-The area subject to the direct control of, and actual use by, a licensed authorized organization for the purpose of conducting a game of bingo. Only one location shall be under a common roof or over a common foundation. The enactment of this definition shall not affect locations in existence under a common roof before March 30, 1996. Operator-A natural person designated pursuant to authority of the Bingo Enabling Act, Texas Civil Statutes, Article 179d, sec.12(a)(7). Place-The area subject to the direct control of, and actual use by, a licensed authorized organization for the purpose of conducting a game of bingo. Only one place shall be under a common roof or over a common foundation. The enactment of this definition shall not affect places in existence under a common roof before March 30, 1996. Primary business office-The physical location at which all records relating to the primary purpose(s) of a licensed authorized organization are maintained in the ordinary course of business. Pull-tab bingo game-An instant bingo card commonly known as a break-open bingo ticket, an instant bingo ticket or an instant bingo card as defined by 16 TAC sec.402.554 (relating to instant bingo). 24-hour period -A period of 24 consecutive hours commencing at 12:00 midnight. Working day-Other than a Saturday, Sunday or holiday authorized by law, a period of nine consecutive hours commencing at 8:00 a.m. and ending at 5:00 p.m. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604526 Kimberly L. Kiplin General Counsel Texas Lottery Commission Effective date: April 22, 1996 Proposal publication date: January 23, 1996 For further information, please call: (512) 323-3791 16 TAC sec.402.546 The Texas Lottery Commission adopts the repeal of sec.402.546, concerning exemptions from licensing requirements, without changes to the proposed text as published in the January 23, 1996, issue of the Texas Register (21 TexReg 566). This section is being repealed because it expired by operation of law on April 1, 1995. Pursuant to House Bill 2771, 73rd Legislature, Acts 1993, the administration and regulation of bingo transferred from the Texas Alcoholic Beverage Commission to the Texas Lottery Commission, effective April 1, 1994. Further, pursuant to House Bill 2771, sec.29(d), before the first anniversary of the effective date of the transfer of functions, the Texas Lottery Commission shall review each rule adopted by the Texas Alcoholic Beverage Commission under the Bingo Enabling Act and may specifically adopt any rule. A rule that is not specifically adopted expires on the first anniversary of the effective date of a transfer of functions. Since the effective date of the transfer of functions was April 1, 1994, the first anniversary of such date was April 1, 1995. This rule was not adopted by April 1, 1995, and, therefore, expired on April 1, 1995. No comments were received regarding adoption of the repeal. The repeal is adopted under Texas Civil Statutes, Article 179d, sec.16(a) and (d), and under Texas Government Code, sec.467.102, which provide the Texas Lottery Commission with the authority to adopt new rules for the enforcement and administration of the Bingo Enabling Act. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604536 Kimberly L. Kiplin General Counsel Texas Lottery Commission Effective date: April 22, 1996 Proposal publication date: January 23, 1996 For further information, please call: (512) 323-3791 16 TAC sec.402.547 The Texas Lottery Commission adopts the repeal of sec.402.547, concerning books and records-bingo licenses, without changes to the proposed text as published in the January 23, 1996, issue of the Texas Register (21 TexReg 566). This section is being repealed because it expired by operation of law on April 1, 1995. Pursuant to House Bill 2771, 73rd Legislature, Acts 1993, the administration and regulation of bingo transferred from the Texas Alcoholic Beverage Commission to the Texas Lottery Commission, effective April 1, 1994. Further, pursuant to House Bill 2771, sec.29(d), before the first anniversary of the effective date of the transfer of functions, the Texas Lottery Commission shall review each rule adopted by the Texas Alcoholic Beverage Commission under the Bingo Enabling Act and may specifically adopt any rule. A rule that is not specifically adopted expires on the first anniversary of the effective date of a transfer of functions. Since the effective date of the transfer of functions was April 1, 1994, the first anniversary of such date was April 1, 1995. This rule was not adopted by April 1, 1995, and, therefore, expired on April 1, 1995. No comments were received regarding adoption of the repeal. The repeal is adopted under Texas Civil Statutes, Article 179d, sec.16(a) and (d), and under Texas Government Code, sec.467.102, which provide the Texas Lottery Commission with the authority to adopt new rules for the enforcement and administration of the Bingo Enabling Act. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604537 Kimberly L. Kiplin General Counsel Texas Lottery Commission Effective date: April 22, 1996 Proposal publication date: January 23, 1996 For further information, please call: (512) 323-3791 16 TAC sec.402.548 The Texas Lottery Commission adopts the repeal of sec.402.548, concerning general restrictions on the conduct of bingo, without changes to the proposed text as published in the January 23, 1996, issue of the Texas Register (21 TexReg 567). This section is being repealed because it expired by operation of law on April 1, 1995. Pursuant to House Bill 2771, 73rd Legislature, Acts 1993, the administration and regulation of bingo transferred from the Texas Alcoholic Beverage Commission to the Texas Lottery Commission, effective April 1, 1994. Further, pursuant to House Bill 2771, sec.29(d), before the first anniversary of the effective date of the transfer of functions, the Texas Lottery Commission shall review each rule adopted by the Texas Alcoholic Beverage Commission under the Bingo Enabling Act and may specifically adopt any rule. A rule that is not specifically adopted expires on the first anniversary of the effective date of a transfer of functions. Since the effective date of the transfer of functions was April 1, 1994, the first anniversary of such date was April 1, 1995. This rule was not adopted by April 1, 1995, and, therefore, expired on April 1, 1995. No comments were received regarding adoption of the repeal. The repeal is adopted under Texas Civil Statutes, Article 179d, sec.16(a) and (d), and under Texas Government Code, sec.467.102, which provide the Texas Lottery Commission with the authority to adopt new rules for the enforcement and administration of the Bingo Enabling Act. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604538 Kimberly L. Kiplin General Counsel Texas Lottery Commission Effective date: April 22, 1996 Proposal publication date: January 23, 1996 For further information, please call: (512) 323-3791 16 TAC sec.402.549 The Texas Lottery Commission adopts the repeal of sec.402.549, concerning allowable expenditures of receipts from bingo, without changes to the proposed text as published in the January 23, 1996, issue of the Texas Register (21 TexReg 567). This section is being repealed because it expired by operation of law on April 1, 1995. Pursuant to House Bill 2771, 73rd Legislature, Acts 1993, the administration and regulation of bingo transferred from the Texas Alcoholic Beverage Commission to the Texas Lottery Commission, effective April 1, 1994. Further, pursuant to House Bill 2771, sec.29(d), before the first anniversary of the effective date of the transfer of functions, the Texas Lottery Commission shall review each rule adopted by the Texas Alcoholic Beverage Commission under the Bingo Enabling Act and may specifically adopt any rule. A rule that is not specifically adopted expires on the first anniversary of the effective date of a transfer of functions. Since the effective date of the transfer of functions was April 1, 1994, the first anniversary of such date was April 1, 1995. This rule was not adopted by April 1, 1995, and, therefore, expired on April 1, 1995. No comments were received regarding adoption of the repeal. The repeal is adopted under Texas Civil Statutes, Article 179d, sec.16(a) and (d), and under Texas Government Code, sec.467.102, which provide the Texas Lottery Commission with the authority to adopt new rules for the enforcement and administration of the Bingo Enabling Act. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604539 Kimberly L. Kiplin General Counsel Texas Lottery Commission Effective date: April 22, 1996 Proposal publication date: January 23, 1996 For further information, please call: (512) 323-3791 16 TAC sec.402.546 The Texas Lottery Commission adopts new sec.402.546, relating to temporary authorization, without changes to the proposed text as published in the January 23, 1996, issue of the Texas Register (21 TexReg 566). The rule will clarify the provisions of the Bingo Enabling Act, sec.13, which relate to temporary authorizations The rule is necessary because it will put people on notice of the specific requirements for issuance of a temporary authorization, and also maintaining and/or extending a temporary authorization to conduct bingo. The section sets out who is eligible to obtain a temporary authorization, what information is required to be filed, what specific activities are authorized under a temporary authorization, and under what circumstances a temporary authorization may be extended. The Texas Lottery Commission received two written comments during the comment period and one oral comment during the February 6, 1996 public comment hearing. The commenters are opposed to the rule language that provides that temporary authorizations may not be amended. The commenters believe that circumstances may occur which make it imperative that a temporary authorization be amended to change the time or day of the conduct of bingo. One commenter believes language should be added to the rule which requires the agency issue a temporary authorization if a license is not issued or denied before the 31st day after the date of the filing of an application for a license. Two commenters requested the transcripts of the Bingo Advisory Committee meetings, at which comments relating to one or more of the various versions of the staff's draft rule were received be incorporated into this rulemaking record. These particular Bingo Advisory Committee meetings occurred prior to the time the agency proposed the rule. At the February 6, 1996 public comment hearing, some persons did not provide comment but simply indicated opposition to or support for the rule. The names of groups and associations making comments for and against the section. In favor of: Bingo Advisory Committee, River City Bingo, North Austin Foundation, Inc., and VFW Post 6008. Against: Fort Worth Bookkeeping, Family and Bluebonnet Bingo, Bingo Advisory Committee, and Thompson Allstate Bingo Supply, Inc. The agency disagrees with comments indicating that, under certain circumstances, a temporary authorization should be allowed to be amended. The agency believes the Bingo Enabling Act recognizes that only licenses may be amended. A temporary authorization is not a license, and, therefore, should not be subject to an amendment. Further, the agency believes that by allowing temporary authorizations to be amended additional delay in issuing a license for bingo-related activities based on a completed and accurate application will occur. The agency believes amending temporary authorizations creates a disincentive for an applicant to persevere in filing a complete and correct application since the person will simply undertake to operate under the temporary authorization. The agency disagrees with the comment to add language to the rule requiring the agency issue a temporary authorization if a license is not issued or denied before the 31st day after the date of the filing of an application for a license. The agency believes adding this language is not an accurate restatement of the Bingo Enabling Act, sec.13(b). Further, even if such language was an accurate restatement, there is no reason to restate the statute in this rule. The agency disagrees with the commenters who want incorporated into this rulemaking record the transcript of the Bingo Advisory Committee meetings at which comments relating to one or more of the different versions of the staff's draft rule were received. These meetings occurred prior to the time the agency proposed the rule. The meetings were working meetings to discuss the draft language of the rule among the Bingo Advisory Committee members and, also, to negotiate with and/or ask questions of agency staff regarding the various provisions of staff's draft rule. At one Bingo Advisory Committee meeting, the Committee received public comments regarding the various provisions of staff's draft rule. All of these events and actions occurred prior to the time the agency proposed the rule for adoption. The agency does not believe incorporating the transcripts of these meetings into this rulemaking record is appropriate. The discussion and comment related to a draft rule during the process of negotiation of language. The new section is adopted under the provisions of Texas Civil Statutes, Article 179d, sec.16, which authorize the Texas Lottery Commission to adopt rules for the enforcement and administration of the Bingo Enabling Act and the provisions of Texas Government Code, sec.467.102, which authorize the Texas Lottery Commission to adopt rules for the enforcement and administration of Texas Government Code Chapter 467 and the laws under the Commission's jurisdiction. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604528 Kimberly L. Kiplin General Counsel Texas Lottery Commission Effective date: April 22, 1996 Proposal publication date: January 23, 1996 For further information, please call: (512) 323-3791 16 TAC sec.402.547 The Texas Lottery Commission adopts new sec.402.547, relating to prohibited bingo occasion without changes to the proposed text as published in the January 23, 1996, issue of the Texas Register (21 TexReg 568). The rule is needed to clarify that the authorized organization is the entity responsible for the conduct of bingo and that an active member of such organization must be physically present and actively supervising and directing the bingo occasion. The Texas Lottery Commission believes that without such person being present and actively supervising and directing the bingo occasion the integrity and security of the bingo games could be jeopardized. The section clearly states that an active member of the organization must be physically present and actively supervising and directing the bingo occasion. The section further states that the organization may not commence or continue a bingo occasion unless such an active member is physically present and to do so, is in violation of the Bingo Enabling Act, Texas Civil Statutes, Article 179d ("Act"). The Texas Lottery Commission received one written comment during the comment period and one oral comment at the February 6, 1996 public comment hearing. At the hearing, some people did not comment but did indicate either their support for or opposition to the rule. One commenter at the public comment hearing indicated that the term "active member" is not defined in the rule and it should be. Another commenter wanted the entire rule deleted because the provisions of the Bingo Enabling Act, sec.sec.11(g), 12(a)(7), and 19(a) address the language of the rule. Two commenters requested the transcripts of the Bingo Advisory Committee meetings at which comments relating to one or more of the various versions of the staff's draft rule were received be incorporated into this rulemaking record. These particular Bingo Advisory Committee meetings occurred prior to the time the agency proposed the rule. The names of groups and associations making comments for and against the section. In favor of: Bingo Advisory Committee, River City Bingo, North Austin Foundation, Inc., and Family and Bluebonnet Bingo. Against: VFW Post 2348 and Bingo Advisory Committee. The agency disagrees with the commenter who believes the term "active member" should be defined because the Bingo Enabling Act, sec.sec.11(g), 12(a) (7), and 19(a) clearly sets out who can be designated as an active member and any language in the rule regarding this issue is surplusage. The agency disagrees with the commenter who wants the rule deleted because the matters addressed by the rule are already addressed by provisions of the Bingo Enabling Act. The agency believes the provisions of the Act require that only a member may conduct, promote, or administer a bingo game. The agency believes such requirement can be fulfilled only if the member is physically present and actively supervising and directing the bingo occasion. The agency disagrees with the commenters who want incorporated into this rulemaking record the transcript of the Bingo Advisory Committee meetings at which comments relating to one or more of the different versions of the staff's draft rule were received. These meetings occurred prior to the time the agency proposed the rule. The meetings were working meetings to discuss the draft language of the rule among the Bingo Advisory Committee members and, also, to negotiate with and/or ask questions of agency staff regarding the various provisions of staff's draft rule. At one Bingo Advisory Committee meeting, the Committee received public comments regarding the various provisions of staff's draft rule. As a result of the dialogue between the Bingo Advisory Committee and agency staff, language was revised in the draft rule. All of these events and actions occurred prior to the time the agency proposed the rule for adoption. The agency does not believe incorporating the transcripts of these meetings into this rulemaking record is appropriate. The discussion and comment related to a draft rule during the process of negotiation of language. Aspects of the dialogue and comment relate to provisions that may no longer exist or may have been revised. The new section is adopted under the provisions of Texas Civil Statutes, Article 179d, sec.16, which authorize the Texas Lottery Commission to adopt rules for the enforcement and administration of the Bingo Enabling Act and the provisions of Texas Government Code, sec.467.102, which authorize the Texas Lottery Commission to adopt rules for the enforcement and administration of Texas Government Code Chapter 467 and the laws under the Commission's jurisdiction. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604529 Kimberly L. Kiplin General Counsel Texas Lottery Commission Effective date: April 22, 1996 Proposal publication date: January 23, 1996 For further information, please call: (512) 323-3791 16 TAC sec.402.548 The Texas Lottery Commission adopts new sec.402.548, relating to general restrictions on the conduct of bingo without changes to the proposed text as published in the January 23, 1996, issue of the Texas Register>> (21 TegReg 568). The section is necessary to put people on notice of general restrictions on bingo. While the provisions of the Bingo Enabling Act ("Act"), Texas Civil Statutes, Article 179d, address the matters set out in this rule, this rule outlines the requirements in greater detail. Pursuant to the Act, sec.16(i), the commission or its officers and agents may enter and inspect the contents of premises where a game of bingo is being conducted or where it is intended that a game is to be conducted, or where any equipment used or intended for use in the conduct of a game is found. Further, pursuant to the Act, sec.16(a), the commission has broad authority and shall exercise strict control and close supervision over bingo games. Also, the commission may adopt rules for the enforcement and administration of the Act. With the foregoing statutory provisions in mind, the commission believes it is important to set out in a rule the requirement that the name of the conductor appear on an advertisement of a bingo game. The commission desires to clarify, for security, integrity and fairness purposes, that bingo equipment is subject to inspection and that no licensee may tamper with such equipment so as to affect a person's chances of winning. The commission wants to ensure that persons know where bingo may be conducted. The commission wants to ensure that the statutory maximum amount of a bingo prize is not circumvented by awarding merchandise at a reduced value in lieu of cash. The commission believes players should know the name of the operator conducting the occasion, and, as such, has required in this rule that a sign with the name of the operator in no less than one inch type be prominently displayed at the bingo premise. The commission believes that, from a security, integrity, and fairness perspective, workers and employees should not be allowed to participate as a player in the bingo games. Finally, the commission wants to ensure that, in the event of a request for verification of a winning card or numbers drawn, standard procedures are utilized. The commission believes such procedures are important to maintain the integrity and fairness of the bingo games. The section sets out provisions on advertising, inspection of equipment, location of bingo occasion, merchandise prizes, notice of law and regulation, notification of name of operator, reservation of bingo cards, workers and employees prohibited from playing, and verification of winning cards and numbers drawn. The agency received 12 written comments during the comment period and six oral comments at the February 6, 1996 public comment hearing. One commenter wants subsection (b)(1) and (2) and subsection (c) of the rule deleted because the commenter believes the Bingo Enabling Act addresses the issues included in these provisions. This same commenter wants subsection (g) of the rule deleted because the commenter believes signs containing the Gamblers Anonymous 1-800 number are already posted on the premises where bingo is conducted, and, therefore, this provision is unnecessary. Many commenters believe that the caller should be able to verify the numbers in lieu of the operator. Several commenters are opposed to the provision in subsection (f) of the rule that requires the name of the operator be posted on a sign because the commenters believe that such a requirement is cost prohibitive and also because it would be difficult for people to maintain the signs if the primary operator is unable to do so since sometimes there are last minute changes. Some commenters do not oppose the posting requirement of the name of the organization and operator but believe the other information required by the rule is unnecessary. Finally, several commenters agree with subsection (i)(1). One commenter believes requiring posting the name of the operator is not a problem because this information can be posted on a chalkboard. One commenter believes the rule should not require a lease when the lease arrangement is "rent free". This commenter believes this particular provision was intended for commercial lessors, not "benevolent" lessors. This commenter believes such a requirement triggers unnecessary annual reporting requirements and annual license renewals. One commenter believes the rule is not clear regarding the location within the bingo premises where the Bingo Enabling Act and rules should be maintained, believes the restriction of the size of the letters required on the "notification of operator" sign should be deleted, and believes the prohibition of "workers and employees" playing bingo is too broad. One commenter believes the rule is unclear as to whether the operator must terminate the game if a worker is playing a game. One commenter believes that the provisions relating to the requirements for advertising are too restrictive and a waste of advertising space. Two commenters requested the transcripts of the Bingo Advisory Committee meetings at which comments relating to one or more of the various versions of the staff's draft rule were received be incorporated into this rulemaking record. These particular Bingo Advisory Committee meetings occurred prior to the time the agency proposed the rule. At the February 6, 1996 public comment hearing, some people did not testify but did indicate support for or opposition to the rule. The names of groups and associations making comments for and against the section. In favor of: Dallas County REACT, Inc., Bingo Advisory Committee, River City Bingo and North Austin Foundation, Inc. Against: Youth Benefit, Inc., Clements Boys and Girls Club, Lions Club of Killeen, Fort Worth Bookkeeping, Military Order of the Cooties Pup Tent #3, National Italian American Sports Hall of Fame, LULAC Council #616, Knights of Columbus Council 3253, Family and Bluebonnet Bingo, VFW Post 6008 and Bingo Advisory Committee. The agency disagrees with the commenter who believes that subsection (b)(1) and (2) should be deleted since the rule does not contain such paragraphs; and, therefore, there is nothing to delete. The agency disagrees with the commenter who wants subsection (c) deleted because it is redundant to the Act, sec.16. The agency does not believe the rule language is redundant and further, believes the rule language places the responsibility on the organization to maintain bingo equipment in proper working condition. The agency disagrees with the commenters who believe the rule language requiring the Gamblers Anonymous 1-800 telephone number is redundant because there is no reference in the rule language for such a 1-800 telephone number and therefore, there is nothing to delete. The agency disagrees with the commenters who want the rule to allow callers to verify the number drawn instead of the operator. The agency believes the operator is the person responsible for the conduct of the game and should conduct the verification. Further, the integrity and security of the game may be jeopardized if the caller is able to verify the numbers drawn since the caller is the person who actually calls the numbers during the bingo game. Finally, the verification only occurs if a person requests such verification, most likely due to a dispute. The agency disagrees with the commenters who do not want the rule to require the name of the operator and organization be posted on a sign. The agency does not believe the posting of the sign is cost prohibitive since the rule does not mandate the type of sign to be posted. For example, if the sign was constructed of paper or the names were written on a chalkboard, the cost would be minimal. The agency does not believe writing the names on paper, chalkboard, or similar medium creates an undue hardship which prevents "last minute changes". In addition, the agency believes it is important, in the interest of the integrity and fairness of the game, that the players know who is responsible for the conduct of the game. Further, the agency disagrees with the commenters who do not believe the other language is necessary. The agency believes this "other language" is one of the reasons for the rule, i.e., to inform players of the proper recourse for complaint resolution. The agency disagrees with the commenter who believes the rule should not require a lease when the lease agreement is "rent free" because the current language in the rule does not require a lease. The agency disagrees with the commenter who believes the rule is not clear regarding the location where the Act and rules should be maintained because the rule simply requires the Act and rules be maintained, kept current, and made available to any person. The agency disagrees with the commenter who is opposed to the letter size restriction on the "notification of operator" because the agency wants the information to be visible and believes less than one inch tall letters will not be visible. The agency disagrees with the commenter who believes the phrase "workers and employees" is too broad because the agency believes it is specific and the agency does not want workers and employees playing bingo during the occasion they are working. The agency also disagrees with the commenter who believes the rule is unclear as to whether the operator must terminate the game if a worker is playing a game. The rule provides that the game may not continue if a worker is a player. The operator must either cease the game or have the worker stop playing. Since the operator is responsible for the worker, the agency fails to understand why the operator would allow the worker to play. The agency disagrees with the commenter who believes the provisions relating to advertising requirements are too restrictive. Previous regulatory language required the license number to appear on the advertising. This requirement has been removed. Therefore, the agency believes the rule language is less restrictive. The agency disagrees with the commenters who want incorporated into this rulemaking record the transcript of the Bingo Advisory Committee meetings at which comments relating to one or more of the different versions of the staff's draft rule were received. These meetings occurred prior to the time the agency proposed the rule. The meetings were working meetings to discuss the draft language of the rule among the Bingo Advisory Committee members and, also, to negotiate with and/or ask questions of agency staff regarding the various provisions of staff's draft rule. At one Bingo Advisory Committee meeting, the Committee received public comments regarding the various provisions of staff's draft rule. As a result of the dialogue between the Bingo Advisory Committee and agency staff, language was revised in the draft rule. All of these events and actions occurred prior to the time the agency proposed the rule for adoption. The agency does not believe incorporating the transcripts of these meetings into this rulemaking record is appropriate. The discussion and comment related to a draft rule during the process of negotiation of language. Aspects of the dialogue and comment relate to provisions that may no longer exist or may have been revised. The new section is adopted under the provisions of Texas Civil Statutes, Article 179d, sec.16, which authorize the Texas Lottery Commission to adopt rules for the enforcement and administration of the Bingo Enabling Act and the provisions of Texas Government Code, sec.467.102, which authorize the Texas Lottery Commission to adopt rules for the enforcement and administration of Texas Government Code Chapter 467 and the laws under the Commission's jurisdiction. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604530 Kimberly L. Kiplin General Counsel Texas Lottery Commission Effective date: April 22, 1996 Proposal publication date: January 23, 1996 For further information, please call: (512) 323-3791 16 TAC sec.402.549 The Texas Lottery Commission adopts new sec.402.549, relating to exemptions from licensing requirements, without changes to the proposed text as published in the January 23, 1996, issue of the Texas Register (21 TexReg 569). The rule is needed because it clarifies the particular exemptions from the licensing requirements of the Bingo Enabling Act, Texas Civil Statutes, Article 179d ("Act"). The Texas Lottery Commission believes it is important to make clear that an organization intending to conduct a game of bingo under the Act, sec.39 must submit to the agency the facts supporting its exemption from the licensing requirements. If the organization is exempt, the agency will issue a letter of exemption to the organization. The purpose of the rule is to make it easy for persons to know what type of organizations are exempt from the licensing requirements of the Bingo Enabling Act and to allow distributors to know which organizations can receive bingo equipment. The rule sets out the type of allowable exemptions and provides that an exemption is valid for two years from the date of issuance. The agency did not receive written comment during the comment period. At the February 6, 1996 public comment hearing, while there was no testimony, some people indicated support for or opposition to the rule. The names of groups and associations making comments for and against the section. In favor of: Forth Worth Bookkeeping, Military Order of the Cooties Pup Tent #3, Dallas County REACT, Inc., Bingo Advisory Committee, River City Bingo, North Austin Foundation, Inc., Family & Bluebonnet Bingo, and VFW Post 6008. Against: LULAC Council #616. The new section is adopted under the provisions of Texas Civil Statutes, Article 179d, sec.16, which authorize the Texas Lottery Commission to adopt rules for the enforcement and administration of the Bingo Enabling Act and the provisions of Texas Government Code, sec.467.102, which authorize the Texas Lottery Commission to adopt rules for the enforcement and administration of Texas Government Code Chapter 467 and the laws under the Commission's jurisdiction. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604531 Kimberly L. Kiplin General Counsel Texas Lottery Commission Effective date: April 22, 1996 Proposal publication date: January 23, 1996 For further information, please call: (512) 323-3791 16 TAC sec.402.554 The Texas Lottery Commission adopts an amendment to sec.402.554, relating to instant bingo, with changes to the proposed text as published in the January 23, 1996, issue of the Texas Register (21 TexReg 570). In response to comments regarding the requirement of the language "Authorized by the Texas Lottery Commission" in subsection (a)(2)(C) of this section, such subparagraph is deleted and the remaining subparagraphs of this subsection are relettered to correspond with such deletion. Also, subsection (a)(2)(A) of this section is revised to reflect that the "Texas Lottery Commission" seal must appear diameter circle. In response to comments received regarding the prohibition of pull-tab sales during intermission, the agency will not delete subsection (d)(3)(A),(B), and (C) of this section, such subparagraphs were proposed to be deleted. However, subsection (d)(3)(C) is revised to reflect the statutory required intermission and the first sentence of subsection (d)(3) of this section is deleted for the same reason. As a result of House Bill (HB) 3021, 74th Legislature, Acts 1995, ("HB 3021") the Bingo Enabling Act ("Act"), Texas Civil Statutes, Article 179d was amended. These amendments provide, in part, that bingo may be played using a pull-tab bingo game, a break-open bingo ticket, or an instant bingo card subject to the rules of the commission. The Act, sec.16 provides that the commission may adopt rules for the enforcement and administration of the Act. The Act, sec.16 also provides that the commission has broad authority and shall exercise strict control and close supervision over all games of bingo conducted in this state to the end that the games are fairly conducted and the proceeds derived from the games are used for the purposes authorized in the Act. Therefore, while the rule is an existing rule, the commission believes amendments to the rule are necessary to achieve the statutory goals of strict control and close supervision of bingo games, including pull-tab bingo games. The rule, as amended, puts persons on notice of definitions of significant terms used in the rule and what each individual card must contain and how it must be constructed, the price of an individual card, the times in which instant bingo cards may be sold, and the information that must be recorded on the cash register and the information that must be shown on the daily cash report. The amendments to the rule set out provisions for definitions, requirements for construction of the instant bingo card, the maximum cost to purchase an instant bingo card, the times in which instant bingo cards may be sold, and the types of records that must be kept concerning the sale of instant bingo tickets. The agency received 29 written comments during the comment period and 12 oral comments during the February 6, 1996 public comment hearing. Many of the commenters are opposed to the language in the rule prohibiting the sale of pull- tabs during the 10 minute intermission between bingo occasions. These commenters believe that the 1995 revisions to the Bingo Enabling Act, by virtue of HB 3021, were made to clarify that pull-tabs are a game of bingo, not to change the ongoing industry practice of selling pull-tabs during intermission. Many of these commenters believe that prohibiting the sale of pull-tabs during intermission will greatly reduce the amount of revenue generated from the sale of pull-tabs. Some of these commenters, while still opposed to the language in the rule prohibiting pull-tabs sales during intermission, believe a legislative change is required to allow the sale of pull-tabs during intermission. Other commenters believe the legislative intent was not to repeal the industry practice of selling pull-tabs during intermission but to satisfy a concern raised by the Internal Revenue Service that instant bingo is not bingo and therefore, is subject to taxation. Several of these commenters believe the legislature would have expressly prohibited the sale of pull-tabs during intermission if such a prohibition was the intent of the legislature. One commenter believes the language of the rule is unclear as to whether the sale of bingo paper during intermission is also prohibited. One commenter believes that bingo can not survive without the sale of pull-tabs because of competition by the lottery. This commenter believes the Texas Attorney General should render an opinion on the interpretation of the statutory language added to the Bingo Enabling Act, by virtue of HB 3021. This commenter believes the agency should segregate the bingo occasions and let the organizations decide when they want to take an intermission. Ultimately, this commenter wants the requirement of an intermission between bingo occasions deleted. Several commenters believe the statutory definition of bingo, found in the Bingo Enabling Act, sec.2 does not include instant bingo. These commenters believe instant bingo is a form of bingo activity, not a bingo game and therefore, the statutory requirement of an intermission between bingo games does not prohibit the sale of pull-tabs during intermission. One commenter believes language in the Bingo Enabling Act provides the agency with the authority to adopt rules to allow the sale of pull-tabs during intermission. One commenter believes the agency is interpreting the word "game" in the Bingo Enabling Act, sec.11(u) too strictly. Many commenters believe prohibiting the sale of pull-tabs by deleting the language "prior to its licensed times" would severely damage the sale of pull- tabs for the organization. These commenters believe 80% of all pull-tab sales for the second session occur during the 30 minute intermission, with about 10% of sales occurring while the games end. These commenters also oppose the deletion of subsection (d)(3)(B) and (C). Several commenters want the requirement that the word "B-I-N-G-O" be printed in no less than 29-point type removed. Another commenter wants subsection (a)(2)(B) revised so that "B-I-N-G-O" is not required to be in 29-point type but instead, is printed in a conspicuous location. One of these same commenters wants the requirement that the card contain no other symbols, emblems, or characters removed because this requirement infringes on free enterprise and removing the restriction would enable different types of pull-tabs. One of the commenters indicates that Texas is the only state requiring instant bingo tickets be printed with the "B-I-N-G-O" format. The commenter believes other states have realized there is no substantive difference between "B-I-N-G-O" on a ticket and some other configuration of numbers or symbols. Another of these commenters believes removing this requirement will allow charities to make more profits. This commenter wants pull-tabs to be able to look like lottery instant tickets. Several commenters want the provisions in the rule setting out the size of type deleted because it limits new ideas for pull-tabs. One commenter wants subsection (a)(2)(H), (I), (J), and (K) deleted, and subsection (c)(4) deleted and replaced with the following language added: "each individual ticket or tab must be constructed so that it is substantially impossible, in the opinion of the Commission to determine a concealed number or symbol until it has been sold." One commenter generally supports the rule as proposed. This commenter suggests retaining all parts of the definition of an instant bingo card except subsection (a)(2)(A), (B), and (C). The commenter wants to remove the requirement that a Texas Lottery Commission seal appear on the card. The commenter believes there is no legitimate regulatory or accountability purpose served in requiring a Texas Lottery Commission seal. The commenter believes removal of the seal will eliminate the need to separately produce and store Texas products. The commenter believes segregated inventories reduce the variety of games available in Texas, thereby limiting the variety available to players at bingo games. One commenter believes that if the "Texas Lottery Commission" seal is printed on the ticket, additional words showing approval by the Commission are unnecessary. This commenter also wants language added to the rule allowing information contained in the packing slip to be included on the flare card or on a packing slip because the commenter believes there is no legitimate regulatory reason why the packing slip is the exclusive repository of this information. This commenter wants flare card information currently required to be printed on each card deleted and replaced with the requirement that the flare card be prominently displayed for all players. This commenter wants subsection (a)(2)(G), (H), (I), and (K) deleted. The commenter believes the requirements contained in these provisions conflicts with industry and North American Gaming Regulators Association ("NAGRA") standards. This commenter suggested language for subsection (a)(2)(H), (I), and (K). The language is as follows: "Subsection (a)(2)(H) be constructed of paper or paper products and glued or otherwise security sealed along all edges and between any break-open tabs. Subsection (a)(2)(I) have numbers or symbols that are concealed behind the tab covering. Subsection (a)(2)(K) prevent the determination of a winning or losing pull-tab or instant ticket by any means other than the physical removal of the tab covering prior to purchase. Notwithstanding the above, encrypted markings shall not be prohibited." This commenter believes that the language in subsection (a)(2)(K) ignores new technology which enhances security, integrity, accountability while enhancing entertainment values. This commenter also wants subsection (a)(3) revised to be consistent with the commenter's suggested language allowing the use of a flare card. The commenter also wants subsection (c)(1) and (4) modified to be consisted with the comments regarding subsection (a)(2)(K). The commenter wants subsection (d)(3) modified to add language allowing the licensed organization to sell instant bingo cards on the premises specified in its license and where regular or paper special bingo cards are sold, during the organization's licensed times. One commenter wants the definition section amended to include pull-tab games in addition to instant bingo. This commenter also believes subsection (a) (2)(H), (I), and (J) should be broadened to allow any type of material or construction which preserves secrecy and prevents reading before purchase. The commenter also believes this language should allow for deals in rolls. This commenter provided rule language to substitute for the agency's rule or, in the alternative, that pertinent parts be added as amendments to the agency rule. This commenter's language is designed to carry out the aforementioned comments. Two commenters want the rule to require the agency to limit breaks to 10 minutes and allow 20 minutes for preparation time before games. One commenter wants different subsections of the rule amended to allow electronic instant bingo tickets, specifically subsection (a)(2)(H), (I), (J), and (K). This commenter wants the language in subsection (c) amended to remove the requirement that instant bingo tickets be constructed of glued cardboard. This commenter believes the plain language of HB 3021 allows for new technology offered by the commenter's company, including electronic tickets. Two commenters requested the transcripts of the Bingo Advisory Committee meetings at which comments relating to one or more of the various versions of the staff's draft rule were received be incorporated into this rulemaking record. These particular Bingo Advisory Committee meetings occurred prior to the time the agency proposed the rule. Several people submitted written comments which only expressed opposition to the rule. Also, at the February 6, 1996 public comment hearing, some people did not testify but did indicate support for or opposition to the rule. The names of groups and associations making comments for and against the section. In favor of: Dallas County REACT, Inc., Bingo Advisory Committee, River City Bingo, North Austin Foundation, Inc., Hewitt VFW Post 6008, and National Association of Fundraising Ticket Manufacturers. Against: American Legion Auxiliary, 626, Youth Benefit, Inc., Clements Boys and Girls Club, Lions Club of Killeen, Fort Worth Bookkeeping, Military Order of the Cooties Pup Tent #3, Amvets Post 89, Celina Volunteer Fire Department, VFW Plano 4380, LULAC Council #616, West Texas Bingo, Redmen Caddo #19, Amvets Post #5, Holiday Lake Volunteer Fire Department, Family and Bluebonnet Bingo, VFW Post 6008, Bingo Advisory Committee, Unicorn Centers, Inc., Caring and Sharing Foundation, Improved Order of Red Men, Riding Unlimited, International Gamco, Inc., Jollyville Sertoma Club, Creative Schools, Inc., Knights of Columbus #8156, Juan Diego Missionary Society, AIDS Care and Assistance/Rites of Passage, Northwest Sertoma Club, Thompson Allstate Bingo Supply, Inc., Wigwam Council #8, Comanche Tribe #18, Kiva Tribe #26, American GI Forum, Cochise Council #9, Air Force Sergeants Association Chapter #1056, Merkel Chamber of Commerce, Trend Gaming Systems, LLC, I.O.R. White Mountain #12, Brownsville Jaycees, Zonta Club of Brownsville, I.O.R. Omaha #25, Boys and Girls Club of Brownsville, I.O.R. Romona #5, I.O.R. War Eagle #5, I.O.R. Buffalo #13, I.O.R. Cheyenne #14, I.O.R. Blackcrow #16, Huace Tribe #48, Lake Worth Lions Club, and Manor Volunteer Fire Department, Inc. The agency agrees with the commenters who believe the amendments to the Bingo Enabling Act ("Act") which prohibit the conduct of bingo during an intermission between occasions do not prohibit the sale of pull-tab during such intermission. The agency agrees with the commenters who believe the amendments added by virtue of HB 3021 were to satisfy a concern raised that pull-tabs were not a form of bingo, and, as such, subject to federal taxation. The agency agrees that if the legislative intent was to prohibit pull-tab sales during intermission, such intent would have been expressly stated in HB 3021, especially in light of the industry practice of selling pull-tabs during intermission. The agency disagrees with the commenters who want the requirement that the word "B-I-N-G-O" be printed in no less than 29-point type removed. The agency believes the purpose of this requirement was to ensure identification of a standard pull-tab being used in Texas. The agency disagrees with the commenters who want the requirement that the card contain no other symbols, emblems, or characters removed because the agency believes such a removal would be inconsistent with the traditional definition of bingo contained not only in the Act, sec.2(2) but also in the promulgated standards of the North American Gaming Regulators Association ("NAGRA"). NAGRA Standards on Bingo provides that bingo is a specific form of gambling played for prizes with cards having five rows of five squares bearing numbers, except for the center square which is a free space. The traditional form of bingo also includes the requirement that the letters B-I-N-G-O appear in order above the five columns. Players holding cards cover numbers, as objects similarly numbered are drawn at random, and the game is won by a player who first covers a predetermined arrangement of numbers on such card. Also, the NAGRA Standards on Bingo provide that "Bingo" means the traditional game of chance played for a prize determined prior to the start of the game, using cards containing five rows of five squares, each imprinted with randomly placed numbers, one through seventy-five, except for the center square which may be a free space, and a set of designators, similarly numbered, which are contained in a selection device. The letters "B-I-N-G-O" must also be imprinted on the card, in order above each of the five columns. Players who have paid consideration for the cards they are holding compete for prizes by covering numbers imprinted on their cards when similarly numbered designators are randomly drawn and called. A winner is the first player to cover a predetermined arrangement of numbers on such cards. The game begins when the first number is called and ends when a player has covered the previously designated arrangement and declares bingo and the winning card is independently verified. The agency believes the provisions contained in this rule setting out the requirements of the instant bingo card conform to the game of bingo. Further, the agency disagrees with the commenters who believe removal of such restrictions will increase profits to charities. The commenters did not provide factual or statistical data to support this contention. In fact, the Commission has received data that suggests removal of such restrictions will decrease profits. The agency disagrees with the commenters who want subsection (a)(2)(H), (J), and (K) deleted. The agency believes subsection (a)(2)(H), (J), and (K) are NAGRA standards. The purpose of such standards is to ensure fairness, integrity, and security of the bingo game. The agency disagrees with the suggestion that the rule allow for electronic pull-tabs. To allow for this type of pull-tab would conflict with NAGRA standards. Further, use of electronic pull-tabs may involve a video display dispenser, which is a prohibited gambling device, as defined by HB 3021, sec.10. The agency disagrees with the commenters who want the requirement that a "Texas Lottery Commission" seal appear on the card removed. The agency believes such a requirement puts people on notice that the pull-tab has been approved by the Texas Lottery Commission for use in Texas and, therefore, the pull-tab has met the requirements to ensure fairness, integrity, and security of the bingo game. Further, requiring the "Texas Lottery Commission" seal on instant bingo cards will prevent instant bingo cards from other jurisdictions from being used or in sold in Texas. However, the agency agrees with the commenter who wants the words "Authorized by the Texas Lottery Commission" deleted since the "Texas Lottery Commission" seal must appear on the instant bingo card. Therefore the subsection (a)(2)(C) is deleted. However, to ensure that the seal is conspicuous to persons, the rule will require the seal to appear in no less than 26-point type diameter circle of the seal. Such size restriction is already in use by licensed manufacturers. The agency disagrees with the commenters who do not want the packing slip to be the exclusive repository of information regarding the deal of instant bingo cards because the agency believes the information contained on the package slip is essential for accounting and investigative purposes. The agency disagrees with the commenter who wants flare