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 10. COMMUNITY DEVELOPMENT PART V. Texas Department of Commerce CHAPTER 186.Smart Jobs Fund Program SUBCHAPTER A.General Provisions 10 TAC sec.186.104 sec.186.106 The Texas Department of Commerce adopts amendments to sec.186.104 and sec.186.106 implementing the Smart Jobs Fund Program authorized by the Texas Government Code, Chapter 481, Subchapter J, as amended, without changes to the proposed text as published in the May 14, 1996, issue of the Texas Register (21 TexReg 4207). Section 186.104, concerning Definitions, deletes the definition for "skills" because it is not required in administering the program. Changes are made to the definitions of "existing job" and "new job" to allow a time period of one year instead of six months. The definition of "job-related occupational skills" is changed to give employers more flexibility in defining the job-related occupational skills needed to perform the duties and tasks required for a specific job. The definition of "technological change" is amended to reflect that the result of technological change enhances production efficiency or product performance instead of product marketability. A minor grammatical change is made to the definition for "minority employer status for application purposes." Section 186.106, concerning Modifications, is amended to delete the wage increase percentage of 5.0% and to allow the employer to specify the wage increase modification that it is requesting the executive director make. No comments were received regarding adoption of the amendments. The amendments are adopted under the authority of Texas Government Code, Subchapter J, sec.481.153, which requires the Texas Department of Commerce Policy Board to adopt rules to implement the Smart Jobs Fund Program, and the Administrative Procedure Act, Texas Government Code, Chapter 2001, Subchapter B, Rulemaking, as amended, which prescribes the standards for agency rulemaking. 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 August 28, 1996. TRD-9612553 W. Lane Lanford Chief Administrative Officer Texas Department of Commerce Effective date: September 18, 1996 Proposal publication date: May 14, 1996 For further information, please call: (512) 936-0178 SUBCHAPTER C.Application for Grants 10 TAC sec.sec.186.301, 186.302, 186.306, 186.307 The Texas Department of Commerce adopts amendments to sec.sec.186.301, 186.302, 186.306 and 186.307 of the rules implementing the Smart Jobs Fund Program authorized by the Texas Government Code, Chapter 481, Subchapter J, as amended, without changes to the proposed text as published in the May 14, 1996, issue of the Texas Register (21 TexReg 4208). Section 186.301, concerning Eligibility, is amended so that an employer rendering services to a Smart Jobs Fund contractor and receiving grant monies for those services is not eligible to receive a grant during the contract period. Section 186.302, concerning Application Requirements, is amended to correctly reflect that a consortium is composed of two or more providers and to correctly reflect sec.481.155(d) of the Smart Jobs Fund Program Act. It is also amended to provide that job-related basic skills must be integrated as part of the job- related occupational skills training curricula as currently stated in the definition for "job-related basic skills;" to provide that the application must specify the training provider for each curricula; and to clarify how the cost per job is calculated. Section 186.302 is further amended to delete information required in the application on whether the trainees are women or minority group members, and if so, to which minority group the trainees belong. Section 186.306, concerning Funding Priorities, is amended to delete the following funding priorities in the scoring mechanism: one or more employers acting in partnership with a consortium composed of one or more providers; quality of the business and training plan; the role and status of the training provider including public education and Texas-based providers; and whether the trainees are Texas residents. This section is also amended to clarify that priority is given to funding applications which will have a regional impact as a result of the project or that will train for manufacturing occupations. A minor grammatical change is also made. Section 186.307, concerning Provider Eligibility, is amended to delete the requirement that providers meet the definition of "existing employer" and to delete that employers new to Texas may provide training to their own employees with grant funds. It is also amended to add that an employer that has a contract under the Smart Jobs Fund cannot receive Smart Jobs Fund grant monies for services rendered to another Smart Jobs Fund contractor during the contract period. No comments were received regarding adoption of the amendments. The amendments are adopted under the authority of Texas Government Code, Subchapter J, sec.481.153, which requires the Texas Department of Commerce Policy Board to adopt rules to implement the Smart Jobs Fund Program, and the Administrative Procedure Act, Texas Government Code, Chapter 2001, Subchapter B, Rulemaking, as amended, which prescribes the standards for agency rulemaking. 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 August 28, 1996. TRD-9612551 W. Lane Lanford Chief, Administrative Officer Texas Department of Commerce Effective date: September 18, 1996 Proposal publication date: May 14, 1996 For further information, please call: (512) 936-0178 CHAPTER 196.Tourism Advisory Committee Rules 10 TAC sec.sec.196.4, 196.6, 196.10, 196.13, 196.15 The Texas Department of Commerce adopts amendments to sec.sec.196.4, 196.6, 196.10, 196.13 and 196.15 of the Tourism Advisory Committee rules, without changes to the proposed text as published in the May 14, 1996, issue of the Texas Register (21 TexReg 4210). These amendments are necessary to conform the rules to recent amendments made to the Tourism Advisory Committee by-laws. Section 196.4, Regular Members, is amended to increase the number of Tourism Advisory Committee members from fourteen to seventeen. The three additional members are to be appointed by the executive director of the Texas Department of Commerce to provide additional ethnic, regional and business sector diversity within the membership of the Tourism Advisory Committee. Section 196.6, Elections and Members, is amended to provide that the members are selected solely by residents of the regions which the members represent. Section 196.10, Length of Term, is amended to provide that the three members appointed by the executive director begin their two year terms at the end of the election announcement at the annual travel Summit meeting. Section 196.13, Open Records Act, is amended to refer instead to the Public Information Act. Section 196.15, Dissolution, is amended to delete the reference to August 31, 1995, because that date has passed. The word "each" is added before the word "biennium" to clarify that the Tourism Advisory Committee is dissolved each biennium. No comments were received regarding adoption of the amendments. The amendments are adopted under the authority of Government Code sec.sec.481.0044, 481.005 and 481.007, Texas Civil Statutes Article 6252-33, and the Administrative Procedure Act, Government Code, Chapter 2001, Subchapter B. 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 August 28, 1996. TRD-9612550 W. Lane Lanford Chief Administrative Officer Texas Department of Commerce Effective date: September 18, 1996 Proposal publication date: May 14, 1996 For further information, please call: (512) 936-0178 TITLE 13. CULTURAL RESOURCES PART III. Texas Commission on the Arts CHAPTER 31.Agency Procedures 13 TAC sec.31.10 The Texas Commission on the Arts adopts by reference an amendment to sec.31.10, concerning the application forms and instructions for the Financial Assistance Application Form with changes to the proposed text as published in the July 23, 1996, issue of the Texas Register (21 TxReg 6863). This section is being adopted to be consistent with changes to programs and services of the commission as outlined in the Texas Arts Plan as amended September 1996. By adopting the section the commission will provide better access to available programs and services to the constituents. No comments were received regarding adoption of the amendment. The amendment is adopted under Government Code, sec.444.009, which provides the Texas Commission on the Arts with the authority to make rules and regulations for its government and that of its officers and committees. sec.31.10.Financial Assistance Application Form. The commission adopts by reference application form and instructions for the Financial Assistance Application Form as outlined in the Texas Arts Plan as amended September, 1996. This document is published by and available from the Texas Commission on the Arts, P.O. Box 13406, Austin, Texas 78711. 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 August 30, 1996. TRD-9612750 John Paul Batiste Executive Director Texas Commission on the Arts Effective date: September 20, 1996 Proposal publication date: July 23, 1996 For further information, please call: (512) 463-5535 CHAPTER 35 Texas Arts Plan 13 TAC sec.35.1 The Texas Commission on the Arts adopts by reference an amendment to sec.35.1, concerning the Texas Arts Plan with changes to the proposed text as published in the July 23, 1996, issue of the Texas Register (21 TxReg 6864). This section is being adopted to revise the commission's mission, goals and assistance guidelines by reorganizing administrative and program structure to enable the agency to more effectively meet the needs of the citizens of Texas. By adopting the section the commission will provide better access to available programs and services to the constituents. No comments were received regarding adoption of the amendment. The amendment is adopted under Government Code, sec.444.009, which provides the Texas Commission on the Arts with the authority to make rules and regulations for its government and that of its officers and committees. sec.35.1.Texas Arts Plan. The commission adopts by reference the Texas Arts Plan as amended September, 1996. This document is published by and available from the Texas Commission on the Arts, P.O. Box 13406, Austin, Texas 78711. 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 August 30, 1996. TRD-9612751 John Paul Batiste Executive Director Texas Commission on the Arts Effective date: September 20, 1996 Proposal publication date: July 23, 1996 For further information, please call: (512) 463-5535 13 TAC sec.35.2 The Texas Commission on the Arts adopts the repeal of sec.35.2, concerning the Addendum to the Texas Arts Plan as published in the July 23, 1996, issue of the Texas Register(21 TxReg 6864). The purpose of this repeal is that this information has been incorporated into sec.35.1 of this title (relating to Texas Arts Plan). No comments were received regarding adoption of the repeal. The repeal is adopted under Government Code, sec.444.009, which provides the Texas Commission on the Arts with the authority to make rules and regulations for its government and that of its officers and committees. 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 August 30, 1996. TRD-9612752 John Paul Batiste Executive Director Texas Commission on the Arts Effective date: September 20, 1996 Proposal publication date: July 23, 1996 For further information, please call: (512) 463-5535 CHAPTER 37.Application Forms and Instructions for Financial Assistance 13 TAC sec.37.23, sec.37.26 The Texas Commission on the Arts adopts by reference amendments to sec.37.23 and sec.37.26, concerning the application forms and instructions for the Arts in Education Program--Sponsors and the Texas Touring Arts Program--Sponsors with changes to the proposed text as published in the July 23, 1996, issue of the Texas Register (21 TxReg 6865). These sections are being adopted to be consistent with changes to programs and services of the commission as outlined in the Texas Arts Plan as amended September 1996. By adopting these sections the commission will provide better access to available programs and services to the constituents. No comments were received regarding adoption of the amendments. The amendments are adopted under Government Code, sec.444.009, which provides the Texas Commission on the Arts with the authority to make rules and regulations for its government and that of its officers and committees. sec.37.23.Application Form and Instructions for Arts in Education Program-- Sponsors. The commission adopts by reference application form and instructions for Arts in Education Program--Sponsors as outlined in the Texas Arts Plan as amended September, 1996. This document is published by and available from the Texas Commission on the Arts, P.O. Box 13406, Austin, Texas 78711. sec.37.26.Application Form and Instructions for Texas Touring Arts Program-- Sponsors. The commission adopts by reference application form and instructions for the Texas Touring Art Program--Sponsors as outlined in the Texas Arts Plan as amended September, 1996. This document is published by and available from the Texas Commission on the Arts, P.O. Box 13406, Austin, Texas 78711. 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 August 30, 1996. TRD-9612753 John Paul Batiste Executive Director Texas Commission on the Arts Effective date: September 20, 1996 Proposal publication date: July 23, 1996 For further information, please call: (512) 463-5535 TITLE 16. ECONOMIC REGULATION PART III. Texas Alcoholic Beverage Commission CHAPTER 33.Licensing License and Permits Surcharges 16 TAC sec.33.23 The Texas Alcoholic Beverage Commission adopts an amendment to sec.33.23 without changes to the proposed text as published in the July 23, 1996 issue of the Texas Register (21 TexReg 6868). This amendment deals with the annual surcharges for all licenses and permits issued by the Texas Alcoholic Beverage Commission. This amendment was adopted to bring the agency's practice in conformance with statutory changes contained in Contingency Riders 11, 12, 13 and 14 to the agency's appropriation in House Bill 1, 74th Legislature, Regular Session. These riders allow funding of Texas Alcoholic Beverage Commission operations through imposition of the surcharges imposed through this rule. The amount of each surcharge is determined through weighted averages applied to each license and permit. No comments were received regarding the adoption of the amendment. The amendment is adopted under the Texas Alcoholic Beverage Code, sec.5.31 and sec.5.50(b). Cross reference to statute: Texas Alcoholic Beverage Code, sec.11.32, sec.11.35 and sec.61.35. sec.33.23.Alcoholic Beverage License and Permit Surcharges. (a) A surcharge of all original or renewal permit or license fees set by the Texas Alcoholic Beverage Code shall be levied against all license and permit holders as follows: Figure 1: 16 TAC sec.33.23(a) (1) The surcharge shall apply to each brewpub licensed under Texas Alcoholic Beverage Code, Chapter 74, even though one or more are licensed under the same general management or ownership. (2) An organization which meets the requirements for exemption from a private club registration permit under the Texas Alcoholic Beverage Code, sec.32.11, is also exempt from the surcharge. (b) The surcharges shall be due and payable at the same time and in the same place and manner as the original or renewal permit, certificate, or license fee to which the surcharges apply. (c) Failure or refusal to timely pay the license, certificate or permit surcharge shall be considered the same as failure to timely pay the original or renewal certificate, permit or license fee and the same penalties will apply. (d) The amount of surcharge due shall be determined by the issue date of the permit or license and the surcharge in effect under this rule on the issue date of that license or permit. (e) This section shall take effect October 1, 1996. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas, on August 30, 1996. TRD-9612712 Doyne Bailey Administrator Texas Alcoholic Beverage Commission Effective date: October 1, 1996 Proposal publication date: July 23, 1996 For further information, please call: (512) 206-3204 PART VI. Texas Motor Vehicle Commission CHAPTER 101.Practice and Procedure 16 TAC sec.101.66 The Texas Motor Vehicle Board of the Texas Department of Transportation adopts new sec.101.66, concerning the submission of amicus briefs to the Board, without changes to the proposed text as published in the May 24, 1996, issue of the Texas Register (21 TexReg 4513). This new section specifies a deadline for amicus briefs to be submitted to the Board and to clarify any confusion regarding the time limit and to allow Board members sufficient time to review such documents. The new rule provides that amicus briefs must be submitted to the Board no later than seven days before the Board meeting at which the matter is to be heard, unless the amicus can show good cause why this deadline should be extended. No written comments were received regarding adoption of the proposed new section. However, two speakers appeared before the Board at its August 8 meeting to speak regarding sec.101.66. Testimony in favor of the rule was offered by Karen Coffey, Chief Counsel of the Texas Automobile Dealers' Association. Testimony against the rule was offered by Lloyd E. Ferguson, representing General Motors. Testimony in favor of the rule reflected that its supporters believe the rule allows the amicus adequate time to submit a brief and yet also allows the Board sufficient time for reviewing submitted material. Those against the rule responded that the current Board rules specified a deadline of 17 days for all materials to be submitted before the Board and suggested this time was necessary for a party to respond to an amicus brief, which often raises complex issues and can be accompanied by numerous exhibits. Supporters of the rule pointed out that amicus briefs are designed to aid the decision maker, not to aid the parties in a contested case. The Board considered these comments and found proposed sec.101.66 provided a balance of the competing interests of parties who might want to respond to an amicus briefs and of Board members needing sufficient time to review issues raised. Furthermore, the Board found that extending the time was in the public's best interests because it allowed a greater flow of information between itself and interested parties. The new section is adopted under sec.3.06 of the Texas Motor Vehicle Commission code, Article 4413(36) and (36a), Texas Civil Statutes, which provides the Board with the authority to adopt rules necessary and convenient to effectuate the provisions of the Code and to govern practice and procedure before the agency. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas, on August 29, 1996. TRD-9612673 Brett Bray Director, Motor Vehicle Division Texas Motor Vehicle Commission Effective date: September 19, 1996 Proposal publication date: May 24, 1996 For further information, please call: (512) 463-8630 CHAPTER 105.Advertising 16 TAC sec.sec.105.4-105.10 The Texas Motor Vehicle Board of the Texas Department of Transportation adopts amendments sec.105.4, concerning definitions, sec.105.10, concerning the fees excludable from the advertised price of a new or used motor vehicle, with changes to the proposed text as published in the May 24, 1996, issue of the Texas Register (21 TexReg 4513). Section 105.10 is adopted with changes and sec.105.4 is adopted without changes and will not be republished. The amendment to sec.105.4 adds on-line communication to the various media listed as carrying advertisements of motor vehicles. It clarifies to licensed dealers of new and used vehicles that advertisements sent out over on-line services such as the Internet are required to comply with all Board advertising rules, just like advertisements contained in other media. The amendment to sec.105.10 clarifies the fees which are excludable from the advertised price of a new or used motor vehicle. The Board opted to change the language of the original proposed rule slightly to this final version to make it consistent with the language of the Consumer Credit code, Article 5069-7.01(g). Written comments in favor of the proposed amendments to sec.105.4 were received from both the Texas Automobile Dealers Association and the Texas Independent Automobile Dealers Association. Oral comments were also received at the Board meeting at the time of adoption in favor of the proposed rule. Written comments in favor of the proposed amendments to sec.105.10 were received from the Texas Automobile Dealers Association and Attorney David R. Sapp. Again, oral comments were also received at the Board meeting at the time of adoption. Supporters felt the addition of on-line services to sec.105.4 added clarity to the rules about the definition of advertisement. Additionally, supporters felt the changes in the language of sec.105.10 provided needed clarification regarding what fees may be included in the advertised price of a vehicle. After reviewing submitted comments, the Board decided it would change the wording of the propose rule to the current final version. The change, proposed by a supporter, offered more clarity and was more succinct than the proposed version. The Board agrees with the comments submitted. The amendments are adopted under sec.3.06 of the Texas Motor Vehicle Commission Code, and Texas Civil Statutes, Article 4413(36) and (36a), which provides the Board with the authority to adopt rules necessary and convenient to effectuate the provisions of the Code and to govern practice and procedure before the agency. sec.105.10. Dealer Price Advertising. (a) The featured price of a new or used motor vehicle, when advertised, must be the full cash price for which the vehicle will be sold to any and all members of the buying public. The only charges that may be excluded from the advertised price are: (1) any registration, certificate of title, license fees, or an additional registration fee, if any, charged by a full service deputy as provided by County Road and Bridge Act, sec.4.202(g) [state and local taxes]; (2) any taxes [license]; and [(3) title; [(4) deputy; and] (3)[(5)] any other fees or charges that are allowed or prescribed by law. [documentary fee]. (b)-(e) (No change.) This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas, on August 29, 1996 TRD-9612672 Brett Bray Director, Motor Vehicle Division Texas Motor Vehicle Commission Effective date: September 19, 1996 Proposal publication date: May 24, 1996 For further information, please call: (512) 463-8630 PART IX. Texas Lottery Commission CHAPTER 401.Administration of State Lottery Act 16 TAC sec.401.368 The Texas Lottery Commission adopts amendments to 16 TAC sec.401.368, relating to instant ticket vending machines, with changes to the text as published in the July 23, 1996, issue of the Texas Register (21 TexReg 6868). The section that is adopted with changes is 16 TAC sec.401.368(g). This change is made to clarify the placement of the four additional games required to be displayed by the retailer. The remaining sections are adopted without changes. This section, as amended, will provide clear guidance to lottery sales agents regarding the use of instant ticket vending machines. Instant ticket vending machines are ticket dispensing machines that dispenses Texas Lottery instant game tickets without the assistance of a sales agent's personnel. The Texas Lottery Commission owns or leases the instant ticket vending machies and places them in the lottery sales agent's location; the sales agent is not required to purchase or lease the instant ticket vending machines. The placement of the instant ticket vending machines at a sales agent's location must be approved by the executive director of the Texas Lottery Commission. This approval is necessary on certain criteria such as type and size of sales agent location and minimum sales criteria. These criteria are necessary to ensure that the instant ticket vending machines are placed in locations that will have a maximum benefit to the Texas Lottery Commission so to ensure a maximization of sales at any given sales agent's location. Likewise, the site of the instant ticket vending machine within the sales agent's location is also subject to approval of the Texas Lottery Commission. This approval is necessary to ensure sufficient usage of the instant ticket vending machine by the public. Furthermore, the amendment provides that the sales agent must carry a minimum of eight instant games at all times, this is necessary so that a sufficient number of game choices are available to the public. Lottery sales studies have shown that lottery participants enjoy a variety of games and at least a choice of eight instant ticket games will meet this demand. In addition to carrying the required eight games contained within the instant ticket vending machine, sales agents are required to carry a minimum of four additional instant games from a prominent secondary location. The amendment also provides that the sales agent must certify whether the sales agent's location is within one thousand feet of any preschool, elementary, middle or high school, and if so, the instant ticket vending machines must contain a remote shut off device to be used by store personnel. The remote control of the instant ticket vending machines is necessary to protect the public safety and welfare of minors and to assure compliance with the state law that prohibits the sale of lottery tickets to person less than 18 years of age. Finally, the amendment provides for various maintenance provisions to ensure that the instant ticket vending machines are in good working order and available for public use. No comments were received regarding the adoption of the proposed amendments. The amendments are adopted under the provisions of Texas Government Code, sec.466.015, which authorize the Texas Lottery Commission to adopt rules governing the establishment and operation of the lottery and Texas Government Code, sec.467.102, which authorizes 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.401.368.Instant Ticket Vending Machines. (a) No sales agent may distribute or sell Texas Lottery instant game tickets from an instant ticket vending machine, except those instant ticket vending machines supplied and placed by the Texas Lottery. For purposes of this section an instant ticket vending machine is defined as a ticket dispensing machine that dispenses Texas Lottery instant game tickets without the assistance of a sales agent's personnel. (b) Instant ticket vending machines may be placed by the Texas Lottery in a sales agent's location based upon criteria established by the executive director. The criteria may include consideration of the location of the sales agent, the type of the sales agent's location, e.g., grocery store, the size of the sales agent's location, and a minimum sales criteria and shall be provided to the sales agents prior to implementation of such criteria. (c) A lottery sales agent must maintain a minimum sales criteria established by the executive director in order to obtain and retain an instant ticket vending machine. A sales agent who does not maintain minimum sales in accordance with such sales criteria may be placed in a sales review probation unless good cause exists as determined by the executive director. After the sales agent's probation period has expired, the sales agent's sale of lottery instant game tickets shall be reviewed. If the sales agent has not maintained the minimum sales in accordance with the minimum ticket sales criteria during such probation, the agency's staff shall remove the instant ticket vending machine. (d) The minimum sales criteria established by the executive director shall be provided to the sales agents at least 30 days prior to implementation of such minimum sales criteria. (e) Instant ticket vending machines may only be placed within the sales agent's location in a site approved by the Texas Lottery. (f) A lottery sales agent shall carry a minimum of eight instant games at all times and shall keep the instant ticket vending machine supplied with eight instant games. (g) A lottery sales agent shall carry and display a minimum of four additional instant games from a prominent secondary location. (h) A lottery sales agent shall redeem any lottery prize of less than $600. (i) A lottery sales agent shall certify whether the sales agent location is greater than one thousand feet from any pre-school, elementary school, middle school or high school. (j) A lottery sales agent location within one thousand feet from any pre school, elementary school, middle school or high school shall be equipped only with an instant ticket vending machine(s) containing a remote shut off device. (k) A lottery sales agent shall keep the instant ticket vending machine stocked with printer supplies. (l) A lottery sales agent shall provide designated sales reports to the Texas Lottery. (m) A lottery sales agent shall undergo required training relating to the use and maintenance of instant ticket vending machines. (n) If a lottery sales agent loses or misplaces the keys to an instant ticket vending machine, or if the keys to an instant ticket vending machine are stolen, the lottery sales agent responsible shall pay $100.00 for each occasion to cover the costs of the service call and hardware associated with the installation of new locks on the instant ticket vending machine. (o) A lottery sales agent shall allow service technicians access to the instant ticket vending machine during normal business hours to allow service and repair of the instant ticket vending machine. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas, on August 28, 1996 TRD-9612651 Kimberly L. Kiplin General Counsel Texas Lottery Commission Effective date: September 19, 1996 Proposal publication date: July 23, 1996 For further information, please call: (512) 323-3791 TITLE 22. EXAMINING BOARDS PART I. Texas Board of Architectural Examiners CHAPTER 1. Architects The Texas Board of Architectural Examiners adopts amendments to sec.sec.1.18, 1.21, 1.25, 1.27, 1.42-1.46, 1.48, 1.51, 1.82, and 1.83, concerning examinations. The amendments are adopted to accommodate the changes in administering the Architect Registration Examination (ARE). Sections 1.27 and 1.82 are adopted with changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6126). Sections 1.18, 1.21, 1.25, 1.42-1.46, 1.48, 1.51, and 1.83 are adopted without changes and will not be republished. The amendments are adopted for the agency to adjust to the new format of the ARE. The ARE was previously given in a paper and pencil format, but is now computerized. Most of the changes involved the wording "paper and pencil." Other changes were to dates because the new ARE is offered year-round, whereas the previous exam was offered twice a year. The changes to the adopted rules involve cleaning up the text, such as adding a comma or changing "administrative" to administration." The changes will allow the agency to continue administering the ARE to exam candidates. The changes were needed due to the new format in which the exam is being administered. No comments were received regarding adoption of these amendments. SUBCHAPTER A. Scope; Definitions 22 TAC sec.1.18 The amendment is adopted under the Texas Civil Statutes, Article 249a, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612591 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER B. Registration 22 TAC sec.1.121, sec.1.125, sec.1.127 The amendments are adopted under the Texas Civil Statutes, Article 249a, which provides the Texas Board of Architectural Examiners with authority to promulgate rules. sec.1.27. Continuance. (a) Properly submitted applications for registration by examination, in the process of approval, will be effective for three years only. Thereafter, the Board may require the applicant to update the application or reapply. (b) Candidates approved for examination will be required to pay an annual record maintenance fee each December or the file will be closed. After three years the closed file will be destroyed and any credit for divisions previously passed will be forfeited. Candidates will be allowed to reopen files during the three year period only upon payment of the record maintenance fees for the current year and each year the file has been closed. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612592 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER C. Examinations 22 TAC sec.sec.1.42-1.46, 1.48, 1.51 The amendments are adopted under the Texas Civil Statutes, Article 249a, which provides the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612595 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 22 TAC sec.1.50 The Texas Board of Architectural Examiners adopts the repeal of sec.1.50, concerning Reapplication, without changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6128) and will not be republished. The repeal is due to the new administration procedures of the Architect Registration Examination. No comments were received regarding adoption of the repeal. The repeal is adopted under the Texas Civil Statutes, Article 249a, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612597 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER D. Certification and Annual Registration 22 TAC sec.1.69 The Texas Board of Architectural Examiners adopts an amendment to sec.1.69, concerning Reinstatement. The amendment is adopted to clarify confusing terminology, without changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6128) and will not be republished. The amendment is adopted for the agency to help clarify confusing terminology. No comments were received regarding adoption of this amendment. The amendment is adopted under the Texas Civil Statutes, Article 249a, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612598 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER E. Fees sec.1.82, sec.1.83 The amendments are adopted under the Texas Civil Statutes, Article 249a, which provides the Texas Board of Architectural Examiners with authority to promulgate rules. sec.1.82. Application, Examination and Initial Registration Fees. (a) All applicants for registration by examination must remit an application fee, as prescribed by the Board, with their original application. (b) An approved candidate when scheduling to take an examination, will be required to pay examination and examination administration fees as prescribed by the Board. (c) An initial registration fee for registration by examination will be charged as prescribed by the Board. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612601 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER F. Architect's Seal 22 TAC sec.1.103 The Texas Board of Architectural Examiners adopts an amendment to sec.1.103, concerning Required Use. The amendment is adopted to relieve, in the short term, problems that have arisen due to the impact of technology on the design professions, with changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6129). The amendment is adopted to provide alternatives to sealing documents, taking into consideration the effects of new technology in businesses. The statement specified in the rule allows the recipient of the documents to identify the documents as a drawing by an architect registered by TBAE. No comments were received regarding adoption of this amendment. The amendment is adopted under the Texas Civil Statutes, Article 249a, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. sec.1.103. Required Use. (a)-(c) (No change.) (d) Once documents bearing the architect's seal are issued from the architect's office, the seal shall not be removed. However, if the client requests electronic drawing files that would be used as reference documents, the following statement shall be substituted for the seal: The record copy of this drawing is on file at the offices of (name of firm), (address of firm). This electronic document is released for the purposes of reference, coordination, and/or facility management under the authority of (name), (registration number) on (date). Any modification(s) to this drawing shall be in compliance with the Texas Board of Architectural Examiners' rules. (e)-(j) (No change.) This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612604 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER G. Titles and Firm Names 22 TAC sec.1.121, sec.1.122 The Texas Board of Architectural Examiners adopts the repeals to sec.1.121 and sec.1.122, concerning Titles and Firm Names. These rules are repealed due to the updating and rewriting of Subchapter G, Titles and Firm Names, without changes to the proposed rules as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6129) and will not be republished. The rules were repealed to rewrite and update the content of the rules in Subchapter G, Titles and Firm Names. The changes will allow the Enforcement Division of the agency to function more efficiently and effectively. No comments were received regarding the adoption of the repeals. The repeals are adopted under the Texas Civil Statutes, Article 249a, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612610 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER G. Compliance and Enforcement 22 TAC sec.sec.1.121-1.125 The Texas Board of Architectural Examiners adopts new sec.sec.1.121-1.125, concerning Compliance and Enforcement. The new rules are adopted to update the rules of the Board; and more importantly, help the Enforcement Division of the agency carry out the tasks it has been charged with performing. Section 1.123 is adopted with changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6130). Sections 1.121, 1.122, 1.124, and 1.125 are being adopted without changes and will not be republished. The new rules are adopted to rewrite and update the content of the rules in Subchapter G, Titles and Firm Names. The changes to the adopted rules involve changing the term "chapter" to "title." The changes will allow the Enforcement Division of the agency to function more efficiently and effectively. No comments were received regarding adoption of the new rules. The new rules are adopted under the Texas Civil Statutes, Article 249a, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. sec.1.123. Multiple Offices. If an architect or architectural firm maintains offices in more than one locality, the following shall apply: (1) an office located in Texas having a person registered as an architect in Texas employed in the firm can solicit and perform architectural work. (2) an office located in Texas not having a person registered as an architect in Texas employed in the firm shall not do architectural work for the public of the State of Texas unless: (A) the architectural work is done under the responsible charge of an architect registered in Texas; and (B) the responsible architect personally affixes his/her signature, Texas Architect's seal, and the date to all reports, plans and specifications, or other architectural documents issued by the office, or as otherwise required by Subchapter F of this title (relating to Architect's Seal). (3) an office located in Texas not having a person registered as an architect in Texas employed in the firm shall not do architectural work for the public unless all negotiations with prospective clients, whether written or oral, clearly designate that an architect registered in Texas will be responsible for the work. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612607 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER H. Rules of Conduct 22 TAC sec.sec.1.141-1.148 The Texas Board of Architectural Examiners adopts the repeals to sec.sec.1.141- 1.148, concerning rules of conduct. The rules are repealed due to updating and rewriting of Subchapter H. Rules of Conduct, without changes to the proposed text in the July 5, 1996, issue of the Texas Register (21 TexReg 6131) and will not be republished. The rules are repealed to rewrite and update the content of the rules in Subchapter H, Rules of Conduct. The changes will allow the Enforcement Division of the agency to function more efficiently and effectively. No comments were received regarding the adoption of the repeals. The repeals are adopted under the Texas Civil Statutes, Article 249a, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612616 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER H. Professional Conduct 22 TAC sec.sec.1.141-1.150 The Texas Board of Architectural Examiners adopts new sec.sec.1.141-1.150, concerning Professional Conduct. The new rules are adopted to update the rules of the Board; and more importantly, help the Enforcement Division of the agency carry out the tasks it has been charged with performing. Sections 1.146, 1.147, 1.148, and 1.150 are adopted with changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6131). Sections 1.141- 1.145 and sec.1.149 are adopted without changes and will not be republished. The new rules are adopted to rewrite and update the content of the rules in Subchapter H, Rules of Conduct. The changes will allow the Enforcement Division of the agency to function more efficiently and effectively. No comments were received regarding adoption of the new rules. The new rules are adopted under the Texas Civil Statutes, Article 249a, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. sec.1.146. Professional Practice and Reputation. (a) The architect shall not offer or promise to pay or deliver, directly or indirectly, any commission, political contribution, gift, favor, gratuity, benefit, or reward as an inducement to secure any specific architectural work or assignment; providing and excepting, however, that an architect may pay a duly licensed employment agency its fee or commission for securing architectural employment in a salaried position. This is not intended to prohibit architects from volunteering their services to charity. (b) The architect shall not solicit professional employment by advertising which is false, misleading, deceptive, or which does not clearly display the registrant's state registration number. (c) The architect shall not make, publish, or cause to be made or published any representation or statement concerning his/her professional qualifications or those of his/her partners, associates, firm, or organization, either current or former, which is in any way misleading or tends to mislead the recipient thereof, or the public, concerning his/her architectural education, experience, specializations, or other architectural qualifications. (d) A registrant must comply with the Professional and Consulting Services Procurement Act, Texas Civil Statutes, Government Code, Title 10, Chapter 2254. sec.1.147. Addiction/Habituation. If