card information required to be printed on each card deleted because the agency believes such information must be on each card to ensure that every player has knowledge of the odds of winning and prizes to be awarded for each pull-tab game. The agency believes that allowing the flare card to be prominently displayed will not achieve, to the same extent, the goal of putting players on notice. The agency disagrees with the commenter who wants the rule to authorize deals in rolls because such product does not meet NAGRA standards. The agency believes that deals of pull-tabs which are in rolls can only be used in conjunction with a video display pull-tab dispenser, which is a prohibited gambling device by virtue of HB 3021, sec.10. Additionally, the deals in rolls can only be used in conjunction with a particular type of pull-tab dispenser, thereby restricting free enterprise. The agency disagrees with the commenters who want incorporated into this rulemaking record the transcript of the Bingo Advisory Committee meetings at which comments relating to one or more of the different versions of the staff's draft rule were received. These meetings occurred prior to the time the agency proposed the rule. The meetings were working meetings to discuss the draft language of the rule among the Bingo Advisory Committee members and, also, to negotiate with and/or ask questions of agency staff regarding the various provisions of staff's draft rule. At one Bingo Advisory Committee meeting, the Committee received public comments regarding the various provisions of staff's draft rule. As a result of the dialogue between the Bingo Advisory Committee and agency staff, language was revised in the draft rule. All of these events and actions occurred prior to the time the agency proposed the rule for adoption. The agency does not believe incorporating the transcripts of these meetings into this rulemaking record is appropriate. The discussion and comment related to a draft rule during the process of negotiation of language. Aspects of the dialogue and comment relate to provisions that may no longer exist or may have been revised. The amendment is adopted under the provisions of Texas Civil Statutes, Article 179d, sec.16, which authorize the Texas Lottery Commission to adopt rules for the enforcement and administration of the Bingo Enabling Act and the provisions of Texas Government Code, sec.467.102, which authorize the Texas Lottery Commission to adopt rules for the enforcement and administration of Texas Government Code, Chapter 467 and the laws under the Commission's jurisdiction. sec.402.554. Instant Bingo. (a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise: (1) Deal of series-Each separate, serialized package of instant bingo cards. (2) Instant Bingo Card-A device used to play a specific game of chance consisting of an individual card, the face of which is initially hidden from view to conceal numbers. Each individual card must: (A) bear in no less than 26-point diameter circle an impression of the commission's seal with the words "Texas Lottery Commission" engraved around the margin and a five-pointed star in the center; (B) contain the letters B-I-N-G-O on its face in a conspicuous location in no less than 29-point type; (C) contain the series number assigned by the manufacturer; (D) contain the manufacturer's name or trademark; (E) disclose the amount and number of prize winners, the number of individual cards contained in a deal, and the cost per card; (F) contain no other symbols, emblems, or characters; (G) be constructed of cardboard and glued or otherwise securely sealed along all four edges of the card and between the individual break-open tabs on the card; (H) have numbers or symbols that are concealed behind perforated window tabs; (I) allow such numbers or symbols to be revealed only after the player has physically removed the perforated window tabs; and (J) prevent the determination of a winning or losing instant bingo ticket by any means other than the physical removal of the perforated window tabs by the player. (3) Instant bingo game. A game of chance played by the random selection of one or more individually prepackaged instant bingo cards from a series of instant bingo cards. Prize winners are determined by the preprinted appearance of numbers in a prescribed order, according to winning arrangements indicated on the reverse side of the card. (b) (No change.) (c) (No change.) (4) Each individual card must be constructed so that it is substantially impossible, in the opinion of the commission, to determine a concealed number or numbers until it has been opened by a player. Without limiting the requirements of the previous sentence of this paragraph, for all instant bingo cards offered for sale by a licensed organization on or after February 1, 1988, such cards shall be required to be constructed of cardboard and in such a manner so that cardboard gluing occurs on all four edges of the card and between the individual break-open tabs on the card. The glue must be of sufficient strength and type so as to prevent the undetectable separation of the card. (5)-(6) (No change.) (d) Prizes, costs, sales, percentages. (1) The cost to purchase an individual instant bingo card may not exceed $1.00 and must be clearly posted in the vicinity of the location where cards are sold. (2) (No change.) (3) A licensed organization may sell instant bingo cards on the premises specified in its license and where regular or paper special bingo cards are sold. They may be sold for cash or redeemed for cash or other cards only: (A) during the times that bingo cards are being sold; (B) during the organization's licensed times where regular or paper special bingo games are being conducted; or (C) during the required intermission between the bingo occasions of two organizations. (4)-(7) (No change.) (e)-(f) (No change.) (g) Records. (1) (No change.) (2) The sales of and prizes paid for instant bingo cards, including the series number, shall be shown on the daily cash report and aggregate total sales for the organization must be recorded on the cash register. (3)-(5) (No change.) (h)-(i) (No change.) This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604532 Kimberly L. Kiplin General Counsel Texas Lottery Commission Effective date: April 22, 1996 Proposal publication date: January 23, 1996 For further information, please call: (512) 323-3791 16 TAC sec.402.555 The Texas Lottery Commission adopts new sec.402.555, relating to card-minding devices with changes to the proposed text as published in the January 23, 1996, issue of the Texas Register (21 TexReg 571). Subsection (d)(4) of this section is revised to provide that the price for a cardface played through a card- minding device shall be no less than the price as that of a disposable paper cardface or bingo hard card, sold separately or in combination. As a result of House Bill 3021, 74th Legislature, Acts 1995, ("HB 3021") the Bingo Enabling Act ("Act"), Texas Civil Statutes, Article 179d, was amended. These amendments provide, in part, for a card-minding device. Pursuant to the Act, sec.11(v), "a person may not use a card-minding device: (1)to generate or determine the random letters, numbers, or other symbols used in playing the bingo card played with the device's assistance; (2)as a receptacle for the deposit of tokens or money, including coins or paper currency, in payment for playing the bingo card played with the device's assistance; or, (3)as a dispenser for the payment of a bingo prize, including coins, paper, currency, or anything of value for the bingo card played with the device's assistance. No more than 30% of gross bingo game sales at each bingo occasion can be on electronic or mechanical card-minding devices. This provision does not include pull-tabs, instant bingo tickets, or break-open bingo games." In addition, House Bill 3021, sec.10 provides that "nothing in this Act shall be construed as authorizing any game using a video lottery machine or machines. In this section, 'video lottery machine' or 'machine' means any electronic video game machine that, upon insertion of cash, is available to play or simulate the play of a video game, including but not limited to video poker, keno, and blackjack, utilizing a video display and microprocessor in which the player may receive free games or credits that can be redeemed for cash, coins, or tokens or that directly dispenses cash, coins, or tokens." Pursuant to the Act, sec.16, the Commission may adopt rules for the enforcement and the administration of the Act. In reconciling the previously-referenced statutory provisions, the Commission believes card-minding devices are authorized by the Act but such devices may not be video lottery machines. Further, the Commission believes the statute is clear that no more than 30% of gross bingo game sales at each bingo occasion can be on card-minding devices. The rule puts persons on notice of what steps are required for approval of card-minding devices in Texas, manufacturing requirements, conductor requirements, commission inspection of devices, records requirements, restrictions on the manner in which a device is used and requirements for verification of the winning cardface and/or the numbers drawn. The rule sets out provisions for approval of card-minding devices in Texas, manufacturing requirements, conductor requirements, commission inspection of devices, records requirements, restrictions on the use of a device and requirements for verification of the winning cardface and/or the numbers drawn. The agency received five written comments during the comment period and five oral comments during the February 6, 1996 public comment hearing. One commenter wanted the policy statement set out in subsection (a) deleted and replaced with the following language: "All card-minding devices must be operated in accordance with subsection (g)(2) of this section." This same commenter wants the language set out in subsection (c) deleted, subsection (c) (2) revised to read as follows: "Manufacturers of card-minding devices must manufacture each card- minding device to insure that the internal accounting system records and retains the serial number of each bingo card sold for cardminder use, the price of each card sold, the total amount of the cardminder sales for each game and the total amount of cardminder card faces sold for each game. This information must be secure before the game begins and shall not be accessible for alteration during the game. The device must have a security check system to detect any entry or alteration at any time. The accounting system must be able to verify winning cards and to print them for posting. The capabilities and information must not be lost through power failure or other disruption during the game period." This same commenter wants subsection (c)(4) deleted because the commenter believes the Bingo Enabling Act already outlines this requirement. This same commenter wants to delete the language referencing "dial-up telephone number of the card- minding device" in subsection (c)(1). One commenter objects to the requirement of continuous monitoring of all bingo disposable cards because: (1)the Bingo Enabling Act ("Act") doesn't require cardminding devices to monitor and account for disposable bingo card sales, (2)the accounting is to be done by the use of the cash register under the Act, (3)the Act requires the accounting system to be handled by a systems service provider, (4)such a requirement will add great expense to the cost of the device and would be cost prohibitive for some charities, (5)some manufacturers can not comply with such a requirement, thereby decreasing competition, and (6)the same information is now provided by charities in their daily reports. This commenter suggests the total receipts of paper disposable bingo cards from the cash register be entered into the cardminding system at the close of the occasion and the agency, by use of a dial-up modem, could obtain these figures to ensure compliance with the 30% maximum cardminder sale, at any time after the occasion is completed. This commenter believes the sales ratio is easily controlled by the organizations by limiting the number of devices in use in relation to the attendance. The commenter believes such method has proven to be successful in other states that have a statutory ratio limit. While the commenter objects to continuous monitoring, the commenter does not object to a dial-up capability so the Commission can download the retained information between playing times. This commenter also believes the restriction of no more than 66 faces played through a device because the commenter believes such a restriction is contrary to the provisions of the Act since the Act sets a limit on sales of faces to a maximum of 30% of total bingo sales. The commenter believes the limitation of 66 faces is arbitrary. Finally, the commenter submitted a proposed rule to be substituted for the agency rule and published by the Commission. Another commenter believes that the language in subsection (c)(1) requiring dial-up capability is expensive because it requires a complete point of sale system to be provided by the manufacturer. This commenter further believes that conductor staffing levels and training would be increased, resulting in a higher level of expense. This commenter suggested the following language in lieu of the existing language in subsection (c)(1): "Manufacturers of card-minding devices must manufacture each card-minding device in such a manner to ensure that the internal accounting system of the card-minding device is capable of continuously monitoring all cardminder sales. The card-minding device must have the capability to accept data input of the total disposable bingo cards sales for any bingo occasion." Several commenters believe the dial-up capability will be cost prohibitive, will restrict free enterprise, and is unnecessary from a "security and integrity" focus. This same commenter believes that the language in subsection (c)(2) should clarify that any remote monitoring take place outside of any bingo occasion time periods. The commenter believes that outside communication during a bingo occasion would tie up system resources and possibly disrupt the game. This commenter suggests the following language in lieu of the existing language in subsection (c)(2): "The card-minding device must have a dial-up capability so that the commission may remotely monitor the operation and internal accounting systems of the card-minding device, at any time other than during any bingo occasion." This commenter also suggested the following language for subsection (d)(5): "No more than 30% of gross bingo game sales at each bingo occasion can be on electronic or mechanical card-minding devices. This provision does not include, pull-tabs, instant bingo tickets, or break-open bingo games." This commenter wants paragraph (2)(A)(i) deleted because the commenter believes that the purpose of paragraph (2)(A)(i) is unclear because the commenter believes that automatic marking is not related to security and integrity issues and also, because automatic marking does not provide any material advantage. This commenter believes that automatic marking is important to players with physical disabilities. Finally, this commenter wants paragraph (2) (B) deleted because the commenter believes this provision creates an additional sales limitation that conflicts with the statutory limit of card-minding device sales of thirty percent of sales. Two commenters want the language in paragraph (5)(g)(A)(i) deleted because the provisions prohibits automatic marking of bingo numbers. One of the commenters believes this language conflicts with the most recent statutory revisions to the Bingo Enabling Act because such revisions do not contain a prohibition of this kind. Also, both commenters believe the prohibition discriminates against persons with disabilities and may violate the federal Americans with Disabilities Act. Finally, one of the commenters believes such prohibition results in discrimination of the manufacturers of the advanced communication technology. At the public comment hearing, one commenter wanted subsection (d)(4) deleted, the word "immediate" deleted from subsection (e), and subsection (h) revised to allow the caller to verify the numbers in lieu of the operator. Several commenters at the public comment hearing are opposed to the requirement of setting prices on cardfaces played using a card-minding device because the commenters believe that this requirement restricts free enterprise and because charities will have to charge more since the cost of the device will have to be covered. One commenter at the public comment hearing believes the requirement of notification to the agency of the removal of a device is excessive and may create unnecessary paperwork. This same commenter is opposed to the prohibition of reservation of a device because it prevents an organization from reserving a device for its best customers. Also, this commenter wants the language restricting the number of cardfaces played through a card-minding device deleted. One commenter believes that if the rule sets prices, it should require that faces played through a card-minding device and faces played through disposable paper or hard cards be sold for the same price, or that paper will not be sold at a greater price. Two commenters requested the transcripts of the Bingo Advisory Committee meetings at which comments relating to one or more of the various versions of the staff's draft rule were received be incorporated into this rulemaking record. These particular Bingo Advisory Committee meetings occurred prior to the time the agency proposed the rule. Some people at the public comment hearing did not testify but did indicate support for or opposition to the rule. The names of groups and associations making comments for and against the section. In favor of: Bingo Advisory Committee, River City Bingo, North Austin Foundation, Inc., and VFW Post 6008. Against: Bingo Advisory Committee, Fort Worth Bookkeeping, Military Order of the Cooties Pup Tent #3, Celina Volunteer Fire Department, VFW Plano 4380, LULAC Council #616, West Texas Bingo, Family and Bluebonnet Bingo, Trend Gaming Systems, LLC, St. Andrews Episcopal Church and Fortunet. The agency disagrees with the commenter who wants the policy statement set out in subsection (a) deleted and replaced with suggested language because the suggested language is already in the rule. The agency disagrees with the commenters who want subsection (c) deleted and replaced with different versions of suggested language. Each version of the suggested language does not ensure a satisfactory level of security, integrity, and fairness of the game through use of a card-minding device. For example, the versions of the suggested language eliminate the requirement of continuous monitoring of all disposable bingo cards. The agency believes it is imperative that the card-minding device be capable of continuously monitoring sales of disposable bingo cards so that the agency knows that the statutory maximum limit of 30% of gross sales of bingo at each bingo occasion is not exceeded by an organization. Without monitoring the sales of disposable bingo cards, the agency will not be able to determine whether sales of card-minding devices have exceeded the 30% maximum set out in the Bingo Enabling Act ("Act") , sec.11(v). Further, the Act, sec.16(a) provides the commission has broad authority and shall exercise strict control and close supervision over all games of bingo conducted in this state to the end that the games are fairly conducted and the proceeds derived from the games are used for the purpose authorized in this Act. The agency believes that to ensure the 30% maximum of sales on a card-minding device is not exceeded, the device, if an organization elects to use such a device, must account for sales of disposable bingo cards. Moreover, the agency disagrees with the commenter who believes the Act requires the use of a cash register for accounting. The Act, sec.11(l) simply provides that sales be recorded on a cash register, not that the cash register perform accounting functions. Further, the point-of-sale module of a card-minding device system functions as a cash register. The agency disagrees with the commenter who believes the Act requires the accounting system to be handled by a system service provider because the provisions of the Act referencing the activities of a system service provider encompass more activities than just accounting-related activities of bingo sales. The agency also disagrees with the commenter who believes the requirement of continuous monitoring will add great expense to the cost of the device and would be cost prohibitive and some manufacturers can not comply with such a requirement, thereby decreasing competition. In July 1995, the agency invited manufacturers of card-minding devices to participate in a fact-finding conference. As a part of the fact-finding conference, the agency requested information regarding whether card-minding devices had continuous monitoring capabilities. The overwhelming response from the manufacturers was that the card-minding devices did have such capabilities. For those manufacturers who indicated their devices did not currently have such capabilities, these manufacturers indicated their devices could have continuous monitoring capabilities at a minimal expense. Therefore, the requirement of continuous monitoring will not add great expense since the majority of the devices already contain such capabilities. Moreover, the agency does not believe competition will be decreased because manufactures can not comply with such a requirement for the same reasons. The agency disagrees with the commenter who believes sales information is now provided by charities in their daily reports since there is no requirement that daily reports include card-minding device sales on daily reports and there is no capability of continuous monitoring of a daily report. Further, the agency believes that organizations who elect to use a card-minding system could experience a reduction in paperwork, thereby reducing their costs to maintain such records. The agency disagrees with the commenter who suggests that total receipts of paper disposable bingo card cards from the cash register be entered into the card-minding system at the close of the occasion because this method does not provide the organization with real time feedback of the 30% maximum of card- minding sales. The goal of which is to ensure that the 30% maximum is not exceeded. Further, the agency disagrees with the commenter who wants to use a limitation of devices to ensure the 30% maximum is not exceeded because the agency does not believe that limiting the number of devices in use will ensure that the 30% maximum is not exceeded. The agency disagrees with the commenter who wants the restriction of 66 faces played through a card-minding device deleted. The agency disagrees that the 66 faces limitation is designed to ensure that the 30% maximum is not exceeded. The purpose of the 66 faces limitation is to ensure fairness and the integrity of the game by ensuring that a player using a card-minding device does not have a material advantage over a player using a disposable paper card. The agency disagrees with the commenter who believes the 66 faces limitation is arbitrary. In a survey conducted by the agency, the agency determined that this limitation is consistent with the same type of limitation in other states. The agency disagrees with the commenters who are opposed to the requirement of dial-up capabilities. The commenters believe such capability would be costly to organizations, disruptive to the game, require organization staffing levels to increase, restrict free enterprise and is unnecessary from a security and integrity standpoint. At the previously mentioned fact-finding conference, the agency requested information from manufacturers regarding dial-up capability. The overwhelming response was that the devices had dial-up capabilities. The manufacturers who indicated that their devices did not currently have such a capability, could have such capability in the near future at a reasonable cost. Since a large number of these devices already have dial-up capabilities, the agency disagrees with the commenter who believes such a requirement infringes on free enterprise. In addition, since some of these manufacturers in some lease agreements with organizations, are paid based on a percent of sales, these manufacturers' devices have dial-up capabilities for their own monitoring and control purposes. Further, the agency is not aware that the use of a dial-up capability will cause a disruption to the game or that it will increase staffing levels. The purpose of the dial-up capability is to allow the agency to dial-up the device to monitor bingo sales. The agency does not envision an increase in staffing levels for an organization. Finally, the agency disagrees with the commenter who believes the dial-up capability requirement is unnecessary from a security and integrity standpoint. The agency desires to ensure that the statutory 30% maximum of bingo sales is not exceeded. If an organization's sales were exceeded, the organization would violate the Act, sec.11(v). The dial-up capability allows the agency to detect, upon the agency's inquiry, such a violation of the Act. The agency disagrees with the commenters who want the provision prohibiting automatic marking deleted. The agency believes automatic marking gives a player using a card-minding device a material advantage over a player using a disposable bingo card. The agency disagrees with the commenters who believe automatic marking is important to players with disabilities because the agency is aware of no complaints from persons with disabilities regarding an inability to play bingo even in its current form, disposable paper bingo. Therefore, allowing automatic marking by players will give such players a material advantage and doesn't assist players with disabilities who can not otherwise play bingo. Additionally, allowing automatic marking may allow a player to play bingo while not being physically present. The agency believes a player must be physically present to play bingo; otherwise, the device is what is playing bingo, not the player. Therefore, from a security, integrity, and fairness of the game perspective, the agency believes automatic marking should be prohibited. The agency disagrees with the commenter who wants the word "immediate" deleted in subsection (e) because the agency believes under certain circumstances immediate access to the card-minding device is appropriate. Further, under the Act, sec.16, the commission has clear authority to inspect bingo premises and bingo games at anytime. Finally, the rule as adopted will enable the commission to fulfill its statutory requirements of preserving the security and integrity of the bingo game. The agency agrees with the commenters who are opposed to the rule requiring that prices on cardfaces played using a card-minding device be the same price as that of disposable bingo paper faces. Therefore, the agency has revised the language in subsection (d)(4) of this section to accommodate these comments. The agency disagrees with the commenter who believes notification to the agency of the removal of a device is excessive and may create unnecessary paperwork. The agency believes it is important from a security, integrity, and fairness of the game perspective, when there is a malfunction of a device to the extent such device must need to be removed. The agency disagrees with the commenter who wants the rule to allow for reservation of a device because it creates an appearance of an unfair advantage to a player and compromises the integrity and fairness of the game. The agency believes it must have the discretion to retain the device to ensure that the ("EPROM") erasable programmable read only memory modules or any other part of the device has not been altered or tampered with to ensure the security, integrity, and fairness of the game. The agency disagrees with the commenters who want incorporated into this rulemaking record the transcript of the Bingo Advisory Committee meetings at which comments relating to one or more of the different versions of the staff's draft rule were received. These meetings occurred prior to the time the agency proposed the rule. The meetings were working meetings to discuss the draft language of the rule among the Bingo Advisory Committee members and, also, to negotiate with and/or ask questions of agency staff regarding the various provisions of staff's draft rule. At one Bingo Advisory Committee meeting, the Committee received public comments regarding the various provisions of staff's draft rule. As a result of the dialogue between the Bingo Advisory Committee and agency staff, language was revised in the draft rule. All of these events and actions occurred prior to the time the agency proposed the rule for adoption. The agency does not believe incorporating the transcripts of these meetings into this rulemaking record is appropriate. The discussion and comment related to a draft rule during the process of negotiation of language. Aspects of the dialogue and comment relate to provisions that may no longer exist or may have been revised. The new section is adopted under the provisions of Texas Civil Statutes, Article 179d, sec.16, which authorize the Texas Lottery Commission to adopt rules for the enforcement and administration of the Bingo Enabling Act and the provisions of Texas Government Code, sec.467.102, which authorize the Texas Lottery Commission to adopt rules for the enforcement and administration of Texas Government Code Chapter 467 and the laws under the Commission's jurisdiction. sec.402.555. Card-minding Device. (a) Policy Statement. All card-minding devices must be operated in accordance with subsection (g)(2) of this section. (b) Approval of Card-minding Devices. (1) No card-minding device may be sold, leased, or otherwise furnished to any person in this state or used in the conduct of bingo for public play unless and until a card-minding device which is identical to the card-minding device intended to be sold, leased, or otherwise furnished has first been presented to the commission by its manufacturer, at the manufacturer's expense, and has been approved by the commission for use within the state. (2) An identical card-minding device to the card-minding device intended to be sold, leased, or otherwise furnished must be presented to the commission in Austin for review. If granted, approval extends only to the specific card- minding device approved. Any modification must be approved by the commission. (3) Once a card-minding device has been approved, the commission may keep the card-minding device for further testing and evaluation for as long as the commission deems necessary. (c) Manufacturing Requirements. (1) Manufacturers of card-minding devices must manufacture each card-minding device in such a manner to ensure that the internal accounting system of the card-minding device is capable of continuously monitoring all disposable bingo cards and cardminders sales so that at any bingo occasion sales of cardminders do not exceed thirty percent of gross bingo receipts. (2) The card-minding device must have a dial-up capability so that the commission may remotely monitor the operation and internal accounting systems of the card-minding device at any time. (3) Manufacturers of card-minding devices incorporating erasable programmable read only memory modules ("EPROM") and EPROM receptacle or similar logic storage and/or retrieval components must seal these modules and their associated circuitry to secure against unauthorized removal, additions, changes or other alterations by utilizing commission-approved protective seal tape. No security seal shall be broken except when authorized by the commission. (4) Manufacturers of card-minding devices must manufacture each card-minding device to insure that the internal accounting system records and retains for a period of not less than twelve months, the serial number of each bingo card sold for cardminder use, the price of each card sold, the total amount of the cardminder sales for each occasion and the total amount of cardminder card faces sold for each occasion. This information must be secure and shall not be accessible for alteration during the occasion. The cardminder system must be able to verify winning cards and to print them for posting. The capabilities and information must not be lost through power failure or other disruption during the occasion. (5) If the commission detects or discovers any problem with the card-minding device that affects the security and/or integrity of the bingo game or card- minding device, the commission may direct the manufacturer, distributor, or conductor to cease the sale, lease, or use of the card-minding device, as applicable. The commission may require the manufacturer to correct the problem or recall the card-minding device immediately upon notification by the commission to the manufacturer. If the manufacturer, distributor, or conductor detects or discovers any defect, malfunction, or problem with the card-minding device, the manufacturer, distributor, or conductor, as applicable, shall immediately remove the card-minding device from use or play and immediately notify the commission of such action. (6) The toll-free "800" number operated by the Problem Gamblers' Help Line of the Texas Council on Problem and Compulsive Gambling must be displayed on each card-minding device in such a manner that it is conspicuous and clearly visible to a player using the card-minding device. (d) Conductor requirements. (1) Before initial use by a licensed authorized organization, each licensed authorized organization that leases or purchases a card-minding device must notify the commission in writing of the make, model, serial number and dial-up telephone number of the card-minding device. (2) No conductor shall require a player to use a card-minding device in playing bingo. (3) Prior to the start of the bingo occasion, no card-minding device may be reserved for use by any player, with the exception of a player who is disabled in accordance with the provisions of the American with Disabilities Act, or, a player who is playing more than one consecutive bingo occasion. (4) The price for a cardface played through a card-minding device shall be no less than the price as that of a disposable paper cardface or bingo hardcard, sold separately or in combination. (e) Inspection. The commission or the commission's authorized representative(s) may examine and inspect any individual card-minding device and related systems. Such examination and inspection includes immediate access to the card-minding device and unlimited inspection of all parts of the card- minding device. (f) Records. (1) Each manufacturer selling card-minding devices must maintain a log showing the date, and serial number of the purchased card-minding device and to whom the card-minding device was sold. (2) Each distributor selling, leasing, or otherwise furnishing card-minding devices must maintain a log showing the following information: (A) the date, model and serial number of the card-minding device; (B) the name and Texas taxpayer identification number of the licensed organization to whom the card-minding device was furnished; (C) name, address, and Texas taxpayer identification number of the manufacturer or distributor from whom the card-minding device was purchased; and (D) name, address and Texas taxpayer identification number of the distributor to whom the card-minding device was sold, leased or otherwise furnished. (3) Each conductor purchasing, leasing, or otherwise utilizing a card-minding device must maintain a record showing the date, model, and serial number of the card-minding device and, the name, address, and Texas taxpayer identification number of the distributor from whom the card-minding device was purchased, leased, or otherwise furnished. If multiple conductors hold an interest in a card-minding device, each must maintain a separate record. (4) All records, reports and receipts relating to the card-minding device's sales, maintenance, and repairs must be retained by the conductor on the premises where the conductor is licensed to conduct bingo or at a location designated in writing by conductor for a period of four years for examination by the commission. Any change in the designated location must be submitted to the commission in writing at least ten days prior to the change. (5) Manufacturers and distributors must provide and maintain for four years the following information on each invoice or other document used in connection with a sale or lease, as applicable: (A) date of sale or lease; (B) quantity sold or leased; (C) cost per card-minding device; (D) model and serial number of each card-minding device; (E) name and address of the purchaser or lessee; and (F) Texas taxpayer identification number of the purchaser or lessee. (g) Restrictions. (1) No licensee may display, use or otherwise furnish a card-minding device which has in any manner been marked, defaced, tampered with, or which otherwise may deceive the public or affect a person's chances of winning. (2) A card-minding device may be used by a bingo player only when operated in the following manner: (A) The bingo player must perform at least the following functions: (i) Input each number or symbol called by the conductor into the memory of the card-minding device by use of a separate input function. Automatic marking of numbers or symbols is prohibited; (ii) Notify the conductor when a winning pattern or "bingo" occurs by means that do not utilize the card-minding device or the associated system; and (iii) Identify the winning cardface and display the cardface to the conductor. (B) Each player using a card-minding device is limited to playing a maximum of sixty-six cardfaces during any game. (C) The bingo player must be physically present on the premises where the game is actually conducted. (h) Verification. (1) Verification of winning cardface. The numbers appearing on the winning cardface must be verified at the time the winner is determined and prior to prize(s) being awarded in order to insure that the numbers on the cardface in fact have been drawn from the receptacle. This verification shall be done in the immediate presence of one or more players at a table other than the winner's. Alternatively, each winning cardface played on a card-minding device shall be displayed on any television monitors in use. Each winning cardface played on a card-minding device shall also be printed by the conductor through use of the card-minding system and posted on the licensed premises where it may be viewed in detail by the players until at least 30 minutes after the completion of the last bingo game of that organization's occasion. (2) Verification of numbers drawn. Any player may request a verification of the numbers drawn at the time a winner is determined and a verification of the balls remaining in the receptacle and not drawn. Verification shall take place in the immediate presence of the operator, one or more players other than the winner, and the player requesting the verification. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604533 Kimberly L. Kiplin General Counsel Texas Lottery Commission Effective date: April 22, 1996 Proposal publication date: January 23, 1996 For further information, please call: (512) 323-3791 16 TAC sec.402.556 The Texas Lottery Commission adopts new sec.402.556, relating to pull-tab or instant bingo dispensers without changes to the proposed text as published in the January 23, 1996, issue of the Texas Register (21 TexReg 573). As a result of House Bill (HB) 3021, 74th Legislature, the Bingo Enabling Act ("Act"), Texas Civil Statutes, Article 179d, was amended. These amendments provide, in part, for a ticket or pull-tab dispenser ("dispenser"). Under the Act, sec.2(24), a dispenser means "an electronic or mechanical device that dispenses a break-open bingo ticket, an instant bingo ticket, or a pull-tab bingo game after a person inserts money into the device. A bingo game representation or combination of bingo games must be shown on the ticket dispensed." Pursuant to the Act, sec.11(w), a dispenser "may not be used: (1) to generate or determine the random letters, numbers, or other symbols used in playing a bingo game; (2) to affect the chances of winning at a bingo game; and, (3) as a dispenser for the payment of a bingo prize, including coins, paper currency, or anything of value for the bingo game played." In addition, HB 3021, sec.10, provides that "nothing in this Act shall be construed as authorizing any game using a video lottery machine or machines. In this section, 'video lottery machine' or 'machine' means any electronic video game machine that, upon insertion of cash, is available to play or simulate the play of a video game, including but not limited to video poker, keno, and blackjack, utilizing a video display and microprocessor in which the player may receive free games or credits that can be redeemed for cash, coins, or tokens or that directly dispenses cash, coins, or tokens." Pursuant to the Act, sec.16, the commission may adopt rules for the enforcement and the administration of the Act. The Act, sec.16 also provides that the commission has broad authority and shall exercise strict control and close supervision over all games of bingo conducted in this state to the end that the games are fairly conducted and the proceeds derived from the games are used for the purposes authorized in the Act. Therefore, the commission believes the rule is necessary to achieve the statutory goals of strict control and close supervision of bingo games, including the use of pull-tab dispensers. In reconciling the previously-referenced statutory provisions, the commission believes dispensers are authorized under the Act but such dispensers may not be video lottery machines. The Commission believes the adoption of a rule regulating dispensers is necessary for the enforcement and administration of the Act. Further, the rule will assist the commission in ensuring that pull-tab dispensers are not prohibited gambling devices. It is clear that Texas, through the Texas legislature, has rejected forms of land based and riverboat casino gaming and off track betting for horse and dog racing in Texas. The purpose of the rule is to put persons on notice as to what type of dispensers will be approved from a manufacturing focus, what is required of bingo conductors, and what is required of distributors. The rule sets out provisions for: approval of pull-tab or instant bingo dispensers; manufacturing requirements; conductor requirements; inspection of a dispenser by the commission; records requirements; and, prohibition of using the dispenser in such a manner which may deceive the public or affect a person's chance of winning. The agency received 14 written comments during the public comment period and four oral comments at the February 6, 1996 public comment hearing. Several commenters want subsection (b)(2) and (3) deleted. These commenters want subsection (b)(2) language replaced with language which allows the dispenser to be able to determine whether a ticket or tab is an apparent winning or non- winning ticket after the insertion of money into the dispenser and which provides that the device where the money is inserted is considered part of the dispenser. These commenters want subsection (b)(3) language replaced with language that provides that manufacturers must manufacture each dispenser so the device is not a class 3 gambling device that is prohibited by state and federal laws. These commenters believe the rule infringes on free enterprise. One of these commenters wants subsection (c)(1) and (2) deleted because the commenter doesn't understand how new organizations can share a dispenser. Also, one of these commenters wants the language in subsection (c)(4) deleted which requires the deal or package of instant bingo cards to be mixed and shuffled prior to sale. These commenters also want the word "immediate" deleted in subsection (d). One of these commenters wants the language in subsection (e)(3) requiring multiple conductors holding an interest in a dispenser to maintain separate records deleted. One of these commenters believes the language to be included in the rule should be from a view of protecting the security and integrity of the game and maximizing benefits to the charity. One commenter supports the rule because the rule creates a reasonable balance between regulation and market place flexibility. The commenter believes the rule ensures the integrity of the dispensers by requiring Commission inspection and approval while providing accessibility to a variety of dispensers by charitable organizations at affordable prices. The commenter believes there are six or seven separate companies that manufacture dispensers that fit the criteria of the rule. Each of the dispensers dispenses a conventional instant bingo/pull-tab ticket-the same type of ticket already approved in Texas. This commenter further indicated that these dispensers will dispense instant bingo/pull-tab tickets produced by every instant bingo ticket manufacturer licensed in Texas. The commenter believes the organizations will have a variety of tickets from which to choose and a variety of suppliers from which to purchase them. The commenter believes subsection (b)(2) and (3) are essential to maintain the purpose for and character of charitable bingo in Texas. The commenter also believes that removal of one or both of these provisions will permit a form of slot machine gambling in Texas. In addition, the commenter believes any machine that contains a video screen that displays the winning or losing symbols so the player need not open the ticket to determine if it is a winner or a loser is not an instant bingo dispenser. Instead, it is a video gambling device that issues a win receipt. The commenter believes inclusion of such a dispenser in the rule seems contrary to the language prohibiting slot machines and video gambling devices included in the 1995 legislation authorizing instant bingo/pull-tab dispensers. The commenter further indicated the language precluding the video display of winning or non-winning symbols is consistent with every other state that has addressed the issue by rule. Another commenter believes the requirements of subsection (a) are essential to good regulation and should be adopted. However, the commenter wants subsection (a) to clarify that break-open bingo tickets include tickets in an electronic format, bar coded paper receipts to be redeemed for cash are permitted, and a dispenser may display a break-open bingo ticket. The commenter wants subsection (b) to take into account new technology whereby break-open bingo tickets are electronically dispensed to a screen and played by the purchaser on the screen. The commenter indicates that the electronic games and tickets retain all of the fundamental characteristics of the paper product. Further, winning tickets are evidenced by a bar coded paper receipt issued by the dispenser which is redeemed for cash. The commenter believes this technology offers many security and accounting features that benefit not only the organizations but also Texas. The commenter strongly supports subsection (b)(3) which prohibits rolling or spinning symbols because such dispensers replicate slot machines rather than instant bingo tickets. The commenter also supports subsection (e). Many commenters want the dispenser to be like the dispensers used in Texas to sell lottery tickets. These commenters believe the use of "slot-machine-like electronic pull-tab dispensers" will actually lose money for the organizations. Several commenters believe the language in subsection (b)(2) eliminates any visual technology which provides an aid to the player. These commenters do not believe the visual display jeopardizes security, accountability, or integrity of the dispenser. These commenters believe the legislature considered visual display issues and the language in HB 3021 does not prohibit visual animation or displays. The commenter suggested language which would allow visual display. The commenters believe the language in subsection (b)(3) prohibits a certain type of visual animation and such prohibition is not authorized by and is contrary to the Bingo Enabling Act ("Act"). One of these commenters suggested language which would allow visual animation but prohibit an EPROM allowing random number generation ability. One commenter believes the rule is an attempt to bring further misfortune to one of the lottery's main competitions-bingo. One commenter indicated it had reviewed the rule and would have no difficulty complying with its provisions and, therefore, supports the rule as drafted. One commenter wants to use "the new pull-tab dispensers" because the commenter believes that without such dispensers, organizations can not compete with the Indian Casino in El Paso and the other casinos in adjacent states, and the activities of the Texas Lottery. This commenter wants to be allowed to compete on a level playing field. Another commenter believes that since the Tiguas are using video display pull-tab dispensers and are operating gaming under the Restoration Act, authority already exists to allow charities to use video display pull-tab dispensers. The commenter believes that a prohibition of such dispensers in Texas while the dispensers are allowed on the Tigua reservation would avoid the 5th Circuit U.S. Court of Appeals decision, Ysleta Del Sur v. State of Texas . This commenter wants the rule broadened to allow any dispenser that passes the necessary tests for the security and the integrity of the games and provides acceptable audit capabilities. The commenter also wants the rule to allow for a type of pull-tabs to be sold only through dispensers. The commenter believes this type of dispensing provides for better security as no tickets can be handled, stolen or examined without discovery. The commenter provided suggested language to achieve the goals covered by the comments. Two commenters requested the transcripts of the Bingo Advisory Committee meetings at which comments relating to one or more of the various versions of the staff's draft rule were received be incorporated into this rulemaking record. These particular Bingo Advisory Committee meetings occurred prior to the time the agency proposed the rule. Some people at the public comment hearing did not testify but did indicate support for or opposition to the rule. The names of groups and associations making comments for and against the section. In favor of: Bingo Advisory Committee, River City Bingo, North Austin Foundation, Inc., Civil Air Patrol-Odessa, Composite Squadron 42136, VFW Post 6008, National Association of Fundraising Ticket Manufacturers, Jollyville Sertoma Club, Creative Schools, Inc., Juan Diego Missionary Society, Knights of Columbus #8156, AIDS Care and Assistance/Rites of Passage, Northwest Sertoma Club and Technik Manufacturing, Inc. Against: Fort Worth Bookkeeping, Military Order of the Cooties Pup Tent #3, Celina Volunteer Fire Department, VFW Plano 4380, LULAC Council #616, Family and Bluebonnet Bingo, International Gamco, Inc., Geodesic's Living and Odessa East Rotary. The agency disagrees with the commenters who want subsection (b)(2) and (3) of the rule deleted. The agency believes a device which can, through the use of a video display and microprocessor, determine whether a ticket is a winning or non-winning ticket without the player having to open the pull-tab is not a dispenser and is in violation of the Bingo Enabling Act ("Act"). Further, the agency believes a device containing visual animation simulating or displaying rolling or spinning reels is not a dispenser and is in violation of the Act. Instead, such a device which issues a credit is a video lottery machine as defined in HB 3021, sec.10. The agency disagrees with the commenter who wants the language of subsection (b)(3) replaced with language indicating that manufacturers must manufacture each dispenser so the device is not a class 3 gambling device prohibited by state and federal laws. Texas law does not refer to "Class 3 gambling devices". The agency does not believe the rule should refer to federal law since bingo is not regulated by federal law. Instead, bingo is regulated by Texas law. The agency disagrees with the commenters who want to delete subsection (b)(2) and (3) because the commenters believe the language infringes on free enterprise. The agency believes the purpose of the rule is to regulate bingo within the parameters of the Act. The agency believes the purpose of HB 3021, sec.10, was to prohibit video lottery machines. The agency believes the removal of one or both of these provisions will permit a form of slot machine gambling in Texas. Also, the agency disagrees with the commenter who believes subsection (b)(2) and (3) are contrary to the Act since without such paragraphs, the dispenser could be a prohibited video lottery machine as defined by HB 3021, sec.10. The agency disagrees with the commenter who believes that since the Tiguas are using video display pull-tab dispensers and are operating under the Restoration Act, authority already exists to allow charities to use video display pull-tab dispensers in Texas. The commenter cites Ysleta Del Sur Pueblo v. Texas and Ann Richards, Governor of Texas; Texas, et. al. v. Ysleta Del Sur Pueblo 36 F.3d 1325 (5th Cir. 1994), cert. denied, 115 S. Ct. 1358 (U.S. Mar 20, 1995) (Numbers 94-1161 and 94-1310) to support his position. The agency does not believe this case stands for the proposition that since the Tiguas use video display pull-tab dispensers, authority exists for license authorized organizations in Texas to do the same. In the Pueblo v. Texas case, the Court held that the Restoration Act, 25 U.S. C. sec.1300g, governs the case and not the Indian Gaming Regulatory Act, 25 U.S. C. sec.sec.2701-21. While the Restoration Act, in pertinent part, provides that "all gaming activities which are prohibited by the laws of the State of Texas are hereby prohibited on the reservation and on lands of the tribe", the Tribe's activities are still regulated by the federal government, not Texas. While the Restoration Act makes Texas law applicable to the Tiguas, the federal government's right to enforce that law is still exclusive. Therefore, simply because the Tiguas are using video display pull-tab dispensers does not indicate that Texas has authorized use of such devices. Quite the contrary, Texas has not authorized use of video display pull-tab dispensers. This rule clarifies this prohibition while at the same time authorizes the use of statutorily recognized pull-tab dispensers. However, referring to the gaming activities on tribal lands to suggest authority exists for gaming activities in Texas is nonsensical. Even though the Restoration Act provides that the Tribe may conduct whatever gaming activities Texas may conduct, Texas does not regulate such tribal gaming activities and has had no input with federal authorities as to the Tribe's use of video display pull-tab dispensers. The agency believes such dispensers are video lottery machines prohibited by Section 10, HB 3021. In Sycuan Band of Mission Indians v. Roache, 54 F.3d 535, 541-43 (9th Cir.), cert. denied, ____ S. Ct. ____ (1995), the Ninth Circuit Court of Appeals rejected a challenge by the Sycuan Band of Mission Indians to a district court ruling classifying video pull-tab machines as Class III gaming devices that would be illegal without a state compact. Under 25 U.S.C. sec.2703(7)(A)(i), Class II games, which are legal even without a state compact, include "the game of chance commonly known as bingo... including (if played in the same location) pull-tabs." The Sycuan Band argued that its video pull-tab games could not be classified as Class III gaming devices because the IGRA specifically permits "electronic, computer, or other technological aids" to be used in connection with the Class II game of bingo. Id. The Ninth Circuit held that the video pull-tab machines were Class III gaming devices and could not be operated without a compact. The court rejected the Band's argument that these devices were merely electronic aids reasoning that "an 'electronic aid' to a Class II game can be viewed as a device that offers some sort of communications technology to permit broader participation in the basic game being played, as when a bingo game is televised to several rooms or locations." Sycuan Band, 54 F.3d at 542. The agency disagrees with the commenters who want subsections (a) and (b) to authorize pull-tabs that are electronically dispensed to a screen and played by the purchaser on the screen and bar coded paper receipts to be redeemed for cash. The agency believes such a device is a video lottery machine as set out in HB 3021, sec.10. The agency disagrees with the commenters who believe the video dispenser provides for better security, accountability, and integrity because the video display unit itself does not do so because the display unit only displays the individual ticket as it passes the microprocessor. The agency believes the bar code reader in the dispenser can easily be compromised by the use of another bar code reader or similar technology not attached to the dispenser . The agency disagrees with the commenter who believes the rule is an attempt to bring misfortune to bingo. The agency is empowered to regulate bingo by exercising strict control of the games and believes the rule conforms to the provisions of the Act. The notion that the agency is attempting to bring misfortune to bingo, which creates revenue for the state and charitable organizations, is absurd. The agency disagrees with the commenter who wants subsection (c)(1) and (2) deleted because the commenter doesn't understand how organizations can share a dispenser. The agency believes organizations can share a dispenser provided the organizations maintain accurate records. Since organizations' occasions are separated by an intermission, an organization can remove its deal of unsold pull-tabs prior to the second organization's use of the dispenser. For the foregoing reasons, the agency also disagrees with the commenter who wants the requirement of multiple conductors holding an interest in a dispenser to maintain separate records deleted. Also, the agency believes each organization must maintain its own records of sales for accounting and auditing purposes. In addition, precedence has already been established for organizations to co-own bingo equipment. The agency disagrees with the commenter who wants the word "immediate" deleted in subsection (d) because the agency believes under certain circumstances immediate access to the dispenser is appropriate. Further, under the Act, sec.16 the commission has clear authority to inspect bingo premises and bingo games at anytime. Finally, the rule as adopted will enable the commission to fulfill its statutory requirements of preserving the security and integrity of the bingo game. The agency disagrees with the commenter who wants the requirement that the deal be shuffled and mixed prior to sale deleted since there is no such requirement in the rule. The agency disagrees with the commenters who want incorporated into this rulemaking record the transcript of the Bingo Advisory Committee meetings at which comments relating to one or more of the different versions of the staff's draft rule were received. These meetings occurred prior to the time the agency proposed the rule. The meetings were working meetings to discuss the draft language of the rule among the Bingo Advisory Committee members and, also, to negotiate with and/or ask questions of agency staff regarding the various provisions of staff's draft rule. At one Bingo Advisory Committee meeting, the Committee received public comments regarding the various provisions of staff's draft rule. As a result of the dialogue between the Bingo Advisory Committee and agency staff, language was revised in the draft rule. All of these events and actions occurred prior to the time the agency proposed the rule for adoption. The agency does not believe incorporating the transcripts of these meetings into this rulemaking record is appropriate. The discussion and comment related to a draft rule during the process of negotiation of language. Aspects of the dialogue and comment relate to provisions that may no longer exist or may have been revised. The new section is adopted under the provisions of Texas Civil Statutes, Article 179d, sec.16, which authorize the Texas Lottery Commission to adopt rules for the enforcement and administration of the Bingo Enabling Act and the provisions of Texas Government Code, sec.467.102, which authorize the Texas Lottery Commission to adopt rules for the enforcement and administration of Texas Government Code Chapter 467 and the laws under the Commission's jurisdiction. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604534 Kimberly L. Kiplin General Counsel Texas Lottery Commission Effective date: April 22, 1996 Proposal publication date: January 23, 1996 For further information, please call: (512) 323-3791 TITLE 22. EXAMINING BOARDS Part V. State Board of Dental Examiners Chapter 107. Dental Board Procedures Procedures for Investigating Complaints 22 TAC sec.107.100 The State Board of Dental Examiners adopts new sec.107.100, concerning receipt, processing, and coordination of complaints, without changes to the proposed text as published in the February 2, 1996, issue of the Texas Register (21 TexReg 744). The new rule enables patients and/or other members of the general public or dental profession to file complaints against Texas dentists and dental hygienists and/or dental laboratory registrants pursuant to the recently amended Dental Practice Act. The new rule establishes protocol for the receipt and processing of all complaints thereby assuring the public that all complaints are given appropriate consideration. No comments were received regarding adoption of the new rule. The new rule is adopted under Texas Government Code, sec. sec.2001.021 et seq; Texas Civil Statutes, Article 4551d, which provides the State Board of Dental Examiners with the authority to adopt and promulgate rules consistent with the Dental Practice Act; and Article 4548h sec.1, which provides that the State Board of Dental Examiners shall adopt rules concerning filing complaints and prescribe the information to be provided by a complainant. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on March 29, 1996. TRD-9604447 Douglas A. Beran, Ph.D. Executive Director State Board of Dental Examiners Effective date: April 19, 1996 Proposal publication date: February 2, 1996 For further information, please call: (512) 463-6400 22 TAC sec.107.101 The State Board of Dental Examiners adopts new sec.107.101, concerning guidelines for the conduct of investigations, with changes to the proposed text as published in the February 2, 1996, issue of the Texas Register (21 TexReg 744). Specifically, the change in sec.107.101(c) is to correct a typographical error. The term "investigate case" is changed to "investigation file" to clarify the meaning of the rule. The new rule provides for the categorization and prioritization of complaints to protect the public safety pursuant to the recently amended Dental Practice Act. The new rule ensures complaints are assigned priority classifications for the appropriate conduct of investigative actions. No comments were received regarding adoption of the new rule. The new rule is adopted under Texas Government Code sec.2001.021 et seq; Texas Civil Statutes, Article 4551d which provides the State Board of Dental Examiners with the authority to adopt and promulgate rules consistent with the Dental Practice Act; and Article 4548h sec.1, which provides that the State Board of Dental Examiners shall adopt rules concerning the investigations of complaints, and that such rules shall distinguish between categories of complaints, and ensure that complaints are not dismissed without appropriate consideration. sec.107.101. Guidelines for the Conduct of Investigations. (a) Upon receipt of a complaint and in order to provide proper statistical and/or a reporting mechanism, the alleged complaint violation(s) shall be classified into one or more of the following 17 categories defined as follows: (1) Abandonment-Discontinuing treatment of a patient without timely notice whereby the patient is unable to provide for continued treatment. (2) Advertising-Advertising through false, misleading, and deceptive statements, whether in person and/or via a print or nonprint medium. (3) Allowing the Auxiliary to Practice Dentistry-Allowing an auxiliary person to perform dental services which are reserved for licensed dentists or dental hygienists. (4) Dishonorable Conduct-Conduct which brings discredit upon the dental profession. (5) Failure to Abide with Rules/Regulations-A violation of the day-to-day practice of dentistry, including but not limited to, the failure to use proper protection (e.g., lead apron) while taking radiographs, fair dealing, and/or special knowledge requirements cited in sec.109.122. (6) Fee dispute-Unless involved in fraud or other extenuating circumstances, this type of violation usually is outside the jurisdiction of the Board. (7) Fraud-Attempting or practicing financial gain through deception, misrepresentation, and/or illegal means in the course of providing dental treatment. Fraud also includes the waiving of the insurance co-payment. (8) Impairment-Impaired due to self-abuse of drugs, alcohol abuse, and/or the use of Nitrous Oxide. (9) Controlled Substances and Prescriptions-Promoting or furthering addiction, violation of record keeping rules, prescribing for non-dental purposes, and/or over prescribing of controlled substances. (10) Negligence-Dental treatment considered to be below the standard (parameters) of care based on second opinion evaluations. (11) Patient Abuse-The mistreatment of a patient -verbally or physically. (12) Patient Death-As specified in sec.109.177, a requirement to submit a written report within 30 days after the death of a patient as a result of dental treatment. (13) Patient Hospitalization-As in "Patient Death," a requirement to submit a written report of a patient's hospitalization as a result of dental treatment whose hospitalization was not in the normal course of dental treatment. This includes any injury (morbidity) or incident in the dental office. (14) Practicing Dentistry Without a License (PDWOL) -Practicing dentistry without a Texas dental license as defined in Article 4551a, Dental Practice Act. (15) Operating a Dental Laboratory Without Registration (ODLWOR)-Any dental laboratory (in-state or out-of-state) providing services without being registered with the Board. (16) Probation Violation/Non Compliance-Violation of a Board Order requirement. (17) Sanitation-Failure to maintain a sterile, clean dental office environment; failure to follow appropriate infection control procedures. (b) Upon the Board Secretary's authorization to initiate an investigation of a complaint, the Director of Enforcement shall insure complaints are assigned a priority classification with appropriate investigative action. (c) Upon the receipt of an investigation file, the assigned investigator shall commence an investigation and provide a preliminary report to the Director of Enforcement who, in coordination with the Board Secretary and Executive Director, shall then evaluate the imminent danger to the public of Texas. A decision for immediate temporary suspension of license shall be made if danger or harm is ongoing. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on March 29, 1996. TRD-9604448 Douglas A. Beran, Ph.D. Executive Director State Board of Dental Examiners Effective date: April 19, 1996 Proposal publication date: February 2, 1996 For further information, please call: (512) 463-6400 22 TAC sec.107.102 The State Board of Dental Examiners adopts new sec.107.102, concerning procedures in conduct of investigations, without changes to the proposed text as published in the February 2, 1996, issue of the Texas Register (21 TexReg 745). The new rule provides for a precise and unbiased procedure for the conduct of investigations pursuant to the recently amended Dental Practice Act. The new rule establishes agency protocol for conducting agency investigations. No comments were received regarding adoption of the new section. The new rule is adopted under Texas Government Code, sec. sec.2001.021 et seq; Texas Civil Statutes, Article 4551d, which provides the State Board of Dental Examiners with the authority to adopt and promulgate rules consistent with the Dental Practice Act; and Article 4548h sec.1, which provides that the State Board of Dental Examiners shall adopt rules concerning procedures to be followed in the investigation of complaints. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on March 29, 1996. TRD-9604450 Douglas A. Beran, Ph.D. Executive Director State Board of Dental Examiners Effective date: April 19, 1996 Proposal publication date: February 2, 1996 For further information, please call: (512) 463-6400 22 TAC sec.107.103 The State Board of Dental Examiners adopts new sec.107.103, concerning compliance, without changes to the proposed text as published in the February 2, 1996, issue of the Texas Register (21 TexReg 746). The new rule ensures that a monitoring program is established and maintained for those licensees who have received a Board order pursuant to the recently amended Dental Practice Act. The new rule provides that individuals sanctioned by the Board will be monitored to assure their compliance with the stipulations of their board orders (i.e., sanctions). No comments were received regarding adoption of the new rule. The new rule is adopted under Texas Government Code, sec. sec.2001.021 et seq; Texas Civil Statutes, Article 4551d, which provides the State Board of Dental Examiners with the authority to adopt and promulgate rules consistent with the Dental Practice Act; and Article 4548h sec.1, which provides that the State Board of Dental Examiners shall develop a system to monitor license holders' compliance with the Dental Practice Act. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on March 29, 1996. TRD-9604449 Douglas A. Beran, Ph.D. Executive Director State Board of Dental Examiners Effective date: April 19, 1996 Proposal publication date: February 2, 1996 For further information, please call: (512) 463-6400 Administrative Penalties 22 TAC sec.107.200 The State Board of Dental Examiners adopts new sec.107.200, concerning administrative penalties, with changes to the proposed text as published in the February 2, 1996, issue of the Texas Register (21 TexReg 747). Specifically, the change in sec.107.200 Sec (d) and (e) is to correct a grammatical error. The new rule provides for administrative penalties for licensees or registrants who violate the Dental Practice Act and/or the State Board of Dental Examiner's rules and regulations. Not all violations of law and rules are subject to administrative penalties; the more serious violations are included in this rule, e.g. where a patient is harmed. The criteria set forth in the statute for determining the amount of penalty are included in the rule and the maximum amount is increased for each prior violation. The new rule establishes violation categories, amount of penalty and a standardized penalty schedule for administrative penalties imposed on licensees or registrants for violations of the Dental Practice Act and/or the rules and regulations of the State Board of Dental Examiners. No comments were received regarding adoption of the new rule. The new rule is adopted under Texas Government Code, sec. sec.2001.021 et seq; Texas Civil Statutes, Article 4551d, which provides the State Board of Dental Examiners with the authority to adopt and promulgate rules consistent with the Dental Practice Act and Article 4548j which provides that the State Board of Dental Examiners shall adopt a rule setting forth a penalty schedule for use in assessing administrative penalties. sec.107.200. Administrative Penalty (a) Upon review of the completed investigation file and on the recommendation of the Board Secretary or his/her designee, an administrative penalty may be imposed on a licensee or registrant for violation(s) of the Dental Practice Act and/or Board rules and regulations. (b) Administrative penalties may be imposed for the following violation categories: (1) Advertising; (2) Utilizing an unregistered dental laboratory; (3) Failure to maintain a centralized inventory ledger for Controlled Substances; (4) Failure to complete the required continuing education hours; (5) Violating the terms and conditions of an issued Board Order; (6) Practicing dentistry or operating a registered dental laboratory with a delinquent license or registration certificate; (7) Failure to provide timely notice of a change of address; (8) Failure to maintain the dental office in a sanitary condition; (9) Failure to make, maintain, and keep adequate records of the diagnosis made and treatment performed for and upon each dental patient; (10) Failure to post the required consumer information; (11) Failure to have at least one certified dental technician employed a minimum of 30 hours per week at a specific dental laboratory; (12) Other technical violations of the Dental Practice Act or the Board's rules and regulations that will not likely cause harm or danger to the public of Texas. (c) The penalty for a violation may be in the amount not to exceed $5,000. Each day a violation continues or occurs is a separate violation for the purposes of imposing a penalty. (d) The amount of penalty imposed shall be based on the following criteria: (1) The seriousness of the violation, including but not limited to, the nature, circumstances, extent, and gravity of the prohibited acts and the hazard or potential hazard created to the health, safety, or welfare of the public; (2) The economic damage to property or the environment caused by the violation; (3) The history of previous violations; (4) The amount necessary to deter future violations; (5) Efforts to correct the violation; and (6) Any other matter that justice may require. (e) The amount of penalty imposed shall be based on a standardized penalty schedule as described below. Initial offense or repeat offenses shall be based on finalized administrative action. (1) First offense: $100 to $1,000 per violation for each day the violation continues or occurs; (2) Second offense: $100 to $2,500 per violation for each day the violation continues or occurs; and (3) Third offense: $100 to $5,000 per violation for each day the violation continues or occurs. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on March 29, 1996. TRD-9604451 Douglas A. Beran, Ph.D. Executive Director State Board of Dental Examiners Effective date: April 19, 1996 Proposal publication date: February 2, 1996 For further information, please call: (512) 463-6400 Chapter 109. Conduct 22 TAC sec.109.10 The State Board of Dental Examiners adopts new sec.109.10, concerning consumer information, without changes to the proposed text as published in the February 2, 1996, issue of the Texas Register (21 TexReg 747). The new rule provides that dental patients shall be notified that complaints concerning dental services can be directed to the Board and the name, mailing address, and telephone number of the Board shall be displayed publically in the office of the Texas dentist pursuant to the recently amended Dental Practice Act. The rule provides that a licensee may use any one or more of the three methods of notification provided in the statute. Further, it provides the minimum size and color or type used in a notification and requires that it be legible. If a posted sign is used, a minimum size is prescribed. These requirements are included to ensure that licensees present the required information in a readable format that is displayed in a location where patients may observe the notice or sign, whichever is used. The new rule establishes the manner in which a Texas dentist practicing dentistry shall notify dental patients that complaints concerning dental services can be directed to the Board. No comments were received regarding adoption of the new section. The new rule is adopted under Texas Government Code, sec. sec.2001.021 et seq; Texas Civil Statutes, Article 4551d, which provides the State Board of Dental Examiners with the authority to adopt and promulgate rules consistent with the Dental Practice Act; and Texas Civil Statutes, Article 4549b which provides that the State Board of Dental Examiners by rule shall provide methods by which consumers are notified where to file complaints with the Board. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on March 29, 1996. TRD-9604453 Douglas A. Beran, Ph.D. Executive Director State Board of Dental Examiners Effective date: April 19, 1996 Proposal publication date: February 2, 1996 For further information, please call: (512) 463-6400 Anesthesia and Anesthetic Agents 22 TAC sec.109.177 The State Board of Dental Examiners adopts an amendment to sec.109.177, concerning report of injury (morbidity) or death (mortality) in the dental office or hospital, without changes to the proposed text as published in the February 2, 1996, issue of the Texas Register (21 TexReg 748). The amended rule provides for a technical review by a licensed dentist of the "morbidity" and/or "mortality" for proper placement and prioritization of the event in the complaint process. The amended rule ensures that a report on mortality or morbidity will be reviewed first by the Secretary to make a preliminary determination whether the licensee is at fault. In cases where it is clear, on a preliminary basis, that the licensee is not at fault, no case number will be assigned. Once a case number is assigned, the licensee has a complaint on record. The Board requires a licensee to report mortality or morbidity no matter what caused such, and when there is no relation to dental services provided, the licensee should not be burdened with a reported complaint on his/her record. No comments were received regarding adoption of the amended rule. The amendment is adopted under Texas Government Code, sec. sec.2001.021 et seq; Texas Civil Statutes, Article 4551d, which provides the State Board of Dental Examiners with the authority to adopt and promulgate rules consistent with the Dental Practice Act. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on March 29, 1996. TRD-9604452 Douglas A. Beran, Ph.D. Executive Director State Board of Dental Examiners Effective date: April 19, 1996 Proposal publication date: February 2, 1996 For further information, please call: (512) 463-6400 Part XII. Board of Vocational Nurse Examiners Chapter 231. Administration Definitions 22 TAC sec.231.11 The Board of Vocational Nurse Examiners adopts an amendment to sec.231.11, relative to Headquarters of the Board, without changes to the proposed text as published in the February 6, 1996, issue of the Texas Register (21 TexReg 836). This rule is amended to reflect the new address of the Board of Vocational Nurse Examiners. No comments were received relative to the adoption of this rule. The amendment is adopted under Texas Civil Statutes, Article 4528c, sec.5(h), which provide the Board of Vocational Nurse Examiners with the authority to make such rules and regulations as may be necessary to carry in effect the purposes of the law. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604656 Marjorie A. Bronk, R.N. Executive Director Board of Vocational Nurse Examiners Effective date: April 24, 1996 Proposal publication date: February 6, 1996 For further information, please call: (512) 305-8100 Chapter 235. Licensing Application for Licensure 22 TAC sec.235.3, sec.235.6 The Board of Vocational Nurse Examiners adopts amendments to sec.235.3, relative to Qualifications for Licensure by Examination and sec.235.6, relative to Applications for Licensure by Endorsement, without changes to the proposed text as published in the February 6, 1996, issue of the Texas Register (21 TexReg 837). Section 235.3 is amended to clarify the language, as the Board no longer gives/administers the licensure examination. Section 235.6 is amended to clarify that there may be additional requirements for licensure for the endorsement applicant that reflect new active and current Texas licensure requirements. No comments were received relative to the adoption of these rules. The amendments are adopted under Texas Civil Statutes, Article 4528c, sec.5(h), which provide the Board of Vocational Nurse Examiners with the authority to make such rules and regulations as may be necessary to carry in effect the purposes of the law. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604657 Marjorie A. Bronk, R.N. Executive Director Board of Vocational Nurse Examiners Effective date: April 24, 1996 Proposal publication date: February 6, 1996 For further information, please call: (512) 305-8100 Issuance of Licenses 22 TAC sec.235.49 The Board of Vocational Nurse Examiners adopts an amendment to sec.235.49, relative to Emeritus Licenses, without changes to the proposed text as published in the February 27, 1996, issue of the Texas Register (21 TexReg 1474). The rule is amended to reflect new active and current Texas licensure requirements. No comments were received relative to the adoption of the rule. The amendment is adopted under Texas Civil Statutes, Article 4528c, sec.5(h), which provide the Board of Vocational Nurse Examiners with the authority to make such rules and regulations as may be necessary to carry in effect the purposes of the law. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604659 Marjorie A. Bronk, R.N. Executive Director Board of Vocational Nurse Examiners Effective date: April 24, 1996 Proposal publication date: February 27, 1996 For further information, please call: (512) 305-8100 Chapter 237. Continuing Education Continuing Education 22 TAC sec.237.19 The Board of Vocational Nurse Examiners adopts an amendment to sec.237.19, relative to Relicensure Process, without changes to the proposed text as published in the February 6, 1996, issue of the Texas Register (21 TexReg 837). The rule is amended to create consistency in the rules and to clarify requirements for continuing education for endorsement applicants. No comments were received relative to the adoption of the rule. The amendment is adopted under Texas Civil Statutes, Article 4528c, sec.5(h), which provide the Board of Vocational Nurse Examiners with the authority to make such rules and regulations as may be necessary to carry in effect the purposes of the law. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604658 Marjorie A. Bronk, R.N. Executive Director Board of Vocational Nurse Examiners Effective date: April 24, 1996 Proposal publication date: February 6, 1996 For further information, please call: (512) 305-8100 Part XX. Texas Board of Private Investigators and Private Security Agencies Chapter 435. Training Programs 22 TAC sec.435.3 The Texas Board of Private Investigators and Private Security Agencies adopts an amendment to sec.435.3, concerning Certificate of Completion with changes to the proposed text as published in the February 13, 1996, issue of the Texas Register (21 TexReg 1021). The Board has determined that the amendment is necessary in order to ensure that sufficient training records are kept on all private security and private investigation registrants. Minor changes have been made to correct grammar and to clarify the language. The amendment clearly defines the requirements for certificates of completion for Level One, Two and Three training courses which are required for various members of the private security and private investigation industry. Comments were basically favorable to the amendment. An individual instructor offered written comment regarding some changes in grammar; he made no other comment either for or against the amendment. The amendment is adopted under the Texas Government Code, Texas Civil Statutes, Article 4413(29bb), sec.11(a)(3) which provides the Texas Board of Private Investigators and Private Security Agencies with the authority "to promulgate all rules and regulations necessary in carrying out the provisions of this Act." Texas Civil Statutes, Article 4413(29bb), is affected by this amendment. sec.435.3. Certificate of Completion. (a) There shall be four separate Certificates of Completion for the training course, one for each level of training, and one for the firearm requalification course. (b) All Certificates of Completion shall contain the: (1) name and approval number of the school; (2) date of completion; (3) name, signature and approval number of training instructor; (4) name and signature of the director; and (5) full name and social security number of student. (c) Each certificate of completion shall contain the dates of final completion of the entire course. Additionally, the specific date of firearm qualification shall appear on Level 3 certificates. (d) The Level One course certificate shall contain the words "has successfully completed the Level One training course approved by the Texas Board of Private Investigators and Private Security Agencies". (e) The Level Two course certificate shall contain the words "has successfully completed the Level Two training course approved by the Texas Board of Private Investigators and Private Security Agencies". (f) The Level Three course certificate shall contain the words "has successfully completed the Level Three training course approved by the Texas Board of Private Investigators and Private Security Agencies". (g) The firearm requalification certificate shall contain the words "has successfully completed the firearms requalification training course approved by the Texas Board of Private Investigators and Private Security Agencies". This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on March 26, 1996. TRD-9604332 Clema D. Sanders Executive Director Texas Board of Private Investigators and Private Security Agencies Effective date: April 17, 1996 Proposal publication date: February 13, 1996 For further information, please call: (512) 463-5545 Chapter 447. Advertisements 22 TAC sec.447.1 The Texas Board of Private Investigators and Private Security Agencies adopts an amendment to sec.447.1, concerning Address Shown in Advertisements without changes to the proposed text as published in the February 13, 1996, issue of the Texas Register (21 TexReg 1022). The Board has determined that the amendment is necessary because many licensees use their homes as their principal place of business. Requiring these licensees to use their home address in advertisements could place them and their families in jeopardy. The amendment will allow licensees the option of using their mailing address in advertisements. No comments were received regarding adoption of the amendment. The amendment is adopted under the Texas Government Code, Article 4413(29bb) , sec.11(a)(3) which provides the Texas Board of Private Investigators and Private Security Agencies with the authority "to promulgate all rules and regulations necessary in carrying out the provisions of this Act." Texas Civil Statutes, Article 4413(29bb), is affected by this amendment. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on March 26, 1996. TRD-9604333 Clema D. Sanders Executive Director Texas Board of Private Investigators and Private Security Agencies Effective date: April 17, 1996 Proposal publication date: February 13, 1996 For further information, please call: (512) 463-5545 Part XXII. Texas State Board of Public Accountancy Chapter 501. Professional Conduct Client Records 22 TAC sec.501.32 The Texas State Board of Public Accountancy adopts amendment to sec.501.32, without changes to the proposed text as published in the February 13, 1996, issue of the Texas Register (21 TexReg 1022). The amendment allows the board to include computer format information in the definition of client records. The amendment will function to clarify that client records may include computer records. No comments were received concerning adoption of the rule. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on March 28, 1996. TRD-9604643 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: April 24, 1996 Proposal publication date: February 13, 1996 For further information, please call: (512) 505-5566 Client Records 22 TAC sec.501.33 The Texas State Board of Public Accountancy adopts an amendment to sec.501. 33, without changes to the proposed text as published in the February 13, 1996, issue of the Texas Register(21 TexReg 1023). The amendment allows the board to recognize that working papers may also include computer format information. The amendment will function to clarify that working papers may include computer records. No comments were received concerning adoption of the rule. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on March 28, 1996. TRD-9604644 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: April 24, 1996 Proposal publication date: February 13, 1996 For further information, please call: (512) 505-5566 Other Responsibilities and Practices 22 TAC sec.501.41 The Texas State Board of Public Accountancy adopts an amendment to sec.501. 41, without changes to the proposed text as published in the February 13, 1996, issue of the Texas Register(21 TexReg 1023). The amendment allows the board to forbid a certificate holder in industry practice from disclosing information from a previous employer to a new employer when the certificate holder was not authorized to do so by the previous employer. The amendment will function to place the same confidentiality requirements on certificate holders in industry concerning information as that which is currently required of certificate holders in client practice of public accountancy. No comments were received concerning adoption of the rule. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on March 28, 1996. TRD-9604645 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: April 24, 1996 Proposal publication date: February 13, 1996 For further information, please call: (512) 505-5566 Chapter 511. Certification as CPA Experience Requirements 22 TAC sec.511.124 The Texas State Board of Public Accountancy adopts an amendment to sec.511. 124, without changes to the proposed text as published in the February 13, 1996, issue of the Texas Register (21 TexReg 1023). The amendment allows someone not physically located in the office of an applicant for the CPA examination to still supervise the applicant. The amendment will function to ease the current restriction requiring a supervisor of an applicant for the CPA examination to be located in the office of the applicant. One comment was received concerning adoption of the rule. The comment was in favor of the adoption. The commenter described the circumstances under which he envisions the proposed amendment will be applicable. Board staff neither agrees nor disagrees with the commenter. The comments do not require a change in the language of the proposed amendment. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on March 28, 1996. TRD-9604646 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: April 24, 1996 Proposal publication date: February 13, 1996 For further information, please call: (512) 505-5566 Chapter 523. Continuing Professional Education Continuing Professional Education Standards 22 TAC sec.523.32 The Texas State Board of Public Accountancy adopts an amendment to sec.523. 32, with changes to the proposed text as published in the February 13, 1996, issue of the Texas Register (21 TexReg 1024). The changes are the replacement of the word "insure" with the word "ensure" in 4A and 4B of the rule. The addition of a period after the words "self interest" and the deletion of the new language in the last half of the last sentence under subsection (b)(2). The deleted language reads "even if it means a loss of job or client." The changes also include the phrase "Effective January 1, 1995," at the beginning of the rule. The word each is no longer capitalized. This phrase was in the original rule but removed in the proposed rule and now returned to the adopted rule. The amendment allows clarification of the standards and requirements for ethics courses and ethics instructors. The amendment will function to insure that ethics courses for CPAs will be more focused and that they will address pertinent ethical problems. No comments were received concerning adoption of the rule. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law. sec.523.32. Ethics Course. (a) General. Effective January 1, 1995, each certificate or registration holder, unless granted retired or permanent disability status or other exemption, is required every three years to successfully complete a four-hour course of comprehensive study on the Rules of Professional Conduct of the board, offered through a board-registered provider of continuing professional education. (b) Course content and board approval. Before a provider of continuing professional education can offer this course, the content of the course must be submitted to the continuing professional education committee of the board for prior approval. Course content shall be approved only after demonstrating, either in a live instructor format or in a self-study format, that the course contains the underlying intent established in the following criteria. (1) The course shall encourage the certificate or registration holder to educate himself or herself in the ethics of the profession, specifically the Rules of Professional Conduct of the board. (2) The course shall convey the intent of the board's Rules of Professional Conduct in the certificate or registration holder's performance of professional services, and not mere technical compliance. A certificate or registration holder is expected to apply ethical judgment in interpreting the rules and determining the public interest. The public interest should be placed ahead of self interest. (3) The primary objectives of a continuing professional education ethics course shall be to: (A) emphasize the ethical standards of the profession, as described in this section; and (B) review and discuss the board's Rules of Professional Conduct and their implications for certificate or registration holders in a variety of practices, including: (i) a certificate or registration holder engaged in the client practice of public accountancy who performs attest and non-attest services, as defined in sec.501.2 of this title (relating to Definitions); (ii) a certificate or registration holder employed in industry who provides internal accounting and auditing services; and (iii) a certificate or registration holder working in education or in government accounting or auditing. (4) An ethics course shall meet the requirements of the board's continuing professional education rules as described in Chapter 523 of this chapter (relating to Continuing Professional Education). Effective June 1, 1996, prior to offering and scheduling an ethics course, a sponsor shall: (A) ensure that the instructor has completed the board's ethics training program at least every three years or as required by the board; (B) ensure that the instructor's professional license has never been suspended or revoked for violation of the Rules of Professional Conduct; and (C) provide its advertising materials to the board's CPE Committee for approval. Such advertisements shall: (i) avoid commercial exploitation; (ii) identify the primary focus of the course; and (iii) be professionally presented and consistent with the intent of sec.501.43 of this title (relating to Advertising). (c) Evaluation. At the conclusion of each course, the sponsor shall administer testing procedures to determine whether the program participants have obtained a basic understanding of the course content, including the need for a high level of ethical standards in the accounting profession. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on March 28, 1996. TRD-9604647 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: April 24, 1996 Proposal publication date: February 13, 1996 For further information, please call: (512) 505-5566 Chapter 527. Quality Review 22 TAC sec.527.9 The Texas State Board of Public Accountancy adopts new sec.527.9, without changes to the proposed text as published in the February 13, 1996, issue of the Texas Register (21 TexReg 1025). The new section allows clarification of the requirements for quality reviews and quality review sponsors and reviewers. The new section will function to improve performances by CPAs and to improve the quality of quality reviews and reviewers. No comments were received concerning adoption of the rule. The new section is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on March 28, 1996. TRD-9604648 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: April 24, 1996 Proposal publication date: February 13, 1996 For further information, please call: (512) 505-5566 22 TAC sec.527.10 The Texas State Board of Public Accountancy adopts new sec.527.10, without changes to the proposed text as published in the February 13, 1996, issue of the Texas Register (12 TexReg 1025). The new section allows the board to create a committee and administrative structure to accept quality review reports. The new section will function to increase the quality of quality review reports. No comments were received concerning adoption of the rule. The new section is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on March 28, 1996. TRD-9604649 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: April 24, 1996 Proposal publication date: February 13, 1996 For further information, please call: (512) 505-5566 22 TAC sec.527.11 The Texas State Board of Public Accountancy adopts new sec.527.11, without changes to the proposed text as published in the February 13, 1996, issue of the Texas Register (21 TexReg 1026). The new section allows the board to clearly state the responsibilities of the committee charged with accepting quality review reports. The new section will function to clarify the duties of the committee accepting quality review reports. No comments were received concerning adoption of the rule. The new section is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on March 28, 1996. TRD-9604650 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: April 24, 1996 Proposal publication date: February 13, 1996 For further information, please call: (512) 505-5566 TITLE 25. HEALTH SERVICES Part I. Texas Department of Health Chapter 31. Nutrition Services 25 TAC sec.31.1 The Texas Department of Health (department) adopts under federal mandate amendment to sec.31.1, concerning the Special Supplemental Nutrition Program for Women, Infants and Children (WIC). Section 31.1(b) adopts by reference the Fiscal Year 1996 WIC State Plan of Operations. Section 31.1(c) adopts by reference the WIC Policy and Procedure Manual. Federal regulations at 7 CFR, Part 246, require the United States Department of Agriculture (USDA) to approve an annual update of the WIC State Plan of Operations. The amendment to sec.31.1(b) covers the annual update for the fiscal year 1996, which was approved by the USDA effective October 1, 1995. The 1996 update covers the state agency's goals and objectives for improving program operations; the affirmative action plan; and local agency identification-WIC project information. The amendments to the WIC Policy and Procedure Manual cover new and revised USDA policies, which became effective when the federal regulations and federal circulars became effective, and are incorporated into policies that were approved by USDA. The latest federal requirements which are being incorporated into the WIC Policy and Procedure Manual by the amendments to sec.31.1(c) cover the state agency's affirmative action plan; program initiation and expansion; allowable costs for peer counselors; allowable costs for outreach incentive items; allowable costs for laboratory costs; employee uniforms; financial reporting; nutrition education expenditures; breastfeeding promotion expenditures; automation change management; computer environment and platform modifications; system backups; telephone with data communications capabilities; repair of computer equipment; surge protector requirement; requests for new or additional computers and/or peripherals; nondiscrimination statement; collection of racial/ethnic data; certification periods; midpoint screening; time frames for processing applicants; appointment system; inactivation for failure to pick up food vouchers; notification of ineligibility; notification of termination; notification of certification expiration; waiting list for WIC; waiting list recall; identification of WIC applicant; residency as a certification requirement; preventing and detecting dual participation; income screening as a certification requirement; adjunctive income eligibility; economic unit for income; definition of income; Texas WIC income guidelines; collection and use of social security numbers; completion of the family certification form/release list; participant priority risk; criteria for identifying nutritional risk conditions; infant born to high risk or WIC mother; weighing equipment; determination of hematocrit/hemoglobin; assessment of medical history; regression in nutritional status; use of medical data taken prior to the time eligibility is determined; competent professional authority; issuance of WIC family identification cards; issuance of duplicate family identification cards; issuance of verification of certification; enrollment of transferring participants; certification data entry forms; completing the supplemental information form; completion and issuance of food vouchers; double issuance of WIC food vouchers; triple issuance of WIC food vouchers; recipients of food instruments; signing of food voucher by proxy; disposition of voided and destroyed food vouchers; replacement of voided food vouchers; documenting missing/stolen food vouchers; action to be taken when issued vouchers are reported lost/stolen by participant; liability of local agency for food voucher inventory; mailing food vouchers; WIC food voucher supplies; criteria used for approving grocer/vendor's authorization; food packages; selection of allowable foods; tailoring food packages to meet individual needs; program benefits for homeless individual and those lacking refrigeration; use of contract formula samples; issuance of special formulas; issuance of formula to children and women with special dietary needs; intolerance to all authorized formulas; exception formulas for specialized medical needs; vendor abuse; exchange of formula between issuance dates; exchange of out-of-state food instruments; confidentiality of participant information; provision of food stamp, AFDC, Medicaid, EPSDT, and child support enforcement information to WIC applicants; compliance with the clinical laboratory improvement amendment of 1988 (CLIA); compliance with the national voter registration act (NVRA) of 1993; consent for immunizations; procedure for immunizations; contraindications to immunizations; emergency procedures; telephones for licensed vocational nurses; monitoring storage of vaccines; licensed vocational nurse training; CPR training for licensed vocational nurses; professional support; in service training; quality assurance; self-audits; immunization reporting forms; immunization communications; patient records; immunization tracking; follow up of delinquent clients for immunizations; and state agency monitoring of clinical operations and fiscal/food delivery systems. The amendments to sec.31.1(c) also cover deletion of policies and procedures concerning the following: report of program operations; report of card sequences used; report of cards voided; lost/stolen card report; FNS-191 racial ethnic report; location of automated system site of issuing food vouchers; local agency responsibility for automated inventory records; food voucher issuance using the automated food delivery system; copy file/save file; automated certification records "TOSTATE"; diskette/procedure log; WIC numbers for participants; telephone with data communications capabilities; surge protector requirement; diskette supply; use of manual certification and food voucher issue system; repair of computer equipment; automated food voucher issuance; food voucher inventories for automated sites; end of month reconciliation for users of the automated system; frequency of automation tasks system; issuance of formula to breast-feeding mothers; income eligibility of foreign students; daily card and participation log; completion and issuance of food vouchers; and validation errors. The amendment is adopted under federal mandate for the following reasons. Under federal and state enabling legislation (the Child Nutrition Act of 1966, Title 42, United States Code, sec.1786; and the Texas Omnibus Hunger Act of 1985, Acts 1985, 69th Legislature, Chapter 150, Title II), the WIC Program is 99% federally funded and governed by federal regulations. Funds are made available to the department by a federal grant. The federal statute (42 United States Code, sec.1786), federal regulations (7 CFR, Part 246), and the federal grant (Federal-State Special Supplemental Food Program Agreement) authorize the USDA to make the funds available to the department to administer the WIC Program in the State of Texas, provided that the department administers the program in accordance with the federal regulations. The amendment is adopted under Health and Safety Code, sec.12.001(b), which provides the Texas Board of Health (board) with authority to adopt rules for the performance of every duty imposed by law upon the board, the department, and the commissioner of health. sec.31.1. Special Supplemental Food Program for Women, Infants, and Children (WIC). (a) (No change.) (b) WIC State Plan of Operations. (1) The department adopts by reference the publication titled "WIC State Plan of Operations", as amended effective October 1, 1995. This plan has been developed by the department's WIC Program and approved by the United States Department of Agriculture. (2) (No change.) (c) WIC Policy and Procedure Manual. (1) The department adopts by reference the publication titled "WIC Policy and Procedure Manual," which the department developed, as amended effective October 1, 1995. This policy and procedure manual has been developed by the department's WIC Program and approved by the United States Department of Agriculture. (2) (No change.) This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604552 Susan K. Steeg General Counsel, Office of General Counsel Texas Department of Health Effective date: October 1, 1995 Proposal publication date: N/A For further information, please call: (512) 458-7236) TITLE 28. INSURANCE Part I. Texas Department of Insurance Chapter 1. General Administration Subchapter B. Fees, Charges and Costs 28 TAC sec.1.302 The Commissioner of Insurance adopts new sec.1.302, concerning the fee to be charged for affixing the official seal of the Texas Department of Insurance and for certifying to the seal, without changes to the proposed text as published in the January 19, 1996, issue of the Texas Register (21 TexReg 492). New sec.1.302 is necessary to comply with sec.22.004 of the Civil Practice and Remedies Code, added by the 74th Legislature, 1995, in HOUSE BILL 1943, and to provide a uniform fee for all requests for affixing the official seal and certifying to the seal. The Insurance Code, Article 4.07(A)(2), authorizes the department to charge up to $20 for affixing the official seal and certifying to the seal. Section 7.1301(d) provides for a $10 fee for affixing the official seal and certifying to the seal for certain authorized insurers. The practice of the department has been to charge $10 for all requests for affixing the official seal and certifying to the seal. New sec.22.004 of the Civil Practice and Remedies Code requires an additional $1.00 for a request for production or certification of a record under a subpoena, a request for production, or other instrument issued under the authority of a tribunal that compels production or certification of a record. The $1 fee is specifically required in addition to any other fee charged. To comply with sec.22.004 and to establish a uniform fee for all instances in which the official seal is affixed and certified to, new sec.1.302 will provide for a single $11 fee for each certification, regardless of the authority or intent of the person or entity making the request. Simultaneous to adopting new sec.1.302, the department is amending sec.sec.7.1301 and 7.1404 to delete references to the current fees for certification addressed in those sections. New sec.1.302 provides for a single $11 fee for each certification, regardless of the authority or intent of the person or entity making the request. No comments were received on the proposed section as published. The new section is adopted under the Insurance Code, Article 1.03A, which provides that the Commissioner of Insurance may adopt rules and regulations to execute the duties and functions of the Texas Department of Insurance as authorized by statute. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604544 Alicia M. Fechtel General Counsel and Chief Clerk Texas Department of Insurance Effective date: April 23, 1996 Proposal publication date: January 19, 1996 For further information, please call: (512) 463-6327 Chapter 7. Corporate and Financial Regulation Subchapter M. Regulatory Fees 28 TAC sec.7.1301 The Commissioner of Insurance adopts an amendment to sec.7.1301, concerning the fee to be charged for affixing the official seal of the Texas Department of Insurance and for certifying to the seal, without changes to the proposed text as published in the January 19, 1996, issue of the Texas Register (21 TexReg 493). Amended sec.7.1301 is necessary to comply with sec.22.004 of the Civil Practice and Remedies Code, added by the 74th Legislature, 1995 in HOUSE BILL 1943, to provide a uniform fee for all requests for affixing the official seal and certifying to the seal, and to conform to new sec.1.302. The Insurance Code, Article 4.07(A)(2), authorizes the department to charge up to $20 for affixing the official seal and certifying to the seal. Section 7.1301(d)(3) provides for a $10 fee for affixing the official seal and certifying to the seal for certain authorized insurers. The practice of the department has been to charge $10 for all requests for affixing the official seal and certifying to the seal. New sec.22.004 of the Civil Practice and Remedies Code requires an additional $1.00 for a request for production or certification of a record under a subpoena, a request for production, or other instrument issued under the authority of a tribunal that compels production or certification of a record. The $1.00 fee is specifically required in addition to any other fee charged. To comply with sec.22.004 and to establish a uniform fee for all instances in which the official seal is affixed and certified to, new 28 TAC sec.1.302, will provide for a single $11 fee for each certification, regardless of the authority or intent of the person or entity making the request. Section 7.1301(d)(3), which references the $10 charge, is deleted and the remainder of said rule is renumbered accordingly. Simultaneous to this amendment of sec.7. 1301, the department is amending sec.7.1404 to delete reference to the current fee for certification addressed in that section. Amended Section 7.1301(d)(3), which references the $10 charge, is deleted and the remainder of said rule is renumbered accordingly. Simultaneous to this amendment of sec.7.1301, the department is amending sec.7.1404 to delete reference to the current fee for certification addressed in that section and adding sec.1.302, to provide for a single $11 fee for each certification, regardless of the authority or intent of the person or entity making the request. No comments were received on the proposed amendment as published. The amendment is adopted under the Insurance Code, Article 1.03A, which provides that the Commissioner of Insurance may adopt rules and regulations to execute the duties and functions of the Texas Department of Insurance as authorized by statute. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604545 Alicia M. Fechtel General Counsel and Chief Clerk Texas Department of Insurance Effective date: April 23, 1996 Proposal publication date: January 19, 1996 For further information, please call: (512) 463-6327 Subchapter N. Service of Process 28 TAC sec.7.1404 The Commissioner of Insurance adopts an amendment to sec.7.1404, concerning the fee to be charged for affixing the official seal of the Texas Department of Insurance and for certifying to the seal, without changes to the proposed text as published in the January 19, 1996, issue of the Texas Register (21 TexReg 494). Amended sec.7.1404 is necessary to comply with sec.22.004 of the Civil Practice and Remedies Code, as added by the 74th Legislature, 1995, in HOUSE BILL 1943, to provide a uniform fee for all requests for affixing the official seal and certifying to the seal, and to conform to new sec.1.302 and amended sec.7.1301. The Insurance Code, Article 4.07(A)(2), authorizes the department to charge up to $20 for affixing the official seal and certifying to the seal. Section 7.1301 previously provided for a $10 certification fee for requests from certain insurers. Section 7.1404(g) previously provided for a $10 fee for certificates of service, which involve the affixing of the official seal and certifying to the seal, other than the two certificates of service automatically issued to plaintiffs and court clerks. New sec.22.004 of the Civil Practice and Remedies Code requires an additional $1.00 for a request for production or certification of a record under a subpoena, a request for production, or other instrument issued under the authority of a tribunal that compels production or certification of a record. The $1.00 fee is specifically required in addition to any other fee charged. To comply with sec.22.004 and to establish a uniform fee for all instances in which the official seal is affixed and certified to, new 28 TAC sec.1.302, which is being adopted by the Commissioner simultaneously to this adoption will provide for a single $11 fee for each certification, regardless of the authority or intent of the person or entity making the request. New 28 TAC sec.7.1301, which is being adopted simultaneously by the Commissioner deletes subsection (d)(3), which refers to the $10 fee. Amended subsection 7.1404(g) states that the fee charged for additional certificates of service will be the same fee normally charged for affixing the official seal and certifying to the seal and that portion which refers to the older fee is deleted. Section 7.1404(g) provides that the fee charged for additional certificates of service will be the same fee normally charged for affixing the official seal and certifying to the seal and that portion which refers to the older fee is deleted. No comments were received on the amended section as published. The amendment is adopted under the Insurance Code, Article 1.03A, which provides that the Commissioner of Insurance may adopt rules and regulations to execute the duties and functions of the Texas Department of Insurance as authorized by statute. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604546 Alicia M. Fechtel General Counsel and Chief Clerk Texas Department of Insurance Effective date: April 23, 1996 Proposal publication date: January 19, 1996 For further information, please call: (512) 463-6327 Chapter 9. Title Insurance Subchapter A. Basic Manual of Rules, Rates and Forms for the Writing of Title Insurance in the State of Texas 28 TAC sec.9.1 The Commissioner of Insurance adopts an amendment to sec.9.1, concerning amendments to the Basic Manual of Rules, Rates and Forms for the Writing of Title Insurance in the State of Texas (the Basic Manual), with changes to the proposed text as published in the January 26, 1996, issue of the Texas Register (21TexReg 651). The amended section concerns amendments to the Basic Manual, which the section adopts by reference. The amendments to the Basic Manual consist of modifications to Administrative Rules L-1, L-2, L-3, D.1, G.1 and G.2 concerning the requirements for licensing title insurance agents under the Insurance Code, Articles 9.36 and 9.37; title insurance escrow officers under the Insurance Code, Articles 9.42, 9.43 and 9.44; and direct operations under the Insurance Code, Article 9.36A. Administrative Rules L-1, L-2 and L-3 establish requirements for issuance, cancellation, renewal, change in operations and additional appointments for title insurance agents, title insurance escrow officers, and direct operations. In Administrative Rules L-1, L-2 and L-3 the procedure for cancellation of a license requires that the entity requesting cancellation inform the department by letter of the reasons for cancellation as a mandatory requirement for granting the cancellation. This ensures that information regarding malfeasance by a title insurance agent, escrow officer or direct operation as a ground for license cancellation is reported to the department, in accordance with Insurance Code, Article 1.10D. Administrative Rules L-1, L-2 and L-3 have been amended to implement changes to the Insurance Code which provide that a staggered license renewal system may be adopted under the Insurance Code, Article 21.01-2. The current procedure for renewal of title insurance agents' licenses, escrow officers' licenses, and direct operations' licenses has been converted to a staggered renewal system which uniformly distributes the number of license expirations and renewals over a 12-month time period. The adoption of a staggered renewal system, where the processing of renewal applications is spread over a 12-month time period rather than all renewals being processed in a single month, eliminates license processing overloads, allows more efficient use of department staff time and expedites the issuance of licenses to the applicants. Administrative Rule L-1 is also amended to include pertinent language relating to letters of credit issued by a financial institution in this state and insured by an agency of the United States Government. In response to comments, the department has changed portions of L-1, L-2 and L-3, as proposed. The second sentence of L-1. I. was clarified. In L-1 the word "UNDERWRITER" was changed to "TITLE INSURANCE COMPANY" because title insurance company is a defined term and underwriter is not. In L-1. I. B. 2. the language "names of partners" has been deleted because the names of the partners are not typically the name of the partnership. In L-1. I. C. 6. the term "insurance company" was deleted and the term "Title Insurance Company" was inserted for clarification. In L-1. III. A. 3., L-2. IV. C. and L-3. III. 2. the language "including any improprieties involving the" agent, escrow officer or direct operation has been deleted for clarification. In L-1. III. B. the phrase "by the Agent " was added since clarification was needed regarding who should submit the information to whom. In L-1. IV. A. and B., L-2. V. A. and B., and L- 3. IV. A. and B. language was deleted and new language was added to clarify that the staggered renewal system will be phased in over a three year period and that all licenses will be renewed with an expiration date that coincides with the expiration date of the initial license issued. In L-1. IV. B. 3. new language was added to eliminate the requirement that corporate title insurance agents must submit a new Certificate of Account Status each time they renew. In L-1. V. B. 1. new language was added to clarify that relicensing would be necessary when a new partner was added to the partnership but relicensing would not be necessary where a partner was deleted. The language in subsections L-1. V. B. 3, 4 and 5 was deleted and moved to the previous section as new L-1. V. A. 4, 5 and 6. Each of these provisions relates to changes in the name of the title agent. This change was made because none of the name changes warrant cancellation of a license and the expense and burden of reissuance of new title agent and escrow officer licenses. These new provisions are similar to requirements for a change in operations of a title agent involving the addition or deletion of a county which can currently be accomplished without the expense, delay, and regulatory requirment of cancellation of existing licenses and issuance of new licenses. The new subsections and current subsection L-1. V. A. 3. were changed to require the title agent, adding or deleting a county or changing its name, to either surrender the current license or submit a sworn statement that such license has been lost. In L-1. V. A. 3. a. iv. and 3. b. iv. the language "signed and dated by the Agent" was added for clarification purposes. In L-1. V. 3. a. iii. and 3. b. iii., concerning the submission of an executed Abstract Plant Information Form when a county is deleted or added by a title insurance agent, new language was added to require such form only in cases where the abstract plant has not been examined within the previous 12 months. Section 9.1 incorporates by reference certain amendments to the Basic Manual. The amendment consists of proposed modifications to Administrative Rules L-1, L- 2, L-3, D.1, G.1 and G.2 concerning the requirements for licensing title insurance agents, escrow officers and direct operations; requirements for ceasing operations by agents and direct operations; procedures pertaining to the policy guarantee fee and audit and review of escrow trust accounts. The amendment converts the current procedure for renewal of title agents' licenses, escrow officers' licenses and direct operations' licenses to a staggered renewal system to uniformly distribute the number of license expirations and renewals over a 24 month time period. A staggered renewal system eliminates license processing overloads allowing more efficient use of department staff time and expedites the issuance of licenses to the applicants. The amendment further imposes a new requirement that an entity requesting license cancellation must send the department a letter indicating the reasons for the request. The amendment also corrects various typographical and grammatical errors that currently exist in these sections of the Basic Manual, and changes references from the State Board of Insurance to the Texas Department of Insurance as consistent with the requirements of House Bill 1461. Comment: Commenters believe that in L-1. I. "additional licenses" is unclear and recommend clarifying language. Agency Response: The agency agrees and has added the recommended language. Comment: Commenters suggest that the reference to the word "UNDERWRITER" in L-1 should be revised to read "TITLE INSURANCE COMPANY" because it is a defined term and "Underwriter" is not. Agency Response: The department agrees and has made this change. Comment: Commenters believe that in L-1. I. B. 2., concerning section B of the title agent 's license application, the language requiring the names of all partners should be deleted because the names of the partners are not typically the name of the partnership. Agency Response: The agency agrees and the language has been deleted. Comment: Commenters suggest that in L-1. II. 1. the term "insurance company" should be deleted and the term "Title Insurance Company" should be inserted. Agency Response: The agency agrees and this change was made. Comment: Commenters believe that the requirement in L-1. III. A., requiring the title insurance company to give the agent 30 days advance notice before canceling the agent's license, and the requirement in L-1.III.B., requiring the title insurance agent to give the title insurance company 30 days advanced notice before surrendering its license, should be amended to allow the required notice period for cancellation or surrender to be a negotiated term of the agent's contract rather than have the 30 day notice requirement mandated by rule. Agency Response: The agency disagrees and believes that 30 days advance notice for cancellation or surrender of an agent's license is required to adequately protect the public. Immediate cancellation or surrender of an agent's license might cause a loss of jurisdiction over an agent's license that could prevent the department from taking disciplinary action against an agent who had engaged in malfeasance. The agency acknowledges that the 30 day advanced notice requirement does not preclude the right of a title insurance company to take necessary action to cause the title agent to immediately cease issuing policies in cases of title agent malfeasance. Comment: Commenters believe that in L-1. III. A. 3., L-2. IV. C. and L-3. III. 2. the term "improprieties" is extremely vague, not adequately defined and should be deleted. Agency Response: The agency agrees and this term has been deleted. Comment: Commenters believe that in L-1. III. B it is unclear who should submit the information to whom and have recommended clarifying language. Agency Response: The agency agrees and has adopted the recommended language. Comment: Commenters state that L-1.IV. A. and B., L-2. V. A. and B., and L-3. IV. A. and B. appear to institute a staggered renewal system that would renew all existing licenses in a single one year period. Agency Response: The agency added new language to clarify that the staggered renewal system will be implemented over a three year period and that all licenses will be renewed with an expiration date that coincides with the expiration date of the initial license issued. Comment: Commenters object to the procedure set out in L-1. IV. B. 3. requiring corporate title agents to submit a new Certificate of Account Status each time they renew. The commenters believe that because title agents are exempt from corporate franchise taxes, requiring a new Certificate of Account Status upon renewal involves unnecessary expense to the renewing title agent, the comptroller and the department. Agency Response: The agency agrees and has added new language eliminating this requirement. Comment: Commenters object to the procedure set out in L-1. V. B. 3, 4 and 5 requiring the cancellation of a license and the expense and burden of reissuance of a new license when there are minor changes in the name of the title agent. Commenters believe that none of these changes warrant cancellation and reissuance of a license. Agency Response: The agency agrees and the changes recommended by the commenters have been adopted. Comment: Commenters believe that the instructions for the submission of the Title Agent Update Form in L-1. V. 3. a. iv. and 3. b. iv. are unclear and have recommended clarifying language. Agency Response: The agency agrees and the recommended language has been adopted. Comment: Commenters object to the procedure set out in L-1. V. 3. a. iii. requiring the title agent upon deletion of a county to submit an executed Abstract Plant Information Form for all other counties unaffected by the deletion. The commenters feel there is no need to examine the abstract plant because the remaining counties entered in the abstract plant are unaffected by the deletion. Agency Response: The agency disagrees because the abstract plant of many title agents are only examined about every four years and the additional spot tests necessitated by this requirement are considered beneficial from a regulatory stand point. New limiting language was added to require an Abstract Plant Information Form only in cases where the abstract plant has not been examined within the previous 12 months. Comment: Commenters object to the procedure set out in L-3. III. 2. requiring a letter to be sent to the department upon cancellation of a direct operation license by an underwriter. The commenter argues that this requirement is irrelevant because the underwriter is seeking cancellation of its own direct operation. Agency Response: The agency disagrees and believes that it is careful regulation to require the underwriter to submit a letter indicating the reasons for cancellation of a direct operation license because if the department fails to receive this information it could prevent the department from pursuing necessary administrative enforcement action. For with changes: Texas Land Title Association The amendment is adopted under the Insurance Code, Articles 9.36, 9.42, 9. 43, 9.36A, 21.01-2, and 1.03A and the Government Code, sec.sec.2001.004 et seq. Article 9.36 authorizes the department to accept applications, issue, renew, and cancel title insurance agents' licenses and provides for a staggered renewal system to be adopted under Article 21.01-2. Article 9.42 authorizes the department to adopt a system of staggered renewal for escrow officers' licenses under Article 21.01-2. Article 9.43 authorizes the department to accept applications for escrow officers' licenses and to grant such license. Article 9.36A authorizes the department to accept applications, issue, and renew direct operations' licenses and provides for the adoption of a staggered renewal system under Article 21.01-2. Article 21.01-2 authorizes the commissioner by rule to adopt a staggered renewal system under which licenses expire on various dates during a licensing period. Article 1.03A authorizes the commissioner to adopt rules and regulations for the conduct and execution of the duties and functions of the department as authorized by statute. The Government Code, sec.sec.2001.004 et seq authorizes and requires each state agency to adopt rules of practice setting forth the nature and requirements of available procedures and to prescribe the procedure for adoption of rules by a state administrative agency. sec.9.1 Basic Manual Of Rules, Rates, and Forms for the Writing of Title Insurance in the State of Texas. The Texas Department of Insurance adopts by reference the Basic Manual of Rules, Rates, and Forms for the Writing of Title Insurance in the State of Texas as amended effective May 1, 1996. The document is published by and is available from Hart Information Services, 11500 Metric Boulevard, Austin, Texas 78758, and is available from and on file at the Texas Department of Insurance, Title Insurance Section, Mail Code 103-1T, 333 Guadalupe Street, Austin, Texas 78701-1998. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604627 Alicia M. Fechtel General Counsel and Chief Clerk Texas Department of Insurance Effective date: April 23, 1996 Proposal publication date: January 26, 1996 For further information, please call: (512) 463-6327 TITLE 30. ENVIRONMENTAL QUALITY Part I. Texas Natural Resource Conservation Commission Chapter 116. Control of Air Pollution by Permits for New Construction or Modification Subchapter F. Standard Permits 30 TAC sec.sec.116.610, 116.617, 116.620, 116.621 The commission adopts amendments to sec.116.610, concerning Applicability and sec.116.617, concerning Standard Permit List and new sec.116.620, concerning Installation and/or Modification of Oil and Gas Facilities and sec.116.621, concerning Municipal Solid Waste Landfills. Sections 116.610, 116.620, and 116. 621 are adopted with changes to the proposed text as published in the October 6, 1995, issue of the Texas Register (20 TexReg 8168). Section 116.617 is adopted without changes and will not be republished. The amendments include the deletion of subsections (d)-(g) of sec.116.610, eliminating duplicative requirements also contained in paragraphs in sec.116. 615, concerning General Conditions. In addition, the amendments involve the deletion of sec.116.617(3), relating to Installation and/or Modification of Oil and Gas Facilities. This paragraph is renumbered as the new sec.116.620. The renumbering of specific standard permits from paragraphs to sections simplifies future addition or modification of standard permits, since Texas Register rules allow a section to be open for only one set of changes at a time. Minor changes to sec.116.610 and sec.116.620 have been made to conform these sections to Texas Register style conventions. New sec.116.621 establishes criteria for obtaining a standard air quality permit for a municipal solid waste landfill (MSWLF). The Texas Clean Air Act (TCAA) states that a permit is required to construct a new facility or to modify an existing facility that may emit air contaminants. The MSWLF standard permit is not a new requirement, but provides an alternative to the New Source Review permit process of Chapter 116, Subchapter B. The standard permit alternative specifies operating and control requirements, but does not require modeling or a health effects review. The commission staff has reviewed the United States Environmental Protection Agency's (EPA) New Source Performance Standards (NSPS) for MSWLFs, adopted March 1, 1996. As discussed in the preamble to the proposed rulemaking, as published in the October 6, 1995, issue of the Texas Register (20 TexReg 8168), the staff has incorporated the adopted federal standards into the final rulemaking. Paragraph (1) of sec.116.621 specifies sections of the standard permit subchapter which must be complied with in order to qualify for the standard permit. Paragraph (2) of sec.116.621 lists facilities and operations which do not qualify for the standard permit. Paragraph (3) of sec.116.621 requires the inclusion of the initial design capacity report in the standard permit registration. Paragraph (4) of sec.116.621 requires compliance with the adopted federal NSPS Subpart WWW, with additions and changes. Paragraph (5) of sec.116.621 specifies procedures to control fugitive particulate matter emissions. Paragraph (6) of sec.116.621 provides that the executive director may require upwind/downwind air sampling for particulate matter and specifies the procedures to follow for such testing. Paragraph (7) of sec.116.621 describes the inspection and maintenance protocols for active gas collection and control systems (GCCS) organic compound leaks from compressor seals, pipeline valves, pressure relief valves in gaseous service, and pump seals. Paragraph (8) of sec.116.621 requires the owner or operator of each MSWLF unit to maintain records sufficient to readily determine if compliance with the standard permit has been maintained. The commission has prepared a Takings Impact Assessment for these rules pursuant to Texas Government Code, sec.2007.043. The following is a summary of that assessment. The purpose of the amendments and new sections is to eliminate duplicative language, renumber the standard permit for oil and gas facilities, and establish a standard permit for MSWLFs and municipal solid waste (MSW) facilities. The MSW standard permit provides an option for MSWLFs that are required to obtain an air quality permit. The amendments and new sections will substantially advance this specific purpose by changing rule language as appropriate. Promulgation and enforcement of the rules will not affect private real property because no new control requirements are added by this adoption. A public hearing was held November 6, 1995, in Austin. The following 12 commenters submitted testimony regarding the proposed rules: the City of Arlington (Arlington); Browning-Ferris Industries Southern Region (BFI); the City of Brownwood (Brownwood); the City of Corpus Christi (Corpus Christi); the EPA; the City of Garland (Garland); Galveston Houston Association for Smog Prevention (GHASP); HDR Engineering, Inc. (HDR); Lloyd, Gosselink, Fowler, Blevins and Mathews, P.C., on behalf of USA Waste Services, Inc. (USA Waste); the Texas Lone Star Chapter of the Solid Waste Association of North America (TxSWANA); McElroy & Sullivan, L.L.P., on behalf of Waste Management of Texas, Inc. (WMTX); and the Brazos Valley Solid Waste Management Agency (BVSWMA), on the behalf of the Cities of Bryan and College Station. Arlington, BFI, Brownwood, Corpus Christi, Garland, HDR, USA Waste, TxSWANA, WMTX, and BVSWMA generally supported the proposed revisions, but suggested changes or clarification. The EPA and GHASP suggested changes without generally supporting or opposing the proposed revisions. Brownwood and BVSWMA supported the comments filed by TxSWANA on the proposed standard air permit for MSWLFs. HDR generally supported TxSWANA's comments. No comments were received regarding sec.116.610 or sec.116.617. Installation or Modification of Oil and Gas Facilities. GHASP does not support less stringent control under sec.116.620(a)(8) and (9) than is required for paragraph (7). With this rulemaking project, no changes were made to the content of the standard permit for the installation and/or modification of oil and gas facilities. Modification to the oil and gas standard permit was limited to the renumbering of subsections. During the negotiations for the final oil and gas standard permit, a tiered approach was devised to allow oil and gas facilities to be constructed or modified within certain distances to off-plant receptors under certain conditions. With the tiered approach, Best Available Control Technology (BACT) as well as protection of public health and welfare are still ensured. For further explanation, see the August 18, 1995, issue of the Texas Register (20 TexReg 6324). GHASP stated that under sec.116.620(b)(1), the 25,000 gallon cut-off size is not stringent enough and that regulation should occur down to 5,000 gallon tank size to ensure that nuisance situations do not occur or toxic pollution does not threaten people. This comment was addressed in previous rulemaking in which the agency responded that the 25,000 gallon threshold has been the historical limit for BACT. The commission finds the 25,000 limitation on tank storage size to be consistent with its definition of BACT. Furthermore, there is no provision in this standard permit that prevents a person from claiming that a nuisance violation is alleged to have occurred. GHASP considers the 80% control under sec.116.620(b)(2)(A) to be less than adequate. The commission finds that a tiered approach for control of glycol dehydrators is BACT and this approach ensures the protection of public health and welfare. GHASP objected to using a 10,000 parts per million (ppm) volatile organic compounds (VOC) leak detection level under sec.116.620(c)(1)(A). GHASP stated that the leak detection level should be 500 ppm to be consistent with other parts of the rule in order to reduce ozone precursors maximally and further stated that this will result in savings of products and pollution control equipment. GHASP also objected to the phrase "reasonably accessible" under subsection (c)(1)(D) and (2)(D). A tiered approach for leak detection levels is used to allow oil and gas facilities to be constructed or modified within certain distances to off-plant receptors under certain conditions. With the tiered approach, BACT as well as protection of public health and welfare are ensured. As to the comment regarding what valves and fittings are "reasonably accessible," the commission believes that reasonably accessible valves are those which would not expose monitoring personnel to immediate danger, such as being less than two meters above a support surface. For further explanation, see the August 18, 1995, issue of the Texas Register (20 TexReg 6324). MSWLFs-Comments. Arlington, Brownwood, BVSWMA, Corpus Christi, Garland, TxSWANA, USA Waste, and WMTX supported the adoption of a standard air permit for MSWLF. TxSWANA stated that the use of a standard preconstruction air permit could provide the MSW industry with significant regulatory and economic relief, and at the same time, improve air quality in Texas. Brownwood further stated that for landfills, the standard air permit approach appears to be the best approach, since real reductions in air pollution can be achieved without the unnecessary expense of having to obtain individual permits. USA Waste further noted that the use of standard permits can significantly reduce the red tape and cost associated with obtaining a permit without compromising the benefits obtained. The commission agrees that the standard air permit will provide equivalent environmental benefit to the Chapter 116, Subchapter B air permit, at less cost to the regulated community and the Texas Natural Resource Conservation Commission (TNRCC). TxSWANA and USA Waste supported the use of a standard air permit if new and modified landfills are legally required to obtain separate air quality permits. The TCAA requires any person who plans to construct any new facility or engage in the modification of any existing facility which may emit air contaminants into the air of Texas to obtain an air quality permit. The definitions of MSWLF and MSW facility in 30 TAC Chapter 101 reflect the agency's view that landfills are facilities. This position is consistent with the federal NSPS for MSWLF. Corpus Christi, TxSWANA, and USA Waste recommended that the TNRCC postpone adoption of the final standard air permit until the EPA adopts the final NSPS. TxSWANA noted that the proposed standard permit includes landfill gas collection and control requirements that are largely based on EPA's proposed NSPS, and that waiting would avoid conflicting and inconsistent state and federal regulations. The EPA adopted the NSPS on March 1, 1996. The final state rule has been revised to be consistent with the adopted NSPS. TxSWANA recommended that the TNRCC modify the standard permit to directly incorporate the final NSPS. The commission agrees with TxSWANA and has directly incorporated the entire final NSPS by reference. TxSWANA, USA Waste, and Corpus Christi requested an explanation of what physical and operational changes at a MSW facility will trigger the need for a standard permit to authorize the construction of new and modified MSW facilities. Arlington and TxSWANA stated that it is important that the TNRCC make clear that just because a landfill has received a "modification" as defined in 30 TAC sec.305.70, the landfill does not have to secure a standard air permit. TxSWANA further stated that the standard permit should make it clear that Chapter 116 authorization is only required for landfill expansions beyond currently permitted capacity, and that such authorization is not needed for solid waste permit modifications required to implement Subtitle D. The commission agrees that clarification is needed. MSWLFs differ from most types of facilities receiving air permits because construction is an ongoing process as new cells (disposal units within the MSWLF) are added. The commission intended that Chapter 116 authorization be required for MSWLF expansions and that such authorization is not needed for solid waste permit amendments or modifications that do not increase the air emissions associated with the permitted facility. Arlington, Corpus Christi, Garland, TxSWANA, and USA Waste pointed out the need to explain whether the standard permit applies to all areas of the existing MSW facility or just the modified areas. Garland stated that the standard permit should only apply in new and modified areas of existing landfills. Garland noted that the disposal of waste in existing areas, including the associated air emissions, have previously been authorized by the state. Garland stated that landfill owners should not be required to obtain additional authorization for these areas when seeking to expand the size of the existing landfill. Garland noted that if the standard permit applies to all areas of an existing landfill, the standard permit will discourage expansions of existing landfills and encourage the construction of landfills in greenfields, a goal which appears at odds with the concept behind the TNRCC's "brownfields" initiative. TxSWANA and USA Waste further stated that the standard permit should explain how emissions will be calculated for modifications, and where and when gas collection systems will be required to be installed in existing areas. Arlington, TxSWANA, and USA Waste recommended that the standard permit thresholds be determined based only on the modified areas and that the installation of GCCS be specifically required only in modified areas. Arlington stated that application of the standard permit thresholds to existing landfill areas will unnecessarily complicate compliance. TxSWANA further stated that a permit requirement that tries to include previously deposited waste on previously permitted areas could create significant legal questions regarding the right of permittees to rely on prior authorization as well as create extensive practical difficulties in emission estimation and system retrofitting. The commission agrees that clarification is needed. The commission refers to the definition of MSW facility within Chapter 101, concerning General Rules. The general rules define a MSW facility so as to encompass the entire landfill: "all contiguous land, structures, other appurtenances, and improvements on the land used for processing, storing, or disposing of solid waste." According to Chapter 116, when a facility is modified, the entire facility must obtain a permit. Thus, the area of the MSW facility that is impacted by the standard permit is considered to be the entire facility. This policy is consistent with the adopted NSPS, which requires emissions control over the entire landfill, rather than a portion of it. GHASP stated that standard permits should require modeling and health effects review. GHASP expressed concern that the TNRCC would permit facilities that would have potential nuisance situations. TxSWANA stated that the use of a standard permit may be the only practical way to satisfy the permit requirements. The commission believes that meaningful modeling and health effects review cannot be done for a MSWLF before the landfill is operating due to the difficulty in determining the characteristics and distribution of emissions. The control imposed by this standard permit meets all of the requirements of the federal NSPS and is designed to ensure that the air resources of the State of Texas are protected without subjecting permit applicants to unnecessary costs and regulatory burden. TxSWANA urged the TNRCC to more actively seek input from its MSW Division as part of the consideration of the comments, especially regarding the default value for the generation rate constant (k) and for nonmethane organic compounds (NMOC) Concentration (C [sub]NMOC). The agency has developed the MSWLF standard air permit as a multi-media project. Specific provisions have been coordinated among several divisions, including the MSW Division. WMTX commented on proposed sec.116.621(1), which states that facilities complying with the applicable requirements may be issued a standard permit. WMTX stated that the language "...are hereby entitled to the standard permit" in sec.116.610(a), more appropriately describes the applicability of a standard permit. The commission agrees with WMTX that paragraph (1) should reflect more certainty of action, and has revised it to read, "qualify for a standard permit," consistent with sec.116.617. Paragraph (1) continues to reference sec.116.610. To further clarify, the first sentence of sec.116.621 has been revised to state, "a person may claim a standard permit," instead of "a standard permit may be issued." BFI, Corpus Christi, EPA, Garland, TxSWANA, and USA Waste commented on the default values in sec.116.621(3), which were proposed for use in calculating NMOC emission rates in the absence of site-specific data. BFI supported the proposed default values. Corpus Christi, TxSWANA and USA Waste suggested changes to the generation rate constant for landfills with drier waste. TxSWANA stated that because of the strict requirements of Subtitle D, the waste that is disposed of in new and modified MSW facilities should be considered as drier waste. Corpus Christi, USA Waste, and TxSWANA recommended that the default value for the generation rate constant (k) be changed to k=0.02 per year. TxSWANA and USA Waste also requested that a determination be made to identify what constitutes "wet" and "drier" and also to determine which category Subtitle D of the Resource Conservation and Recovery Act landfills represent. TxSWANA and USA Waste noted that the proposed standard permit sets the default value for C [sub]NMOC NMOC as 1,170 parts per million by volume (ppmv) for MSW facilities that have not received any industrial waste and 4, 400 ppmv for MSW facilities that have received industrial solid waste. TxSWANA, USA Waste, Garland, and Corpus Christi recommended the use of C [sub]NMOC=1,170 ppmv for all MSW facilities except those codisposing organic industrial solid waste. Garland stated that the Tier 2 testing conducted in the Dallas/Fort Worth area demonstrates that actual C point=4.02p [sub]NMOC values in pre-Subtitle D landfills are generally less than 1, 170 ppmv. TxSWANA and USA Waste further requested the development of a regulatory method to distinguish between landfills that do and do not accept organic industrial waste in greater than de minimis amounts. The EPA expressed concern regarding paragraph (3), which states that the maximum expected NMOC emission rate will be calculated using the procedures provided in 40 Code of Federal Regulations (CFR), sec.60.753 of the proposed NSPS for MSWLFs published in the May 30, 1991, issue of the Federal Register (56 FR 24468). The EPA noted that the default values for the generation rate constant (k), generation potential (L [sub]0), and the C [sub]NMOC differ from the default values in the proposed 40 CFR, sec.60. 753. The EPA stated that the public record should address the method for deriving the default values in paragraph (3), why they differ from the default values in 40 CFR, sec.60.753, and demonstrate that the proposed default values are at least as stringent as the proposed NSPS. The commission has deleted the specific references to default values in the adopted rule. To be consistent with the adopted NSPS, the commission has modified the rule language to directly reference the NSPS, which addresses default values. BFI stated that if the rule is conformed to the March 1995 draft final NSPS, the commission should authorize the use of representative data from historic landfill operations. The commission believes that representative data from historic landfill operations is not transferable to other MSWLF sites, because MSWLFs are unique in waste characterization and operation. The use of the default values in calculating the NMOC emission rates followed by testing provides more accurate information. The commission has modified the rule language to directly reference the adopted NSPS, which does not provide for using data from different landfills. Corpus Christi, EPA, GHASP, and USA Waste commented on the threshold levels in sec.116.621(4). The EPA expressed concern that for MSWLFs located in an ozone attainment area, the proposed threshold level was the NMOC emission rate specified in the NSPS, or 150 megagrams (Mg) per year. The EPA stated that this should be modified to state that the threshold value shall be the lower of the two emission rates. GHASP stated that the 150 Mg is particularly inappropriate when the EPA has proposed a 50 Mg threshold. GHASP expressed a concern that the TNRCC needs to be as stringent as possible, since in nonattainment areas reduction of ozone precursor emissions needs to occur. USA Waste and Corpus Christi supported the TNRCC's decision to set the NMOC threshold at 150 Mg per year and stated that the level is consistent with existing TNRCC regulations in 30 TAC Chapter 115. Corpus Christi further stated that a more stringent threshold level in the attainment areas would be economically unreasonable and unsupported by current research data. The rule as proposed specified that the state rule incorporate the NMOC emission rate (50 Mg per year) specified in the NSPS, provided the federal standard was promulgated prior to the adoption of the state rule, or the agency would incorporate the use of 150 Mg per year as the threshold for requiring the installation of the active GCCS. The standard permit incorporates the 50 Mg per year threshold (emission rate cutoff), since that is the value incorporated by the adopted NSPS. HDR noted that paragraph (4)(A) requests the determination of the C [sub]NMOC and (k) values and does not require a submittal of the recalculated NMOC emission rate utilizing the site-specific values. HDR suggested that a second NMOC emission rate calculation in accordance with the procedures of 40 CFR, sec.60.753 of the proposed federal rules be required, using the site-specific values, to show emission rates below the threshold level. HDR further noted that the appropriate section of the federal rule is referenced erroneously as 40 CFR, sec.61.753 when it should be 40 CFR, sec.60. 753. The commission has deleted the specific rule language to resolve the deficiencies pointed out in HDR's comment. The commission has modified the rule language to directly reference the adopted NSPS, which addresses the calculation and reporting methodology. TxSWANA and USA Waste noted that the proposed standard permit sets the NMOC threshold level in ozone nonattainment areas at "the amount constituting the major source as defined for that area in sec.116.12," but sec.116.12 does not define major sources with regard to emissions of NMOC. TxSWANA and USA Waste noted that sec.116.12 defines major source based on VOC emissions. TxSWANA and USA Waste requested that the TNRCC amend the standard air permit to clarify the ambiguity and offered the following suggested language: "... or a NMOC emission rate equivalent to a VOC emission rate constituting a [the amount constituting the] major source for VOC as defined for that area in sec.116.12 of this title (relating to Major Source/Major Modification Emission Thresholds)." Garland and Arlington acknowledged support for setting the NMOC threshold at major source levels. However, Garland and Arlington stated that for this provision to be effective, the proposed standard permit needs to explain the relationship between NMOC and VOC emissions because the TNRCC regulations do not define major sources of NMOC emissions. Garland suggested that the threshold trigger for the standard permit should be tied to the specific NMOC threshold for each nonattainment area in the state. Arlington suggested that the standard permit specifically set out the emissions threshold in terms of NMOC emissions in each ozone nonattainment area. VOC is a subset of NMOC (while all VOCs are NMOC, not all NMOCs are VOC). For landfills, the most predominant NMOCs that are not VOC are ethane, methylene chloride, trichlorofluoromethane, and chlorodifluoromethane. VOC can be determined by subtracting out the non-VOC portion of the NMOC. Section 116. 