in the course of a disciplinary proceeding, it is found by the Board that addiction or habituation to alcohol or a controlled substance, as provided by Texas Civil Statutes, Article 4476-15, sec.1.02(4) (Controlled Substance Act), contributed to a violation of the Act or rules of this Board, then the Board may condition its disposition of the disciplinary matter on the architect's completion of a rehabilitation program approved by the Texas Commission on Alcohol and Drug Abuse at a facility also approved by the Commission. sec.1.148. Responsibility to the Architectural Profession. (a) The architect shall not: (1) circumvent or attempt to circumvent any provision of the Act or a general Board rule through the actions of another; (2) participate, directly or indirectly, in any plan, scheme, or arrangement attempting or having as its purpose the evasion of any provision of the Act or general Board rule; (3) fail to exercise reasonable care or diligence to prevent his/her partners, associates, and employees from engaging in conduct which, if done by him/her, would violate any provision of the Act or general Board rule; (4) violate any of the professional practice requirements of federal, state and local statutes, codes, regulations, rules or ordinances in providing architectural services; (5) engage in any illegal conduct involving moral turpitude; (6) engage in any conduct that discredits or tends to discredit the architectural profession; (7) make, publish, or disseminate any statements, criticisms, or arrangements on architectural matters connected with public policy which are inspired or paid for by an interested party or parties, unless he/she has prefaced such statement or comment by explicitly identifying himself/herself, disclosing the identities of the party or parties on whose behalf he/she is speaking and revealing the existence of any pecuniary interest he/she may have in such architectural matter; (8) permit or allow his/her professional identification, seal, firm or business name, or his/her services to be used or made use of, directly or indirectly, or in any manner whatsoever, so as to make possible to create the opportunity for the unauthorized practice of architecture by any person, firm, or corporation in this state; (9) perform any acts, allow any omissions, or make any assertions or representations in the practice of architecture which are fraudulent, deceitful, or misleading, or which in any manner whatsoever tend to create a misleading impression; (10) associate with or permit or allow the use of his/her name, firm or business name or professional identification, or seal in connection with any business venture, project or enterprise which he/she knows or should have known, is engaged in professional practices which violate any provision of the Act or any Board rule; (11) maliciously injure or attempt to injure or damage the professional reputation of another by any means whatsoever; provided and except, however, that this shall not relieve any architect of the obligation to expose any fraud, gross negligence, incompetence, misconduct, unethical or illegal conduct to the proper authorities or preclude a frank but private appraisal of architects or other persons or firms when requested by a client or prospective employer; (12) aid or abet, directly or indirectly, any unregistered person in connection with the unauthorized practice of architecture, or any firm or corporation in the practice of architecture unless carried on in accordance with the provisions of the Act; (13) directly or indirectly or in any manner whatsoever lend his/her registration, seal, or professional identification to any unregistered person or to any firm or corporation carrying on the practice of architecture contrary to the provisions of the Act; or (14) on his/her own authority as an employee of the State of Texas or any of its political subdivisions authorize or create any situation contrary to the requirements of the Act. (b) The architect possessing knowledge of an applicant's qualifications for registration shall cooperate with the Board by responding in writing to the Board with those qualifications when requested to do so by the applicant or the Board. (c) The architect shall be personally and professionally responsible and accountable for the care, custody, control, and use of his/her architect's seal, his/her professional signature, and identification. The architect whose seal has been lost, misplaced, or stolen, shall, upon discovery of its loss, report same immediately to the Board, which may invalidate the stolen registration number of said seal, if it deems this necessary, and issue another registration number to said architect. sec.1.150. Criminal Convictions. (a) In consideration of Texas Civil Statutes, Articles 6252-13c and 13d, the following will apply in the processing of an application for registration as an architect: (1) The applicant will be required to state, as part of a sworn affidavit, whether he/she has ever been convicted of a felony or misdemeanor; (2) Applicants with prior convictions will be required to provide a summary of the conviction in sufficient detail to allow the Board to determine if it is applicable to the application for registration; (3) If the Board determines the conviction is applicable to the application, the Board staff will obtain sufficient details of the conviction to allow the Board to determine the effect of the conviction on the applicant's eligibility for registration; (b) In determining whether a criminal conviction is applicable to an applicant's application, the Board will consider the following: (1) the nature and seriousness of the crime; (2) the relationship of the crime to the purposes for requiring a registration to practice architecture; (3) the extent to which a registration might offer an opportunity to engage in further criminal activity of the same type as that which the applicant had been previously involved; and (4) the relationship of the crime to the ability, capacity, or fitness required to perform the duties and discharge the responsibilities of an architect. (c) In addition to the factors that may be considered under subsection (b) of this section, the Board shall consider the following: (1) extent and nature of the applicant's past criminal activity; (2) the age of the applicant at the time the crime was committed, and the amount of time that has elapsed since the applicant's last criminal activity; (3) the conduct and work activity of the applicant prior to and following the criminal activity; (4) evidence of the applicant's rehabilitation; and (5) other evidence of the applicant's fitness to practice as an architect. (d) Crimes relating to the practice of architecture include, but are not limited to, the following: (1) criminal negligence; (2) soliciting, offering, giving or receiving any form of bribe; (3) the unauthorized use of property, funds or proprietary information belonging to another; (4) acts relating to the acquisition, use, or dissemination of confidential information related to architecture; and (5) any violation as an individual or as a consenting party of any provision of the Act (Texas Civil Statutes, Article 249a). (e) The application of any applicant deemed ineligible for registration because of a prior criminal conviction will be proposed for rejection and the applicant will be provided the following information in writing: (1) the reason for rejecting the application; (2) notice of the administrative procedure used to conduct an informal conference to show compliance with all requirements of law for registration as an architect, as provided by sec.1.275 of this title (relating to Complaints), and similar to the proceedings established for registrants under sec.1.161 of this title (relating to Disciplinary Actions); and (3) notice that upon exhaustion of the administrative appeal, an action may be filed in a district court of Travis County for review of the evidence presented to the Board and its decision. The person must begin the judicial review by filing a petition with the court within 30 days after the Board's decision is final and appealable. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612613 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER I. Charges Against Architects: Action 22 TAC sec.sec.1.161-1.179 The Texas Board of Architectural Examiners adopts the repeals to sec.sec.1.161- 1.179, concerning Charges Against Architects: Action. The rules are repealed due to updating and rewriting of Subchapter I, Charges Against Architects: Action, without changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6134) and will not be republished. The rules were repealed due to the rewriting and updating of the content of the rules in Subchapter I, Charges Against Architects: Action. The changes will allow the Enforcement Division of the agency to function more efficiently and effectively. No comments were received regarding adoption of the repeals. The repeals are adopted under the Texas Civil Statutes, Article 249a, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612622 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 22 TAC sec.1.161 The Texas Board of Architectural Examiners adopts new sec.1.161, concerning Disciplinary Actions. The new rule is adopted to update the rules of the Board; and more importantly, help the Enforcement Division of the agency carry out the tasks it has been charged with performing, with changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6135). The new rule is adopted to rewrite and update the content of the rules in Subchapter I, Charges Against Architects: Action. The changes will allow the Enforcement Division of the agency to function more efficiently and effectively. No comments were received regarding adoption of the new rule. The new rule is adopted under the Texas Civil Statutes, Article 249a, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. sec.1.161. Disciplinary Actions. (a) The Board may revoke Certificates of Registration for failure to register annually. Register annually is defined as: (1) completing the renewal form completely; and (2) remitting the correct amount of renewal fees as described in Subchapter E of this chapter (relating to Fees). A registrant who has failed to register annually and has not yet been revoked by Board action will be categorized as a delinquent registrant. (b) Under the authority and provisions of the Regulation of the Practice of Architecture (the Act), sec.11, the Board may take disciplinary action against a registrant who is found censurable for a violation of law, rules, or conduct. In such case, the Board may do any of the following: (1) revoke a certificate of registration; (2) suspend a certificate of registration; (3) probate a suspended registration; (4) assess an administrative penalty: (A) the administrative penalty levied by the Board for each violation shall not exceed the maximum amount allowed by Article 249a, Texas Civil Statutes. (B) each day a violation continues or occurs may be considered a separate violation when levying an administrative penalty; (5) issue a formal or informal reprimand: (A) a formal reprimand will take the form of a Board order; (B) an informal reprimand may be no less than an oral or written admonishment from the Board. All actions of the Board are properly recorded and available upon request as public information. In addition, all actions enumerated in this subsection, except an informal reprimand, will be published in the Board newsletter and transmitted to the National Council of Architectural Registration Boards. (c) Architects must comply with the Texas Department of Licensing and Regulation requirements and submit drawings in a timely manner. The Board may revoke or suspend an architects certificate of registration; place on probation an architect whose registration has been suspended or reprimanded; or assess an administrative penalty in an amount not to exceed $1000. (d) An individual whose registration has expired for nonpayment of renewal fees is a delinquent registrant of the Board and is subject to all provisions of the Act and Board rules governing registrants until such time as registration is revoked by action of the Board. (e) In determining disciplinary actions to be taken by the Board, the requirements of Texas Civil Statutes, Article 6252-13c and 6252-13d, as set out in subsection (i) of this section, will be considered in addition to any provisions of the Act or Board rules. (f) In determining conduct in the practice of architecture that warrants disciplinary action, the Board will consider, among other things, professional conduct and conviction of certain crimes as provided in Texas Civil Statutes, Articles 6252-13c and 6252-13d. (g) A registrant alleged to have violated the law, rules, or standards of conduct will be notified by personal service or by certified or registered mail of the facts or conduct alleged to be in violation and shall be afforded an opportunity to present arguments and evidence in his/her own behalf before a determination of censurable conduct is made by the Board, as provided in Subchapter J of this chapter (relating to Complaint Procedures). (h) Where a violation appears evident, the Board will consider instituting disciplinary action by means of scheduling a public hearing in conformance with Subchapter K of this chapter (relating to Hearings-Contested Cases); however: (1) the registrant will first be advised of the right to voluntarily contact the Board within a specified time limit to schedule an informal conference normally at the Board office with an informal conference review committee for the purpose of showing there has been no violation as alleged. The committee will be composed of appropriate personnel. The registrant may employ an attorney to represent him. If the registrant desires a conference and the complaint cannot thereafter be dismissed on the evidence, an effort will be made to reach an informal settlement. This settlement will take the form of a proposed agreed Board order which will be presented to the Board for acceptance or rejection; (2) if facts and circumstances of a particular case appear to warrant disposition by offering the registrant a consent order, the Executive Director on the advice of the staff and legal counsel may approve of such offer in lieu of an informal conference. Any such consent order may be accepted or rejected by the Board. If the registrant declines such an offer, or if the Board rejects it, the procedures in paragraph (1) of this subsection will be followed; (3) if the registrant's registration has expired, the Board may propose not to renew the registration. If the registrant does not concur with this action and submits the required fee to effect an automatic renewal of his/her registration, the Board will renew the registration and instigate proceedings to suspend the registration or revoke the registration; or (4) any Board action under this subsection which is not informally disposed by stipulation, agreed settlement, consent order, or default will be treated as a contested case and disposed as provided by the Administrative Procedure Act (Texas Civil Statutes, Government Code, Title 10, Chapter 2001) and the Board rules for hearings and contested cases. (A) The Board shall hear such witnesses as are reasonably necessary to fairly present the relevant issues as set forth in the complaint, together with witnesses knowledgeable of material facts to the defense of the architect. (B) Copies of the notices of formal hearings scheduled shall be filed with the Secretary of State and other appropriate agencies. (C) The Board shall keep an official record of all proceedings and exhibits. (D) The Board may cause a transcript of the proceedings to be made which, together with the evidence and exhibits submitted, shall be the record of the hearing. Such transcript may be made also on written request of either party of said charges, but at the expense of the demand party. A copy of such transcript, however caused to be made, shall be submitted to the Board and become part of the record of the case. (i) Criminal convictions shall be handled as follows: (1) Under the authority of Texas Civil Statutes, Article 6252-13c, sec.4e, and Article 249a, sec.5(b), the Board shall revoke the registration of any registrant incarcerated as a result of conviction for a felony committed subsequent to being registered as an architect. The registration of any registrant shall also be revoked for felony probation revocation, revocation of parole, or revocation of mandatory supervision subsequent to being registered as an architect regardless of the date of the original conviction. (2) The Board may take any of the actions set out in subsection (b) of this section when a registrant is convicted of a misdemeanor or a felony without incarceration if the crime directly relates to his/her duties and responsibilities as an architect as set out in sec.1.150 of this title (Relating to Criminal Convictions). Full disclosure of information involving a misdemeanor or a felony is required at the time of the conviction. (3) Any registrant whose registration has been revoked under the provisions of this subsection will be advised in writing of the right to apply for reinstatement of registration. (j) The facts and circumstances of each disciplinary case will be assessed by the following factors before any sanctions available to the Board are ordered. (1) The seriousness of the prohibited acts or omissions. (2) The number of prior complaints found justified against the respondent. (3) The severity of penalty necessary to deter future violations. (4) Efforts or resistance to correct the violations. (5) Any hazard to the health, safety or welfare of the public. (6) Any actual damage, physical or otherwise, caused by the violations. (7) Any economic benefit gained through the violations. (8) Any other matters that justice and public welfare may require. (k) The following is a table of suggested sanctions for specific infractions of the law or rules: Figure: 22 TAC 1.61(k) (l) Any felony conviction which includes incarceration will statutorily require the revocation of a registration, Article 6252-13c, Texas Civil Statutes. (m) The Board, the Executive Director, an administrative hearing judge, and the participants in an informal conference may arrive at a greater or lesser sanction than suggested in subsection (k) of this section based on the ultimate assessment of evidence or agreement in the expedience of justice. Conditions of a suspension, probation, or formal reprimand may be set by the Board in its final order. (n) A registrant whose registration is current or renewable under the Act, sec.12, is responsible to the Board and subject to all rules governing the acts of registrants. The registrant shall answer promptly all inquiries concerning matters under the jurisdiction of the Board, and shall fully comply with final decisions and orders of the Board. Failure to comply with these matters will constitute a separate offense of misconduct subject to any of the penalties provided under the Act, sec.11. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612619 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER J. Violations by Unregistered Persons 22 TAC sec.sec.1.191-1.195 The Texas Board of Architectural Examiners adopts the repeals to sec.sec.1.191- 1.195, concerning Violations by Unregistered Persons. The rules are repealed due to updating and rewriting of Subchapter J, Violations by Unregistered Persons, without changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6137) and will not be republished. The rules were repealed to rewrite and update the content of the rules in Subchapter J, Violations by Unregistered Persons. The changes will allow the Enforcement Division of the agency to function more efficiently and effectively. No comments were received regarding the adoption of the repeals. The repeals are adopted under the Texas Civil Statutes, Article 249a, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612628 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER J. Complaint Procedure 22 TAC sec.sec.1.191-1.193 The Texas Board of Architectural Examiners adopts new sec.sec.1.191-1.193, concerning Complaints against Registrants and Nonregistrants. The new rules are adopted to update the rules of the Board; and more importantly, help the Enforcement Division of the agency carry out the tasks it has been charged with performing. Sections 1.191 and 1.192 are being adopted with changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6137). Section 1.193 is being adopted without changes and will not be republished. The new rules are adopted to rewrite and update the content of the rules in Subchapter J, Complaint Procedures. The changes will allow the Enforcement Division of the agency to function more efficiently and effectively. No comments were received regarding adoption of the new rules. The new rules are adopted under the Texas Civil Statutes, Article 249a, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. sec.1.191. General. (a) The Regulation of the Practice of Architecture (the Act), Article 249a, Texas Civil Statutes, is specific in its provisions authorizing the lawful practice of architecture. It is equally specific in charging the Texas Board of Architectural Examiners with responsibility for enforcement of the Act. The statute exempts certain persons from provisions of the Act, but otherwise, unregistered persons are liable for violations. (1) The Board has authority to seek misdemeanor convictions and fines up to $1000 per violation for persons representing themselves as an architect, architectural designer, or other title of profession or business using some form of the word "architect" and/or offering or performing architectural services not under an exception as permitted under the Act. (2) Each day of an offense is considered a separate violation. (b) Complaints alleging violations of the Act or Board rules must be made in good faith and be accompanied by sufficient information or factual evidence for the Executive Director to establish probable cause. If the Executive Director does not find probable cause, he/she shall be authorized to dismiss the allegation without further action. The Board is not responsible for proving the basis of a complaint. (c) Complaints shall normally be submitted in writing along with copies or originals of all supporting evidence; however, the Executive Director may initiate an inquiry based on any information that will establish probable cause. (d) The Board will act only when the basis of the complaint would be a violation of the Act or Board rules if substantiated. (e) If a valid complaint, accompanied by sufficient information or factual evidence to establish probable cause, is filed with the Executive Director, the Board may proceed independent of any action by the complainant to enter into litigation with the defendant or to abandon the complaint. (f) The Board may, upon request, keep the identity of the complainant confidential to the extent permitted by law. (g) The Board office shall maintain a separate file containing all information in connection with complaints, charges, hearings in connections with such charges, and the action of the Board in each case. (h) On each written complaint filed with the Board, a report to the complainant shall be made at least as frequently as quarterly on the status of the complaint until the final disposition of the complaint. sec.1.192. Complaints Against Nonregistrants. (a) Complaints alleging violations of the Act or Board rules should be in writing and accompanied by sufficient information or factual evidence to establish probable cause. Complaints shall be submitted on forms provided by the Board or in a written form that will provide the same information as the official forms. Complaints must be notarized. Information to be provided includes: (1) name of the alleged violator; (2) description of the alleged violation; (3) supporting information and factual evidence; (4) names, addresses and phone numbers of witnesses; and (5) probable source of other pertinent information. (b) Upon determination that a violation of the Act or Board rules has occurred, the Board may take one or more of the following actions: (1) enter into an agreement of voluntary compliance; or (2) file an injunctive suit to obtain compliance; or (3) file a criminal complaint with the appropriate prosecuting authority as provided by the Act, sec.13. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612625 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER L. Hearings-Contested Cases 22 TAC sec.sec.1.231-1.276 The Texas Board of Architectural Examiners adopts new sec.sec.1.231-1.276, concerning Hearings-Contested Cases. The new rules are adopted to update the rules of the Board; and more importantly, help the Enforcement Division of the agency carry out the tasks it has been charged with performing. Sections 1.231, 1.242, and 1.251 are adopted with changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6138). Sections 1.232- 1.241, 1.243-1.250 and 1.252-1.276 are adopted without changes and will not be republished. The new rules are adopted to add the content of the rules in Subchapter L, Hearings - Contested Cases to Chapter 1, Architects. The changes will allow the Enforcement Division of the agency to function more efficiently and effectively. No comments were received regarding adoption of the new rules. The new rules are adopted under the Texas Civil Statutes, Article 249a, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. sec.1.231. State Office of Administrative Hearings. (a) Formal contested case hearings will be conducted for the Board by the State Office of Administrative Hearings (SOAH), as authorized by Texas Civil Statutes, Government Code, Title 10, Chapter 2003. Hearings will be conducted in accordance with the Administrative Procedure Act, the rules and regulations of the SOAH, and the Regulation of the Practice of Architecture (the Act) and the Texas Board of Architectural Examiners' Rules and Regulations. (b) An administrative law judge (judge) assigned to the SOAH will perform the duties and responsibilities as described in sec.sec.1.231-1.276 of this title (relating to Hearings - Contested Cases). (c) The judge shall consider any applicable Board rules and policies in conducting the hearing. If there is any conflict between the rules of the SOAH and these Board rules, these rules will control unless otherwise specifically stated in the SOAH rules. This subsection does not apply if the rules of the Board are contrary to or are otherwise precluded by statutory or other controlling law, including Texas Civil Statutes, Government Code, Title 10, Chapter 2003. sec.1.242. Discovery. (a) Parties to an administrative hearing before the State Office of Administrative Hearings (SOAH) shall have the discovery rights provided in the Administrative Procedure Act, the Act and Board rules. (b) Requests for issuance of subpoenas or commissions should be directed to the Board. (c) All discovery requests should be initially directed to the party from which discovery is being sought. (d) All disputes with respect to any discovery matter shall be filed with and resolved by the SOAH. (e) All parties will be afforded a reasonable opportunity to file objections or move for a protective order with respect to the issuance of a subpoena or commission. (f) Copies of discovery requests and documents filed in response thereto shall be filed with all parties, but should not be filed with the SOAH unless directed by the judge or when in support of a motion to compel, motion for protective order, or motion to quash. sec.1.251. Administrative Law Judge. (a) The judge shall have the authority and duty to: (1) conduct a full, fair, and impartial hearing; (2) take action to avoid unnecessary delay in the disposition of the proceeding; and (3) maintain order. (b) The judge shall have the power to regulate the course of the hearing and the conduct of the parties and authorized representatives, including the power to: (1) administer oaths; (2) take testimony; (3) rule on questions of evidence; (4) rule on discovery issues; (5) issue orders relating to hearing and prehearing matters, including orders imposing sanctions that the Board may impose; (6) admit or deny party status; (7) limit irrelevant, immaterial, and unduly repetitious testimony and reasonably limit the time for presentations; (8) grant a continuance; (9) request parties to submit legal memoranda, proposed findings of fact and conclusions of law; and (10) issue proposals for decision pursuant to the Administrative Procedure Act. (c) A judge shall disqualify himself/herself or shall recuse himself/herself on the same grounds and under the same circumstances as specified in Texas Rules of Civil Procedure, Rule 18b. (d) A substitute judge may use the existing record and need not repeat previous proceedings, but may conduct further proceedings as are necessary and proper to conclude the hearing and render a proposal for decision. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612633 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 CHAPTER 3. Landscape Architects SUBCHAPTER B. Registration 22 TAC sec.3.23 The Texas Board of Architectural Examiners adopts an amendment to sec.3.23, concerning Forms and Instructions. The amendment is adopted to have the correct address of the Council of Landscape Architectural Registration Boards (CLARB) in the rules. The rules are adopted with changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6146). The amendment is adopted to correctly identify the mailing address of the CLARB. The new address will inform registrants of the correct location of the CLARB. No comments were received regarding adoption of the amendment. The amendment is adopted under the Texas Civil Statutes, Article 249c, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. sec.3.23. Forms and Instructions. Application forms and instructions will be furnished by the Council of Landscape Architecture Registration Boards (CLARB), 12700 Fair Lakes Circle, Suite 110, Fairfax, VA 22033. The applicant must request CLARB to transmit completed applications with all required supporting documentation to the Board office. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612593 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 22 TAC sec.3.25 The Texas Board of Architectural Examiners adopts an amendment to sec.3.25, concerning Processing. The amendment is adopted due to changes in the way applications are processed by the agency, without changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6147) and will not be republished. The amendment is adopted due to the reason that applicants must request the Council of Landscape Architectural Registration Boards (CLARB) to send completed transcripts to TBAE for evaluation to take the examination. The change will reduce the amount of preparation and time spent on evaluating applications. No comments were received regarding adoption of the amendment. The amendment is adopted under the Texas Civil Statutes, Article 249c, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612594 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER C. Written Examinations 22 TAC sec.3.46 The Texas Board of Architectural Examiners adopts an amendment to sec.3.46, concerning Scoring. The amendment is adopted due to the fees specified in new rule Subchapter E, Fees, sec.3.89, with changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6147). The amendment is adopted to provide better organization within the rules. No comments were received regarding adoption of the amendment. The amendment is adopted under the Texas Civil Statutes, Article 249c, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. sec.3.46. Scoring. (a) (No change.) (b) There will be no Board review of examinations with candidates. Candidates must request review of their examination within 14 days of receipt of their exam results. Once they are notified by TBAE that their exam is available for review, the candidate must schedule and complete the review within 20 days. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612596 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER D. Certification and Annual Registration 22 TAC sec.3.69 The Texas Board of Architectural Examiners adopts an amendment to sec.3.69, concerning Reinstatement. The amendment is adopted to clarify confusing terminology, without changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6147) and will not be republished. The amendment is adopted for the agency to help clarify confusing terminology. No comments were received regarding adoption of the amendment. The amendment is adopted under the Texas Civil Statutes, Article 249c, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612599 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER E. Fees 22 TAC sec.3.89 The Texas Board of Architectural Examiners adopts new sec.3.89, concerning Examination Review Fee. The rule is adopted to clearly designate the fees charged candidates for reviewing past exams, without changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6148) and will not be republished. The new rule is adopted to recover costs incurred from preparation and time spent allowing candidates to review past exams. No comments were received regarding adoption of the new rule. The new rule is adopted under the Texas Civil Statutes, Article 249c, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612602 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER F. Landscape Architect Seal 22 TAC sec.3.104 The Texas Board of Architectural Examiners adopts an amendment to sec.3.104, concerning Required Use. The amendment is adopted to relieve, in the short term, problems that have arisen due to the impact of technology on the design professions, with changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6148). The amendment is adopted to provide alternatives to sealing documents, taking into consideration the effects of new technology in businesses. The statement specified in the rule allows the recipient of the documents to identify the documents as a drawing by an architect registered by TBAE. No comments were received regarding adoption of the amendment. The amendment is adopted under the Texas Civil Statutes, Article 249c, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. sec.3.104. Required Use. (a)- (b) (No change.) (c) The absence of a seal affixed to any contract documents or plans shall be considered a violation of these rules and regulations. However, if the client requests electronic drawing files that would be used as reference documents, the following statement shall be substituted for the seal: The record copy of this drawing is on file at the offices of (name of firm), (address of firm). This electronic document is released for the purposes of reference, coordination, and/or facility management under the authority of (name), (registration number) on (date). Any modification(s) to this drawing shall be in compliance with the Texas Board of Architectural Examiners' rules. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612605 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER G. Titles and Firm Names 22 TAC sec.sec.3.121-3.123 The Texas Board of Architectural Examiners adopts the repeals to sec.sec.3.121- 3.123, concerning Firm Names and Authority for Practice. The rules are repealed due to the updating and rewriting of Subchapter G, Titles and Firm Names, without changes to the repealed rules as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6149) and will not be republished. The rules are repealed to rewrite and update the content of the rules in Subchapter G, Titles and Firm Names. The changes will allow the Enforcement Division of the agency to function more efficiently and effectively. No comments were received regarding adoption of the repeals. The repeals are adopted under the Texas Civil Statutes, Article 249c, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612611 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER G. Compliance and Enforcement 22 TAC sec.sec.3.121-3.125 The Texas Board of Architectural Examiners adopts new sec.sec.3.121-3.125, concerning Compliance and Enforcement. The new rules are adopted to update the rules of the Board; and more importantly, help the Enforcement Division of the agency carry out the tasks it has been charged with performing. Sections 3.121, 3.124, and 3.125 are adopted with changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6149). Sections 3.122 and 3.123 are adopted without changes and will not be republished. The new rules are adopted to rewrite and update the content of the rules in Subchapter G. Titles and Firm Names. The changes will allow the Enforcement Division of the agency to function more efficiently and effectively. No comments were received regarding adoption of the new rules. The new rules are adopted under the Texas Civil Statutes, Article 249c, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. sec.3.121. General. In carrying out its responsibilities to insure strict compliance with and enforcement of the Regulation of the Practice of Landscape Architecture (the Act), the Board will make inquiries into situations which allegedly violate or abridge the requirements of the Act and Board rules dealing with "landscape architecture," and those representations which imply the legal capacity to offer or provide "landscape architecture" services to the public. Situations which are considered by the Board to pose or have caused serious harm to the public, or cannot be readily resolved through voluntary compliance, will be disposed of by administrative, civil, or criminal proceedings as authorized by law. sec.3.124. Business Names. (a) Individual registrants and properly constituted business entities are authorized by law to engage in the practice of "landscape architecture"; however, the Board does not certify or register "landscape architectural" firms, per se. In order for such businesses to acquire corporate "landscape architectural" status, via a No Objection letter issued by the Texas Board of Architectural Examiners, the business must supply the Board: (1) information on what services they intend to offer; (2) the names of the individuals employed by their business that are Texas registered landscape architects; and (3) Landscape Architect of Record affidavits, available at the Board office, signed by Texas registered landscape architects and notarized by a Notary Public. (b) Thus, that responsibility of this Board to protect the public interests from the irresponsible practice of "landscape architecture" is vested in the qualification and responsibility of landscape architects who are accountable individually. sec.3.125. Titles. (a) Persons holding Certificates of Registration for Landscape Architecture issued by this Board are authorized to employ the title landscape architect" and use the word "landscape architecture," or various constructions thereof, in describing or identifying services he/she solicits, offers, or executes. (b) No other person, firm, partnership, corporation, or groups of persons may employ the title "landscape architect" or constructions of the word "landscape architecture" to describe persons or services, nor do such unregistered individuals or groups have authority to solicit, offer, or execute "landscape architectural" services in this state. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612608 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER H. Rules of Conduct 22 TAC sec.sec.3.141-3.148 The Texas Board of Architectural Examiners adopts the repeals to sec.sec.3.141- 3.148 concerning Rules of Conduct. The rules are repealed due to updating and rewriting of Subchapter H, Rules of Conduct, without changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6150) and will not be republished. The rules were repealed to rewrite and update the content of the rules in Subchapter H, Rules of Conduct. The changes will allow the Enforcement Division of the agency to function more efficiently and effectively. No comments were received regarding adoption of the repeals. The repeals are adopted under the Texas Civil Statutes, Article 249c, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612617 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER H. Professional Conduct 22 TAC sec.sec.3.141-3.150 The Texas Board of Architectural Examiners adopts new sec.sec.3.141-3.150 concerning Professional Conduct. The new rules are adopted to update the rules of the Board; and more importantly, help the Enforcement Division of the agency carry out the tasks it has been charged with performing. Sections 3.148 and 3.150 are adopted with changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6151). Sections 3.141-3.147 and 3.149 are adopted without changes and will not be republished. The new rules are adopted to rewrite and update the content of the rules in Subchapter H, Rules of Conduct. The changes will allow the Enforcement Division of the agency to function more efficiently and effectively. No comments were received regarding adoption of the new rules. The new rules are adopted under the Texas Civil Statutes, Article 249c, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. sec.3.148. Responsibility to the "Landscape Architectural" Profession. (a) The landscape architect shall not: (1) circumvent or attempt to circumvent any provision of the Act or a general Board rule through the actions of another; (2) participate, directly or indirectly, in any plan, scheme, or arrangement attempting or having as its purpose the evasion of any provision of the Act or general Board rule; (3) fail to exercise reasonable care or diligence to prevent his/her partners, associates, and employees from engaging in conduct which, if done by him/her, would violate any provision of the Act or general Board rule; (4) violate any of the professional practice requirements of federal, state and local statutes, codes, regulations, rules or ordinances in providing landscape architectural services; (5) engage in any illegal conduct involving moral turpitude; (6) engage in any conduct that discredits or tends to discredit the landscape architectural profession; (7) make, publish, or disseminate any statements, criticisms, or arrangements on "landscape architectural" matters connected with public policy which are inspired or paid for by an interested party or parties, unless he/she has prefaced such statement or comment by explicitly identifying himself/herself, disclosing the identities of the party or parties on whose behalf he/she is speaking and revealing the existence of any pecuniary interest he/she may have in such "landscape architectural" matter; (8) permit or allow his/her