621(2)(F) has been added to clarify that new major sources or modifications under the federal new source review requirements of the Federal Clean Air Act (FCAA), Part C (Prevention of Significant Deterioration) or Part D (nonattainment review) must obtain a regular air quality permit in accordance with sec.116.110 (concerning Applicability). The definitions in these federal rules use VOC, not NMOC. When the potential emission rate would otherwise exceed the amount constituting the major source definition for ozone nonattainment areas (e.g., in Houston, 25 tons per year of VOC constitutes a major source), the permit holder may elect to install landfill gas controls to remain below the major source level. Representations to limit the air emissions, made in the registration, become enforceable conditions of the standard air permit. Arlington, Corpus Christi, Garland, USA Waste, and TxSWANA commented on paragraph (4), concerning the proposed time allowed for submitting site-specific testing. TxSWANA and USA Waste stated that the allotted 90 days to perform Tier 2 and/or Tier 3 testing is an insufficient amount of time, and noted that the proposed NSPS would allow up to one year to perform this testing. TxSWANA, USA Waste, and Corpus Christi recommended that the time period be changed to 180 days rather than 90 days to conduct Tier 2 and Tier 3 testing. Arlington and Garland also suggested that the standard permit allow up to 180 days to perform Tier 2 testing rather than 90 days as proposed. TxSWANA, Arlington, and Garland stated that recent experience conducting Tier 2 testing in the Dallas/Fort Worth area indicated that 90 days will not be sufficient to obtain and analyze Tier 2 data. Arlington noted that the testing is new and few laboratories are capable of performing the test. The commission has modified the rule language by eliminating specific reference to time frames in the rules, since these time frames are specified in the adopted NSPS. Any MSWLF construction or modification which would otherwise result in a major new source or modification under the FCAA, Part C or Part D would need to install and operate the GCCS prior to becoming a major source, to eliminate the need for federal nonattainment permitting. HDR stated that language in paragraph (4)(B)(i) and (ii) appears to conflict in its requirements for the submitted design of the active GCCS. HDR stated that clause (i) requires the GCCS to be designed to accommodate gas produced by the entire landfill falling under the proposed standard permit, while clause (ii) requires the designed system to collect gas from areas or cells of the permitted landfill which contain final cover, or where refuse has been in place for over five years. HDR stated that the conflict is that clause (i) requires a GCCS design to address the permitted landfill in total, while clause (ii) implies a phased GCCS design. HDR noted that due to the trend for new and amended landfills to have long operational lives, it is recommended that the required plan for the GCCS be submitted conceptually with the standard permit application to address the entire facility covered by the standard permit, and that the final design and installation of the GCCS take place in phases in accordance with the requirements of clause (ii). The commission eliminated the specific rule language addressed in HDR's comment to be consistent with the requirements of the adopted NSPS. BFI proposed that paragraph (4)(B)(iv)(I) should address the routing of total collected gas "to an open flare with a minimum height of 30 feet and that is designed, operated, and inspected in accordance with 40 CFR sec.60.18" and satisfies the requirements of Standard Exemption 80. The commission has modified the rule language to incorporate BFI's comment. BFI proposed that paragraph (4)(B)(iv)(II) be changed to read: "the total collected gas is routed to a control device such as an enclosed flare with a minimum vent release height of 30 feet and that reduces the total collected NMOC gas emissions by 98% or to less than 20 ppmv, as hexane." BFI requested the change in order to address enclosed flares, which are not subject to 40 CFR, sec.60.18, and to make the means of expressing NMOC reductions consistent with the proposed NSPS for MSWLFs (i.e., 20 ppmv as hexane). The commission has modified the rule language to incorporate BFI's comment. WMTX supported the concept of employing reasonable control technologies and methodologies at MSWLFs to limit particulate matter emissions in sec.116.621(8). WMTX stated that the proposed rule identifies the control technologies which can be most effectively employed to control such emissions. However, WMTX stated that the use of the phrases "minimize any fugitive particulate matter emissions" and "achieve maximum control of dust emissions" could be construed to suggest a constantly escalating, but never satisfied requirement to employ any conceivable means of controlling such emissions. In addition, some of the control technologies identified are obviously not appropriate for use on all of the areas identified (e.g., paving of a cell during excavation). WMTX suggested specific language for paragraph (8). The adopted NSPS is limited to organic emission control from landfills, while the standard permit additionally covers particulate matter emissions, which may also be associated these facilities. The commission believes that the term "minimize" contains an element of technical practicability and economical reasonableness and disagrees that the term suggests a constantly escalating means of controlling emissions. The commission modified the rule language, now paragraph (5), in response to the comments concerning the maximum control of dust emissions. BFI stated that it did not support the inclusion of a mandate that high-volume air sampling be "performed upon request of the TNRCC executive director or a designated representative" in sec.116.621(9). BFI believes that TNRCC authority to require sampling for any criteria or hazardous air pollutant should conform to what the agency has historically required in the terms and conditions specified in individual permits. BFI further stated that specific testing should not be addressed in the requirements of this regulation. In addition, BFI noted that the proposed rule does not specify whether the testing is for total suspended particulate, for which there is no longer a National Ambient Air Quality Standard (NAAQS), or for inhalable particulate matter (PM [sub]10), for which a NAAQS does exist. BFI proposed that testing be only for PM [sub]10. High-volume air sampling provides a mechanism for determining compliance in situations where estimating emissions in advance of operational activity is difficult. The commission believes that high-volume air sampling is useful and economically reasonable in measuring emissions. This standard permit is intended to test total suspended particulates, for which state standards exist. If necessary, federal standards may be addressed under 30 TAC sec.101.8, concerning Sampling, which provides the commission or executive director the authority to request that any person owning or operating a source which emits air contaminants conduct sampling to determine the opacity, rate, composition, and/or concentration of such emissions. WMTX suggested deleting sec.116.621(9) from the proposal. Due to the size and nature of operations at MSWLFs, WMTX stated that upwind/downwind high volume air sampling for particulate matter is unlikely to provide data useful to evaluate the control of particulate matter emissions. WMTX stated that requirements to utilize the control methodologies set out in paragraph (8) will adequately limit particulate matter emissions from MSWLFs. WMTX further stated that the lack of identifiable criteria for either triggering a sample event or evaluating the results is further basis for deleting the paragraph. The commission considers the option to require upwind/downwind high volume air sampling, which establishes compliance status with the standards, necessary in order to ensure the effectiveness of the control criteria. Furthermore, the commission believes that it is difficult to anticipate all the criteria that would necessitate sampling; thus, the commission has not modified the rule to attempt to itemize the various criteria that might trigger a request for monitoring. GHASP stated that the TNRCC and the local programs should be notified when sampling will occur so that an opportunity to observe the sampling is presented. The commission agrees, and has revised sec.116.621(6) accordingly. WMTX suggested that if the commission adopts sec.116.621(10), it continue to monitor the status of the proposed federal rules and, if changes are made to them prior to final adoption, that the commission initiate a process to revise the Texas state rules accordingly. BFI suggested defining a leak as methane, rather than as methane, propane, or hexane. BFI opposed the inclusion of specific meteorological conditions as a basis for determining when surface leak testing should be performed, since it would require that either the landfill be located next to a continuously operating National Weather Service station or that it purchase, install, calibrate, and maintain an operating anemometer and recording rain gauge, and to train an individual in the proper operation, calibration, and maintenance of these instruments. Because the adopted NSPS fully treats surface leaks, adding flexibility that was not included in the proposed version, the commission has eliminated proposed paragraph (10) from the final rule. The adopted NSPS also clarifies that a surface leak is measured as methane. The surface leak requirements are now directly incorporated by reference to the entire final NSPS in sec.116. 621(4). GHASP stated that under sec.116.621(11)(J)(i), allowing ten tons per year (tpy) of fugitives per year seems like a lot. The commission believes that the ten tpy exemption is appropriate. The commission believes that requiring MSW facilities, often owned by local governments, to implement fugitive emission inspection and maintenance programs at facilities with less than ten tpy of fugitive emissions is not economically reasonable. Since the majority of components in a GCCS are under negative pressure, the fugitive monitoring requirements would not be generally applicable anyway. Only a gas processing facility, which is not a typical control system, will have significant numbers of components and potentially be subject to the component monitoring requirements, now renumbered as paragraph (7). Also, the commission believes that under certain circumstances, alternative methods to implement fugitive emission inspection and maintenance programs may be reasonable. Therefore, sec.116.621(7)(E) is added to provide for use of alternative methods of fugitive monitoring if approved by the executive director. BFI stated that in paragraph (11)(A), leaks should be defined as "escape of gas with a total organic compound concentration greater than or equal to 10, 000 ppmv above background methane," not "methane, propane, or hexane." BFI noted that 10,000 ppmv as methane is not equal to 10,000 ppmv as hexane or as propane. The commission agrees with BFI, and has added a clarifying definition in sec.116.621(7)(A). GHASP stated that in paragraph (11)(A), a 10,000 ppm leak detection level for VOCs is too high for a severe ozone nonattainment area like the Houston area and stated that the leak detection level needs to be lowered to 500 ppm. The commission believes that the 10,000 ppm detection level is a sufficient leak detection program for reducing VOC emissions from landfill gas collection systems. The fugitive emission and inspection program requires monitoring for total organic compounds, which includes methane. Because the concentration of VOC in landfill gas is low compared to the total organic compound content, actual VOC emissions will be well under 10,000 ppm. BFI requested that in paragraph (11)(E), valves installed underground solely for the purpose of isolating sections of pipe in order to make repairs be made exempt from inspection and maintenance protocols. BFI stated that these buried valves are left in a permanently open position, unless it becomes necessary to uncover them and close them in order to perform pipeline repairs. BFI stated that requiring these valves to be in a valve box would result in creating an unnecessary confined space, which presents a safety hazard. In addition, BFI stated that this type of design creates a path for gas to escape the landfill and for air to enter, creating the potential for fugitive leaks of NMOC and for fires inside the landfill. The buried valves referenced in BFI's comments are in continuous vacuum service and therefore exempt under paragraph (7)(D)(i). The commission has also added specific language in sec.116.621(7)(B) to further clarify this issue. BFI stated that in paragraph (11)(G), the proposed regulation addresses only new and reworked piping connections that are welded or flanged. BFI further stated that high-density polyethylene piping which has no welded connections should be exempt from leak detection, monitoring, and repair requirements. The commission has modified the rule language to reflect BFI's comment, in sec.116.621(7)(C). BFI stated that in paragraph (11)(J)(i), the proposed regulation should specify the means by which uncontrolled fugitive emissions that leak from components should be quantified, i.e., which emission factors should be used to ensure that emissions are less than ten tpy in order to qualify for the exemption from inspection and maintenance protocols. The commission believes that addressing the issue of which fugitive emission factors to use is appropriate for inclusion in a guidance document which will be available. BFI stated that in paragraph (11)(J)(iii), a vacuum of 0.725 pounds per square inch (psi) is equivalent to 20 inches water column and that this amount of vacuum is not acceptable in design and operation of landfill gas extraction systems. BFI further stated that depending upon well location, a vacuum over 20 inches water column would significantly enhance the probability of air infiltration and potential fires in the landfill. BFI proposed that components in vacuum be exempt from the inspection and maintenance protocols. The commission agrees with BFI, and has added an exemption in sec.116.621(7) (D)(i) to incorporate BFI's comment. BFI opposed the sampling and analysis for nitrogen concentrations in the landfill gas at each well in the gas collection header in paragraph (12)(D) (iii). BFI stated that if monitoring is required for oxygen, as a means of determining air infiltration into the landfill resulting from vacuum extraction of landfill gas, it is an unnecessary expense to test for nitrogen concentrations as oxygen. The adopted NSPS allows an option for monitoring oxygen instead of nitrogen. Because the NSPS fully treats surface leaks, including recordkeeping, the commission has eliminated proposed paragraph (10), addressing surface leaks, and the associated recordkeeping in proposed paragraph (12). Recordkeeping is now addressed in paragraph (8). HDR stated that in paragraph (12)(F)(vi), requiring landfills to calculate maximum expected gas generation flow rates using Method 2E as listed in the proposed NSPS and emission guidelines will have a significant economic impact on the owners of MSWLFs. HDR questioned the need for this calculation based on the fact that performance testing will be conducted on the system via the required surface monitoring, along with the verification of negative pressure at all of the well heads. HDR stated that if the TNRCC believes that maximum gas generation flow rates are necessary, a recommended alternative to Method 25 would be to use one of several available gas generation models such as the one referenced in sec.60.754 of the proposed federal regulations. However, HDR stated that because these models only serve as a theoretical estimate of the gas generation rate for a landfill, HDR stressed that model results should be used for information only, and not to evaluate the adequacy of an installed GCCS. The adopted NSPS does not require Method 2E sampling. Because the NSPS fully treats the issue of expected gas generation flow rates, including recordkeeping, the commission has eliminated the specification. HDR stated that in paragraph (12)(F)(vii), the calculated radius of influence (ROI) of extraction wells in accordance with Method 2E will have a significant economic impact on landfill owners with little benefit in return. HDR stated that the required surface monitoring (performance testing) will indicate areas of the landfill surface that require additional control; and if the required repairs fail to resolve the emission point, owners will ultimately install additional wells. HDR further stated that although available as an option for design of the GCCS in place of the 200 meter design default spacing in the proposed NSPS and emission guidelines, the nonhomogeneous characteristics of a landfill renders the use of a uniform calculated ROI to evaluate GCCS performances ineffective. Additionally, HDR stated that the presence of negative pressure within the refuse induced by the already installed GCCS will impact any tests conducted to determine ROI. Based on experience, HDR believed that performance testing through GCCS operation surface monitoring will sufficiently indicate when and where additional extraction wells are needed. HDR recommended that this requirement be removed from the proposed rule. The adopted NSPS allows more flexibility than the proposed version upon which the standard permit proposal was based. Because the NSPS addresses the design layout of collection wells and related recordkeeping, the commission has eliminated the proposed recordkeeping requirement. The amendments and new sections are adopted under the Texas Health and Safety Code, the TCAA, sec.382.017, which provides the commission the authority to adopt rules consistent with the policy and purpose of the TCAA. sec.116.610. Applicability. (a) Pursuant to the Texas Clean Air Act (TCAA), sec.382.051, projects involving the types of facilities or physical or operational changes to facilities which meet the requirements for a standard permit listed in this subchapter are hereby entitled to the standard permit; provided however, that: (1) (No change.) (2) construction or operation of the project shall be commenced prior to the effective date of a revision to this subchapter under which the project would no longer meet the requirements for a standard permit; (3)-(5) (No change.) (b) Any project which constitutes a new major source, or major modification under the new source review requirements of the FCAA, Part C (Prevention of Significant Deterioration Review) or Part D (Nonattainment Review) and regulations promulgated thereunder shall be subject to the requirements of sec.116.110 of this title (relating to Applicability) rather than this subchapter. (c) (No change.) sec.116.620. Installation and/or Modification of Oil and Gas Facilities. (a) Emission specifications. (1) Venting or flaring more than 0.3 long tons per day of total sulfur shall not be allowed. (2) No facility shall be allowed to emit total uncontrolled emissions of sulfur compounds, except sulfur dioxide (SO point=4.52p [sub]2), from all vents (excluding process fugitives emissions) equal to or greater than four pounds per hour unless the vapors are collected and routed to a flare. (3) Any vent, excluding any safety relief valves that discharge to the atmosphere only as a result of fire or failure of utilities, emitting sulfur compounds other than SO [sub]2 shall be at least 20 feet above ground level. (4) New or modified internal combustion reciprocating engines or gas turbines permitted under this standard permit shall satisfy all of the requirements of Standard Exemption Number 6, except that registration using the Form PI-7 or PI- 8 shall not be required. Emissions from engines or turbines shall be limited to the amounts found in sec.116.211(a)(1) of this title (relating to Standard Exemption List). (5) Total Volatile Organic Compound (VOC) emissions from a natural gas glycol dehydration unit shall not exceed ten tons per year (tpy) unless the vapors are collected and controlled in accordance with subsection (b)(2) of this section. (6) Any combustion unit (excluding flares, internal combustion engines, or natural gas turbines), with a design maximum heat input greater than 40 million British thermal units (Btu) per hour (using lower heating values) shall not emit more than 0.06 pounds of nitrogen oxides per million Btu. (7) No facility which is less than 500 feet from the nearest off-plant receptor shall be allowed to emit uncontrolled VOC process fugitive emissions equal to or greater than ten tpy, but less than 25 tpy, unless the equipment is inspected and repaired according to subsection (c)(1) of this section. (8) No facility which is 500 feet or more from the nearest off-plant receptor shall be allowed to emit uncontrolled VOC process fugitive emissions equal to or greater than 25 tpy unless the equipment is inspected and repaired according to subsection (c)(1) of this section. (9) No facility which is less than 500 feet from the nearest off-plant receptor shall be allowed to emit uncontrolled VOC process fugitive emissions equal to or greater than 25 tpy unless the equipment is inspected and repaired according to subsection (c)(2) of this section. (10) No facility shall be allowed to emit uncontrolled VOC process fugitive emissions equal to or greater than 40 tpy unless the equipment is inspected and repaired according to subsection (c)(2) of this section. (11) No facility which is located less than 1/4 mile from the nearest off- plant receptor shall be allowed to emit hydrogen sulfide (H [sub]2S) or SO [sub]2 process fugitive emissions unless the equipment is inspected and repaired according to subsection (c)(3) of this section. No facility which is located at least 1/4 mile from the nearest off-plant receptor shall be allowed to emit H [sub]2S or SO [sub]2 process fugitive emissions unless the equipment is inspected and repaired according to subsection (c)(3) of this section or unless the H [sub]2S or SO point=4.52p [sub]2 emissions are monitored with ambient property line monitors according to subsection (e)(1) of this section. Components in sweet crude oil or gas service as defined by Chapter 101 of this title (relating to General Rules) are exempt from these limitations. (12) Flares shall be designed and operated in accordance with 40 Code of Federal Regulations (CFR), Part 60.18 or equivalent standard approved by the commission, including specifications of minimum heating values of waste gas, maximum tip velocity, and pilot flame monitoring. If necessary to ensure adequate combustion, sufficient gas shall be added to make the gases combustible. An infrared monitor is considered equivalent to a thermocouple for flame monitoring purposes. An automatic ignition system may be used in lieu of a continuous pilot. (13) Appropriate documentation shall be submitted to demonstrate that compliance with the Prevention of Significant Deterioration (PSD) and nonattainment new source review provisions of the Federal Clean Air Act, Parts C and D, and regulations promulgated thereunder, are being met. The oil and gas facility shall be required to meet the requirements of Subchapter B of this chapter (relating to New Source Review Permits) instead of this subchapter if a PSD or nonattainment permit is required. (14) Documentation shall be submitted to demonstrate compliance with applicable New Source Performance Standards (NSPS, 40 CFR 60) and National Emission Standards for Hazardous Air Pollution (NESHAP, 40 CFR 61). (15) New and increased emissions shall not cause or contribute to a violation of any National Ambient Air Quality Standard or regulation property line standards as specified in Chapters 111, 112, and 113 of this title (relating to Control of Air Pollution From Visible Emissions and Particulate Matter; Control of Air Pollution From Sulfur Compounds; and Control of Air Pollution From Toxic Materials). Engineering judgment and/or computerized air dispersion modeling may be used in this demonstration. To show compliance with sec.116.610(a)(1) of this title (relating to Applicability) for H [sub]2S emissions from process vents, ten milligrams per cubic meter shall be used as the "L" value instead of the value represented by sec.116.610(a)(1) of this title. (16) Fuel for all combustion units and flare pilots shall be sweet natural gas or liquid petroleum gas, fuel gas containing no more than ten grains of total sulfur per 100 dry standard cubic feet (scdf), or field gas. If field gas contains more than 1.5 grains of H [sub]2S or 30 grains total sulfur compounds per 100 scdf, the operator shall maintain records, including at least quarterly measurements of fuel H [sub]2S and total sulfur content, which demonstrate that the annual SO point=4.52p [sub]2 emissions from the facility do not exceed the limitations listed in the standard permit registration. If a flare is the only combustion unit on a property, the operator shall not be required to maintain such records on flare pilot gas. (b) Control requirements. (1) Floating roofs or equivalent controls shall be required on all new or modified storage tanks, other than pressurized tanks which meet Standard Exemption 83, unless the tank is less than 25,000 gallons in nominal size or the vapor pressure of the compound to be stored in the tank is less than 0.5 pounds per square inch absolute (psia) at maximum short-term storage temperature. (A) For internal floating roofs, mechanical shoe primary seal or liquid- mounted primary seal or a vapor-mounted primary with rim-mounted secondary seal shall be used. (B) Mechanical shoe or liquid-mounted primary seals shall include a rim- mounted secondary seal on all external floating roofs tanks. Vapor-mounted primary seals will not be accepted. (C) All floating roof tanks shall comply with the requirements under sec.115.112(a)(2)(A)-(F) of this title (relating to Control Requirements). (D) In lieu of a floating roof, tank emissions may be routed to: (i) a destruction device such that a minimum VOC destruction efficiency of 98% is achieved; or (ii) a vapor recovery system such that a minimum VOC recovery efficiency of 95% is achieved. (E) Independent of the exemptions listed in this paragraph, if the emissions from any fixed roof tank exceed ten tpy of VOC or ten tpy of sulfur compounds, the tank emissions shall be routed to a destruction device, vapor recovery unit, or equivalent method of control that meets the requirements listed in subparagraph (D) of this paragraph. (2) The VOC emissions from a natural gas glycol dehydration unit shall be controlled as follows. (A) If total uncontrolled VOC emissions are equal to or greater than ten tpy, but less than 50 tpy, a minimum of 80% by weight minimum control efficiency shall be achieved by either operating a condenser and a separator (or flash tank), vapor recovery unit, destruction device, or equivalent control device. (B) If total uncontrolled VOC emissions are equal to or greater than 50 tpy, a minimum of: (i) 98% by weight minimum destruction efficiency shall be achieved by a destruction device or equivalent; or (ii) 95% by weight minimum control efficiency shall be achieved by a vapor recovery system or equivalent. (c) Inspection requirements. (1) Owners or operators who are subject to subsection (a)(7) or (8) of this section shall comply with the following requirements. (A) No component shall be allowed to have a VOC leak for more than 15 days after the leak is detected to exceed a VOC concentration greater than 10, 000 parts per million by volume (ppmv) above background as methane, propane, or hexane, or the dripping or exuding of process fluid based on sight, smell, or sound for all components. The VOC fugitive emission components which contact process fluids where the VOCs have an aggregate partial pressure or vapor pressure of less than 0.5 psia at 100 degrees Fahrenheit are exempt from this requirement. If VOC fugitive emission components are in service where the operating pressure is at least 0.725 pounds per square inch (psi) (five kilopascals (Kpa)) below ambient pressure, then these components are also exempt from this requirement as long as the equipment is identified in a list that is made available upon request by the agency representatives, the United States Environmental Protection Agency (EPA), or any other air pollution agency having jurisdiction. All piping and valves two inches nominal size and smaller, unless subject to federal NSPS requiring a fugitive VOC emissions leak detection and repair program or Chapter 115 of this title (relating to Control of Air Pollution from Volatile Organic Compounds), are also exempt from this requirement. (B) All technically feasible repairs shall be made to repair a VOC leaking process fugitive component within 15 days after the leak is detected. If the repair of a component would require a unit shutdown, the repair may be delayed until the next scheduled shutdown. All leaking components which cannot be repaired until a scheduled shutdown shall be identified for such repair by tagging. The executive director, at his discretion, may require early unit shutdown or other appropriate action based on the number and severity of tagged leaks awaiting shutdown. (C) New and reworked underground process pipelines containing VOCs shall contain no buried valves such that process fugitive emission inspection and repair is rendered impractical. (D) To the extent that good engineering practice will permit, new and reworked valves and piping connections in VOC service shall be so located to be reasonably accessible for leak-checking during plant operation. Valves elevated more than two meters above a support surface will be considered non-accessible and shall be identified in a list to be made available upon request. (E) New and reworked piping connections in VOC service shall be welded or flanged. Screwed connections are permissible only on piping smaller than two- inch diameter. No later than the next scheduled quarterly monitoring after initial installation or replacement, all new or reworked connections shall be gas-tested or hydraulically-tested at no less than normal operating pressure and adjustments made as necessary to obtain leak-free performance. Flanges in VOC service shall be inspected by visual, audible, and/or olfactory means at least weekly by operating personnel walk-through. (F) Each open-ended valve or line in VOC service, other than a valve or line used for safety relief, shall be equipped with a cap, blind flange, plug, or a second valve. Except during sampling, the second valve shall be closed. (G) Accessible valves in VOC service shall be monitored by leak-checking for fugitive emissions at least quarterly using an approved gas analyzer. For valves equipped with rupture discs, a pressure gauge shall be installed between the relief valve and rupture disc to monitor disc integrity. All leaking discs shall be replaced at the earliest opportunity, but no later than the next process shutdown. Sealless/leakless valves (including, but not limited to, welded bonnet bellows and diaphragm valves) and relief valves equipped with a rupture disc or venting to a control device are exempt from monitoring. (H) Dual pump seals with barrier fluid at higher pressure than process pressure, seals degassing to vent control systems kept in good working order, or seals equipped with an automatic seal failure detection and alarm system, submerged pumps, or sealless pumps (including, but not limited to, diaphragm, canned, or magnetic driven pumps) are exempt from monitoring. (I) All other pump and compressor seals emitting VOC shall be monitored with an approved gas analyzer at least quarterly. (J) After completion of the required quarterly inspections for a period of at least two years, the operator of the oil and gas facility may request in writing to the Office of Air Quality, New Source Review Division that the monitoring schedule be revised based on the percent of valves leaking. The percent of valves leaking shall be determined by dividing the sum of valves leaking during current monitoring and valves for which repair has been delayed by the total number of valves subject to the requirements. This request shall include all data that has been developed to justify the following modifications in the monitoring schedule. (i) After two consecutive quarterly leak detection periods with the percent of valves leaking equal to or less than 2.0%, an owner or operator may begin to skip one of the quarterly leak detection periods for the valves in gas/vapor and light liquid service. (ii) After five consecutive quarterly leak detection periods with the percent of valves leaking equal to or less than 2.0%, an owner or operator may begin to skip three of the quarterly leak detection periods for the valves in gas/vapor and light liquid service. (2) Owners or operators who are subject to subsection (a)(9) or (10) of this section shall comply with the following requirements. (A) No component shall be allowed to have a VOC leak for more than 15 days after the leak is found which exceeds a VOC concentration greater than 500 ppmv for all components except pumps and compressors and greater than 2, 000 ppmv for pumps and compressors above background as methane, propane, or hexane, or the dripping or exuding of process fluid based on sight, smell, or sound. The VOC fugitive emission components which contact process fluids where the VOCs have an aggregate partial pressure or vapor pressure of less than 0.044 psia at 100 degrees Fahrenheit are exempt from this requirement. If VOC fugitive emission components are in service where the operating pressure is at least 0.725 psi (five Kpa) below ambient pressure, these components are also exempt from this requirement as long as the equipment is identified in a list that is made available upon request by agency representatives, the EPA, or any air pollution control agency having jurisdiction. All piping and valves two inches nominal size and smaller are also exempt from this requirement. (B) All technically feasible repairs shall be made to repair a VOC leaking process fugitive component within 15 days after the leak is detected. If the repair of a component would require a unit shutdown, the repair may be delayed until the next scheduled shutdown. All leaking components which cannot be repaired until a scheduled shutdown shall be identified for such repair by tagging. The executive director, at his or her discretion, may require early unit shutdown or other appropriate action based on the number and severity of tagged leaks awaiting shutdown. (C) New and reworked underground process pipelines containing VOCs shall contain no buried valves such that process fugitive emission inspection and repair is rendered impractical. (D) To the extent that good engineering practice will permit, new and reworked valves and piping connections in VOC service shall be so located to be reasonably accessible for leak-checking during plant operation. Valves elevated more than two meters above a support surface will be considered non-accessible and shall be identified in a list to be made available upon request. (E) New and reworked piping connections in VOC service shall be welded or flanged. Screwed connections are permissible only on piping smaller than two- inch diameter. No later than the next scheduled quarterly monitoring after initial installation or replacement, all new or reworked connections shall be gas-tested or hydraulically-tested at no less than normal operating pressure and adjustments made as necessary to obtain leak-free performance. Flanges in VOC service shall be inspected by visual, audible, and/or olfactory means at least weekly by operating personnel walk-through. (F) Each open-ended valve or line in VOC service, other than a valve or line used for safety relief, shall be equipped with a cap, blind flange, plug, or a second valve. Except during sampling, the second valve shall be closed. (G) Accessible valves in VOC service shall be monitored by leak-checking for fugitive emissions at least quarterly using an approved gas analyzer. For valves equipped with rupture discs, a pressure gauge shall be installed between the relief valve and rupture disc to monitor disc integrity. All leaking discs shall be replaced at the earliest opportunity, but no later than the next process shutdown. Sealless/leakless valves (including, but not limited to, welded bonnet bellows and diaphragm valves) and relief valves equipped with a rupture disc or venting to a control device are exempt from monitoring. (H) Dual pump seals with barrier fluid at higher pressure than process pressure, seals degassing to vent control systems kept in good working order or seals equipped with an automatic seal failure detection and alarm system, submerged pumps, or sealless pumps (including, but not limited to, diaphragm, canned, or magnetic driven pumps) are exempt from monitoring. (I) All other pump and compressor seals emitting VOC shall be monitored with an approved gas analyzer at least quarterly. (J) After completion of the required quarterly inspections for a period of at least two years, the operator of the oil and gas facility may request in writing to the Office of Air Quality, New Source Review Division that the monitoring schedule be revised based on the percent of valves leaking. The percent of valves leaking shall be determined by dividing the sum of valves leaking during current monitoring and valves for which repair has been delayed by the total number of valves subject to the requirements. This request shall include all data that have been developed to justify the following modifications in the monitoring schedule. (i) After two consecutive quarterly leak detection periods with the percent of valves leaking equal to or less than 2.0%, an owner or operator may begin to skip one of the quarterly leak detection periods for the valves in gas/vapor and light liquid service. (ii) After five consecutive quarterly leak detection periods with the percent of valves leaking equal to or less than 2.0%, an owner or operator may begin to skip three of the quarterly leak detection periods for the valves in gas/vapor and light liquid service. (K) A directed maintenance program shall be used and consist of the repair and maintenance of VOC fugitive emission components assisted simultaneously by the use of an approved gas analyzer such that a minimum concentration of leaking VOC is obtained for each component being maintained. Replaced components shall be remonitored within 30 days of being placed back into VOC service. (3) For owners and operators who are subject to the applicable parts of subsection (a)(11) of this section, auditory and visual checks for SO [sub]2 and H [sub]2S leaks within the operating area shall be made every day. Immediately, but no later than eight hours upon detection of a leak, operating personnel shall take the following actions: (A) isolate the leak; and (B) commence repair or replacement of the leaking component; or (C) use a leak collection/containment system to prevent the leak until repair or replacement can be made if immediate repair is not possible. (d) Approved test methods. (1) An approved gas analyzer used for the VOC fugitive inspection and repair requirement in subsection (c) of this section, shall conform to requirements listed in 40 CFR 60.485(a) and (b). (2) Tutweiler analysis or equivalent shall be used to determine the H2S content as required under subsections (a) and (e) of this section. (3) Proper operation of any condenser used as a VOC emissions control device to comply with subsection (a)(5) of this section shall be tested to demonstrate compliance with the minimum control efficiency. Sampling shall occur within 60 days after start-up of new or modified facilities. The permittee shall contact the Engineering Services Section, Air Quality Enforcement Division 45 days prior to sampling for approval of sampling protocol. The appropriate regional office in the region where the source is located shall also be contacted 45 days prior to sampling to provide them the opportunity to view the sampling. Neither the regional office nor the Engineering Services Section, Air Quality Enforcement Division personnel are required to view the testing. Sampling reports which comply with the provisions of the "TNRCC Sampling Procedures Manual," Chapter 14 ("Contents of Sampling Reports," dated January 1983 and revised July 1985), shall be distributed to the appropriate regional office, any local programs, and the Engineering Services Section, Air Quality Enforcement Division. (e) Monitoring and recordkeeping requirements. (1) If the operator elects to install and maintain ambient H [sub]2S property line monitors to comply with subsection (a)(11) of this section, the monitors shall be approved by the Engineering Services Section, Air Quality Enforcement Division office in Austin, and shall be capable of detecting and alarming at H [sub]2S concentrations of ten ppmv. Operations personnel shall perform an initial on-site inspection of the facility within 24 hours of initial alarm and take corrective actions as listed in subsection (c)(3)(A)-(C) of this section within eight hours of detection of a leak. (2) The results of the VOC leak detection and repair requirements shall be made available to the executive director, his or her designated representative, or any air pollution control agency having jurisdiction upon request. Records, for all components, shall include: (A) appropriate dates; (B) test methods; (C) instrument readings; (D) repair results; and (E) corrective actions. Records of flange inspections are not required unless a leak is detected. (3) Records for repairs and replacements made due to inspections of H [sub]2S and SO [sub]2 components shall be maintained. (4) Records shall be kept for each production, processing, and pipeline tank battery or for each storage tank if not located at a tank battery, on a monthly basis, as follows: (A) tank battery identification or storage tank identification, if not located at a tank battery; (B) compound stored; (C) monthly throughput in barrels/month; and (D) cumulative annual throughput, barrels/year. (5) A plan shall be submitted to show how ongoing compliance will be demonstrated for the efficiency requirements listed in subsection (b)(1)(D) of this section. The demonstration may include, but is not limited to, monitoring flowrates, temperatures, or other operating parameters. (6) Records shall be kept on at least a monthly basis of all production facility flow rates (in standard cubic feet per day) and total sulfur content of process vents or flares or gas processing streams. Total sulfur shall be calculated in long tons per day. (7) Records shall be kept of all ambient property line monitor alarms and shall include the date, time, duration, and cause of alarm, date and time of initial on-site inspection, and date and time of corrective actions taken. (8) All required records shall be made available to representatives of the agency, the EPA, or local air pollution control agencies upon request and be kept for at least two years. All required records shall be kept at the plant site, unless the plant site is unmanned during business hours. For plant sites ordinarily unmanned during business hours, the records shall be maintained at the nearest office in the state having day-to-day operations control of the plant site. sec.116.621. Municipal Solid Waste Landfills. A person may claim a standard permit for the construction or modification to a municipal solid waste landfill (MSWLF) or municipal solid waste facility (MSW facility) as defined in sec.101.1 of this title (relating to Definitions), including, but not limited to, Type I, Type 1-AE, Type II, Type III, Type IV, Type IV-AE, Type VI, and Type IX sites as defined in sec.330.41 of this title (relating to Types of Municipal Solid Waste Sites). (1) An MSWLF and associated waste acceptance and handling facilities which comply with sec.116.610 of this title (relating to Applicability), except sec.116.610(a)(1) of this title; sec.116.611 of this title (relating to Registration Requirements); sec.116.614 of this title (relating to Standard Permit Fees); and sec.116.615 of this title (relating to General Conditions) qualify for a standard permit. (2) Separate permit authorization under Subchapter B of this chapter (relating to New Source Review Permits) must be obtained for the following: (A) industrial solid waste solidification/stabilization facilities; (B) outdoor burning; (C) waste incineration other than that used to control landfill gas emissions; (D) landfill cells in which any regulated quantities of hazardous waste will be placed; (E) MSWLF and MSW facilities with passive collection systems as defined in 40 Code of Federal Regulations (CFR), sec.60.751; and (F) any project which constitutes a new major source, or major modification under the new source review requirements of the Federal Clean Air Act, Part C (Prevention of Significant Deterioration review) or Part D (nonattainment review) and regulations promulgated thereunder shall be subject to the requirements of sec.116.110 of this title (relating to Applicability) rather than this subchapter. (3) Registration shall include, in addition to the information required by sec.116.611 of this title, an initial design capacity report in accordance with 40 CFR, sec.60.757(a)(2). (4) The permit holder shall comply with the air emissions standards as specified in 40 CFR Part 60, Subpart WWW, with the following additions and changes. (A) The gas collection and control system (GCCS) shall conform with specifications for active collection systems as specified in 40 CFR, sec.60.759. (B) The GCCS shall be designed to control nonmethane organic compounds (NMOC) gas emissions in one or more of the following ways by routing the total collected gas to: (i) an open flare with a minimum height of 30 feet and which satisfies all of the requirements of sec.116.211 of this title (relating to Standard Exemption List), Standard Exemption Number 80, except that registration using Form P1-7 or P1-8 shall not be required; (ii) a control device (such as an enclosed flare) with a minimum vent release height of 30 feet and which reduces the total collected NMOC gas emissions by 98%, or to less than 20 parts per million by volume (ppmv), as hexane; (iii) a gas treatment system that processes the collected gas for subsequent use or sale. The sum of all emissions from any atmospheric vent from the gas treatment system shall be subject to the requirements of clause (ii) of this subparagraph; (iv) gas or liquid fuel-fired stationary internal combustion reciprocating engines or gas turbines that satisfy all of the requirements of sec.116.211 of this title, Standard Exemption Number 6, except that registration using Form PI- 7 or PI-8 shall not be required; or (v) boilers, heaters, or other combustion units, but not including stationary internal combustion engines or turbines, that satisfy all of the requirements of sec.116.211 of this title, Standard Exemption Number 7. (C) The active GCCS may be capped or removed only if, in addition to the requirements listed in 40 CFR, sec.60.752(b)(2)(v), the MSWLF is permanently closed pursuant to sec.sec.330.250-330.256 of this title (relating to Closure and Post-closure). (5) MSWLF owners and operators shall monitor and control particulate matter as follows. (A) All material handling and transport operations shall be conducted in a manner so as to minimize any fugitive particulate matter emissions. (B) Roads and other areas subject to vehicle traffic shall be paved and cleaned, watered, or treated with dust-suppressant chemicals as necessary to control particulate matter emissions. (C) During excavation, MSWLF cells shall be watered or treated with dust- suppressant chemicals as necessary to control particulate matter emissions. (6) High volume air sampling for net ground level concentrations of total particulate matter shall be performed upon request of the executive director or a designated representative. Each test shall consist of at least one upwind and one downwind sample taken simultaneously. The tests shall be performed during normal operations. A monitoring plan for high volume sampling shall be developed in accordance with the Office of Air Quality Management Plan, Appendix I (United States Environmental Protection Agency (EPA) Requirements for Quality Assurance Project Plans, dated February 1995) and the "TNRCC Sampling Procedures Manual," Chapter 11 ("Particulate Matter," dated January 1983 and revised July 1985), and shall require approval by the executive director or a designated representative prior to sampling. The executive director or a designated representative shall be afforded the opportunity to observe all such sampling equipment, operations, and records upon request. (7) GCCS components (compressor seals, pipeline valves, pressure relief valves in gaseous service, flanges, and pump seals) at an MSWLF or MSW facility, where the total of all estimated uncontrolled fugitive emissions from all components is greater than ten tons per year, shall be inspected and maintained pursuant to the requirements of sec.116.620(c)(1)(A)-(J) of this title (relating to Installation and/or Modification of Oil and Gas Facilities), with the following changes and additions. (A) Instead of the definition in sec.116.620(c)(1)(A) of this title, a leak shall be defined as the escape of gas with a total organic compound concentration greater than or equal to 10,000 ppmv above background as methane; or the dripping or exuding of process fluid based on sight, smell, or sound. (B) In sec.116.620(c)(1)(C) of this title, new and reworked underground pipelines containing NMOC that are located within the gas collection area and are in continuous vacuum service may contain buried valves. (C) In sec.116.620(c)(1)(E) of this title, high density polyethylene pipe connections may be fused or flanged. (D) In addition to those components exempted in sec.116.620(c)(1)(A)-(J) of this title, the following additional components are exempt from the maintenance and inspection protocols: (i) components which are in a continuous vacuum service; (ii) valves which are not externally regulated, such as in-line check valves; (iii) pressure relief valves which are downstream of an intact rupture disc; and (iv) reciprocating compressors which are equipped with degassing vents and vent control systems. (E) Alternate methods of fugitive monitoring may be used, subject to the approval of the executive director. (8) The owner or operator of each MSWLF unit shall maintain complete and up- to-date records sufficient to readily determine continuous compliance with the requirements of this section for the previous five years of operation. All the records shall be maintained in an operating record in accordance with sec.330.113(b)(11) of this title (relating to Recordkeeping Requirements). The records shall be available for review upon request by representatives or any local air pollution agency having jurisdiction. The following recordkeeping requirements shall apply, in addition to those specified in 40 CFR 60, Subpart WWW. (A) Permit holders who are subject to a standard exemption specified in paragraph (4) of this section shall maintain any records specified in the exemption. (B) Permit holders who are subject to paragraph (7) of this section shall maintain a leaking-components log in accordance with sec.116.620(e)(2) of this title. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on March 27, 1996. TRD-9604377 Kevin McCalla Director, Legal Services Division Texas Natural Resource Conservation Commission Effective date: April 19, 1996 Proposal publication date: October 6, 1995 For further information, please call: (512) 239-1966 Chapter 120. Control of Air Pollution From Hazardous Waste or Solid Waste Management Facilities Subchapter B. Pollution Prevention Requirements: Source Reduction and Waste Minimization 30 TAC sec.sec.120.101-120.103, 120.105-120.110 The Texas Natural Resource Conservation Commission (TNRCC) adopts the repeal of sec.sec.120.101-120.103 and sec. sec.120.105-120.110, concerning Definitions, Pollutants and Contaminants, Applicability, Source Reduction and Waste Minimization Plans, Reporting and Recordkeeping Requirements, Exemptions, Enforcement, Compliance Schedules, and Confidentiality, without changes to the proposed text as published in the January 2, 1996, issue of the Texas Register (21 TexReg 21). The repeals are part of a rules revision project to identify TNRCC rules and regulations which need clarification for the benefit of the public, appear to be outdated, seem to impose regulatory requirements in excess of their contribution to the commission's mission, or are duplicated, unnecessary, or inconsistent. In this case, the repealed rules are duplicated in 30 TAC Chapter 335, Subchapter Q, concerning Industrial Solid Waste and Municipal Hazardous Waste. 30 TAC Chapter 120, Subchapter B, and 30 TAC Chapter 335, Subchapter Q, were developed to satisfy requirements of Senate Bill 1099, referred to as the Waste Reduction Policy Act of 1991, passed by the 72nd Texas State Legislature. 30 TAC Chapter 120, Subchapter B, became redundant when the Texas Air Control Board and the Texas Water Commission merged to form the TNRCC on September 1, 1993. A public hearing was held January 23, 1996 in Austin. The public comment period closed February 2, 1996. One commenter submitted testimony regarding sec.sec.120.101-120.103 and 120. 105-120.110. Texas Utilities Services, Inc. (TU) supported the proposed repeals, noting that they will eliminate duplication of existing regulations contained in 30 TAC Chapter 335, Subchapter Q. TU believes that the repeals will reduce potential confusion in the regulated community and supports the agency's efforts to streamline existing regulations where possible. No comments were received from persons who opposed the proposed changes. The repeals are adopted under Texas Health and Safety Code, Texas Clean Air Act (TCAA), sec.382.017, which provides the TNRCC the authority to adopt rules consistent with the policy and purposes of the TCAA. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on March 27, 1996. TRD-9604378 Kevin McCalla Director, Legal Services Division Texas Natural Resource Conservation Commission Effective date: April 19, 1996 Proposal publication date: January 2, 1996 For further information, please call: (512) 239-1966 Chapter 333. Voluntary Cleanup Programs Subchapter A. Voluntary Cleanup Program Section 30 TAC sec.sec.333.1-333.11 The Texas Natural Resource Conservation Commission (TNRCC, commission, or agency) adopts new sec.sec.333.1-333.11, concerning the voluntary cleanup program (VCP). Sections 333.1-333.11 are adopted with changes to the proposed text as published in the November 7, 1995, issue of the Texas Register (20 TexReg 9255). The statutory basis for the proposed rules is found in House Bill (HB) 2296, 74th Legislature, (the statute) which establishes the existence of a Voluntary Cleanup Program in Subchapter S of the Solid Waste Disposal Act (SWDA), Chapter 361, Health and Safety Code. The commission is developing a guidance document for the VCP concurrent with the development of the VCP rules. Subchapter S and the new rules will be included as attachments to the guidance document. The commission has prepared a Takings Impact Assessment for these rules pursuant to Texas Government Code Annotated, sec.2007.043. The following is a summary of that Assessment. The specific purpose of the rule is to implement House Bill (HB) 2296, 74th Legislature, which created the voluntary cleanup program. The VCP was primarily created to provide incentives to encourage the cleanup of thousands of contaminated sites in Texas which require remedial actions in order to complete real estate transactions. The VCP rules will substantially advance this specific purpose by establishing rules where required by statute, clarifying statutory provisions, and providing flexibility in order to promote the redevelopment of contaminated sites. Promulgation and enforcement of these rules could affect private real property which is the subject of the rules. However, the following exceptions to the application of the Texas Government Code, Chapter 2007 listed in Texas Government Code, sec.2007.003(b) apply to these rules: the action is taken in response to a real and substantial threat to public health and safety; the action significantly advances the health and safety purpose; and the action imposes no greater burden than is necessary. Sites to be addressed by the VCP represent a real and substantial threat to public health and safety through contaminated soil, groundwater, surface water, and air. Humans may be exposed to these contaminants through many different pathways such as ingestion, dermal contact, and inhalation. The health and safety purpose is significantly advanced because the VCP will promote the expeditious remediation of many contaminated sites in Texas. The rules do not present a greater burden than is necessary to promote the expeditious remediation of contaminated sites because the rules utilize agency risk-based regulatory programs which provide the necessary degree of investigation and remediation while being protective of human health and safety. The commission accepted public comment on the proposed rules for 30 days following publication on November 7, 1995. A public hearing to accept verbal and written comment on the proposed rule was held at commission offices in Austin, Texas on December 5, 1995. The City of Houston provided oral comment at the public hearing. Written comments were received from the following: Brown McCarroll & Oaks Hartline (Brown McCarroll); Colonial Pipeline Company (Colonial); Cook-Joyce, Inc. (Cook-Joyce); Exxon Chemical Company (Exxon Chemical); City of Houston (COH); Jenkins & Gilchrist; Lloyd, Gosselink, Fowler, Blevins & Mathews, P.C. (Lloyd, Gosselink) on behalf of The Sabine Mining Co., City of Waco, City of Garland, Maxim Technologies, Inc., and Cook-Joyce, Inc.; Locke Purnell Rain Harrell (Locke Purnell) on behalf of itself and JPI Texas Development, Inc.; Railroad Commission of Texas (RRC); Texas Chemical Council (TCC); Texas General Land Office (GLO); Texas Utilities Services, Inc. (TU); the University of Texas System (UT); and Roy F. Weston, Inc (Weston). In the proposal, the commission defined the term "person" and utilized the term "Texas Natural Resource Conservation" in the rule. The agency is currently attempting to streamline agency rules. Toward that end, definitions of terms that are common across all agency programs are being consolidated into one new chapter, proposed 30 TAC Chapter 3. Chapter 3 is expected to be effective in May, 1996. "Person" is a term that will appear in new Chapter 3; therefore, it is not necessary to define that term in these rules. It does not appear in the final rule. In addition, the commission is attempting to more appropriately utilize the terms "commission" and "agency" while ceasing to use "TNRCC" or "Texas Natural Resource Conservation Commission" in its rules. In line with the philosophy, "Texas Natural Resource Conservation Commission" has been replaced with "commission" in the definition of "site subject to a commission permit or order." The commission received a number of general comments. TU expressed general support for the voluntary cleanup program, believing it will provide incentives for cleanup of contaminated sites by streamlining the cleanup process and providing important assurance regarding environmental liability for future owners. The commission received requests from TCC to incorporate the statutory requirements found in HB 2296 in order to make the requirements of the VCP more accessible. These comments were submitted as general comments and comments specific to proposed sec.sec.333.2-333.7, and sec.333.10. The commission responds that Texas Register guidance does not consider the adoption of statutes to be acceptable rulemaking, and therefore the commission believes it appropriate to keep the statute and the rule separate. As noted earlier the VCP Guidance Document will include copies of both the rule and the statute. This should alleviate concerns that separating the two creates confusion. GLO requested that any documents subject to the Texas Open Records Act be made easily available upon request for public review. The commission responds that a standard procedure exists for responding to Texas Open Records Act requests. All documents submitted to the VCP are subject to the Texas Open Records Act and will be easily accessible. The commission has added the following language to the proposed sec.333.1 of the VCP rule to ensure that adequate copies are available: "(b) the applicant shall submit two copies of all documents, one of which the Voluntary Cleanup Program will file in the agency central records." The original proposed language in sec.333.1 is located in sec.333.1(a) in the final rule. In this regard, certain applicants must also notify the agency regional office of activity on a site. Persons entering the VCP and utilizing the Risk Reduction Rules must notify the appropriate agency Regional Office as required by sec.335.8(c) of 30 TAC Chapter 335. Cook-Joyce and Lloyd, Gosselink suggested the establishment of a certification program similar to the Petroleum Storage Tank (PST) certification program for persons preparing the applications, workplans and remedial actions. The purpose of such a program would be to ensure quality control of materials submitted and work performed under the VCP and the Risk Reduction Rules found in 30 TAC Chapter 335, relating to Industrial Solid Waste and Municipal Hazardous Waste. The commission notes that the VCP will require applicants to meet PST requirements for certification of persons preparing PST work plans and reports. To remain consistent with other remediation programs using the Risk Reduction Rules, the VCP will not require certification of persons preparing work plans and reports under the Risk Reduction Rules; however, a certification program for environmental professionals may be considered in the future. UT requested the addition of an applicability section to establish eligibility for the VCP to address how liability protection will be afforded to various categories of applicants, assignment of a voluntary cleanup agreement, liability protection for a subsequent buyer while remediation is ongoing, and when liability protection is effective for the original owner and the buyer. The commission responds that eligibility for entering the VCP is defined by statute. Two categories of applicants are of particular importance, Responsible Parties (RPs) and non-RPs. RPs are not eligible for receiving a liability release as defined by statute. Non-RPs are eligible, but the date of the release depends on their actions. The commission would not allow assignment of a VCP agreement due to the statutory provision that applicants must submit an application and an application fee. Section 361.610(a) of the statute differentiates between applicants and future owners and lenders. Specifically, it states that an applicant "at the time the person applies to perform a voluntary cleanup is released, on certification under sec.361.609...". The commission interprets this language to allow an effective release date for applicants to be the date of application. However, concerning future owners and lenders, sec.361.610(c) of the statute states "an owner who acquires the property on which the site is located or a lender who makes a loan secured by the property after the date of issuance of the certificate is released from all liability for cleanup of contamination released before the date of the certificate." The commission believes that this language is clear that the effective date of release for these persons is the date of the certificate of completion. However, those non- RPs who are not original applicants and who wish to gain liability release prior to the certificate of completion must file a new application, pay the fee, and sign an agreement. This can occur even if there is a prior agreement on file. Thus for example, the VCP may accept an application and fee from a prospective purchaser who is not an RP at the time of their application prior to completion of remediation who will then receive a release of liability beginning at the date of their application upon issuance of the certificate of completion. The original owner is only able to receive the liability protection when they are not an RP; the same is true of a buyer. Lloyd, Gosselink requested clarification on whether and to what extent compliance with the Texas VCP will satisfy the investigation and notice requirements mandated by the National Contingency Plan (NCP) for parties seeking contribution under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Parties may satisfy the requirements of the NCP under the VCP; however, the VCP may not require several actions required under the NCP (e.g. public participation, remedy selection, notification requirements) to preserve cost recovery. It will be the responsibility of parties wishing to preserve future cost recovery to ensure that NCP requirements are met under the terms of the VCP agreement. Lloyd, Gosselink also supports agency's pursuit of an agreement with the Environmental Protection Agency (EPA) for every certificate of completion in order to prevent federal enforcement action. The commission responds that the VCP is attempting to gain the maximum assurances from EPA with respect to their endorsement of the Texas VCP. Negotiations are ongoing with EPA Region VI to develop a memorandum of agreement (MOA) which describes a partnership with EPA to accomplish the goal of promoting response actions through the VCP. A key point of the draft MOA states that if a certificate of completion is issued for a site, Region VI will not plan or anticipate any federal action under CERCLA unless Region VI determines the site poses an imminent and substantial endangerment or emergency situation. Also, EPA will suspend further action or take no action at sites being investigated or remediated under the VCP. Lloyd, Gosselink commented that not all responsible persons should be excluded from the release of liability. The rules should only require that to be excluded from the protections afforded by a certificate of completion, the contamination caused by the RP must constitute an imminent and substantial endangerment. The commission notes that the VCP rule does not include any language regarding persons released from liability. All criteria concerning liability release are stated by statute. The VCP statute does not speak to the issue of imminent and substantial endangerment; therefore, the commission is not addressing this issue. It only references the Health and Safety Code, sec.361.271 and sec.361.275(g), which discuss RP status. Lloyd, Gosselink also believes that the TNRCC has the authority to delineate situations in which lenders will be exempted from site liability if they are financing VCP activities, and further believes the agency should address in guidance when lender activities and financing of cleanups may expose them as responsible persons. Persons released from liability are defined under of the Texas Health and Safety Code, Chapter 361. Unlike the Federal Superfund Statute (CERCLA), there is no secured creditor exemption in the Texas Health and Safety Code. However, lenders have other legal protection possibilities under the VCP statute. If the lender is concerned about liability due to a loan to a responsible party prior to a cleanup, the lender should become an applicant. The lender can then gain liability protection by becoming an applicant as contemplated in the statute. It should be noted that if the response actions are not completed, the lender may become a responsible party depending on their activities related to the site. If the response actions are successfully completed, the lender gains the liability release from the lender's application date once a certificate of completion is issued. Lenders who make a loan after a certificate of completion is issued automatically receive liability protection under the statute, after the date of issuance. Lloyd, Gosselink requested a clarification of the relationship among the Texas Environmental, Health, and Safety Audit Privilege Act (Texas House Bill 2473, 74th Legislature Regular Session (1995)) (the audit bill ), the proposed Spill Rules (30 TAC sec.327.1-327.5) and the VCP. The audit bill has an exclusion for documents required by law to be submitted to the commission. The VCP statute sets out the documentation required to be submitted to that program; therefore, those documents are not privileged when submitted for that program. Concerning the proposed spill rules, there is nothing in either the VCP rules or the spill rules which would preclude a spill cleanup from entering the VCP, once the emergency response to the spill has been completed according to the applicable rules. Lloyd, Gosselink also requested that the commission create an internal policy stating that staff members will minimize costs as much as possible and provide free technical assistance to VCP applicants whenever requested. The commission believes the statute prevents VCP staff from reviewing plans and reports submitted to the VCP until the agreement is signed. In addition, sec.361.603(b)(2) of the statute states that a person participating in the VCP must pay all costs for commission oversight. VCP staff typically provide pre- application assistance through discussions regarding the VCP guidance documents. Staff will provide effective and efficient review of all submittals. Lloyd, Gosselink requested clarification in the preamble on whether facilities not having a permit for their activities but participating in closure actions, which do not do so under enforcement action or order, are eligible for the VCP. Brown McCarroll requested clarification as to when a Resource Conservation and Recovery Act (RCRA) permitted facility can participate in the VCP. Both commenters believe that interim status hazardous waste facilities at the time interim status is acknowledged by the commission should be allowed into the VCP. This comment regarding interim status was made as a general comment as well as a comment specifically targeting certain sections in the proposed rule. Their concern is that the commission is being more restrictive than statutory authority by including interim status facilities in the definition of the phrase "subject to a permit." The agency wishes to clarify its position that interim status facilities do, in fact, meet that definition and are therefore excluded from the VCP. Interim status is a federal regulatory classification. As cited in sec.3005(a) and (e) of RCRA (Permit requirements for Hazardous Waste Management (HWM) facilities) and 40 CFR Parts 265.1 and 270, owners and operators of existing hazardous waste management facilities or of hazardous waste management facilities in existence on the effective date of statutory or regulatory amendments under the act render the facility subject to the requirement to have a RCRA permit. Facility owners and operators with interim status are treated as having been issued a permit (40 CFR Part 270) until either a permit is issued under 3005 of RCRA or until applicable Part 265 closure and post-closure responsibilities are fulfilled. Owners and operators of such facilities are eligible for interim status on an ongoing basis if the facility is in existence on the effective date of any regulatory changes under RCRA which cause the facility to be subject to RCRA Subtitle C regulation. In addition, RCRA authorization prohibits the state from being less stringent than federal regulation. Because interim status facilities fall under federal definition and regulation, such a facility cannot be allowed to use less stringent state regulations to be relieved of federal regulatory requirements. The commission understands the commenter's interpretation that the phrase "subject to permit" could be interpreted to mean a permit has been issued; however, the commission defines the phrase to include interim status facilities because existing federal regulatory requirements in RCRA, sec.3005 (a) and (e) state that such facilities "are required to have a permit" ... and "shall be treated as having been issued such permit". The intent of the VCP statute is that some RCRA regulated facilities, including interim status facilities, are subject to a permit and other applicable federal regulatory requirements and should be omitted from the VCP; RCRA federal requirements must take precedence over state authorized cleanup programs. Concerning sec.333.1, the commission received one comment. The RRC would like the section amended to clarify the jurisdiction of the Railroad Commission of Texas over certain cleanups. The commission responds that jurisdiction is already clarified by statute, specifically SWDA, sec.361.601(3), and the Texas Water Code, sec.26.131; therefore, the commission does not believe it is necessary to amend the rules. However, persons wishing to enter the VCP should note that Chapter 333 does not apply to the cleanup or removal of any waste, pollutant, or substance regulated by or that results from exploration, development, and production of oil or gas or geothermal resources under the jurisdiction of the Railroad Commission. The commission received several comments regarding the proposed definitions in sec.333.2. Concerning "Initiate an enforcement action," Jenkins & Gilchrist requested that the definition be limited to instances where the executive director's Preliminary Enforcement Report has been issued, believing the Notice of Violation (NOV) stage is too early because the violation is only alleged, and no findings of violation have been made. The commission believes the commenter has confused the term "Initiate an enforcement action" with "Pending enforcement action". "Initiate an enforcement action" under the VCP rule provides clarification of the types of actions which the State is prevented from initiating while a party is complying with the terms of the Voluntary Cleanup (VC) agreement. On the other hand if there is a "Pending enforcement action" and the executive director, for example, finds that it is in the best interest of the agency or it will promote the effective use of agency resources or it will expedite a cleanup, the executive director may, but is not required to, allow applicants to enter the voluntary cleanup program. It should be noted that by the time an NOV has been issued, a great deal of agency effort has been expended. To begin again in the VCP would possibly be a significant duplication of effort. For this reason, the commission believes that this is the appropriate point in time to allow the executive director to determine the appropriate program to handle the cleanup. Specifically, regarding "Pending enforcement action," Brown McCarroll, Lloyd, Gosselink, and Jenkins & Gilchrist requested clarification that cleanups are ineligible for the VCP due to enforcement orders or pending orders only to the extent that such orders actually address the remediations at issue. The commission agrees, and the definition now reads "Concerning the remediation of the hazardous substance or contaminant described in the application, a notice of violation has been issued and further administrative, state, or federal enforcement action is under evaluation or an enforcement action is required by federal grant, or the State has incurred unreimbursed costs under the Texas Health and Safety Code, Chapter 361, Subchapter F." Regarding the definition of "Exposure Assessment Model," TCC requested that probabilistic models be included in the definition. The commission intends for persons to develop a conceptual model of the site based on site-specific exposures, and considers the term "conceptual model" in the current definition to be sufficiently broad to allow the agency to accept any valid model. GLO requested clarification of the term "reasonably anticipated" in the definition. The VCP guidance documents will provide further clarification how "reasonably anticipated" is used in the VCP. Although no comments were received concerning "Partial response action," the commission believes that the proposed definition can be clarified by adding the statement, "if any" and replacing "site" with "partial response action area" in the definition so that it now reads, "A response action which is limited to an areal portion of the site and off-site areas, if any, contaminated due to releases which have migrated from the partial response action area onto property owned or controlled by others, inclusive of all media." Lloyd, Gosselink suggested the definition of "Site" should address portions of site. The commission responds that the statute separately addresses the terms "site" and "portion of a site;" therefore, they should not be combined in the rule. Consistent with general comments on the issue of interim status hazardous waste facilities, Lloyd, Gosselink commented that the definition of "Site subject to a commission permit or order" is overly restrictive given the statutory language of HB 2296, and interim status hazardous waste facilities should be allowed to enter into the VCP. The commission disagrees with this comment based upon the reasons elaborated earlier in the preamble; however, the language in the definition has been modified to alleviate confusion. The proposal stated that "these also include interim status hazardous waste facilities, at the time interim status is granted." The final rule states, "these also include hazardous waste facilities, which are operating under interim status." Section 333.3 contains the stated purpose of the VCP rules. Several comments were received addressing this section. Lloyd, Gosselink and Weston requested that the rule be amended to state that the purpose also is intended to provide a timely and efficient process. The commission agrees and the language has been changed by adding the following language to the end of the section, ". . . and to provide a process by which voluntary response actions can be completed in a timely and efficient manner". The GLO commented that the VCP does not remove liability for injuries to natural resources by an unauthorized release of hazardous substances or discharge of petroleum under federal law. UT wanted clarification that the release of liability is only from the State and not from the federal government. The commission emphasizes that the statute only releases liability to the State under State law for cleanup of sites and does not affect federal liabilities. Release of liability by the State does not apply to natural resource damage or restoration under federal law. Finally, UT requested clarification as to whether the program removes liability of only future lenders or all lenders. The commission responds that future lenders who are not RPs will be released from liability, as set out in the statute. Also, lenders who are not RPs and are applicants will be released from liability upon issuance of the certificate of completion (see earlier discussion). Section 333.4 concerns the application to participate in the VCP. Exxon Chemical suggested including a provision to allow the applicant the right to withdraw an application and cancel an agreement at any time during the review process. The commission does not believe such a change is necessary. The right to withdraw an application is discussed in the Texas Health and Safety Code, sec.361.606. If the applicant withdraws from the program, all commission costs incurred or obligated before notification of termination must be paid. Termination of an agreement is discussed in the Texas Health and Safety Code, sec.361.607. Regarding the 45-day time limit for acceptance or rejection of the application, the commission received two comments. GLO requested that the time period to accept or reject an application should be longer, because 45 days is not adequate to coordinate with other agencies if necessary. UT wanted clarification on what happens if the agency does not respond in 45 days. The commission is statutorily obligated under the Texas Health and Safety Code, sec.361.605 to notify an applicant if the application is rejected, within 45 days after application submittal. The management of the agency will oversee the timeliness of staff review. In addition, a Writ of Mandamus is available to force the agency to comply with the statutory deadlines. Lloyd, Gosselink stated that the TNRCC should not initiate enforcement actions during the pendency of the review of VCP applications or immediately following rejection of an application. According to Lloyd, Gosselink's comment, the rule should also recognize that privileged information under the Texas Environmental, Health, and Safety Audit Privilege Act remains protected under the VCP, and the entity does not lose the benefits of any applicable immunities. The commission agrees with the first part of the comment. The section is amended by adding language that the agency shall not initiate enforcement action on a VCP applicant during the pendency of the agency review of an application. The commission does not agree to restrict itself after rejection of an application since there may be circumstances such as fraud where immediate enforcement action is appropriate. For the reasons stated earlier in this preamble, the commission does not believe the audit bill protects those documents required by statute to be submitted to the VCP for the contamination or release that is the subject of the Voluntary Cleanup Agreement. Section 333.5 sets forth standards for rejecting an application. UT wanted clarification that the executive director may reject the application for only the two stated reasons identified in the proposed rule. The commission disagrees noting that sec.361.605 of the statute details other reasons for the executive director to reject an application. GLO believes an ongoing natural resource damage assessment (NRDA) or pre-assessment (PA) should be cause for rejecting an application because an ongoing assessment would indicate that significant natural resource injury has occurred or is suspected to have occurred. The commission notes that acceptance into the VCP does not preclude NRDA or PA actions from proceeding or being initiated since the VCP statute only prevents the commission from initiating enforcement action. It does not prohibit actions by other state agencies or actions pursuant to federal law. Therefore, the VCP will not reject applications based upon these reasons. The VCP will utilize the applicable rules and guidance to ensure that natural resources are adequately protected. Concerning sec.333.5(1), TCC requested its removal because the paragraph is vague, and sec.361.603 and sec.361.605, the SWDA, and sec.333.5(2) are adequate. The commission agrees and the paragraph is not included in the final rule. Lloyd, Gosselink recommended any changes to the definition of "Pending enforcement action" and "Site" should be incorporated into this paragraph. The paragraph has been removed, and there is no need to make corresponding changes. Weston requested clarification of the term "Under enforcement." According to the commenter, a property owner may be under enforcement without realizing it because there has been no response from the commission for an extended period of time. Weston further suggested setting up a single "hot line" so that someone may determine if they are under enforcement in any agency program. The commission responds that the term "under enforcement" is not used in the rule. However, "pending enforcement action" is defined in sec.333.2, and the commission has clarified in this preamble what is meant by the term. Persons may contact the Litigation Support Division to inquire whether or not their site is on the agency's enforcement log. The commission received two comments regarding sec.333.5(2). UT wanted to know when all costs are recoverable and when payment must be made to the fund. The commission responds that payment must be made to the fund prior to acceptance of a VCP application. Lloyd, Gosselink suggested elimination of this paragraph as an option for rejecting an application, because it believes the agency's authority under HB 2296 to assess costs retroactively is questionable. The commission disagrees and is retaining proposed paragraph (2) as an option for rejecting a VCP application. The commission further disagrees that it cannot collect past costs, believing that the SWDA provides that authority. Cost recovery is authorized in Health and Safety Code, Chapter 361, Subchapter F. If its costs are not reimbursed voluntarily, the commission would seek to enforce an order compelling reimbursement; therefore, the commission considers that enforcement is "pending." However, the commission is amending the definition of "Pending enforcement action" to clarify its authority to reject an application for failure to pay such costs. The commission retains paragraph (2) as proposed; however, the removal of proposed paragraph (1) eliminates the necessity of a paragraph number. Section 333.6 concerns the voluntary cleanup agreement. Colonial recommended that a cost schedule be developed to assist the responsible parties in identifying and estimating their potential project costs. In response, the agency can provide rough estimates of its oversight costs on a case-by-case basis per request from the applicant. Factors which may affect these costs include the complexity of the site and the quality and quantity of the work submitted to the VCP. Another comment suggested adding language requiring the agency to complete its technical review of workplans or reports submitted under a voluntary cleanup agreement within 45 days. Colonial suggested that within the 45-day period, the agency must approve the work plan/report, approve portions of the work plan/report, or disapprove the work plan/report. If the work plan/report is approved in whole or in part the applicant can move forward and undertake actions approved. If disapproved, the applicant has 45 days to revise the work plan/report. The commission responds that staff will make every attempt to review a submittal within 45 days, but it does not believe adopting a specific time frame as a rule is appropriate. The VCP must balance the work load and the number of staff in order to provide the most efficient review time and the lowest oversight cost. Specifically regarding sec.333.6(a), the commission received two comments. UT recommended changing the term "both parties" to "TNRCC and the applicant." The commission agrees with the concept, and has replaced the term "both parties" with " the applicant and the executive director or his representative. " Brown, McCarroll and Exxon Chemical believe the statement that an agreement must be signed prior to any response action being implemented does not appear to allow owners of sites which have already undergone voluntary remediation to participate in the VCP. The commenters believe the rule should allow sites previously cleaned up under the guidance and direction of other TNRCC programs to enter into the VCP. If cleanup has previously been approved, the applicant should not be required to meet more stringent cleanup standards. The commission responds that parties who have gained agency final approval of the completed remediation prior to the effective date of the VCP rules may apply to enter the VCP. The executive director has the discretion to reject the application. However, if the application is accepted, the VCP will require submission of all information initially submitted for review to receive the prior approval and may require additional information regarding the site if the previously approved response action did not address all contaminants or contaminated media within the proposed site or partial response action area, if contaminant management practices were initiated or changed since the previous approval date, or regulatory requirements have changed since that approval. The proposed rule has been amended to clarify this. Additionally, the applicant shall pay the application fee and oversight costs. A VC agreement must be signed by the agency representative and the applicant prior to agency review. Sites initiating response actions after the effective date of these rules without signed VC agreements will not be allowed into the VCP. The requirement in sec.333.6(a) that the VC agreement be signed prior to the implementation of any response actions ensures that the response actions are clearly understood and agreed to by both the applicant and the agency representative. Site investigations may begin prior to completion of the application and agreement, although the commission encourages persons to coordinate these activities with the agency after completion of the application and agreement. The commission does agree with the commenters that a language change will clarify this. The following sentences have been added to the rule, "However, for response actions initiated or completed prior to the effective date of these rules, the executive director at his discretion may allow sites to enter the Voluntary Cleanup Program. After the effective date of these rules, persons initiating response actions prior to a signed Voluntary Cleanup agreement may not enter the Voluntary Cleanup Program." Section 333.7 discusses VCP work plans and reports. Lloyd, Gosselink supports this section as proposed. Exxon Chemical stated that the TNRCC should be required to provide an estimate of oversight costs at the time the commission approves the work plans and reports. In response, the VCP will provide non- binding estimates of oversight costs to the applicant at that time, upon request. The commission received several comments specific to sec.333.7(a). UT stated that this section should be modified to state that the exposure assessment model shall examine all currently discovered and reasonably anticipated future exposure pathways for all targeted contaminants and media of concern. The commission responds that in developing a conceptual exposure assessment for a site prior to completing an investigation, it is inappropriate to exclude potential contaminants of concern without proper determination of exposure to human health and the environment. However, the results of a site investigation may provide sufficient information to target the contaminants of concern for remediation purposes. The recommended change is not included in the final rule. UT also requested clarification that "media of concern" refers to soil or groundwater rather than air, except in limited circumstances. The commenter provided no criteria for distinguishing between air, water, and soil. The commission is responsible for protection of human health and the environment including air; therefore, the commission has not changed the proposal. GLO requested that the agency identify existing guidelines that will be used by the executive director to evaluate and maintain consistency in the evaluation of the full nature and extent of contamination at a site. The commission responds that the criteria for determining the nature and extent of contamination are described in the Risk Reduction Rules, PST guidance, and the VCP guidance. It should be noted, though, that the nature and extent of contamination may be determined on a site-by-site basis through the preparation of an exposure assessment model which may not require an investigation of the full nature and extent of contamination. Flexibility in determining the limits of an investigation based on an exposure assessment model is described in the PST and VCP guidance. Additionally, TCC wanted to know if models proposed by parties outside the agency will be accepted. Finally, TCC wanted to know how the agency will handle narrowing down the list of samples and constituents in the VCP to a reasonable number. The agency will determine the acceptability or appropriateness of proposed models based on whether the models provide an accurate assessment of the nature and extent of contamination. Because the second question is fact-specific and can only be answered upon site-specific review, no general comment on an approach to limit numbers of samples or constituents required can be given. Regarding sec.333.7(b), COH suggested replacing "migrated onto property owned or controlled by other" with "migrated onto property where an interest is held by another person." In response, the commission believes the inclusion of this language would effectively exclude parties from initiating partial response actions in areas such as cities with pervasive easements. However, we agree that persons who perform their work in easements, rights-of-way, etc. should be alerted to potential exposure to hazardous substances; therefore sec.333.11 has been modified to provide this notice. Concerning sec.333.7(c)(1), Jenkins & Gilchrist requested that the agency clarify that the only inquiry is whether the person had some responsibility for the active release on the off site property, and that the issue of whether the person had passively allowed the release to migrate under his property is not at issue in this requirement. The commission agrees with this comment. For this reason, the language has been changed to delete the terms "suffer" and "allow" from the rule. Persons should be aware that the certificate of completion will only pertain to contamination that exists before the date of the certificate and will not release persons for contamination which migrates onto the site after the issuance of the certificate. Persons should take all necessary actions to stop off-site contamination from continuing to migrate on-site to avoid future liabilities. GLO commented on sec.333.7(c)(2) stating that the approach to cleanup allowed by this paragraph is flawed because the source of contamination may not be addressed. The commenter believes the TNRCC should address a site's entire contamination, including the source area of that contamination if it presents a risk to human health and the environment. In response, the commission believes the partial response action provides incentives to remediate properties which would not otherwise be remediated. The VCP agreement which precludes initiating an enforcement action will only pertain to the partial response action area, thus preserving the commission's enforcement authority for remaining contaminated areas including sources. Applicants wishing to address only portions of the site as a partial response action should also note sec.361.608(d) of the statute which limits situations in which partial response actions may be approved by the executive director. Section 333.8 addresses response action standards. The commission received a number of comments on the proposed section. Concerning sec.333.8(a), the commission received two comments. GLO requested that all media which exceed ecological risk based cleanup levels should be addressed through response actions. Without these, the commenter contends that a person could still be liable for natural resource damages on the site or affected by the site. The commission understands the commenter's concern and the final rule states "... exceed the health-based and environmental cleanup levels..." As noted earlier, participation in the VCP does not prevent a natural resource damage action. UT noted that an exposure assessment model may reasonably demonstrate that an exposure pathway does not exist, but it cannot prove that a pathway does not exist. To clarify the use of exposure assessment models, the commission is removing the portion of sec.333.8(a) which discusses limitations associated with an exposure assessment model. Exposure assessment models are already discussed in sec.333.7(a) concerning the site investigation, which is the appropriate location to include the use of such models. Section 333.8(a) will now read "Excepting areal limitations with partial response actions, all media which exceed the health-based and environmental cleanup levels shall be addressed..." UT requested clarification on the extent to which the applicant shall select a response action and what role TNRCC will have in selecting the response in sec.333.8(b). The commission responds that the applicant will have the ability to select the response action, and the agency will review the selected response action to ensure that the action is capable of meeting the response action objectives. For State Superfund sites, a public meeting to receive comments on the proposed remedy is required by statute. However, the remedy selection criteria set out in 30 TAC Chapter 335, Subchapter K (relating to Hazardous Substance Facilities Assessment and Remediation) are not applicable to sites in the Voluntary Cleanup Program. Lloyd, Gosselink requested that the applicant limit its evaluation to one proposed remedy rather than all possible remedies. The commission responds that as long as the proposed remedy meets the requirement of 333.8(b), the applicant is not required to evaluate additional remedies. Specifically concerning sec.333.8(c), Lloyd, Gosselink recommended adding the following language to the end of the subsection, "unless such requirements are inconsistent with a specific provision of this subchapter." The commission partially agrees with the comment noting that these rules cannot supersede federal or state statutes, federal rules, or other agencies' rules. The following language has been added to the proposed rule, "... unless such commission rule requirements are inconsistent with a specific provision of this subchapter". GLO stated that when contaminants have migrated or threaten to migrate onto state lands under the management of GLO, a surface easement must be obtained to support the remedial engineering proposed on those lands. The commission responds that this rule speaks only to permits, not the necessity for easements. Permission of the landowner is one method of achieving access to clean up a site. If access is denied, the commission may utilize its authority under the Texas Water Code and Texas Health and Safety Code to obtain access for the applicant. COH requested that the rule be amended to state that persons in the VCP are still required to comply with local codes and ordinances, and may need to obtain building, sewer, or fire permits. The commission believes that the rule requires clarification to limit the exemption from state and local permits to remedial actions and removals under the VCP. The proposed language has been amended to state, "State or local permits are not required for removal or remedial action under the Voluntary Cleanup Program..." to qualify when state or local permits are not required. The commission disagrees with the second half of the comment. The statute is clear that no state or local permits are required for this type of activity. Moreover, the statute does not require that the local substantive requirements are met, although the city may have other legal justification for the imposition of these requirements on an applicant. The commission believes that this issue is unsettled in law and will have to be determined by the courts or by negotiation. The language in the statute is virtually identical to that in the State Superfund Statute, Texas Health and Safety Code, sec.361. 196, and is similar in relevant aspects to the exemption from permitting under CERCLA. The commission received a comment from Jenkins & Gilchrist that this subsection should specify whether state permits that are issued pursuant to federally delegated programs such as RCRA and Treatment, Storage and Disposal (TSD) permits are covered by the permitting exclusion. In response, permits must be obtained if required by federal law or regulation or by a federal program. Section 333.9 concerns deed certification. For purposes of this discussion, "deed certification" and "deed recordation" are used interchangeably. Locke, Purnell strongly supported the section as proposed. UT believes that filing the certificate of completion in the deed records should satisfy the deed certification requirement of this section. The commission partially agrees with the commenter. In order to simplify the deed certification process, for applicants in the VCP the commission will only require one instrument, the certificate of completion, to be recorded into the deed record. Specific deed certification provisions of the applicable rules (i.e, petroleum storage tank or risk reduction rules) will be included in the certificate of completion, as appropriate. These specific provisions will be determined by the actions taken on the site by the applicant, such as the use of engineering controls, which will require a specific provision to be included in the certificate of completion. For those sites which do not rely upon engineering or institutional controls, or post-closure care or are maintaining remediation systems, no additional provisions will be included in the certificate of completion over what is required to meet the statutory requirements for certificates of completion. The proposed language has been changed to indicate that for the VCP the filing of the certificate of completion into the deed record, as required by statute, will satisfy the deed certification requirements of 30 TAC Chapters 334 and 335 (i.e, petroleum storage tank and risk reduction rules) for the areas covered by the certificate of completion. There are two types of certificates of completion. Final certificates are issued when no more response actions are necessary. Conditional certificates are issued when the applicant is satisfactorily maintaining the engineering controls, remediation systems, or post-closure care or non-permanent institutional controls are utilized pursuant to the Voluntary Cleanup agreement. The preamble further elaborates on final and conditional certificates of completion in the discussion concerning sec.333.10. GLO stated that deed certification should be required whenever any residual contamination is left on site; however, the certificate could specify that residential health based limits were achieved. The commission disagrees and believes that the stigma of deed certification inappropriately burdens the property title when no contaminants exist above health based levels. Lloyd, Gosselink recommended that the rule be amended so that sites that achieve industrial health-based levels should not require deed certification. The commission partially agrees with the commenter. No additional "deed certification" provisions will be included in the certificate of completion, since the statute requires that the certificate of completion indicate the proposed future land use. Applicants should note the statutory language in sec.361.610(c) which states "a release of liability does not apply to a person who changes land use from the use specified in the certificate of completion if the new use may result in increased risks to human health or the environment." Thus a future owner who does not maintain compliance with the terms of the certificate of completion will be changing the use of the site and will lose his release of liability. Since the situation that led to the certificate of completion may not be restorable after such a change in use, subsequent purchasers also do not receive a release of liability. However, they may re- enter the VCP prior to purchase and receive liability protection due to their own actions which may include additional response actions. Locke Purnell suggested adding a statement that deed recordation will not be required under the Risk Reduction Rules if health-based levels are achieved. This comment was addressed above, in that the certificate of completion will satisfy the deed recordation requirements for the areas covered by the certificate of completion; for areas not covered by the certificate of completion (i.e. potentially off- site areas), deed certification will be required under 30 TAC Chapters 334 and 335 when residential health-based levels are not achieved and/or non-permanent institutional controls (e.g, zoning), post-closure care, remediation systems, or engineering controls are utilized. Jenkins & Gilchrist suggested notice be given to future landowners, both residential and non-residential, in place of deed recordation. In addition, deed recordation for off-site properties should not be required. The commenter believes this will eliminate the stigma created by deed recordation, and, in the case of off-site properties, eliminate a possible cause of action by the owner of that property. The commission disagrees and believes deed certification is an appropriate requirement under the circumstances noted earlier. In addition, the filing of a certificate of completion is required by statute. The commission has attempted to minimize filing requirements by allowing the certificates of completion to serve as deed certification. Finally, the commission believes that the filing of the certificate of completion should not damage properties but may enhance the value of the property due to evidence of approval by the State of the cleanup action and the statement of liability release for future lenders and owners of the property. Exposure to a cause of action by the off-site landowner is the choice of the applicant selecting a remedy which is not satisfactory to the off-site interest holder. Brown McCarroll recommended amending the section to allow sites that have previously achieved a residential health-based level under the 30 TAC Chapter 335, Subchapter S, Risk Reduction Rules to supplement the deed record with a statement that the deed certification was made under circumstances that no longer require deed certification. As noted earlier, the amended language no longer requires deed certification for the areas covered by the certificate of completion. Moreover, The commission agrees with the comment and responds that upon filing of the certificate of completion, the party may supplement the deed record with a statement that the certificate of completion will supersede prior deed recordation requirements pertaining to the area described in the certificate of completion. The rule has been changed to reflect that possibility by adding new subsection (e) to sec.333.10 which states, "The executive director may allow the applicant to file a statement in the deed records stating that the certificate of completion supersedes prior deed certification requirements." The commission received many comments on proposed sec.333.10 which discusses the certificate of completion. Lloyd, Gosselink supports the language as proposed. In conjunction with other comments regarding previous sections, Brown McCarroll requested that the section be amended to add a certificate of completion specifically for sites previously remediated under the Risk Reduction Rules. The commission responds that it does not have the authority to issue retroactive certificates of completion for sites previously approved by the agency. However, sites which have received agency review and approval prior to the effective date of the VCP rule may enter the VCP for evaluation to determine if current response action requirements are satisfied. The agency will issue a certificate of completion for previously approved sites only if currently appropriate response actions for all contaminants within the area described in the certificate of completion have been completed. The final rule contains a new, sec.333.10(c) which includes this provision. Proposed sec.333. 