professional identification, seal, firm or business name, or his/her services to be used or made use of, directly or indirectly, or in any manner whatsoever, so as to make possible to create the opportunity for the unauthorized practice of "landscape architecture" by any person, firm, or corporation in this state; (9) perform any acts, allow any omissions, or make any assertions or representations in the practice of "landscape architecture" which are fraudulent, deceitful, or misleading, or which in any manner whatsoever tend to create a misleading impression; (10) associate with or permit or allow the use of his/her name, firm or business name or professional identification, or seal in connection with any business venture, project or enterprise which he/she knows or should have known, is engaged in professional practices which violate any provision of the Act or any Board rule; (11) maliciously injure or attempt to injure or damage the professional reputation of another by any means whatsoever; provided and except, however, that this shall not relieve any landscape architect of the obligation to expose any fraud, gross negligence, incompetence, misconduct, unethical or illegal conduct to the proper authorities or preclude a frank but private appraisal of landscape architects or other persons or firms when requested by a client or prospective employer; (12) aid or abet, directly or indirectly, any unregistered person in connection with the unauthorized practice of "landscape architecture," or any firm or corporation in the practice of "landscape architecture" unless carried on in accordance with the provisions of the Act; (13) directly or indirectly or in any manner whatsoever lend his/her registration, seal, or professional identification to any unregistered person or to any firm or corporation carrying on the practice of "landscape architecture" contrary to the provisions of the Act; or (14) on his/her own authority as an employee of the State of Texas or any of its political subdivisions authorize or create any situation contrary to the requirements of the Act. (b) The landscape architect possessing knowledge of an applicant's qualifications for registration shall cooperate with the Board by responding in writing to the Board with those qualifications when requested to do so by the applicant or the Board. (c) The landscape architect shall be personally and professionally responsible and accountable for the care, custody, control, and use of his/her landscape architect's seal, his/her professional signature, and identification. The landscape architect whose seal has been lost, misplaced, or stolen, shall, upon discovery of its loss, report same immediately to the Board, which may invalidate the stolen registration number of said seal, if it deems this necessary, and issue another registration number to said landscape architect. sec.3.150. Criminal Convictions. (a) In consideration of Texas Civil Statutes, Articles 6252-13c and 13d, the following will apply in the processing of an application for registration as a landscape architect. (1) The applicant will be required to state, as part of a sworn affidavit, whether he/she has ever been convicted of a felony or misdemeanor; (2) Applicants with prior convictions will be required to provide a summary of the conviction in sufficient detail to allow the Board to determine if it is applicable to the application for registration; (3) If the Board determines the conviction is applicable to the application, the Board staff will obtain sufficient details of the conviction to allow the Board to determine the effect of the conviction on the applicants eligibility for registration; (b) In determining whether a criminal conviction is applicable to an applicants application, the Board will consider the following: (1) the nature and seriousness of the crime; (2) the relationship of the crime to the purposes for requiring a registration to practice "landscape architecture"; (3) the extent to which a registration might offer an opportunity to engage in further criminal activity of the same type as that which the applicant had been previously involved; and (4) the relationship of the crime to the ability, capacity, or fitness required to perform the duties and discharge the responsibilities of a landscape architect. (c) In addition to the factors that may be considered under subsection (b) of this section, the Board shall consider the following: (1) extent and nature of the applicant's past criminal activity; (2) the age of the applicant at the time the crime was committed, and the amount of time that has elapsed since the applicant's last criminal activity; (3) the conduct and work activity of the applicant prior to and following the criminal activity; (4) evidence of the applicant's rehabilitation; and (5) other evidence of the applicant's fitness to practice as a landscape architect. (d) Crimes relating to the practice of "landscape architecture" include, but are not limited to, the following: (1) criminal negligence; (2) soliciting, offering, giving or receiving any form of bribe; (3) the unauthorized use of property, funds or proprietary information belonging to another; (4) acts relating to the acquisition, use, or dissemination of confidential information related to "landscape architecture"; and (5) any violation as an individual or as a consenting party of any provision of the Act (Texas Civil Statutes, Article 249c). (e) The application of any applicant deemed ineligible for registration because of a prior criminal conviction will be proposed for rejection and the applicant will be provided the following information in writing: (1) the reason for rejecting the application; (2) notice of the administrative procedure used to conduct an informal conference to show compliance with all requirements of law for registration as a landscape architect, as provided by sec.3.275 of this title (relating to Complaints), and similar to the proceedings established for registrants under sec.3.161 of this title (relating to Disciplinary Actions); and (3) notice that upon exhaustion of the administrative appeal, an action may be filed in a district court of Travis County for review of the evidence presented to the Board and its decision. The person must begin the judicial review by filing a petition with the court within 30 days after the Board's decision is final and appealable. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612614 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER I. Charges Against Landscape Architects; Action 22 TAC sec.sec.3.158-3.174 The Texas Board of Architectural Examiners adopts the repeals to sec.sec.3.158- 3.174, concerning Charges Summons. The rules are repealed due to updating and rewriting of Subchapter I, Charges Against Landscape Architects; Action, without changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6154) and will not be republished. The rules are repealed due to the rewriting and updating of the content of the rules in Subchapter I, Charges Against Landscape Architects; Action. The changes will allow the Enforcement Division of the agency to function more efficiently and effectively. No comments were received regarding adoption of the repeals. The repeals are adopted under the Texas Civil Statutes, Article 249c, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612623 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 22 TAC sec.3.161 The Texas Board of Architectural Examiners adopts new sec.3.161, concerning Disciplinary Actions. The new rule is adopted to update the rules of the Board; and more importantly, help the Enforcement Division of the agency carry out the tasks it has been charged with performing, with changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6155). The new rule is adopted to rewrite and update the content of the rules in Subchapter I, Charges Against Landscape Architects: Action. The changes will allow the Enforcement Division of the agency to function more efficiently and effectively. No comments were received regarding adoption of the new rule. The new rule is adopted under the Texas Civil Statutes, Article 249c, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. sec.3.161. Disciplinary Actions. (a) The Board may revoke Certificates of Registration for failure to register annually. Register annually is defined as: (1) completing the renewal form completely; and (2) remitting the correct amount of renewal fees as described in Subchapter E of this chapter (relating to Fees). A registrant who has failed to register annually and has not yet been revoked by Board action will be categorized as a delinquent registrant. (b) Under the authority and provisions of the Regulation of the Practice of Landscape Architecture (the Act), sec.8, the Board may take disciplinary action against a registrant who is found censurable for a violation of law, rules, or conduct. In such case, the Board may do any of the following: (1) revoke a certificate of registration; (2) suspend a certificate of registration; (3) probate a suspended registration; (4) issue a formal or informal reprimand: (A) a formal reprimand will take the form of a Board order; (B) an informal reprimand may be no less than an oral or written admonishment from the Board. All actions of the Board are properly recorded and available upon request as public information. In addition, all actions enumerated in this subsection, except an informal reprimand, will be published in the Board newsletter and transmitted to the Council of Landscape Architectural Registration Boards. (c) Landscape Architects must comply with the Texas Accessibility Standards, 16 Texas Administrative Code 68, per Texas Department of Licensing and Regulation. (d) An individual whose registration has expired for nonpayment of renewal fees is a delinquent registrant of the Board and is subject to all provisions of the Act and Board rules governing registrants until such time as registration is revoked by action of the Board. (e) In determining disciplinary actions to be taken by the Board, the requirements of Texas Civil Statutes, Article 6252-13c and 6252-13d, as set out in subsection (i) of this section, will be considered in addition to any provisions of the Act or Board rules. (f) In determining conduct in the practice of landscape architecture that warrants disciplinary action, the Board will consider, among other things, professional conduct and conviction of certain crimes as provided in Texas Civil Statutes, Articles 6252-13c and 6252-13d. (g) A registrant alleged to have violated the law, rules, or standards of conduct will be notified by personal service or by certified or registered mail of the facts or conduct alleged to be in violation and shall be afforded an opportunity to present arguments and evidence in his/her own behalf before a determination of censurable conduct is made by the Board, as provided in Subchapter J of this chapter (relating to Complaint Procedures). (h) Where a violation appears evident, the Board will consider instituting disciplinary action by means of scheduling a public hearing in conformance with Subchapter K of this chapter (relating to Hearings-Contested Cases); however: (1) the registrant will first be advised of the right to voluntarily contact the Board within a specified time limit to schedule an informal conference normally at the Board office with an informal conference review committee for the purpose of showing there has been no violation as alleged. The committee will be composed of appropriate personnel. The registrant may employ an attorney to represent him. If the registrant desires a conference and the complaint cannot thereafter be dismissed on the evidence, an effort will be made to reach an informal settlement. This settlement will take the form of a proposed agreed Board order which will be presented to the Board for acceptance or rejection; (2) if facts and circumstances of a particular case appear to warrant disposition by offering the registrant a consent order, the Executive Director on the advice of the staff and legal counsel may approve of such offer in lieu of an informal conference. Any such consent order may be accepted or rejected by the Board. If the registrant declines such an offer, or if the Board rejects it, the procedures in paragraph (1) of this subsection will be followed; (3) if the registrant's registration has expired, the Board may propose not to renew the registration. If the registrant does not concur with this action and submits the required fee to effect an automatic renewal of his/her registration, the Board will renew the registration and instigate proceedings to suspend the registration or revoke the registration; or (4) any Board action under this subsection which is not informally disposed by stipulation, agreed settlement, consent order, or default will be treated as a contested case and disposed as provided by the Administrative Procedure Act (Texas Civil Statutes, Government Code, Title 10, Chapter 2001) and the Board rules for hearings and contested cases. (A) The Board shall hear such witnesses as are reasonably necessary to fairly present the relevant issues as set forth in the complaint, together with witnesses knowledgeable of material facts to the defense of the landscape architect. (B) Copies of the notices of formal hearings scheduled shall be filed with the Secretary of State and other appropriate agencies. (C) The Board shall keep an official record of all proceedings and exhibits. (D) The Board may cause a transcript of the proceedings to be made which, together with the evidence and exhibits submitted, shall be the record of the hearing. Such transcript may be made also on written request of either party of said charges, but at the expense of the demand party. A copy of such transcript, however caused to be made, shall be submitted to the Board and become part of the record of the case. (i) Criminal convictions shall be handled as follows: (1) Under the authority of Texas Civil Statutes, Article 6252-13c, sec.4e, and Article 249c, sec.4, the Board shall revoke the registration of any registrant incarcerated as a result of conviction for a felony committed subsequent to being registered as a landscape architect. The registration of any registrant shall also be revoked for felony probation revocation, revocation of parole, or revocation of mandatory supervision subsequent to being registered as a landscape architect regardless of the date of the original conviction. (2) The Board may take any of the actions set out in subsection (b) of this section when a registrant is convicted of a misdemeanor or a felony without incarceration if the crime directly relates to his/her duties and responsibilities as a landscape architect as set out in sec.3.150 of this title (Relating to Criminal Convictions). Full disclosure of information involving a misdemeanor or a felony is required at the time of the conviction. (3) Any registrant whose registration has been revoked under the provisions of this subsection will be advised in writing of the right to apply for reinstatement of registration. (j) The facts and circumstances of each disciplinary case will be assessed by the following factors before any sanctions available to the Board are ordered. (1) The seriousness of the prohibited acts or omissions. (2) The number of prior complaints found justified against the respondent. (3) The severity of penalty necessary to deter future violations. (4) Efforts or resistance to correct the violations. (5) Any hazard to the health, safety or welfare of the public. (6) Any actual damage, physical or otherwise, caused by the violations. (7) Any economic benefit gained through the violations. (8) Any other matters that justice and public welfare may require. (k) The following is a table of suggested sanctions for specific infractions of the law or rules: Figure: 22 TAC sec.3.161(k) (l) Any felony conviction which includes incarceration will statutorily require the revocation of a registration, Article 6252-13c, Texas Civil Statutes. (m) The Board, the Executive Director, an administrative hearing judge, and the participants in an informal conference may arrive at a greater or lesser sanction than suggested in subsection (k) of this section based on the ultimate assessment of evidence or agreement in the expedience of justice. Conditions of a suspension, probation, or formal reprimand may be set by the Board in its final order. (n) A registrant whose registration is current or renewable under the Act, sec.7, is responsible to the Board and subject to all rules governing the acts of registrants. The registrant shall answer promptly all inquiries concerning matters under the jurisdiction of the Board, and shall fully comply with final decisions and orders of the Board. Failure to comply with these matters will constitute a separate offense of misconduct subject to any of the penalties provided under the Act, sec.8. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612620 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER J. Violations by Unregistered Persons 22 TAC sec.sec.3.184-3.188 The Texas Board of Architectural Examiners adopts the repeals to sec.sec.3.184- 3.188, concerning Violations by Unregistered Persons. The rules are repealed due to updating and rewriting of Subchapter J, Violations by Unregistered Persons, without changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6157) and will not be republished. The rules were repealed to rewrite and update the content of the rules in Subchapter J, Violations by Unregistered Persons. The changes will allow the Enforcement Division of the agency to function more efficiently and effectively. No comments were received regarding the adoption of the repeals. The repeals are adopted under the Texas Civil Statutes, Article 249c, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612629 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER J. Complaint Procedure 22 TAC sec.sec.3.191-3.193 The Texas Board of Architectural Examiners adopts new sec.sec.3.191-3.193, concerning Complaint Procedure. The new rules are adopted to update the rules of the Board; and more importantly, help the Enforcement Division of the agency carry out the tasks it has been charged with performing. Section 3.191 is adopted with changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6157). Sections 3.192 and 3.193 are being adopted without changes and will not be republished. The new rules are adopted to rewrite and update the content of the rules in Subchapter J, Complaint Procedures. The changes will allow the Enforcement Division of the agency to function more efficiently and effectively. No comments were received regarding adoption of the new rules. The new rules are adopted under the Texas Civil Statutes, Article 249c, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. sec.3.191. General. (a) The Regulation of the Practice of Landscape Architecture (the Act), Article 249c, Texas Civil Statutes, is specific in its provisions authorizing the lawful practice of landscape architecture It is equally specific in charging the Texas Board of Architectural Examiners with responsibility for enforcement of the Act. The statute exempts certain persons from provisions of the Act, but otherwise, unregistered persons are liable for violations. (1) The Board has authority to seek an injunction, a restraining order, and fines up to $200 per violation for persons using the title "landscape architect" and/or offering or performing "landscape architectural" services not under an exception as permitted under the Act. (2) Actions shall be pursued in a court of competent jurisdiction in the county of the residence of the defendant or the county where the violation occurred. (3) Each day of an offense is considered a separate violation. (b) Complaints alleging violations of the Act or Board rules must be made in good faith and be accompanied by sufficient information or factual evidence for the Executive Director to establish probable cause. If the Executive Director does not find probable cause, he/she shall be authorized to dismiss the allegation without further action. The Board is not responsible for proving the basis of a complaint. (c) Complaints shall normally be submitted in writing along with copies or originals of all supporting evidence; however, the Executive Director may initiate an inquiry based on any information that will establish probable cause. (d) The Board will act only when the basis of the complaint would be a violation of the Act or Board rules if substantiated. (e) If a valid complaint, accompanied by sufficient information or factual evidence to establish probable cause, is filed with the Executive Director, the Board may proceed independent of any action by the complainant to enter into litigation with the defendant or to abandon the complaint. (f) The Board may, upon request, keep the identity of the complainant confidential to the extent permitted by law. (g) The Board office shall maintain a separate file containing all information in connection with complaints, charges, hearings in connections with such charges, and the action of the Board in each case. (h) On each written complaint filed with the Board, a report to the complainant shall be made at least as frequently as quarterly on the status of the complaint until the final disposition of the complaint. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612626 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER K. Hearings-Contested Cases 22 TAC sec.sec.3.231-3.275 The Texas Board of Architectural Examiners adopts new sec.sec.3.231-3.275, concerning Hearings-Contested Cases. The new rules are adopted to update the rules of the Board; and more importantly, help the Enforcement Division of the agency carry out the tasks it has been charged with performing. Sections 3.231, 3.242, and 3.251 are adopted with changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6158). Sections 3.232- 3.241, 3.243-3.250 and 3.252-3.275 are adopted without changes and will not be republished. The new rules are adopted to add the content of the rules in Subchapter K, Hearings - Contested Cases to Chapter 3, Landscape Architects. The changes will allow the Enforcement Division of the agency to function more efficiently and effectively. No comments were received regarding adoption of the new rules. The new rules are adopted under the Texas Civil Statutes, Article 249c, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. sec.3.231. State Office of Administrative Hearings. (a) Formal contested case hearings will be conducted for the Board by the State Office of Administrative Hearings (SOAH), as authorized by Texas Civil Statutes, Government Code, Title 10, Chapter 2003. Hearings will be conducted in accordance with the Administrative Procedure Act, the rules and regulations of the SOAH, and the Regulation of the Practice of Landscape Architecture (the Act) and the Texas Board of Architectural Examiners' Rules and Regulations. (b) An administrative law judge (judge) assigned to the SOAH will perform the duties and responsibilities as described in sec.sec.3.231-3.275 of this title (relating to Hearings - Contested Cases). (c) The judge shall consider any applicable Board rules and policies in conducting the hearing. If there is any conflict between the rules of the SOAH and these Board rules, these rules will control unless otherwise specifically stated in the SOAH rules. This subsection does not apply if the rules of the Board are contrary to or are otherwise precluded by statutory or other controlling law, including Texas Civil Statutes, Government Code, Title 10, Chapter 2003. sec.3.242. Discovery. (a) Parties to an administrative hearing before the State Office of Administrative Hearings (SOAH) shall have the discovery rights provided in the Administrative Procedure Act, the Act and Board rules. (b) Requests for issuance of subpoenas or commissions should be directed to the Board. (c) All discovery requests should be initially directed to the party from which discovery is being sought. (d) All disputes with respect to any discovery matter shall be filed with and resolved by the SOAH. (e) All parties will be afforded a reasonable opportunity to file objections or move for a protective order with respect to the issuance of a subpoena or commission. (f) Copies of discovery requests and documents filed in response thereto shall be filed with all parties, but should not be filed with the SOAH unless directed by the judge or when in support of a motion to compel, motion for protective order, or motion to quash. sec.3.251. Administrative Law Judge. (a) The judge shall have the authority and duty to: (1) conduct a full, fair, and impartial hearing; (2) take action to avoid unnecessary delay in the disposition of the proceeding; and (3) maintain order. (b) The judge shall have the power to regulate the course of the hearing and the conduct of the parties and authorized representatives, including the power to: (1) administer oaths; (2) take testimony; (3) rule on questions of evidence; (4) rule on discovery issues; (5) issue orders relating to hearing and prehearing matters, including orders imposing sanctions that the Board may impose; (6) admit or deny party status; (7) limit irrelevant, immaterial, and unduly repetitious testimony and reasonably limit the time for presentations; (8) grant a continuance; (9) request parties to submit legal memoranda, proposed findings of fact and conclusions of law; and (10) issue proposals for decision pursuant to the Administrative Procedure Act. (c) A judge shall disqualify himself/herself or shall recuse himself/herself on the same grounds and under the same circumstances as specified in Texas Rules of Civil Procedure, Rule 18b. (d) A substitute judge may use the existing record and need not repeat previous proceedings, but may conduct further proceedings as are necessary and proper to conclude the hearing and render a proposal for decision. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612631 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 CHAPTER 5. Interior Designers SUBCHAPTER D. Certification and Annual Registration 22 TAC sec.5.79 The Texas Board of Architectural Examiners adopts an amendment to sec.5.79, concerning Reinstatement. The amendment is adopted to clarify confusing terminology, without changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6165) and will not be republished. The amendment is adopted for the agency to help clarify confusing terminology. No comments were received regarding adoption of this amendment. The amendment is adopted under the Texas Civil Statutes, Article 249e, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612600 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER E. Fees 22 TAC sec.5.93 The Texas Board of Architectural Examiners adopts an amendment to sec.5.93, concerning Application and Examination. The amendment is adopted to establish a uniform initial registration fee, without changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6166) and will not be republished. The amendment is adopted for the agency to establish uniform initial registration fees for three professions it regulates. No comments were received regarding adoption of the amendment. The amendment is adopted under the Texas Civil Statutes, Article 249e, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612603 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER F. The Interior Designer's Seal 22 TAC sec.5.113 The Texas Board of Architectural Examiners adopts an amendment to sec.5.113, concerning Required Use. The amendment is adopted to relieve, in the short term, problems that have arisen due to the impact of technology on the design professions, with changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6166). The amendment is adopted to provide alternatives to sealing documents, taking into consideration the effects of new technology in businesses. The statement specified in the rule allows the recipient of the documents to identify the documents as a drawing by an architect registered by TBAE. No comments were received regarding adoption of the amendment. The amendment is adopted under the Texas Civil Statutes, Article 249e, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. sec.5.113. Required Use. (a)-(c) (No change.) (d) Once documents bearing the interior designer's seal are issued from the interior designer's office, the seal shall not be removed. However, if the client requests electronic drawing files that would be used as reference documents, the following statement shall be substituted for the seal: The record copy of this drawing is on file at the offices of (name of firm), (address of firm). This electronic document is released for the purposes of reference, coordination, and/or facility management under the authority of (name), (registration number) on (date). Any modification(s) to this drawing shall be in compliance with the Texas Board of Architectural Examiners' rules. (e)-(j) (No change.) This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612606 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER G. Titles and Firm Names 22 TAC sec.5.131, sec.5.132 The Texas Board of Architectural Examiners adopts the repeals to sec.5.131 and sec.5.132, concerning Titles and Authority to Practice. The rules are repealed due to the updating and rewriting of Subchapter G, Titles and Firm Names, without changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6167) and will not be republished. The rules were repealed to rewrite and update the content of the rules in Subchapter G, Titles and Firm Names. The changes will allow the Enforcement Division of the agency to function more efficiently and effectively. No comments were received regarding adoption of the repeals. The repeals are adopted under the Texas Civil Statutes, Article 249e, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612612 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER G. Compliance and Enforcement 22 TAC sec.sec.5.131-5.135 The Texas Board of Architectural Examiners adopts new sec.sec.5.131-5.135, concerning Compliance and Enforcement. The new rules are adopted to update the rules of the Board; and more importantly, help the Enforcement Division of the agency carry out the tasks it has been charged with performing. Section 5.135 is adopted with changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6167). Sections 5.131-5.134 are adopted without changes and will not be republished. The new rules are adopted to rewrite and update the content of the rules in Subchapter G, Titles and Firm Names. The changes will allow the Enforcement Division of the agency to function more efficiently and effectively. No comments were received regarding adoption of the new rules. The new rules are adopted under the Texas Civil Statutes, Article 249e, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. sec.5.135. Titles. (a) Persons holding Certificates of Registration for interior design issued by this Board are authorized to employ the title interior designer and use the words interior design or various constructions thereof, in describing or identifying services he/she solicits, offers, or executes. (b) No other person, firm, partnership, corporation, or groups of persons may employ the title interior designer or constructions of the words interior design to describe persons or services nor do such unregistered individuals or groups have authority to solicit, offer, or execute "interior design" services in this state. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612609 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER H. Rules of Conduct 22 TAC sec.sec.5.151-5.156 The Texas Board of Architectural Examiners adopts the repeals to sec.sec.5.151- 5.156, concerning Rules of Conduct. The rules are repealed due to updating and rewriting of Subchapter H, Rules of Conduct, without changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6168) and will not be republished. The rules are repealed to rewrite and update the content of the rules in Subchapter H, Rules of Conduct. The changes will allow the Enforcement Division of the agency to function more efficiently and effectively. No comments were received regarding adoption of the repeals. The repeals are adopted under the Texas Civil Statutes, Article 249e, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612618 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER H. Professional Conduct 22 TAC sec.sec.5.151-5.160 The Texas Board of Architectural Examiners adopts new sec.sec.5.151-5.160, concerning Professional Conduct. The new rules are adopted to update the rules of the Board; and more importantly, help the Enforcement Division of the agency carry out the tasks it has been charged with performing. Sections 5.158 and 5.160 are adopted with changes to the proposed text as published in the July 5, 1996, copy of the Texas Register (21 TexReg 6169). Sections 5.151-5.157 and 5.159 are adopted without changes and will not be republished. The new rules are adopted to rewrite and update the content of the rules in Subchapter H, Rules of Conduct. The changes will allow the Enforcement Division of the agency to function more efficiently and effectively. No comments were received regarding adoption of the new rules. The new rules are adopted under the Texas Civil Statutes, Article 249e, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. sec.5.158. Responsibility to the "Interior Design" Profession. (a) The interior designer shall not: (1) circumvent or attempt to circumvent any provision of the Act or a general Board rule through the actions of another; (2) participate, directly or indirectly, in any plan, scheme, or arrangement attempting or having as its purpose the evasion of any provision of the Act or general Board rule; (3) fail to exercise reasonable care or diligence to prevent his/her partners, associates, and employees from engaging in conduct which, if done by him/her, would violate any provision of the Act or general Board rule; (4) violate any of the professional practice requirements of federal, state and local statutes, codes, regulations, rules or ordinances in providing interior design services; (5) engage in any illegal conduct involving moral turpitude; (6) engage in any conduct that discredits or tends to discredit the "interior design" profession; (7) make, publish, or disseminate any statements, criticisms, or arrangements on interior design matters connected with public policy which are inspired or paid for by an interested party or parties, unless he/she has prefaced such statement or comment by explicitly identifying himself/herself, disclosing the identities of the party or parties on whose behalf he/she is speaking and revealing the existence of any pecuniary interest he/she may have in such "interior design" matter; (8) permit or allow his/her professional identification, seal, firm or business name, or his/her services to be used or made use of, directly or indirectly, or in any manner whatsoever, so as to make possible to create the opportunity for the unauthorized practice of "interior design" by any person, firm, or corporation in this state; (9) perform any acts, allow any omissions, or make any assertions or representations in the practice of "interior design" which are fraudulent, deceitful, or misleading, or which in any manner whatsoever tend to create a misleading impression; (10) associate with or permit or allow the use of his/her name, firm or business name or professional identification, or seal in connection with any business venture, project or enterprise which he/she knows or should have known, is engaged in professional practices which violate any provision of the Act or any Board rule; (11) maliciously injure or attempt to injure or damage the professional reputation of another by any means whatsoever; provided and except, however, that this shall not relieve any interior designer of the obligation to expose any fraud, gross negligence, incompetence, misconduct, unethical or illegal conduct to the proper authorities or preclude a frank but private appraisal of interior designers or other persons or firms when requested by a client or prospective employer; (12) aid or abet, directly or indirectly, any unregistered person in connection with the unauthorized practice of "interior design," or any firm or corporation in the practice of "interior design" unless carried on in accordance with the provisions of the Act; (13) directly or indirectly or in any manner whatsoever lend his/her registration, seal, or professional identification to any unregistered person or to any firm or corporation carrying on the practice of "interior design" contrary to the provisions of the Act; or (14) on his/her own authority as an employee of the State of Texas or any of its political subdivisions authorize or create any situation contrary to the requirements of the Act. (b) The interior designer possessing knowledge of an applicant's qualifications for registration shall cooperate with the Board by responding in writing to the Board with those qualifications when requested to do so by the applicant or the Board. (c) The interior designer shall be personally and professionally responsible and accountable for the care, custody, control, and use of his/her interior designer's seal, his/her professional signature, and identification. The interior designer whose seal has been lost, misplaced, or stolen, shall, upon discovery of its loss, report same immediately to the Board, which may invalidate the stolen registration number of said seal, if it deems this necessary, and issue another registration number to said interior designer. sec.5.160. Criminal Convictions. (a) In consideration of Texas Civil Statutes, Articles 6252-13c and 13d, the following will apply in the processing of an application for registration as an interior designer. (1) The applicant will be required to state, as part of a sworn affidavit, whether he/she has ever been convicted of a felony or misdemeanor; (2) Applicants with prior convictions will be required to provide a summary of the conviction in sufficient detail to allow the Board to determine if it is applicable to the application for registration; (3) If the Board determines the conviction is applicable to the application, the Board staff will obtain sufficient details of the conviction to allow the Board to determine the effect of the conviction on the applicant's eligibility for registration; (b) In determining whether a criminal conviction is applicable to an applicant's application, the Board will consider the following: (1) the nature and seriousness of the crime; (2) the relationship of the crime to the purposes for requiring a registration to practice "interior design"; (3) the extent to which a registration might offer an opportunity to engage in further criminal activity of the same type as that which the applicant had been previously involved; and (4) the relationship of the crime to the ability, capacity, or fitness required to perform the duties and discharge the responsibilities of an interior designer. (c) In addition to the factors that may be considered under subsection (b) of this section, the Board shall consider the following: (1) extent and nature of the applicant's past criminal activity; (2) the age of the applicant at the time the crime was committed, and the amount of time that has elapsed since the applicant's last criminal activity; (3) the conduct and work activity of the applicant prior to and following the criminal activity; (4) evidence of the applicant's rehabilitation; and (5) other evidence of the applicant's fitness to practice as an interior designer. (d) Crimes relating to the practice of "interior design" include, but are not limited to, the following: (1) criminal negligence; (2) soliciting, offering, giving or receiving any form of bribe; (3) the unauthorized use of property, funds or proprietary information belonging to another; (4) acts relating to the acquisition, use, or dissemination of confidential information related to "interior design"; and (5) any violation as an individual or as a consenting party of any provision of the Act (Texas Civil Statutes, Article 249e). (e) The application of any applicant deemed ineligible for registration because of a prior criminal conviction will be proposed for rejection and the applicant will be provided the following information in writing: (1) the reason for rejecting the application; (2) notice of the administrative procedure used to conduct an informal conference to show compliance with all requirements of law for registration as an interior designer, as provided by sec.5.285 of this title (relating to Complaints), and similar to the proceedings established for registrants under sec.5.171 of this title (relating to Disciplinary Actions); and (3) notice that upon exhaustion of the administrative appeal, an action may be filed in a district court of Travis County for review of the evidence presented to the Board and its decision. The person must begin the judicial review by filing a petition with the court within 30 days after the Board's decision is final and appealable. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612615 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER I. Charges Against Interior Designers: Action 22 TAC sec.sec.5.171-5.187 The Texas Board of Architectural Examiners adopts the repeals to sec.sec.5.171- 5.187, concerning Charges Against Interior Designers. The rules are repealed due to updating and rewriting of Subchapter I, Charges Against Interior Designers: Action, without changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6172) and will not be republished. The rules are repealed due to the rewriting and updating of the content of the rules in Subchapter I, Charges Against Interior Designers: Action. The changes will allow the Enforcement Division of the agency to function more efficiently and effectively. No comments were received regarding adoption of the repeals. The repeals are adopted under the Texas Civil Statutes, Article 249e, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612624 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 22 TAC sec.5.171 The Texas Board of Architectural Examiners adopts new sec.5.171, concerning Disciplinary Actions. The new rule is adopted to update the rules of the Board; and more importantly, help the Enforcement Division of the agency carry out the tasks it has been charged with performing, with changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6173). The new rule is adopted to rewrite and update the content of the rules in Subchapter I, Charges Against Interior Designers: Action. The changes will allow the Enforcement Division of the agency to function more efficiently and effectively. No comments were received regarding adoption of the new rule. The new rule is adopted under the Texas Civil Statutes, Article 249e, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. sec.5.171. Disciplinary Actions. (a) The Board may revoke Certificates of Registration for failure to register annually. Register annually is defined as: (1) completing the renewal form completely; and (2) remitting the correct amount of renewal fees as described in Subchapter E of this chapter (relating to Fees). A registrant who has failed to register annually and has not yet been revoked by Board action will be categorized as a delinquent registrant. (b) Under the authority and provisions of the Regulation of the Practice of Interior Design (the Act), sec.15, the Board may take disciplinary action against a registrant who is found censurable for a violation of law, rules, or conduct. In such case, the Board may do any of the following: (1) revoke a certificate of registration; (2) suspend a certificate of registration; (3) probate a suspended registration; (4) issue a formal or informal reprimand: (A) a formal reprimand will take the form of a Board order; (B) an informal reprimand may be no less than an oral or written admonishment from the Board. All actions of the Board are properly recorded and available upon request as public information. In addition, all actions enumerated in this subsection, except an informal reprimand, will be published in the Board newsletter and transmitted to the National Council of Interior Design Qualifications. (c) Interior designers must comply with the Texas Department of Licensing and Regulation requirements and submit drawings in a timely manner. The Board may revoke or suspend an interior designer's certificate of registration or place on probation an interior designer whose registration has been suspended or reprimanded. (d) An individual whose registration has expired for nonpayment of renewal fees is a delinquent registrant of the Board and is subject to all provisions of the Act and Board rules governing registrants until such time as registration is revoked by action of the Board. (e) In determining disciplinary actions to be taken by the Board, the requirements of Texas Civil Statutes, Article 6252-13c and 6252-13d, as set out in subsection (i) of this section, will be considered in addition to any provisions of the Act or Board rules. (f) In determining conduct in the practice of interior design that warrants disciplinary action, the Board will consider, among other things, professional conduct and conviction of certain crimes as provided in Texas Civil Statutes, Articles 6252-13c and 6252-13d. (g) A registrant alleged to have violated the law, rules, or standards of conduct will be notified by personal service or by certified or registered mail of the facts or conduct alleged to be in violation and shall be afforded an opportunity to present arguments and evidence in his/her own behalf before a determination of censurable conduct is made by the Board, as provided in Subchapter J of this chapter (relating to Complaint Procedures). (h) Where a violation appears evident, the Board will consider instituting disciplinary action by means of scheduling a public hearing in conformance with Subchapter K of this chapter (relating to Hearings-Contested Cases); however: (1) the registrant will first be advised of the right to voluntarily contact the Board within a specified time limit to schedule an informal conference normally at the Board office with an informal conference review committee for the purpose of showing there has been no violation as alleged. The committee will be composed of appropriate personnel. The registrant may employ an attorney to represent him/her. If the registrant desires a conference and the complaint cannot thereafter be dismissed on the evidence, an effort will be made to reach an informal settlement. This settlement will take the form of a proposed agreed Board order which will be presented to the Board for acceptance or rejection; (2) if facts and circumstances of a particular case appear to warrant disposition by offering the registrant a consent order, the Executive Director on the advice of the staff and legal counsel may approve of such offer in lieu of an informal conference. Any such consent order may be accepted or rejected by the Board. If the registrant declines such an offer, or if the Board rejects it, the procedures in paragraph (1) of this subsection will be followed; (3) if the registrant's registration has expired, the Board may propose not to renew the registration. If the registrant does not concur with this action and submits the required fee to effect an automatic renewal of his/her registration, the Board will renew the registration and instigate proceedings to suspend the registration or revoke the registration; or (4) any Board action under this subsection which is not informally disposed by stipulation, agreed settlement, consent order, or default will be treated as a contested case and disposed as provided by the Administrative Procedure Act (Texas Civil Statutes, Government Code, Title 10, Chapter 2001) and the Board rules for hearings and contested cases. (A) The Board shall hear such witnesses as are reasonably necessary to fairly present the relevant issues as set forth in the complaint, together with witnesses knowledgeable of material facts to the defense of the interior designer. (B) Copies of the notices of formal hearings scheduled shall be filed with the Secretary of State and other appropriate agencies. (C) The Board shall keep an official record of all proceedings and exhibits. (D) The Board may cause a transcript of the proceedings to be made which, together with the evidence and exhibits submitted, shall be the record of the hearing. Such transcript may be made also on written request of either party of said charges, but at the expense of the demand party. A copy of such transcript, however caused to be made, shall be submitted to the Board and become part of the record of the case. (i) Criminal convictions shall be handled as follows: (1) Under the authority of Texas Civil Statutes, Article 6252-13c, sec.4e, and Article 249e, sec.5(b), the Board shall revoke the registration of any registrant incarcerated as a result of conviction for a felony committed subsequent to being registered as an interior designer. The registration of any registrant shall also be revoked for felony probation revocation, revocation of parole, or revocation of mandatory supervision subsequent to being registered as an interior designer regardless of the date of the original conviction. (2) The Board may take any of the actions set out in subsection (b) of this section when a registrant is convicted of a misdemeanor or a felony without incarceration if the crime directly relates to his/her duties and responsibilities as an interior designer as set out in sec.5.160 of this title (Relating to Criminal Convictions). Full disclosure of information involving a misdemeanor or a felony is required at the time of the conviction. (3) Any registrant whose registration has been revoked under the provisions of this subsection will be advised in writing of the right to apply for reinstatement of registration. (j) The facts and circumstances of each disciplinary case will be assessed by the following factors before any sanctions available to the Board are ordered. (1) The seriousness of the prohibited acts or omissions. (2) The number of prior complaints found justified against the respondent. (3) The severity of penalty necessary to deter future violations. (4) Efforts or resistance to correct the violations. (5) Any hazard to the health, safety or welfare of the public. (6) Any actual damage, physical or otherwise, caused by the violations. (7) Any economic benefit gained through the violations. (8) Any other matters that justice and public welfare may require. (k) The following is a table of suggested sanctions for specific infractions of the law or rules: Figure: 22 TAC sec.5.171(k) (l) Any felony conviction which includes incarceration will statutorily require the revocation of a registration, Article 6252-13c, Texas Civil Statutes. (m) The Board, the Executive Director, an administrative hearing judge, and the participants in an informal conference may arrive at a greater or lesser sanction than suggested in subsection (k) of this section based on the ultimate assessment of evidence or agreement in the expedience of justice. Conditions of a suspension, probation, or formal reprimand may be set by the Board in its final order. (n) A registrant whose registration is current or renewable under the Act, sec.14, is responsible to the Board and subject to all rules governing the acts of registrants. The registrant shall answer promptly all inquiries concerning matters under the jurisdiction of the Board, and shall fully comply with final decisions and orders of the Board. Failure to comply with these matters will constitute a separate offense of misconduct subject to any of the penalties provided under the Act, sec.15. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612621 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER J. Violations by Unregistered Persons 22 TAC sec.sec.5.201-5.205 The Texas Board of Architectural Examiners adopts the repeals to sec.sec.5.201- 5.205 concerning Records. The rules are repealed due to updating and rewriting of Subchapter J, Violations by Unregistered Persons, without changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6174) and will not be republished. The rules were repealed to rewrite and update the content of the rules in Subchapter J, Violations by Unregistered Persons. The changes will allow the Enforcement Division of the agency to function more efficiently and effectively. No comments were received regarding adoption of the repeals. The repeals are adopted under the Texas Civil Statutes, Article 249e, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612630 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER J. Complaint Procedure 22 TAC sec.sec.5.201-5.203 The Texas Board of Architectural Examiners adopts new sec.sec.5.201-5.203, concerning Complaint Procedures. The new rules are adopted to update the rules of the Board; and more importantly, help the Enforcement Division of the agency carry out the tasks it has been charged with performing. Section 5.201 is adopted with changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6175). Sections 5.202 and 5.203 are adopted without changes and will not be republished. The new rules are adopted to rewrite and update the content of the rules in Subchapter J, Complaint Procedures. The changes will allow the Enforcement Division of the agency to function more efficiently and effectively. No comments were received regarding adoption of the new rules. The new rules are adopted under the Texas Civil Statutes, Article 249e, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. sec.5.201. General. (a) The Regulation of the Practice of Interior Design (the Act), Article 249e, Texas Civil Statutes, is specific in its provisions authorizing the lawful practice of interior design It is equally specific in charging the Texas Board of Architectural Examiners with responsibility for enforcement of the Act. The statute exempts certain persons from provisions of the Act, but otherwise unregistered persons are liable for violations. The Board has authority to seek Class "C" misdemeanor convictions for persons using the title "interior designer" and/or offering or performing "interior design" services not under an exception as permitted under the Act. (b) Complaints alleging violations of the Act or Board rules must be made in good faith and be accompanied by sufficient information or factual evidence for the Executive Director to establish probable cause. If the Executive Director does not find probable cause, he/she shall be authorized to dismiss the allegation without further action. The Board is not responsible for proving the basis of a complaint. (c) Complaints shall normally be submitted in writing along with copies or originals of all supporting evidence; however, the Executive Director may initiate an inquiry based on any information that will establish probable cause. (d) The Board will act only when the basis of the complaint would be a violation of the Act or Board rules if substantiated. (e) If a valid complaint, accompanied by sufficient information or factual evidence to establish probable cause, is filed with the Executive Director, the Board may proceed independent of any action by the complainant to enter into litigation with the defendant or to abandon the complaint. (f) The Board may, upon request, keep the identity of the complainant confidential to the extent permitted by law. (g) The Board office shall maintain a separate file containing all information in connection with complaints, charges, hearings in connections with such charges, and the action of the Board in each case. (h) On each written complaint filed with the Board, a report to the complainant shall be made at least as frequently as quarterly on the status of the complaint until the final disposition of the complaint. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612627 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 SUBCHAPTER K. Hearings-Contested Cases 22 TAC sec.sec.5.241-5.285 The Texas Board of Architectural Examiners adopts new sec.sec.5.241-5.285, concerning Hearings-Contested Cases. The new rules are adopted to update the rules of the Board; and more importantly, help the Enforcement Division of the agency carry out the tasks it has been charged with performing. Sections 5.241 and 5.261 are adopted with changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6176). Sections 5.242-5.260 are adopted without changes and will not be republished. The new rules are adopted to add the content of the rules in Subchapter K, Hearings - Contested Cases to Chapter 5, Interior Designers. The changes will allow the Enforcement Division of the agency to function more efficiently and effectively. No comments were received regarding adoption of the new rules. The new rules are adopted under the Texas Civil Statutes, Article 249e, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. sec.5.241. State Office of Administrative Hearings. (a) Formal contested case hearings will be conducted for the Board by the State Office of Administrative Hearings (SOAH), as authorized by Texas Civil Statutes, Government Code, Title 10, Chapter 2003. Hearings will be conducted in accordance with the Administrative Procedure Act, the rules and regulations of the SOAH, and the Regulation of the Practice of Interior Design (the Act) and Texas Board of Architectural Examiners' Rules and Regulations. (b) An administrative law judge (judge) assigned to the SOAH will perform the duties and responsibilities as described in sec.sec.5.241-5.285 of this title (relating to Hearings - Contested Cases). (c) The judge shall consider any applicable Board rules and policies in conducting the hearing. If there is any conflict between the rules of the SOAH and these Board rules, these rules will control unless otherwise specifically stated in the SOAH rules. This subsection does not apply if the rules of the Board are contrary to or are otherwise precluded by statutory or other controlling law, including Texas Civil Statutes, Government Code, Title 10, Chapter 2003. sec.5.261. Administrative Law Judge. (a) The judge shall have the authority and duty to: (1) conduct a full, fair, and impartial hearing; (2) take action to avoid unnecessary delay in the disposition of the proceeding; and (3) maintain order. (b) The judge shall have the power to regulate the course of the hearing and the conduct of the parties and authorized representatives, including the power to: (1) administer oaths; (2) take testimony; (3) rule on questions of evidence; (4) rule on discovery issues; (5) issue orders relating to hearing and prehearing matters, including orders imposing sanctions that the Board may impose; (6) admit or deny party status; (7) limit irrelevant, immaterial, and unduly repetitious testimony and reasonably limit the time for presentations; (8) grant a continuance; (9) request parties to submit legal memoranda, proposed findings of fact and conclusions of law; and (10) issue proposals for decision pursuant to the Administrative Procedure Act. (c) A judge shall disqualify himself/herself or shall recuse himself/herself on the same grounds and under the same circumstances as specified in Texas Rules of Civil Procedure, Rule 18b. (d) A substitute judge may use the existing record and need not repeat previous proceedings, but may conduct further proceedings as are necessary and proper to conclude the hearing and render a proposal for decision. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612632 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: September 19, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 305-8535 TITLE 25. HEALTH SERVICES PART II. Texas Department of Mental Health and Mental Retardation CHAPTER 401.System Administration SUBCHAPTER J.Standards of Care and Treatment in Psychiatric Hospitals 25 TAC sec.sec.401.581-401.583, 401.587-401.590, 401.592, 401.593, The Texas Department of Mental Health and Mental Retardation (TDMHMR) adopts the repeals of sec.sec.401.581-401.583, 401.587-401.590, 401.592, and 401.593, relating to standards of care and treatment in psychiatric hospitals. The sections are adopted contemporaneously with the adoption of new sec.sec.401.581- 401.583 and 401.587-401.593, governing the same matters, in this issue of the Texas Register. The repeals enable the adoption of new sections that implement acts of the 74th Legislature. A public hearing was held in the auditorium of TDMHMR Central Office, 909 West 45th Street, Austin, Texas, on July 9, 1996. There was no public comment concerning the proposed repeal. The sections are adopted under sec.532.015, Texas Health and Safety Code, which provides the Texas Board of Mental Health and Mental Retardation with rulemaking powers; and under sec.577.010, Texas Health and Safety Code, which authorizes the board to adopt rules and standards necessary to ensure the proper care and treatment of patients in psychiatric hospitals. 