10(c) is sec.333.10(d) in the final rule. Brown McCarroll also requested a provision in the Health and Safety Code, sec.361.610, be added to the rule. The specific language states that a "released" party cannot ever be held responsible by the State for existing contamination at the site that was not detected in the course of the voluntary cleanup investigation unless there was fraud, misrepresentation, or knowing failure to disclose material information. The commenter believes this will clarify that those who are not RPs at the time the certificate of completion is issued are released from undiscovered contamination at a site where a good faith investigation of contamination has been made. The commission agrees with the commenter that a released party cannot ever be held responsible by the State for existing contamination at the site unless the conditions stated under the Health and Safety Code, sec.361.610(b) exist or the previously released person changes the land use from that in the certificate of completion if the new use may result in increased risks to human health and the environment as stated in sec.361.610(c). In this regard, a non-RP may become liable in spite of the liability release if he changes the land use to one which may result in increased risks. A change in use includes not maintaining an engineering control, remediation system, or post closure care, or non-permanent institutional controls. The commission believes that it is not necessary to adopt the statutory language in the rule. However, the commission is adding a definition of "Change in land use" to clarify the intent of the statutory language in sec.361.610(c). GLO commented that the certificate of completion should not release a site from natural resource liability under federal law. The commission agrees and notes that parties are not released from federal liabilities under the VCP statute. The commission received several comments regarding the specific subsections of sec.333.10. Concerning sec.333.10(a), COH suggested additional language to clarify that there are some minimum standards and approval necessary for a final report. The commission agrees and the language in the paragraph has been changed to read, "If reports acceptable to the executive director that are submitted..." Regarding sec.333.10(b), UT wanted clarification that the term "legal description" does not necessarily require a survey but must only provide adequate detail such that the areal extent and location of the site is obvious. The commission disagrees with this comment. The certificate will be recorded in the county property records. Without an adequate legal description of the property affected, those who rely upon the property records, such as title companies, may be misled. The legal description should consist of a metes and bounds survey completed by a registered professional surveyor. Jenkins & Gilchrist submitted a comment on proposed sec.333.10(c) stating that the certificate of completion should only be filed in deed records on property owned by the applicant. In response, the statute requires that the certificate of completion be filed in the real property records for the site. If contamination is addressed for off-site properties, the commission will extend the certificate of completion to those areas, unless the applicant requests otherwise. However, if the certificate of completion is not recorded for the offsite properties, the deed certification requirements, if any, of other applicable rules (e.g, risk reduction rules) must be met for cleanups which do not achieve residential health-based levels in all media of concern and/or cleanups that include engineering controls, remediation systems, or post-closure care or non-permanent institutional controls. As noted earlier, exposure to a cause of action by the offsite landowner is the choice of the applicant selecting a remedy which is not satisfactory to the off-site interest holder. The commission wishes to clarify the intent of proposed sec.333.10(c). The commission understands that certain transactions are time-sensitive, and sec.333.10(c) was proposed to allow applicants the opportunity to expedite the process of filing a certificate of completion. The commission believes that additional language is necessary to ensure that the commission's intent is clear in the rule. Therefore, the following language has been added to proposed sec.333.10(c), "The applicant must file the copy of the certificate of completion prior to the sale or transfer of the property, but not later than 60 days after the date of issuance of the certificate of completion." As stated earlier, proposed sec.333.10(c) in the proposed rule, is sec.333.10(d) in the final rule. In the preamble to the proposed rule, the commission requested comment on the concepts of conditional certificates of completion and certificates of completion for phased cleanups. The commission has determined that it will designate certificates as either final certificates or conditional certificates. Final certificates are issued when no more response actions are necessary. Conditional certificates are issued when the applicant is satisfactorily maintaining the engineering controls, remediation systems, or post-closure care, or non-permanent institutional controls are utilized pursuant to the Voluntary Cleanup agreement. For example, demonstration of "satisfactorily maintaining a remediation system" for a ground-water cleanup can be accomplished by showing declining contaminant concentrations and hydraulic control over the contaminant plume, in dedicated monitoring wells. Conditional certificates would be issued prior to final completion of the response action in instances where long-term actions or engineering controls (e.g., groundwater pump and treat, cap and monitoring, non-permanent institutional controls) are necessary. As noted in the preamble to the proposal, the statute does not specifically authorize the issuance of a certificate of completion prior to attainment of final remediation goals when long-term response actions or engineering controls are implemented. However, the commission believes the purpose of the statute, to provide incentives to remediate property by removing liability of non-RP applicants, future landowners, and lenders would be advanced by issuing conditional certificates of completion in these instances. The commission would issue a final certificate of completion when the response actions have met the final remediation goals for the site. The phased approach would allow parties to divide remediation of a contaminated area into separate phases with separate schedules under a single voluntary cleanup agreement. Authorization to conduct a phased response action will be granted only when, in the executive director's evaluation, the schedule is reasonable, and sec.333.10(a) in the final rule includes this qualification for approval of a phased approach. At the completion of each phase, a certificate of completion would be issued for the portion of the contaminated area that has been remediated. The certificates in a phased project may be either final or conditional certificates of completion, depending upon the specific circumstances of each phase. The commission believes issuing conditional certificates and allowing phased cleanups will provide parties the flexibility to prioritize cleanup activities for portions of contaminated areas but still be responsible for remediating the entire area. The commission received several comments in response to its requests. All comments supported both the conditional certificate of completion and certificates for phased projects. Several commenters had specific recommendations. Regarding the conditional certificate of completion, Weston recommended issuing the conditional certificate once a remediation system has been installed. This would allow the property transfer to take place. The commenter stated that if the system fails, it should be clear the TNRCC will pursue the original owner and not a new owner or new lender. The commission disagrees with the comment and notes the statute of the Texas Health and Safety Code, sec.361.610(b) and (c) states the conditions for liability for non-RP applicants, future owners or lenders once a certificate has been issued. The original owner and other responsible parties (under the Health and Safety Code, sec.361.271 and sec.361.275(g)), as well as those who change land use, would be targeted for enforcement if the remediation is not completed per the terms of the voluntary cleanup agreement. Otherwise, the release from liability granted to non-RP applicants, lenders, and subsequent purchasers would not be revoked. UT suggested three different types of conditional certificates. Option 1 would create a separate engineering controls agreement requiring the applicant to post a performance bond or deposit money into an escrow account sufficient to ensure completion of the engineering controls. Option 2 would allow a subsequent buyer to file an amended application without paying the application fee and become a co-applicant. The co-applicant would then be held responsible for completion of the work. The commission has addressed this comment in response to a general comment earlier in the preamble. Option 3 would simply grant a partial certificate of completion for all work except the engineering controls. The commission believes that its proposed solution is preferable to Option 3, since this will result in a full certificate of completion with full liability release. The commission disagrees with Option 1 concerning the need to create a separate "engineering controls" agreement, however a demonstration of financial capacity to complete the response action will be required. The commission believes that the statutory provision in the SWDA, sec.361.604, which requires that the applicant submit information concerning their financial capability to perform the voluntary cleanup allows the VCP to request documentation for demonstrating financial capacity for long-term response actions. In addition, the commission retains its enforcement power against the responsible parties. The commission interprets sec.361.606(e) of the statute to only protect RPs from enforcement during the term of the agreement. After the agreement is terminated, an RP is subject to enforcement should cleanup standards change or additional contamination be discovered. The commission will monitor the success of these controls in the future and if they are found to be inadequate, may propose statutory provisions related to financial assurance. Lloyd, Gosselink believes it is appropriate for the agency to cut off an applicant's ability to unreasonably delay the completion of a response action for a final certificate of completion; however, the commenter is concerned that the proposal preamble did not provide guidance on how long an applicant had to complete a response action. For this reason the commenter requested that TNRCC provide guidance that sets out some general criteria that will allow applicants to adequately predict applicable time constraints, but the commenter believes that specific time lines do not seem realistic given the wide range of possible response actions. The commission agrees. The VCP will negotiate schedules for achieving the response actions based on site-specific considerations. This schedule will enable the agency to ensure that voluntary parties are actively remediating sites. If schedules are not met, the commission may terminate a voluntary cleanup agreement under sec.361.607 of the statute. The commission received several comments specific to the certificates of completion for phased projects. Weston believes they are necessary to expedite property transactions, and further notes a certificate issued under this scenario should not be voided if additional phases are not completed. If a transaction has occurred and the phased project is not completed, the original owner should be held accountable, not the purchaser or the purchaser's lender. The commission agrees with the comment. In the proposal preamble, the commission proposed an alternative of requiring the off-site contamination to be remediated or the on-site certificate becomes void. Lloyd, Gosselink opposed this because the commenter believes it will serve as a disincentive to those wanting to enter the VCP. The commission agrees with this comment and is not pursuing this alternative. The first phase certificate will not become void if the second phase is not remediated. Locke Purnell believes the statute allows TNRCC the discretion to allow both conditional and phased projects. According to their comments, to do otherwise would defeat the entire purpose of the program since most sites will probably require some type of engineering or control or monitoring. The commenter further stated that HB 2296 does not expressly require all non-permanent institutional or engineering controls to be removed before the certificate of completion is issued. As noted earlier, the commission agrees with the commenter that to not allow conditional certificates would seriously undermine the intent of the program; however, the statute uses the terms "successfully completed" and "has been completed" as prerequisites for issuing a certificate of completion. Therefore, the commission is adding a new definition of "completion" to the rule. "Completion" means that no more response actions are necessary or the applicant is satisfactorily maintaining the engineering controls, remediation systems, or post-closure care, or non-permanent institutional controls are utilized pursuant to the Voluntary Cleanup agreement. Section 333.10(a) is amended by stating, "If reports acceptable to the executive director that are submitted under this subchapter demonstrate that no further action is required to protect human health and the environment, the executive director shall certify such facts by issuing the person a final certificate of completion. If the applicant is satisfactorily maintaining the engineering controls, remediation systems, or post-closure care, or non-permanent institutional controls are utilized pursuant to an agreement, the executive director shall certify such facts by issuing the applicant a conditional certificate of completion." Section 333.11 addresses public participation in the VCP process. The commission received a number of comments on this section. UT stated that the section should be entitled "Public notice." The commission agrees with this comment and is adopting this section under its general rulemaking authority. The statute states that the commission may adopt rules concerning public participation, but it is choosing not to at this time in order to expedite response actions under the VCP. GLO stated that notice to the public should be placed in local newspapers and the Texas Register 30 days prior to signing a voluntary cleanup agreement, and public comment should be requested. Along those lines, UT recommended amending the proposed rule to establish a time period for receipt of comments from other landowners. The commission disagrees with this comment and does not believe that notifying the public and receiving comments prior to the signing of a voluntary cleanup agreement is warranted in the Voluntary Cleanup Program. The suggested language would result in unnecessary delays in site cleanups. In spite of the lack of a rule for commenting by landowners, an off-site property owner may use all available legal remedies to require the responsible person to alter a remediation plan. For public entities, COH recommended notice be given to the Chief Clerk or the city secretary. Several other comments were received requesting additional notice requirements. GLO requested amendment of the section to require certified return receipt requested letter to the Commissioner of the GLO whenever the site in the VCP is located adjacent to state owned lands. GLO also requested that TNRCC project managers should be required to notify the Director of the NRDA program at GLO of VCP applications by certified mail return receipt requested. The commission disagrees. The commission does not consider it necessary to notify persons when no contamination has been released to adjacent properties. Where contamination has been released to an off-site property, the final rule requires various forms of notification depending on the level of contamination which has migrated off- site. COH requested that the rule require a good faith effort to give personal notice first. Other comments received believe that less public notice is warranted. Weston believes public participation should be limited to adjacent landowners where contamination has migrated unless specifically required by other regulations or statutes such as RCRA, CERCLA, etc. Jenkins & Gilchrist believes that notification should be limited to property owners where contamination exists above residential health-based levels in any media of concern or where engineering or institutional controls are required. UT requested that the rules state minimum requirements for a sufficient notice including the type of publication, frequency, and deadlines, but the type of notification would be subject to the discretion of the executive director. Finally, Lloyd, Gosselink believes that public notice should be limited to letters to individual households and personal contacts, and TNRCC should not advertise the list of VCP applications on the agency electronic bulletin board service. The commission believes that notice should be provided to all affected property owners, not just adjacent landowners, including non-adjacent landowners where contamination has migrated, as well as the owner of the site when the applicant is a lessee. The proposed rule has been changed to require that applicants shall use the notification form as provided by the executive director at a minimum, but may include additional language as desired. The applicant shall notify property owners with concentrations of contaminants on their property at or below the residential health-based levels for any media. However, notification will not be required when concentrations are at or below background. This notice will occur prior to initiation of the on-site response actions and within two weeks after agency approval of the Site Investigation Report or other final report confirming the nature and extent of contamination at the site. The notice will indicate that the contaminants are at concentrations protective of any future land use and that the commission will not require further investigation or remediation off-site. The notice shall also state the availability for inspection and copying of reports in the commission files concerning the site. For notification under these circumstances, the applicant will have the option of providing public notice in local newspapers, block advertisements, letters to individual households and businesses, or other personal contacts. Proof of such notice is required in the final rule. The final rule requires direct notice in the form of letters to individual households, businesses, and other interest holders when concentrations of contaminants exceeding residential health-based levels have migrated off-site. The notice shall state that concentrations of contaminants exceed the residential health-based level on the off-site property. The notice shall also state the availability for inspection and copying of the reports in the commission files concerning the site. The commission agrees that the frequency and deadlines for notification should be specified. Once the investigation confirms that concentrations of contaminants exceed residential health-based levels off-site, the applicant must provide the direct notice to all affected property owners and interest holders and submit copies of the notice letter delivered with the recipient's signature and date of delivery to the agency within two weeks after initial discovery of the off-site contamination or within two weeks after the effective date of the VCP agreement. If any initial notification attempts are unsuccessful, the applicant shall repeat the process monthly until all affected parties are notified or at least four failed attempts are documented to the satisfaction of the executive director. Proof of such notification is required in the final rule. Notice to governmental entities shall be delivered to the chief clerk or city secretary. The proposed rules have been amended to incorporate these recommended changes. Furthermore, sec.333.11 has been organized into two paragraphs: paragraph (1) addresses notification requirements for off-site migration at or below residential health-based levels; and paragraph (2) addresses notification requirements for off-site migration above residential health-based levels. The agency currently provides access to the VCP site database through the agency electronic bulletin board service. COH recommended revising the language in sec.333.11 to address persons who hold an interest in a piece of property other than owners of property such as leaseholders, easements, etc. In addition, COH commented that the executive director "shall require verification" rather than "may require verification." The commission agrees and has changed the language to reflect these concerns. The new sections are adopted under the Texas Water Code, sec.5.103 and sec.26. 011, which provide the commission with authority to adopt any rules necessary to carry out its powers, duties, and policies and to protect water quality in the state. The sections are also adopted under the Texas Solid Waste Disposal Act, Texas Health and Safety Code, sec.361.017, and sec.361.024, which provide the commission the authority to regulate industrial solid waste and municipal hazardous wastes and all other powers necessary or convenient to carry out its responsibilities. Additional authority is provided in sec.382.017, Texas Health and Safety Code. The Texas Solid Waste Disposal Act, Texas Health and Safety Code, sec.361.604, sec.361.611, and sec.361.612 provide specific authority to promulgate the sections for the Voluntary Cleanup Program. sec.333.1. Requirements. (a) The requirements of the Voluntary Cleanup Program are found in this Subchapter and in the Texas Solid Waste Disposal Act, Subchapter S, Texas Health and Safety Code, Chapter 361. (b) The applicant shall submit two copies of all documents, one of which the Voluntary Cleanup Program will file in the agency central records. sec.333.2. Definitions. The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise. Change in land use-A change in use from a less protective risk classification to a more protective risk classification (e.g., non-residential to residential) or not maintaining an engineering control, remediation system, or post-closure care or non-permanent institutional control as set out in the conditional Certificate. Completion-No more response actions are necessary or the applicant is satisfactorily maintaining the engineering controls, remediation systems, or post-closure care or non-permanent institutional controls are utilized pursuant to the Voluntary Cleanup agreement. Exposure assessment model-A conceptual model of the physical site conditions, contaminants of concern by media, release mechanisms, environmental fate and transport, and potential receptors, and the interaction of each as it relates to site risk. The model identifies the universe of on-site and off-site current and reasonably anticipated future human and environmental exposure pathways and receptors. The purpose of the model is to design and focus site investigations and to assist in the determination of site response action objectives. Initiate an enforcement action-The issuance of a notice of violation by the executive director or referral to the United States Environmental Protection Agency or Attorney General's Office for a possible enforcement action. Partial response action-A response action which is limited to an areal portion of the site and off-site areas, if any, contaminated due to releases which have migrated from the partial response action area onto property owned or controlled by others, inclusive of all media. Partial response action area-The area of the site and off-site within which the partial response action will be conducted in accordance with a plan approved by the executive director. Pending enforcement action-Concerning the remediation of the hazardous substance or contaminant described in the application, a notice of violation has been issued and further administrative, state, or federal enforcement action is under evaluation or an enforcement action is required by federal grant, or the state has incurred unreimbursed costs under the Texas Health and Safety Code, Chapter 361, Subchapter F. Response action objectives-The goals of the response actions, which may include both qualitative and quantitative goals. Site-The property as described in the legal description provided in the voluntary cleanup agreement. Site subject to a commission permit or order-A site or portion of a site concerning which an order or permit has been issued by the commission. These also include hazardous waste facilities, which are operating under interim status. sec.333.3. Purpose. The purpose of the Voluntary Cleanup Program is to provide incentives to remediate property by removing liability of future landowners and lenders and to provide a process by which voluntary response actions can be completed in a timely and efficient manner. sec.333.4. Application to Participate in the Voluntary Cleanup Program (VCP). An application submitted to the Voluntary Cleanup Program must be accepted or rejected within 45 days of receipt by the commission. The commission shall not initiate enforcement action on a Voluntary Cleanup Program applicant during the pendency of the agency review of an application for the contamination or release that is the subject of the Voluntary Cleanup agreement or the activity that resulted in the contamination or release. sec.333.5. Rejection of Application. The executive director may reject an application submitted to the Voluntary Cleanup Program when all costs recoverable under the Texas Solid Waste Disposal Act, Subchapter F, Texas Health and Safety Code, Chapter 361 (State Superfund) for the site are not paid in full to the hazardous and solid waste remediation fee fund by the applicant. sec.333.6. Voluntary Cleanup Agreement. (a) The voluntary cleanup agreement must be signed by the applicant and the executive director or his representative prior to initiation of any response action being implemented, with the exception of emergency measures which should be coordinated with the appropriate emergency response authorities. However, for response actions initiated or completed prior to the effective date of these rules, the executive director at his discretion may allow sites to enter the Voluntary Cleanup Program. After the effective date of these rules, persons initiating response actions prior to a signed Voluntary Cleanup Agreement may not enter the Voluntary Cleanup Program. A certificate of completion may not be issued for sites which have received agency approval for response actions completed prior to the effective date of the rule if: (1) the action did not address all contaminants or contaminated media within the site or partial response action area; (2) contaminant management practices were initiated or changed since the previous approval date; or (3) regulatory requirements have changed since the approval date. (b) In the case of partial response actions, the commission retains the authority to issue an enforcement action regarding releases or contamination not addressed by the partial response action. sec.333.7. Voluntary Cleanup Work Plans and Reports. (a) Voluntary cleanup work plans and reports shall include an investigation of the full nature and extent of contamination in all media unless the person demonstrates to the satisfaction of the executive director that site conditions warrant a focused investigation. This may be demonstrated with an exposure assessment model. The exposure assessment model shall examine all currently discovered and reasonably anticipated future exposure pathways for all contaminants and media of concern. Contaminated media within the investigation area shall be addressed according to the appropriate established technical standards. (b) The requirements of subsection (a) of this section apply to a partial response action when a contaminant release originating from a partial response action area has migrated onto property owned or controlled by others. (c) The requirements of subsection (a) of this section apply to all voluntary cleanup response actions with the following exceptions: (1) when a person demonstrates to the satisfaction of the executive director that the source of contamination is from off-site and the person did not cause the release, the person may address only contamination on the site or the partial response action area within the site according to the appropriate established technical standards. (2) when a contaminant release is present outside the site or partial response action area, but on property owned or otherwise controlled by the applicant, addressing the areal extent of contamination outside the site or partial response action area is not required under the Voluntary Cleanup Program; however, the contaminant release within the partial response action area shall be addressed according to the appropriate established technical standards. sec.333.8. Response Action Standards. (a) Excepting areal limitations with partial response actions, all media which exceed the health-based and environmental cleanup levels shall be addressed through the appropriate response action and in accordance with the appropriate technical standards based upon the site characteristics and site contaminants. (b) The applicant shall select a response action for the response action area which will achieve the response action objectives. (c) State or local permits are not required for removal or remedial action under the Voluntary Cleanup Program. The person conducting the voluntary cleanup shall comply with any federal or state standard, requirement, criterion, or limitation to which the response action would otherwise be subject if a permit were required unless such commission rule requirements are inconsistent with a specific provision of this subchapter. sec.333.9. Deed Certification. The filing of the certificate of completion into the deed record shall satisfy the deed certification requirements of Chapter 334 of this title (relating to Underground and Aboveground Storage Tanks) and Chapter 335 of this title (relating to Industrial Solid Waste and Municipal Hazardous Waste) for the areas covered by the certificate of completion. However, if the certificate of completion is not recorded for the off-site properties, the deed certification requirements, if any, of other applicable rules must be met for cleanups which do not achieve residential health-based levels in all media of concern and/or cleanups that include engineering controls, remediation systems, or post-closure care or non-permanent institutional controls. sec.333.10. Certificate of Completion. (a) If reports acceptable to the executive director that are submitted under this subchapter demonstrate that no further action is required to protect human health and the environment, the executive director shall certify such facts by issuing the person a final certificate of completion. If the applicant is satisfactorily maintaining the engineering controls, remediation systems, or post-closure care, or if non-permanent institutional controls are utilized pursuant to an agreement, the executive director shall certify such facts by issuing the applicant a conditional certificate of completion. The executive director may authorize an applicant to conduct a phased response action only when, in the executive director's evaluation, the schedule is reasonable. (b) For partial response actions, the certificate of completion shall pertain only to the partial response action area and shall include a legal description of that area. (c) For sites approved prior to the effective date of this rule, agency will issue a certificate of completion for sites only if currently appropriate response actions for all contaminants within the area described in the certificate of completion have been completed. (d) The executive director may allow the applicant to file the copy of the certificate of completion into the site deed record on the executive director's behalf if the applicant provides subsequent documentation of the filing. The applicant must file the copy of the certificate of completion prior to the sale or transfer of the property, but not later than 60 days after the date of issuance of the certificate of completion. (e) The executive director may allow the applicant to file a statement in the deed records stating that the certificate of completion supersedes prior deed certification requirements. sec.333.11. Public Notice. Where contamination is located on property owned by another person or on property where an interest such as a fee ownership, leasehold, easement, or right-of-way is held by another person, the applicant must provide notification to all such property owners and interest holders. At a minimum, applicants shall use the notification form provided by the executive director, but may include additional language as desired. (1) Notice to property owners and interest holders, who more likely than not due to migration off-site have concentrations of contaminants on their property at or below the residential health-based levels for any media, shall occur within two weeks after agency approval of a report describing the nature and extent of contamination at the site, and prior to initiation of response actions. However, notification will not be required when concentrations are at or below background. The notice will indicate that the contaminants are at concentrations protective of any future land use and that the TNRCC will not require further investigation or remediation off-site. The notice shall also state the availability for inspection and copying of reports in the commission files concerning the site. Under these circumstances, the applicant may provide notice in local newspapers, block advertisements, letters to individual households and businesses, or other personal contacts. The executive director shall require verification that such activity has been completed. (2) Direct notice is required, in the form of letters to affected individual households, businesses, and other interest holders, when concentrations of contaminants exceeding residential health-based levels have migrated off-site. The notice shall state that concentrations of contaminants exceed the residential health-based levels on the off-site property. The notice shall also state the availability for inspection and copying of reports in the commission files concerning the site. The applicant shall submit copies of the notice letter delivered with the recipient's signature and date of delivery to the agency within two weeks after initial discovery of the off-site contamination or two weeks after the effective date of the VCP agreement. If initial notification attempts are unsuccessful, the applicant shall repeat the process monthly until all affected parties are notified or at least four failed attempts are documented to the satisfaction of the executive director. Notice to governmental entities shall be delivered to the chief clerk or city secretary. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on March 29, 1996. TRD-9604401 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: April 19, 1996 Proposal publication date: November 7, 1995 For further information, please call: (512) 239-6087 TITLE 37. PUBLIC SAFETY AND CORRECTIONS Part I. Texas Department of Public Safety Chapter 16. Commercial Driver's License Application Requirements and Examinations 37 TAC sec.16.49 The Texas Department of Public Safety adopts an amendment to sec.16.49, concerning pre-trip inspection, without changes to the proposed text as published in the February 16, 1996, issue of the Texas Register (21 TexReg 1249). The justification for this section will be to reduce or prevent commercial motor vehicle accidents, fatalities, and injuries by permitting only qualified individuals to hold licenses to drive these vehicles and ensuring that applicants are properly tested and approved. The amendment is necessary in order for the department to conform to legislation that requires the department to issue and administer tests for commercial driver's licenses by defining exactly what a pre-trip inspection is to include. No comments were received regarding adoption of the amendment. The amendment is adopted pursuant to Texas Transportation Code, Chapter 522, sec.522.005,which provides the department may adopt rules necessary to carry out this chapter and the federal act. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on March 25, 1996. TRD-9604590 James R. Wilson Director Texas Department of Public Safety Effective date: April 23, 1996 Proposal publication date: February 16, 1996 For further information, please call: (512) 424-2890 Chapter 21. Equipment and Vehicle Standards 37 TAC sec.21.2 The Texas Department of Public Safety adopts an amendment to sec.21.2, concerning motorcycle operators' and passengers' protective headgear, minimum safety standards, and medical exemption for motorcycle protective headgear, without changes to the proposed text as published in the February 16, 1996, issue of the Texas Register (21 TexReg 1249). The justification for this section will be a means of obtaining a medical exemption waiver for more than ten days. The amendment changes the exemption process for the wearing of protective headgear due to a medical condition. The amendment is necessary due to the passage of Senate Bill 1363, 74th Legislature, 1995. No comments were received regarding adoption of the amendment. The amendment is adopted pursuant to Texas Transportation Code, Chapter 661, which provides the Texas Department of Public Safety with the authority to adopt rules necessary for the administration and enforcement of this Act. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on March 25, 1996. TRD-9604665 James R. Wilson Director Texas Department of Public Safety Effective date: April 23, 1996 Proposal publication date: February 16, 1996 For further information, please call: (512) 424-2890 Chapter 23. Vehicle Inspection Inspection Items, Procedures and Requirements 37 TAC sec.23.42 The Texas Department of Public Safety adopts an amendment to sec.23.42, relating to inspection items, procedures, and requirements, without changes to the proposed text as published in the February 16, 1996, issue of the Texas Register(21 TexReg 1250). The justification for this section will be to allow for undercover officers to work undetected in order to provide more effective enforcement of criminal laws. The amendment adds new subsection (f) which exempts vehicles maintained by a law enforcement agency and used for law enforcement purposes from the safety inspection requirement relating to sunscreening devices and renumbers current subsection (f) to (g). No comments were received regarding adoption of the amendment. The amendment is adopted pursuant to Texas Transportation Code, Chapter 547, sec.547.613 and Chapter 548, sec.548.002, which provides the Texas Department of Public Safety with the authority to adopt rules necessary for the administration and enforcement of this Act. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on March 25, 1996. TRD-9604591 James R. Wilson Director Texas Department of Public Safety Effective date: April 23, 1996 Proposal publication date: February 16, 1996 For further information, please call: (512) 424-2890 TITLE 40. SOCIAL SERVICES AND ASSISTANCE Part XIX. Texas Department of Protective and Regulatory Services Chapter 700. Child Protective Services The Texas Department of Protective and Regulatory Services (TDPRS) adopts the repeal of sec.700.104, 700.105, 700.507, and 700.510; adopts new sec.700. 104- 700.114, 700.507, 700.510, 700.521, 700.1111, 700.1352-700.1355; and adopts amendments to sec.700.501-700.503, 700.506, 700.508, 700.511- 700.518, 700.520, 700.601-700.605, 700.702, 700.703, 700.705, 700.1103, 700.1310, 700. 1312, 700.1315, 700.1316, 700.1321, 700.1322, 700.1332, 700.1333, 700.1350, 700.1405, and 700.1502 in its Child Protective Services chapter. The new sec.700.106, 700.108, 700.113, 700.507, 700.510, 700.1111, 700.1353, and 700. 1355, and the amendments to sec.700.516, 700.518, 700.520, and 700.602 are adopted with changes to the proposed text published in the February 6, 1996, issue of the Texas Register (21 TexReg 839). The repeal of sec.700.104, 700.105, 700.507, and 700.510, new sec.700.104, 700.105, 700.107, 700.109-700. 112, 700.521, 700.1352, and 700.1354, and the amendments to sec.700.501-700.503, 700.506, 700.508, 700.511-700.515, 700.517, 700.601, 700.603-700.605, 700.702, 700.703, 700.705, 700.1103, 700.1310, 700.1312, 700.1315, 700.1316, 700.1321, 700.1322, 700.1332, 700.1333, 700.1350, 700.1405, and 700.1502 are adopted without changes to the proposed text, and will not be republished. The justification for the repeals, amendments, and new sections is to incorporate changes to law made as a result of the last legislative session; changes resulting from TDPRS's new automation system; and changes to further clarify existing policy. The sections will function by providing a streamlined eligibility determination process and public access to correct information. During the public comment period, TDPRS received the following comments from Driscoll Children's Hospital: Comment concerning sec.700.503: While changes to this rule were assumed to be in response to changes in the Texas Family Code, sec.264.302-264.304, the hospital raised questions as to whether Children's Protective Services was suggesting that children who are sexually aggressive or who are acting as perpetrators would not be served. The question was raised as to whether or not an "outcry" is required from a child in order to receive services. The hospital advocated that "Child Protective Services should provide services for sexually aggressive children/alleged perpetrators whether a specific verbal outcry is made or not." Response: As assumed by Driscoll Children's Hospital, these changes were made in response to changes in the Texas Family Code. Prior to these legislative changes, Child Protective Services was required to provide services to children aged seven through nine years old who engaged in pre-delinquent behaviors, whether or not there were allegations of abuse or neglect of those same children. During the 74th Legislative session, the responsibility for providing services to this population was transferred to the Services for At-Risk Youth (STAR) program when no allegations of abuse or neglect of that child are known. Any child, of any age, alleged to be a victim of abuse or neglect by a person responsible for his care, custody or welfare, would still be eligible for Child Protective Services. Behaviors indicating that a child is at risk of child sexual abuse are not restricted solely to the child making an "outcry;" however, allegations of victimization are necessary to warrant a Child Protective Services intervention. Child Protective Services staff will continue to work with community groups to identify resources which most appropriately match children's needs. When circumstances indicate that a child has been abused or neglected, Child Protective Services will continue to be the appropriate initial resource. When no allegations of abuse or neglect are made, but children are clearly in need of some type of service, Child Protective Services staff will continue to assist in identifying the appropriate resource, including the STAR program. Nothing in this rule material is intended to leave children in need of services without a resource. TDPRS is adopting this section without change. Comment concerning sec.700.512: Clarification was requested as to whether or not the use of the word "designated" indicated a change in the amount of evidence required to have a case termed "reason to believe." Response: Use of the term "designated perpetrator" does not indicate a change in the determination of "some credible evidence" prior to making a Child Protective Services investigation disposition. The term has been introduced to reflect an awareness on the part of Children's Protective Services that a person who simply has been alleged to be a perpetrator has met no criteria other than someone's suspicion. Once Child Protective Service has determined to some credible evidence that there is reason to believe that a person did abuse or neglect a child, the role given to that person will change from alleged perpetrator to designated perpetrator. Failing to meet the criteria for a reason to believe disposition, a person's role would remain as that of alleged perpetrator. TDPRS is adopting this section without change. Comment concerning sec.700.520(b)(1): Clarification was requested as to the difference between the roles of alleged perpetrator, alleged victim/perpetrator, designated perpetrator and sustained perpetrator. Response: An alleged perpetrator is a person, ten years of age or older, believed by the reporter, to be a perpetrator of abuse or neglect of a child. An alleged victim/perpetrator is a child, of at least ten years of age, alleged by the reporter to be both a victim and a perpetrator of abuse or neglect within the same report. A designated perpetrator is a person, ten years of age or older, found by some credible evidence, to be a perpetrator of child abuse or neglect. A designated victim/perpetrator is a child of at least ten years of age found, by some credible evidence, to be both a victim and a perpetrator of child abuse or neglect. A sustained perpetrator is an individual, ten years of age or older, who according to the rules specified in sec.700.601-700.603, has been found at a preponderance of the evidence to be a perpetrator of child abuse or neglect. Use of this terminology will clearly be addressed in management policy which support this rule material in the Children's Protective Service Policy Handbook currently being revised. TDPRS may also consider these and other definitions as rules in the future. TDPRS has initiated several clarification changes to the text. In sec.700.106(c) the word "outcry" is changed to "statement." Outcry is a term which many associate primarily with sexual abuse. The term "statement" is used in the Texas Family Code and is not as commonly associated with sexual abuse alone. In sec.700.108(a), the phrase "under any legal basis" is changed to cite the specific legal basis (sec.700.107) that is referred to in the subsection. In sec.700.113(1)(A), the term "inquiry only" is clarified to state "is a request for an application only." In sec.700.516(a)(2), the word "court" was mistakenly deleted and is now reinstated. In sec.700.518(c), the phrase "and the indicted perpetrator is out of the home" is added to clarify circumstances under which a home might be left open after the criminal indictment of a foster or adoptive parent. In sec.700.520(b), the word "can" is changed to "are authorized to" in order to further clarify the agency's authority to request criminal records checks. Section 700.602 is modified to clarify its original intent. The changes do not alter the operational proceedings in place within TDPRS for several years, but simply cross reference other rules through citations and sub-headings, which, as a package, thoroughly describe the process of designating sustained perpetrators and releasing information to persons who have control over the designated perpetrators access to other children. In sec.700.1111(a)(2), the word "council" is corrected to "counsel." In sec.700.1353(a)(1), the term "privately funded" is clarified and corrected to reflect that "privately operated" facilities may be classified as ICF-MR/RC programs. Section 700.1355 is modified to clarify the reasons for not placing siblings together. The section now indicates that siblings might not be placed together if there are "identified therapeutic or safety reasons not to" place them together. Subchapter A. Administration 40 TAC sec.700.104, sec.700.105 The repeals are adopted under the Human Resources Code, Title 2, Subtitle D, Chapter 40, which provides the department with the authority to propose and adopt rules to comply with state law and implement departmental programs; and under the Texas Family Code, Chapter 261, which provides the department with the authority to investigate abuse or neglect of children. The repeals implement the Human Resources Code, Title 2, Subtitle D, Chapter 40 and the Texas Family Code, Chapter 261. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604492 Deborah L. Churchill Supervising Attorney, Legal Services Texas Department of Protective and Regulatory Services Effective date: August 1, 1996 Proposal publication date: February 6, 1996 For further information, please call: (512) 438-3765 40 TAC sec.sec.700.104-700.114 The new sections are adopted under the Human Resources Code, Title 2, Subtitle D, Chapter 40, which provides the department with the authority to propose and adopt rules to comply with state law and implement departmental programs; and under the Texas Family Code, Chapter 261, which provides the department with the authority to investigate abuse or neglect of children. The new sections implement the Human Resources Code, Title 2, Subtitle D, Chapter 40 and the Texas Family Code, Chapter 261. sec.700.106. Retention and Disposal of Case Information. (a) The Texas Department of Protective and Regulatory Services (TDPRS) retains Child Protective Services case information after case closure in order to document services provided to clients, and to meet state and federal accountability requirements. (b) When the retention period has elapsed, TDPRS permanently removes the case information from the Child and Adult Protective Services System (CAPS) database and destroys the paper case record in a manner that does not jeopardize confidentiality. (c) Case information to be destroyed does not include that given to the criminal justice system for its use in investigation and prosecution, such as a videotape of a child's statement. Such information given to the criminal justice system is subject to destruction according to that system's guidelines. (d) Information in CAPS on persons who are principals or collaterals is retained until the last case in which the person is a member is removed from CAPS and then all the information on the person is also removed. (e) The CAPS system classifies cases for retention and destruction purposes according to the criteria in this section at the time the cases are closed. If a closed case on a family is re-opened for subsequent action by TDPRS, such as another intake, investigation, services, or a casework-related special request, staff merge the open and closed cases into one. Staff may also merge cases while both are closed or open. When the merged case is closed it is reclassified and retained for the length of the reclassified retention period. Reclassification is based on the contents of the entire merged case or related cases and the case(s) is given the retention classification highest in the hierarchy. (f) TDPRS may extend the retention period for a case for any of the following purposes: (1) If an activity such as a fiscal or program audit, release notice or hearing, as specified in sec.700.601 of this title (relating to Definitions), fair hearing, lawsuit or appeal involving the case is in process, staff may extend the retention. The case information is retained as long as required by the auditor, administrative law judge, or attorney representing TDPRS. (2) If a person is in more than one case, but the cases are not merged, the CAPS system relates the cases to the person. When the related cases are closed, staff may extend the retention of each of the related cases when necessary to assess risk of abuse/neglect of children and when it is necessary to retain the case information on-line. When it is not necessary to retain the information on- line, staff include the information in the paper case record. (g) The regional director or the director of TDPRS's Office of Protective Services for Families and Children or either's designee must approve the extension of the retention period for a case. The retention period may be extended as long as needed. The reason for the longer retention and the approval must be documented on the records retention window in CAPS. sec.700.108. Retention of Family Preservation Services Case Records. (a) Family preservation case information is the documentation of a case in which the Texas Department of Protective and Regulatory Services (TDPRS) provided ongoing protective services in the child's home, but TDPRS was not the managing conservator of the child and the child was never in foster care as specified in sec.700.107 of this title (relating to Retention of Conservatorship or Foster Care Case Information). (b) TDPRS must retain ongoing services case information for at least five years after the case is closed or until the 18th birthday of the youngest child living in the home when services were provided, whichever is longer. The case information must then be destroyed. sec.700.113. Retention of Case Records Related to Foster and Adoptive Homes. The Texas Department of Protective and Regulatory Services (TDPRS) maintains case record information for foster homes or adoptive homes through TDPRS automated systems and in paper form. When the case record retention period has elapsed, TDPRS permanently removes the case information from TDPRS's automated systems and destroys the paper case record in a manner that does not jeopardize confidentiality. When a foster or adoptive home case record is closed, the retention and destruction policies specified in this section apply. However, if there are concerns about the family, the supervisor may approve an extension of the retention of the case information for up to 20 years. (1) Records are kept for three years after the last case action, unless an extension is granted when the home: (A) is a request for an application only; or (B) is closed after TDPRS has received an application from the family but before TDPRS has made a decision about whether to verify and/or approve the home. (2) Records are kept for five years after the last case action, unless an extension is granted when the home: (A) is closed and no placement is made; (B) is a foster home that is closed, and placements have been made in the past; or (C) is an adoptive home that is closed after a disrupted adoptive placement and no subsequent placements are made with the adoptive family. (3) Records are kept permanently when an adoptive home is closed in which placements are made and the adoption is consummated. The family record is consolidated with the child's record. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604493 Deborah L. Churchill Supervising Attorney, Legal Services Texas Department of Protective and Regulatory Services Effective date: August 1, 1996 Proposal publication date: February 6, 1996 For further information, please call: (512) 438-3765 Subchapter E. Intake, Investigation, and Assessment 40 TAC sec.700.501-700.503, 700.506-700.508, 700.510-700.518, 700.520, 700.521 The amendments and new sections are adopted under the Human Resources Code, Title 2, Subtitle D, Chapter 40, which provides the department with the authority to propose and adopt rules to comply with state law and implement departmental programs; and under the Texas Family Code, Chapter 261, which provides the department with the authority to investigate abuse or neglect of children. The amendments and new sections implement the Human Resources Code, Title 2, Subtitle D, Chapter 40 and the Texas Family Code, Chapter 261. sec.700.507. Investigation Interviews. (a) Basic steps. The primary purpose of the investigation is the protection of the child, as specified in the Texas Family Code, sec.261.201(d). To this end, the Texas Department of Protective and Regulatory Services (TDPRS) Protective Services for Families and Children (PSFC) staff seek to identify protective issues as early in the investigatory process as possible, and terminate the investigation as early as possible if protective issues or risk based dynamics are not discovered. The PSFC worker may: (1) interview and examine, or obtain an examination of, each alleged victim; (2) interview each child in the home who may be at risk of abuse or neglect; (3) interview each of the alleged victim's parents; (4) interview the alleged perpetrator of abuse or neglect; (5) contact collateral sources; (6) make a home visit; (7) conduct a criminal background check on the alleged perpetrator and/or the parents; and/or (8) interview every child in the home who may have information that will help determine whether any child in the home: (A) has been abused or neglected; or (B) is at risk of abuse or neglect; and (9) examine each child in the household unless information from other reliable sources makes doing so unnecessary. (b) Response to allegations of abuse or neglect. PSFC staff may respond to allegations of abuse or neglect in one of three ways. (1) Preliminary investigation (administrative closure). (A) Under certain circumstances, a report which was initially assigned for investigation may be closed administratively as a result of additional information, such that the situation no longer appears to meet the statutory definitions of abuse/neglect or risk of abuse/neglect. Criteria TDPRS uses for consideration when deciding to administratively close a case include, but are not limited to, situations where a preliminary investigation reveals that: (i) the allegations have already been investigated by TDPRS; (ii) another authorized entity, such as law enforcement or another state agency, is, or will be, conducting the investigation; or (iii) TDPRS does not have the authority to finish the investigation because: (I) the alleged victim is not a child or was not born alive; or (II) the abuse or neglect or risk of abuse or neglect is not occurring in Texas; or (III) the initial collateral contacts refute the allegations and do not support evidence of abuse or neglect or risk thereof. This includes when a worker finds no corroboration of abuse or neglect in a preliminary investigation of an anonymous report. (B) Administrative closure applies to the whole investigation, not individual allegations; therefore, PSFC staff must give all allegations the disposition of administrative closure if the goal is to close a case administratively. (C) To administratively close a case assigned for investigation, PSFC staff must have made at least one contact with either a collateral or a principal who provides credible information. (2) Abbreviated investigation with a disposition of "ruled out/no risk. " To conclude an investigation with findings of "ruled out/no risk," PSFC staff must, at a minimum: (A) interview and examine the alleged victim child; (B) interview at least one parent of the victim child; and (C) have determined that no abuse or neglect has occurred or is likely to occur in the foreseeable future because no significant risk factors were identified or risk is controlled. PSFC staff must assess the impact of any noted risk factors and document how those factors are controlled. (3) Thorough investigation. (A) PSFC staff complete the steps to conduct a thorough investigation if the interview with the alleged victim child or the child's parent suggests that: (i) abuse or neglect did occur; (ii) risk of abuse or neglect is indicated; or (iii) it is impossible to determine, based on the child's and parent's statements, whether or not abuse or neglect occurred or risk of abuse or neglect is indicated. (B) Conducting a thorough investigation may include all of the basic steps specified in subsection (a) of this section, but must, at a minimum include: (i) an interview and examination of the alleged victim child; (ii) an interview with at least one of the parents of the alleged victim child; and (iii) an interview with the alleged perpetrator. Exception: If the alleged perpetrator is in police custody, PSFC staff must obtain authorization from the investigating police officer before conducting the interview to ensure that the alleged perpetrator's rights under criminal law are protected. sec.700.510. Completion of the Investigation and Assessment. (a) To complete the preliminary investigation with an administrative closure, Texas Department of Protective and Regulatory Services (TDPRS) Protective Services for Families and Children (PSFC) staff must have contacted at least one source who provided credible information such that the situation met the criteria for preliminary investigation as specified in sec.700.507(b)(1) of this title (relating to Investigation Interviews). (b) To complete an abbreviated investigation, PSFC staff must have: (1) interviewed the victim child; (2) interviewed at least one parent of the victim child; (3) determined that abuse or neglect did not occur and that risk of abuse or neglect does not exist; and (4) documented how and why any noted risk factors are believed to be controlled. (c) To complete a thorough investigation and assessment, PSFC staff must have: (1) interviewed the victim child; (2) interviewed at least one parent of the victim child; (3) interviewed the alleged perpetrator. Exception: If the alleged perpetrator is in police custody, PSFC staff must obtain authorization from the investigating police officer before conducting the interview to ensure that the alleged perpetrator's rights under criminal law are protected; (4) taken any other actions necessary to complete a thorough investigation; (5) completed a full risk assessment and documented the results; (6) determined whether abuse or neglect has occurred and the involvement of the persons in the situation; (7) determined whether there is a reasonable likelihood that a child will be abused or neglected in the foreseeable future; and (8) taken appropriate actions to provide for the child's immediate or short- term safety if the child is at risk of abuse or neglect in the immediate or short-term future. (d) At the end of the investigation, staff must assign a disposition to each allegation identified for the investigation in order to: (1) specify their conclusions about the occurrence of abuse or neglect; (2) derive the overall disposition for the investigation; and (3) derive the overall role for each person with respect to the abuse or neglect that was investigated. sec.700.516. Administrative Review of Investigation Findings. (a) The purpose of an administrative review of investigation findings is to review the determination of whether abuse or neglect occurred, not to review the decision about risk conclusions. Anyone whom the Texas Department of Protective and Regulatory Services' (TDPRS's) Office of Protective Services for Families and Children (PSFC) designates as a perpetrator or victim/perpetrator of child abuse or neglect as specified in sec.700.512(b)(1) of this title (relating to Conclusions About Roles) may request an administrative review of PSFC's investigation determination of whether abuse or neglect occurred, unless the case involves: (1) (No change.) (2) any court order limiting the designated perpetrator's or designated victim/perpetrator's access to the child; or (3) (No change.) (b) The designated perpetrator or designated victim/perpetrator must request the review in writing within 45 days after receiving TDPRS's written notice of findings. (c) If civil or criminal court proceedings related to the abuse or neglect that PSFC has investigated are pending when a designated perpetrator or designated victim/perpetrator requests an administrative review, or if such proceedings are initiated before PSFC begins the review, PSFC may postpone the review until the proceedings are completed. (d) Civil suits to remove the child from the home or restrict the designated perpetrator's or designated victim/perpetrator's access to the child are not delayed by a request for an administrative review. (e) The designated perpetrator or designated victim/perpetrator has a right to: (1)-(3) (No change.) (f) If the designated perpetrator or designated victim/perpetrator or his parents do not speak English or are hearing impaired, TDPRS must provide a certified interpreter unless the designated perpetrator or designated victim/perpetrator or his parents choose to provide a certified interpreter of their own. (g) The designated perpetrator or designated victim/perpetrator or his parents are responsible for all costs they incur in connection with the review, including the cost of an interpreter if they choose to provide one. (h) The regional director for protective services for families and children, or his designee, conducts the review. The reviewer must confirm or revise PSFC's original dispositions based on the same policies that PSFC applied during the original investigation. Within 30 days after completing the review, the reviewer notifies the designated perpetrator or designated victim/perpetrator of the outcome of the review. (i) The reviewer's notification must inform the designated perpetrator or designated victim/perpetrator that he can complain to TDPRS's Office of the Ombudsman if he is dissatisfied with the reviewer's decision. To this end, the notification must include the address and telephone number of the ombudsman. (j) If the reviewer revises PSFC's original findings or advises PSFC to take any other actions in the case, PSFC must: (1) enter the revised findings into the Child and Adult Protective Services System (CAPS); (2) notify each person who was notified of the original findings about the revised findings, except for reporters who report in a non-professional capacity; and (3) (No change.) (k) Since the designated victim/perpetrator is a child, the parents may act on his behalf throughout the review process. The parents may request the review and participate in related decisions and requests as a representative of their child. sec.700.518. Texas Department of Protective and Regulatory Services (TDPRS) Managing Conservatorship of Children in TDPRS Regulated Care. (a) If the investigation finding is reason-to-believe in a case of reported abuse or neglect involving children in TDPRS's managing conservatorship, TDPRS's Office of Protective Services for Families and Children staff must notify: (1)-(4) (No change.) (b) If the investigation finding is reason-to-believe in a case of reported abuse or neglect involving a child in a foster care home or in an adoptive home before the adoption is consummated, TDPRS considers removing the child from the home. If there is a continuing risk of substantial harm to the child, TDPRS removes the child. If TDPRS does not remove the child, the department and the foster or adoptive family must develop and implement a plan for corrective action within 30 days after the investigation is completed. The plan must address the needs of all children in TDPRS's conservatorship who reside in the home. TDPRS must also review its records regarding the foster or adoptive home, including the plan for corrective action, and determine whether to continue placing children in the home. (c) If a law enforcement investigation of a report of abuse or neglect involving a child in a foster care or adoptive home results in criminal indictment of either of the foster or adoptive parents, TDPRS must close the home unless the regional director determines that there is not a continuing risk of substantial harm to children placed there and the indicted perpetrator is out of the home. sec.700.520. Criminal Records Checks. (a) As specified in the Government Code, sec.411.114, the Texas Department of Protective and Regulatory Services (TDPRS) "is entitled to obtain criminal history information records maintained by the Department of Public Safety, the Federal Bureau of Investigation identification division, or another law enforcement agency to investigate . . . a person who is the subject of a report . . . alleging that the person has abused or neglected a child." (b) When necessary to complete a risk assessment, family assessment, or other assessment (including home studies or child care arrangements), TDPRS' Office of Protective Services for Families and Children (PSFC) staff are authorized to ask the Texas Department of Public Safety or local law enforcement to check the criminal records of any of the following parties: (1) persons with a role of alleged perpetrator, alleged victim/perpetrator, designated perpetrator, designated victim/perpetrator, or sustained perpetrator; (2) the alleged victim's custodial or absent parents or other person legally responsible for the child whom the worker is evaluating during the investigation to determine whether they have failed to protect the child or are otherwise active or passive perpetrators, whether or not this was alleged by the reporter, as indicated in sec.700.508 of this title (relating to Interviews with Parents or Other Alleged Perpetrators); and (3) a person with whom the parent or other legally responsible person has placed an alleged or designated victim in accord with a safety plan. (c) The statute indicates that a criminal history check can be made on a "person who is the subject of a report the department receives...provided that the report has proven to have merit." TDPRS defines "...proven to have merit..." as reports that: (1) meet the criteria for assignment for investigation; or (2) are assignable other than that an alleged criminal history needs to be verified through a criminal history check before it is appropriate to decide that the report meets the criteria for assignment. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604495 Deborah L. Churchill Supervising Attorney, Legal Services Texas Department of Protective and Regulatory Services Effective date: August 1, 1996 Proposal publication date: February 6, 1996 For further information, please call: (512) 438-3765 Subchapter E. Intake, Investigation, and Assessment 40 TAC sec.700.507, sec.700.510 The repeals are adopted under the Human Resources Code, Title 2, Subtitle D, Chapter 40, which provides the department with the authority to propose and adopt rules to comply with state law and implement departmental programs; and under the Texas Family Code, Chapter 261, which provides the department with the authority to investigate abuse or neglect of children. The repeals implement the Human Resources Code, Title 2, Subtitle D, Chapter 40 and the Texas Family Code, Chapter 261. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604494 Deborah L. Churchill Supervising Attorney, Legal Services Texas Department of Protective and Regulatory Services Effective date: August 1, 1996 Proposal publication date: February 6, 1996 For further information, please call: (512) 438-3765 Subchapter F. Release Hearings 40 TAC sec.sec.700.601-700.605 The amendments are adopted under the Human Resources Code, Title 2, Subtitle D, Chapter 40, which provides the department with the authority to propose and adopt rules to comply with state law and implement departmental programs; and under the Texas Family Code, Chapter 261, which provides the department with the authority to investigate abuse or neglect of children. The amendments implement the Human Resources Code, Title 2, Subtitle D, Chapter 40 and the Texas Family Code, Chapter 261. sec.700.602. Sustained Conclusions About Designated Perpetrators and Designated Victims/Perpetrators. (a) Conclusion of sustained perpetrator. When the Texas Department of Protective and Regulatory Services (TDPRS) concludes that an individual is responsible for abuse or neglect of a child in the investigation as specified in sec.700.512(b)(1) of this title (relating to Conclusions About Roles), the conclusion is based on "some credible evidence." However, except under the emergency release provisions of sec.700.603(c) of this title (relating to Releasing Information about Designated Perpetrators or Designated Victims/Perpetrators to Outside Parties), TDPRS cannot release information about a designated perpetrator or designated victim/perpetrator to people outside the investigation, unless one of the following conditions is met: (1) release hearing held. Based on a preponderance of the evidence presented in a release hearing, under sec.700.603-700.605 of this title (relating to Releasing Information about Designated Perpetrators or Designated Victims/Perpetrators to Outside Parties, Notice Requirements for Releasing Information to Outside Parties, and Prerequisites for Release Hearings), an administrative law judge has sustained the conclusion that the designated perpetrator or designated victim/perpetrator is responsible for abuse or neglect of a child in the investigation; (2) designated perpetrator waives right to release hearing. As specified in sec.700.604 of this title (relating to Notice Requirements for Releasing Information to Outside Parties), the designated perpetrator or designated victim/perpetrator has been provided with written notice of his right to a release hearing, but has not requested one within 15 days after receiving the notice; or (3) right to release hearing waived by operation of law. The designated perpetrator's or designated victim/perpetrator's right to a release hearing has been waived by operation of law. (b) Authority to release information when conclusions are sustained. When TDPRS's conclusion about a designated perpetrator or designated victim/perpetrator has been sustained as specified in subsection (a) of this section, TDPRS changes the person's role to sustained perpetrator and has the authority to: (1) release information about the perpetrator to individuals who have control over his access to children as specified in sec.700.603 of this title (relating to Releasing Information About Designated Perpetrators or Designated Victims/Perpetrators to Outside Parties), and (2) take other adverse action against the designated perpetrator or designated victim/perpetrator in accordance with applicable law. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604496 Deborah L. Churchill Supervising Attorney, Legal Services Texas Department of Protective and Regulatory Services Effective date: August 1, 1996 Proposal publication date: February 6, 1996 For further information, please call: (512) 438-3765 Subchapter G. Services to Families 40 TAC sec.sec.700.702, 700.703, 700.705 The amendments are adopted under the Human Resources Code, Title 2, Subtitle D, Chapter 40, which provides the department with the authority to propose and adopt rules to comply with state law and implement departmental programs; and under the Texas Family Code, Chapter 261, which provides the department with the authority to investigate abuse or neglect of children. The amendments implement the Human Resources Code, Title 2, Subtitle D, Chapter 40 and the Texas Family Code, Chapter 261. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604497 Deborah L. Churchill Supervising Attorney, Legal Services Texas Department of Protective and Regulatory Services Effective date: August 1, 1996 Proposal publication date: February 6, 1996 For further information, please call: (512) 438-3765 Subchapter K. Court-Related Services 40 TAC sec.700.1103, sec.700.1111 The amendment and new section are adopted under the Human Resources Code, Title 2, Subtitle D, Chapter 40, which provides the department with the authority to propose and adopt rules to comply with state law and implement departmental programs; and under the Texas Family Code, Chapter 261, which provides the department with the authority to investigate abuse or neglect of children. The amendment and new section implement the Human Resources Code, Title 2, Subtitle D, Chapter 40 and the Texas Family Code, Chapter 261. sec.700.1111. Protective Court Orders. (a) The Texas Department of Protective and Regulatory Services (TDPRS) may apply for a protective order for the protection of a member of a family or household. Before filing an application for a protective order, the worker must consult with the: (1) supervisor; (2) designated legal counsel; and (3) nonabusive parent. (b) All parties must be involved in the decision to file an application for a protective order. (c) The worker must provide written notice to the nonabusive parent of TDPRS's decision to apply for a protective order. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604498 Deborah L. Churchill Supervising Attorney, Legal Services Texas Department of Protective and Regulatory Services Effective date: August 1, 1996 Proposal publication date: February 6, 1996 For further information, please call: (512) 438-3765 Subchapter M. Substitute-Care Services 40 TAC sec.sec.700.1310, 700.1312, 700.1315, 700.1316, 700.1321, 700.1322, 700.1332, 700.1333, 700.1350, 700.1352-700.1355 The amendments and new sections are adopted under the Human Resources Code, Title 2, Subtitle D, Chapter 40, which provides the department with the authority to propose and adopt rules to comply with state law and implement departmental programs; and under the Texas Family Code, Chapter 261, which provides the department with the authority to investigate abuse or neglect of children. The amendments and new sections implement the Human Resources Code, Title 2, Subtitle D, Chapter 40 and the Texas Family Code, Chapter 261. sec.700.1353. Intermediate Care Facilities for Persons with Mental Retardation/Related Conditions (ICF-MR/RC). (a) Definitions. (1) ICF-MR/RC program. The ICF-MR/RC program is a federal Title XIX (Medicaid funded) program which provides residential and habilitative services to persons with mental retardation and/or a related condition. Facilities range in size from small group homes (six beds or less) to very large institutions (state schools). ICFs-MR/RC may be operated by the state, by a community mental health/mental retardation center, or may be privately operated. ICFs-MR/RC are licensed by the Texas Department of Human Services, but the Texas Department of Mental Health and Mental Retardation manages the program. Some facilities serve adults, some serve children, and some serve both. Some ICFs-MR/RC specialize in certain disabilities (such as cerebral palsy, behavior problems), certain ages (such as school age only), or accept only males or females. (2) Mental retardation. Mental retardation is a condition characterized by subaverage general intellectual functioning existing concurrently with deficits in adaptive behavior and manifested during the developmental period. Individuals with mental retardation have difficulty learning and applying what they learn in different situations. Generally, the intelligence quotient (IQ) is below 70. (3) Related condition. A related condition is a severe, chronic disability that meets all of the following conditions: (A) a condition attributable to: (i) cerebral palsy or epilepsy; or (ii) any other condition, excluding mental illness, found to be closely related to mental retardation because this condition results in impairment of general intellectual functioning or adaptive behavior similar to that of persons with mental retardation and requires treatment or services similar to those required for these persons; (B) a condition manifested before the person reaches age 22 years; (C) a condition likely to continue indefinitely; and (D) a condition that results in substantial functional limitations in three or more of the following areas of major life activity: (i) self-care; (ii) understanding and use of language; (iii) learning; (iv) mobility; (v) self-direction; and (vi) capacity for independent living. (b) When appropriate. (1) A child may be considered for placement in an ICF-MR/RC when: (A) the child has a diagnosis of mental retardation and/or related condition; (B) there is no single-family home (foster or relative) available that can provide the needed support services; (C) the child has an adaptive behavior level (ABL) or I, II, III, or IV; and (D) the child is Medicaid eligible. (2) The least restrictive placement for most children with mental retardation and/or a related condition is a family (birth, foster, adoptive, relative) home in which support services are provided as needed to assist the child in functioning as independently as possible within his community. Support services include, but are not limited to, Medicaid, respite care, homemaker services, home modifications, transportation, habilitative therapies, speech therapy, caregiver training, and special education. (3) If a family home is not available, an ICF-MR/RC may be appropriate. The most desirable ICF-MR/RC for most children with mental retardation and/or a related condition is a homelike, small group home, with the least desirable being a large institution. sec.700.1355. Sibling Contact. Siblings should be placed together, unless there are identified therapeutic or safety reasons not to. When a child has one or more siblings who have been placed with other substitute caregivers, the child must be given appropriate opportunities to maintain contact with those siblings, unless there are further identified therapeutic or safety reasons not to. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604499 Deborah L. Churchill Supervising Attorney, Legal Services Texas Department of Protective and Regulatory Services Effective date: August 1, 1996 Proposal publication date: February 6, 1996 For further information, please call: (512) 438-3765 Subchapter N. AIDS Policies for Children in TDPRS's Conservatorship 40 TAC sec.700.1405 The amendment is adopted under the Human Resources Code, Title 2, Subtitle D, Chapter 40, which provides the department with the authority to propose and adopt rules to comply with state law and implement departmental programs; and under the Texas Family Code, Chapter 261, which provides the department with the authority to investigate abuse or neglect of children. The amendment implements the Human Resources Code, Title 2, Subtitle D, Chapter 40 and the Texas Family Code, Chapter 261. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604500 Deborah L. Churchill Supervising Attorney, Legal Services Texas Department of Protective and Regulatory Services Effective date: August 1, 1996 Proposal publication date: February 6, 1996 For further information, please call: (512) 438-3765 Subchapter O. Foster and Adoptive Home Development 40 TAC sec.700.1502 The amendment is adopted under the Human Resources Code, Title 2, Subtitle D, Chapter 40, which provides the department with the authority to propose and adopt rules to comply with state law and implement departmental programs; and under the Texas Family Code, Chapter 261, which provides the department with the authority to investigate abuse or neglect of children. The amendment implements the Human Resources Code, Title 2, Subtitle D, Chapter 40 and the Texas Family Code, Chapter 261. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on April 1, 1996. TRD-9604501 Deborah L. Churchill Supervising Attorney, Legal Services Texas Department of Protective and Regulatory Services Effective date: August 1, 1996 Proposal publication date: February 6, 1996 For further information, please call: (512) 438-3765 TITLE 43. TRANSPORTATION Part I. Texas Department of Transportation Chapter 4. Employment Practices Subchapter B. Job Application Procedures 43 TAC sec.sec.4.10-4.12, 4.14-4.16 The Texas Department of Transportation adopts amendments to sec.sec.4.10, 4. 12, 4.14 and new sec.sec.4.11, 4.15-4.16, concerning the department's job application procedures, without changes to the text as published in the December 12, 1995, issue of the Texas Register (20 TexReg 10584). These amendments and new sections are adopted to assure that department rules regarding job application and selection are consistent with current practices and to comply with Government Code, Chapter 657, Veteran's Employment Practices. Chapter 657 requires that an individual who qualifies as a veteran, a surviving spouse of a veteran, or an orphan of a veteran be given preference in employment with a public entity or public work over other applicants for the same position who do not have a greater qualification until at least 40% of the employees of the department are selected from individuals given that preference. An individual entitled to the veteran's employment preference is also entitled to a preference in retaining employment if the department reduces its workforce. Amended sec.4.10 explains the authority and purpose of the job application procedures rules. New sec.4.11 defines terms used in the amended and new sections. Amended sec.4.12 requires job vacancy notices to include the essential functions, minimum qualifications, and knowledge, skills, and abilities required for each vacant position. Amended sec.4.14 requires that applications must be received no later than 5: 00 p.m. on the closing day, or postmarked not later than the day before the closing day, and allow applications by facsimile only from out-of-state applicants. New sec.4.15 reenacts, in an amended form, the subject matter of sec.29.1 which is contemporaneously proposed for repeal because the subject matter falls within Chapter 4, Employment Practices. This new section provides that after a conditional job offer is made and accepted, the department will require that the applicant pass a medical examination to verify that the applicant is able to perform the essential functions of the job, with or without reasonable accommodation, and that the department will designate practicing physicians to make the physical examination of applicants. New sec.4.16 provides that a veteran, surviving spouse of a veteran, or an orphan of a veteran have employment preference in employment with the department over other applicants for the same position who do not have a greater qualification; an individual who has an established service-connected disability and is entitled to a veteran's employment preference is entitled to preference for employment in a position over all other applicants for the same position without a service-connected disability and who do not have a greater qualification; and the veteran's employment preference does not apply to a position of private secretary or deputy of an official of the department, or a position that includes a strictly confidential relation to the appointing or employing official. This section describes eligibility criteria to be considered a qualified veteran, a surviving spouse of a veteran, or an orphan of a veteran; requires the department to provide information regarding an open position that is subject to the veteran's employment preference to the Texas Employment Commission; and provides that the department will give this preference until at least 40% of the employees of the department are selected from individuals given that preference. The department will give 10% of the preferences to qualified veterans discharged from the armed services of the United States within the preceding 18 months. This section describes the documents the department will accept as proof of eligibility for this preference and the department's investigation of the applicant's qualifications. An individual entitled to a veteran's employment preference is also entitled to a preference in retaining employment if the department reduces its workforce. On January 3, 1996, the department conducted a public hearing on the proposed amendments and new section and no oral or written comments were received. The amendments and new sections are adopted under Transportation Code, sec.201.101, which provides the Texas Transportation Commission with the authority to establish rules for the conduct of the work of the Texas Department of Transportation, and more specifically Government Code, Chapter 657, which requires that an individual who qualifies as a veteran, a surviving spouse of a veteran, or an orphan of a veteran be given preference in employment with a public entity or public work. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on April 2, 1996. TRD-9604571 Robert E. Shaddock General Counsel Texas Department of Transportation Effective date: April 23, 1996 Proposal publication date: December 12, 1995 For further information, please call: (512) 463-8630 Chapter 9. Contract Management Subchapter C. Contracting for Architectural and Engineering 43 TAC sec.sec.9.31-9.33, 9.36-9.38 The Texas Department of Transportation adopts amendments to sec.sec.9.31-9.33, 9.36-9.38, concerning contract management. Section 9.33 is adopted with changes to the text as published in the February 9, 1996, issue of the Texas Register (21 TexReg 948). Sections 9.31, 9.32, 9.36-9.38 are adopted without changes and will not be republished. Government Code, Chapter 2254, Subchapter A, the Professional Services Procurement Act, sets forth requirements for selection and contracting of architectural and engineering services. To clarify that a division and a special office may require a preproposal meeting, sec.9.33 is adopted with changes. Section 9.31 revises the definition of: available personnel to reflect the personnel proposed to be used on the contract rather than the entire company; consultant approval team to reflect delegation to the district, division or special office; consultant review committee to reflect delegation of provider selection to the district, division or special office; and Historically Underutilized Business to refer to definition of Historically Underutilized Business as defined by the General Services Commission. The amendments also add the definition of constructability. Section 9.32 clarifies types of work on which providers will be used by adding construction engineering and inspection. Section 9.33: removes child support statement as a requirement of the Request for Proposal (RFP), as this is now required as an attachment to the contract; removes copy of the contract with attachments as a requirement of the RFP, as this will now be provided to the provider as revisions are made to the standard contract, by the consultant review committee; and redefines preproposal meeting to allow the meeting to be held at the discretion of the district, division, or special office, regardless of the estimated contract fee. Section 9.36 clarifies the proposal evaluation summary. Section 9.37 clarifies the interview evaluation, specifies the number of firms contained in the short list summary, clarifies the duties delegated to the district consultant review committee, removes two criteria from the consultant approval team consideration, and allows more than one extension of the contract execution date. The consultants review committee will establish weighting factors to be used statewide to evaluate interview factors and the consultant approval team evaluation criteria. Section 9.38 clarifies criteria used to evaluate providers upon completion of the contract. On February 23, 1996, the department held a public hearing to receive data, comments, views, and testimony concerning revisions to sec.sec.9.31-9.33 and sec.sec.9. 36-9.38 concerning contracting for architectural and engineering. The Consulting Engineers Council of Texas expressed approval of the primary thrust of the revisions to the rules, and suggested revisions or requested clarification to the proposed changes to sec.9.31 and sec.9.33 orally and in writing. Written comments suggesting revisions to sec.9.35 and sec.9.37 were received from Schrickel, Rollins and Associates, Inc. One commenter requested a return to the original definition of "available personnel" in sec.9.31 and expressed concern that the amendments will promote gamesmanship in the selection process. The department believes that the amendments as proposed provide a more realistic measure of available personnel than the original definition, since it will now include only the personnel proposed to be used on the project. The ratio will utilize the performance rating of available personnel proposed by the provider team instead of the specified number of personnel employed by a firm or team. The department considers this to be a much more meaningful criterion and a measure of the team's ability to complete the work being contracted. One commenter requested that sec.9.33 be revised to raise the threshold from $250,000 to $500,000 for a mandatory preproposal meeting. The rules as proposed eliminate any threshold above which a preproposal meeting is required. The decision to hold a preproposal meeting rests solely with the district, division, or special office soliciting the contract. This should result in fewer preproposal meetings being held. Section 9.33(d) is adopted with a change to clarify that a division and a special office may require a preproposal meeting. One commenter stated that the current selection process minimizes the quality of work that firms have provided on previous department projects, and requested that more weight be given to previous performance. Criteria in sec.9. 35(a)(2) for the proposal evaluation and sec.9.37(a)(1)(B) for the interview evaluation address the experience of not only the prime provider, but also all the subproviders and the project manager. These criteria result in 30% to 45% of the proposal evaluation score, and 25% of the interview evaluation score. The department feels that this is a sufficient representation of prior successful work, including work performed for the department as well as other entities. One commenter stated that the District/Division/Special Office Consultant Approval Team identified in sec.9.37(b) added an unnecessary level of review, and requested that it be eliminated. The proposed revisions delegate the responsibility for final selection from the Consultant Approval Team, one committee located in Austin, to the District/Division/Special Office Consultant Approval Team. The department feels that two levels of review are necessary for fair and equitable selection. This delegation should shorten the time required to procure architectural and engineering services. One commenter stated that the criterion considering current dollar volume of work with the department compared to the ratio of available personnel defined in sec.9.37(b)(2)(B)(iii) should not have equal weight with some of the other factors used in the selection process, and recommended that less weight be given to this criterion. This criterion is considered only by the District/Division/Special Office Consultant Approval Team after evaluation of the proposal and interview by the District/ Division/Special Office Consultant Review Committee. During both the proposal and interview evaluations, criteria addressing qualifications, experience and ability to commit resources comprise 100 percent of the evaluation score. The department feels that this process provides well qualified firms in the short list to be considered by the District/Division/Special Office Consultant Approval Team. Sixty to 70% of the District/Division/Special Office Consultant Approval Team's evaluation is also based on criteria relating to qualifications, experience, and ability to commit resources. The department feels that the criterion relating to current dollar volume of work with the department compared to the ratio of available personnel is not weighted too heavily in the evaluation by the District/Division/Special Office Consultant Approval Team. The amendments are adopted under Transportation Code, sec.201.101, which provides the Texas Transportation Commission with the authority to establish rules for the conduct of the work of the Texas Department of Transportation and Government Code, Chapter 2254, Subchapter A, the Professional Services Procurement Act, which sets forth requirements for selection and contracting of architectural and engineering services. sec.9.33. Request for Proposals and Preproposal Meetings. (a) Notice. (1) Texas Register and newspapers. The department will prepare a notice identifying a proposed contract and a due date for providers to send letters of interest to the department. The department will publish this notice in the Texas Register and newspapers a minimum of ten days prior to the deadline for receiving the letter of interest. The department will select newspapers based on general circulation to provide statewide distribution. (2) Electronic notice. The department will publish a notice containing the same information as the notices in the Texas Register and newspapers on an electronic bulletin board a minimum of ten days prior to the deadline for receiving the letter of interest. (3) Organizations. The department will publish a quarterly statewide list of projected contracts for consulting engineering and architectural services and will furnish the list on a quarterly basis to community, business, and professional organizations for dissemination to their membership. (b) Letter of interest. Within ten days of the publication of the notice concerning the contract, the provider shall send a letter of interest to the department notifying the department of the provider's interest in submitting a proposal. The department will accept a letter of interest by electronic facsimile. The department will notify the provider of the date for the preproposal meeting, if applicable, and send the provider a copy of the RFP. (c) Requests for proposals. An RFP will include the following proposal requirements: (1) deadline, date, location, and time for submittal; (2) scope of services to be provided by the department; (3) scope of services to be provided by the provider; (4) an outline of the proposal format and content; (5) any geographic constraints directly relating to the performance of the contract, if applicable; (6) description of the evaluation criteria including minimum and preferred qualifications; (7) a copy of the evaluation forms; (8) a standard form for a statement of intent to meet department goals for DBE/HUB participation in accordance with sec.9.38(a) of this title (relating to Contract Management) and sec.9.40 of this title (relating to Affirmative Action) (the department's assigned DBE/HUB participation goal for the contract will be stated on this form); (9) a debarment certification form; (10) a lower tier debarment certification form; (11) a lobbying certification/disclosure form (if federally funded); and (12) any special contract requirements. (d) Preproposal meeting. The district, division, or special office may require a preproposal meeting to provide an opportunity for the provider to seek clarification of questions concerning the contract. If a preproposal meeting is required, the department will not accept proposals from providers that did not have a representative at the preproposal meeting. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on April 2, 1996. TRD-9604572 Robert E. Shaddock General Counsel Texas Department of Transportation Effective date: April 23, 1996 Proposal publication date: February 9, 1996 For further information, please call: (512) 463-8630 Chapter 29. Insurance Division 43 TAC sec.29.1 The Texas Department of Transportation adopts the repeal of sec.29.1, concerning designated physicians, without changes to the proposed text as published in the December 12, 1995, issue of the Texas Register (20 TexReg 10586). This section is no longer necessary due to the simultaneous adoption of the re- enacted subject matter in Chapter 4, Employment Practices, as new sec.4.15 concerning medical examination, in an amended form. On January 3, 1996, the department conducted a public hearing on the proposed repeal and no oral or written comments were received. The repeal is adopted under Transportation Code, sec.201.101, which provides the Texas Transportation Commission with the authority to establish rules for the conduct of the work of the Texas Department of Transportation. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on April 2, 1996. TRD-9604573 Robert E. Shaddock General Counsel Texas Department of Transportation Effective date: April 23, 1996 Proposal publication date: December 12, 1995 For further information, please call: (512) 463-8630