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 August 23, 1996. TRD-9612419 Ann Utley Chair, Texas MHMR Board Texas Department of Mental Health and Mental Retardation Effective date: September 13, 1996 Proposal publication date: June 21, 1996 For further information, please call: (512) 206-4516 25 TAC sec.sec.401.581-401.583, 401.587-401.593, The Texas Department of Mental Health and Mental Retardation (TDMHMR) adopts new sec.sec.401.581-401.583, 401.587-401.593, relating to standards of care and treatment in psychiatric hospitals. Sections 401.583, 401.587, and 401.588- Figure 1: 25 TAC 401.588(b) are adopted with changes to the proposed text as published in the June 21, 1996, issue of the Texas Register (21 TexReg 5666). Sections 401.581, 401.582, 401.589-401.593 are adopted without changes and will not be republished. The repeals of existing sec.sec.401.581-401.583, 401.587- 401.590, 401.592, and 401.593, relating to the same, are contemporaneously adopted in this issue of the Texas Register. The purpose of the new sections is to implement a number of acts of the 74th Legislature, including House Bill 2094, which clarifies that minors under the age of 16 who are or have been married may admit themselves to mental health services; Senate Bill 96, which allows psychiatric hospitals to apply to the court for an order authorizing administration of psychoactive medication to an individual who has been committed to the hospital and refuses the medication; and Senate Bill 513, which clarifies that admission orders may be orally or electronically transmitted. A public hearing was held in the auditorium of TDMHMR Central Office, 909 West 45th Street, Austin, Texas, on Tuesday, July 9, 1996. Testimony was given by the Texas Hospital Association, Austin and the Texas Society of Psychiatric Physicians, Austin. Written comments were received from Harris Methodist Springwoods, Bedford; The Haven Behavioral Healthcare System, DeSoto; Healthcare America, Austin; McAllen Medical Center, McAllen; Mission Vista Hospital, San Antonio; The Pavilion Northwest Texas Healthcare System, Amarillo; River Crest Hospital, San Angelo; Scott & White Memorial Hospital, Temple; Shoal Creek Hospital, Austin; Texas Association for Marriage and Family Therapy, Inc.; Texas Hospital Association, Austin; Texas Society of Psychiatric Physicians, Austin; and West Texas Neurology, Midland. Oral comments were received from the Texas Society of Child and Adolescent Psychiatry, Austin. In sec.401.583, subparagraph (A) of the definition of "mental health services provider," the term "certified social worker" has been changed to "licensed social worker," consistent with Section 50.001 of the Human Resources Code. In subparagraph (B), the word "licensed" has been added to the term "chemical dependency counselor," consistent with Texas Civil Statutes, Article 4512o. Also in sec.401.583, the definition of "qualified mental health professional" is changed to add "advanced practice nurse" to subparagraph (D) and "or licensed psychological associate" to subparagraph (E). In sec.401.587(c), (e)(1)(A), (e)(5)(B), (e)(5)(C)(i), (e)(6)(A)(iv), (e)(6)(B)(vii), and (e)(6)(D) minor grammatical corrections and clarifications were made. In sec.401.587(e)(2)(A)(i)(I) and (II), language has been added which provides that the requirement for an admitting physician to have conducted an in-person physical and psychiatric examination within 72 hours prior to admission can be satisfied using video/telecommunications face-to-face on-line interaction (when access to in-person care in rural areas is not possible). In sec.401.587(e)(5)(C)(iii), language has been added detailing elements which would contribute to making staffing decisions. In sec.sec.401.587(e)(6)(A)(iv), the term "home plans" is changed to "plans for home." In sec.401.587(e)(6)(B)(vii), the term "assets" has been changed to "strengths." In sec.401.587(e)(6)(D), language relating to progress notes intervals has been changed, i.e., given an average length of stay of 2-14 days, the requirement for weekly progress notes has been changed to daily progress notes for the first two weeks, and weekly thereafter. Figure 1: 25 TAC 401.588(b) has been changed to include reference to the latest edition of the Diagnostic and Statistical Manual (DSM-V), to delete language that would indicate that eligibility for inpatient admission of children and adolescents who are suicidal or self-mutilative does not depend on the absence of supervision. Section III.A. has also been revised on adoption to enable psychiatrists with documentable competence in treating children and adolescents to supervise their care. A commenter expressed concern that the process of development and modification of this TDMHMR subchapter and others adopted in this issue of the Texas Register proceeded at a rapid pace without opportunity for careful thoughtful review. The commenter suggested that the time limit for comments was too short and that three months should be provided. The commenter stated that his copy of the regulations was delivered only 10 days prior to the conclusion of the 30-day comment period. The department responds that each of the subchapters published in this issue of the Texas Register have been under development for at least one year or longer. Further, each proposal has been carefully reviewed both internally and by a large number of individuals representing psychiatric hospitals. The statutory time limit for review of comments is 30 days. The statutory requirement for public notice is publication in the Texas Register. The department regrets that the complimentary copy of the rule did not reach the commenter sooner. The same commenter also stated the belief that the regulations received too limited review, and stated the need for external review of "hastily issued, inadequately reviewed" state regulations that go beyond the standards of the Joint Commission on Accreditation of Healthcare Organizations. The commenter called for a special advisory committee of state and national technical experts to review such proposed regulations. The commenter cites an example from Chapter 405, Subchapter F, to illustrate why this is important: the department's "persistent" requirement for face-to- face observation of patients in mechanical restraints. The commenter states that direct, continuous, face-to-face observation of a patient by staff members is agitating to the patient. Seclusion away from interpersonal contact is the step just before the use of mechanical restraints. The commenter felt an expert panel would be in agreement. The department responds that most of the specific comments offered by the commenter relate to provisions of law and suggest that the commenter's concerns with the processes used to develop the regulations are far-reaching. The department also notes that it has a standing expert committee with broadbased public and private membership that reviews all of its clinical rules. The same commenter noted that there is no built-in mechanism for review or assessment of the impact of the regulations. The commenter questioned if the regulations were promulgated because "we have a need to do something." The commenter questioned if there were specific objectives to be accomplished, and if so, what they were and how it will be known that they have been accomplished. The commenter further suggested that if the regulation is not accomplishing the objective, then it should be rewritten or eliminated. The department responds that the primary objective of the subchapter is to enact numerous provisions of state law. Further, in keeping with the department's role as the mental health authority for the State of Texas and as required by state law, the department's objectives include setting standards of care and treatment that ensure adequate and safe treatment of patients receiving inpatient services in psychiatric hospitals. The assessment of the accomplishment of these objectives is conducted by the Texas Department of Health. With reference to the definition of "assessment" in sec.401.583, a commenter questioned if the removal of administrative functions from this service element had any effect on operations. The department responds that the effect is to clarify that intake is an administrative process and assessment is a clinical process. The distinction in functions should make clear that the staff who perform administrative intake activities are not required to be qualified mental health professionals. In the same section, a commenter noted that the definition of "informed consent" is confusing. The commenter questioned if a minor between the ages of 16 and 18 can meet the conditions of informed consent if the minor is not or has not been married or has not had the disabilities of minority removed. The commenter recommended that (1) the legal capacity standard for informed consent be for individuals 16 years of age or older, regardless of marital status or disabilities of minority; (2) individuals under the age of 16 must be or have been married or must have had the disabilities of minority removed before their consent can be considered informed consent; (3) individuals 16 years of age and older must not be able to be voluntarily admitted by a parent or legal guardian without the individual's own consent; and (4) individuals 16 years of age and older must be able to present themselves for evaluation and admission without parental consent. The commenter also referenced the same issues in sec.401.588(a). The department responds that it is in agreement with the commenter's interpretation of the law, as follows: (1) the legal capacity standard for informed consent applies to individuals age 16 and older, regardless of marital status or disabilities of minority; (2) individuals under the age of 16 must be or have been married or must have had the disabilities of minority removed before their consent can be considered informed consent; (3) individuals 16 years of age and older must not be able to be voluntarily admitted by a parent or legal guardian without the individual's own consent; and (4) individuals 16 years of age and older must be able to present themselves for evaluation and admission without parental consent. Also concerning the element of "comprehension of information" in the definition of "informed consent," a commenter expressed concern that hospitals might be placed in the position of second-guessing every request for voluntary admission to determine whether the patient really knows the nature, purpose, consequences, risks and benefits of and alternative to the decision to enter the hospital. The commenter suggested that this could result in the need for resolution through the involuntary commitment process, and recommended that other (unspecified) alternatives that are less burdensome, less potentially litigious, less time consuming, less costly, and less troublesome and embarrassing to the patient and/or his or her family. Another commenter concurred with these remarks. The department responds that the rule places responsibility for determining the patient's comprehension of information on the physician, not the hospital. Concerning the definition of "intake," a commenter recommended that the language "after it has been determined that admission is clinically appropriate" be deleted, because many of the demographic and insurance-related activities associated with intake occur prior to the evaluation of the patient for admission. The commenter also referenced the same issues in sec.401.587(e)(3). The department responds by questioning why intake would routinely be performed for patients for whom admission has not been previously determined necessary. It does not appear that the rule as written would unduly impede the operation of the hospital. Concerning the definition of "mental health services provider," a commenter recommended that the rule should specify that this term includes social work associates, licensed social workers, and licensed master's social workers. The department responds that it uses the definition of "mental health services provider" contained in the Texas Health and Safety Code. With regard to the definition of "qualified mental health professional," a commenter suggested that the designation should not be limited to master's level social workers but should include bachelor's level social workers with a Texas license. The department responds that the qualifications of all individuals who are designated "qualified mental health professionals" meet threshold equivalencies in terms of education and/or experience relevant to the assessment process. A licensed social worker with a bachelor's degree does not have the requisite clinical experience to fulfill these qualifications. Also concerning the definition of "qualified mental health professional," a commenter commended the department for not raising the minimum qualifications for nurses to require a bachelor's degree in nursing, noting that a registered nurse with two years' experience and American Nurses' Association certification in psychiatric nursing is better qualified than an individual with a bachelor's degree but no specialized psychiatric experience and training. Another commenter noted that advanced nurse practitioners should be added to the professions meeting the criteria. The department responds that it has added "advanced practice nurse" to the listing of designated qualified mental health professionals. With reference to sec.401.587(c), a commenter cited the provision requiring standards of care and treatment in psychiatric hospitals to be no less restrictive than those in state hospitals, and questioned if this standard could be used to prevent psychiatric hospitals from operating unlocked units. The commenter suggested that the requirement to be consistent with state hospitals is burdensome. The department responds that the term "no less restrictive" refers to standards for treatment, not treatment modalities. The department has no regulations providing for or requiring locked units in state facilities. With reference to the issue of burden, it should be noted that this requirement is statutory, and that psychiatric hospitals that are in compliance with the rules that apply to them will be in compliance with the law. Concerning the same subsection commenter stated that hospitals should not be held accountable to vague, undefined "standards of care" unless those standards have been defined and distributed to all psychiatric hospitals in the state. The department responds that the principle is a broad one and that the specific policies and procedures to which psychiatric hospitals are held accountable are distributed to all psychiatric hospitals in the state. Concerning sec.401.587(e)(1)(A), a commenter noted that the requirement for a qualified mental health professional to receive eight hours of inservice training or continuing education related to intake and assessment procedures should not apply to board- certified psychiatrists because the process of board- certification prepares the individual to assess mental health patients. The commenter stated that physicians who are not board-certified may need the supplemental training. The commenter noted that annual continuing medical education (CME) activity is required to justify renewal of a medical license. The department responds that sec.401.587(e)(1)(A) provides for the exemption of all physicians from the inservice requirement. The referenced provision states "Physicians may use continuing medical education (CME) hours to meet this [assessment] requirement." Regarding the same subsection, a commenter recommended that the rule specify that QMHPs such as social workers, psychologists, registered nurses, be able to utilize the annual continuing education unit (CEU) requirements for their professions toward the assessment requirement provided that the CEUs are directly related to assessment. Two other commenters submitted similar comments. The department responds as currently written, the rule provides for these professionals to utilize annual CEUs in relevant areas to meet the requirement for eight hours of inservice training or continuing education relating to intake and assessment. Concerning sec.401.587(e)(2)(A)(i)(I), which requires the admitting physician to have conducted an in-person physical and psychiatric examination within 72 hours prior to admission, a commenter stated that the language disallows video/telecommunications face-to-face on-line interaction currently available to physicians and patients, which is especially useful in rural areas. The department responds that the intent of the provision is not to preclude the use of face-to-face online interactive video communications in rural areas and language has been added to clarify this. Regarding sec.401.587(e)(2)(A)(i)(II), a commenter recommended that only a preadmission psychiatric examination be required within 72 hours prior to admission. The commenter stated that since patients will receive a medical history and physical exam as a matter of course within 24 hours of admission, a preadmission physical examination is not necessary. If the admitting physician does not perform the preadmission psychiatric examination, he or she should be permitted to admit the patient after consultation with another physician who did perform the requisite exam within 72 hours before admission. The department responds that a physical examination is required to rule out treatable physiological bases for psychiatric symptoms and to detect medical conditions that might be exacerbated or complicated by psychiatric treatment. With reference to sec.401.587(e)(2)(A)(ii), a commenter questioned why administrative involvement is necessary in the admission of patients under emergency detention. The commenter noted that the decision is a clinical one. The department responds that the law as expressed in the Texas Health and Safety Code, sec.573.021, states that the administrator must agree to accept a patient who would be presented under an emergency detention. This provision applies equally to freestanding psychiatric hospitals and psychiatric units of general hospitals pursuant to Texas Health and Safety Code sec.241.0265. The reason for the provision is to ensure that facilities are adequate to meet the needs of the presenting patient and that the private facility is willing and able to participate in providing services to a patient presented pursuant to a public issuance. Concerning sec.401.587(e)(2)(B)(i), which states that a facility can only accept a patient when a physician is available to immediately evaluate the person, two commenters stated that freestanding psychiatric hospitals do not generally have physicians onsite 24 hours a day. One commenter stated that the legal system responsible for transporting the patient seldom provides advance notice of the anticipated time that the patient will arrive. The commenter noted that the absence of an immediately available physician would necessitate further transportation of the patient to the county facility. If the patient or the patient's family prefers treatment by a physician at another facility, the patient would again require transfer, which could create a barrier to the patient's rapid stabilization. The commenter recommended that the standard be changed to allow up to one hour for the physician assessment, which would allow the qualified mental health professional to advise the patient of rights and begin the preliminary assessment pending the physician's evaluation. Another commenter recommended that the standard be changed to allow up to four hours for the physician assessment. The department responds that under the provisions of the Texas Health and Safety Code, sec.573.021, a person cannot be taken to a psychiatric hospital for emergency detention unless the head of the facility or designee agrees in advance to accept the individual. This advance notice provides time to summons an on-call physician. Concerning the same paragraph, a commenter asked what advice should be given to local police departments when apprehending a person for emergency detention, especially if the receiving hospital is unwilling or unable to accept a patient. The department responds that pursuant to Texas Health and Safety Code, sec.573.012, every county in Texas is required to designate a facility for the purpose of accepting individuals apprehended under emergency detention provisions. Concerning sec.401.587(e)(2)(B)(ii), which states that a patient apprehended under emergency detention who subsequently applies for voluntary admission must still be evaluated under the emergency detention provisions of the law, a commenter suggested review of the section to ensure that individuals are not prevented from admitting themselves voluntarily. The department responds that the intent of this provision is to ensure that individuals who are presented on an emergency detention basis are not coerced into voluntary admission to avoid an examination that could result in the determination that emergency detention is appropriate or inappropriate. Regarding sec.401.587(e)(5), dealing with staffing requirements, a commenter asked for clarification of the term "adequate numbers," as it applies to various staff, including nurses. The commenter stated that in practice the use of such vague terms does not provide latitude for professional judgment, but serves as part of an after-the-fact assessment of staffing deficiencies in surveys by the Texas Department of Health. The commenter requested that the department consider adding elements that might contribute to staffing decisions, such as those in the Medicare conditions for participation interpretive guidelines, cited at 42 CFR sec.482.23(b). The department responds that the language requested has been added. With reference to sec.401.587(e)(5)(C)(i), a commenter recommended that a bachelor degree in nursing with psychiatric certification (accredited by the National League of Nursing) be acceptable credentials for the director of nursing because the number of master's prepared psychiatric nurses is limited; a significant cost attaches to the recruitment of a master's prepared psychiatric nurse; and qualified nurses with bachelor's degrees and psychiatric certification are available. Another commenter stated that the requirement would place an unnecessary and unreasonable burden on psychiatric hospitals, especially in rural areas. The commenter noted the absence of a grandfather clause for individuals who have served as directors of nursing for many years, and stated the concern that psychiatric hospitals and the Texas Department of Health may have to defend this requirement in court because of "'unfair employment practices.'" Another commenter stated that the requirement was "ludicrous" and that not one of the nationally recognized accrediting or certifying agencies or organizations requires or supports the proposed change. The commenter suggested that the requirement "seems rather to be the reoccurring Don Quixote like dream of a single individual within the department" and suggested that the provision had been advanced and withdrawn previously and overturned in state survey requirements. The commenter suggested "This proposed section should be renamed the Lazarus amendment then thrown out...." Another commenter noted the difficulty and great financial burden this requirement poses for small rural hospitals, stating that even the use of a consultant will add $12-15,000 to the annual budget. Three commenters requested that the proposed requirement be replaced by earlier draft language calling for the director of psychiatric nursing services to be "qualified by education and experience." The department responds that the requirement contained in the rule parallels the requirement currently being met by most hospitals in Texas as part of the requirements for Medicare certification. As such, it would not seem to represent an undue hardship, a standard that is not in keeping with statewide practice, or the vision of a single individual. As a historical note, this requirement has not been previously advanced by TDMHMR. With reference to sec.401.587(e)(6)(A)(iv), a commenter noted that specifying the elements of the social services portion of the medical record, some of which may be addressed in other parts of the record, the department is promoting the fragmentation of the medical record. The commenter further noted that it is not practical to require a complete psychosocial evaluation for patients discharged within 48 hours. Another commenter expressed concern about the required "assessment of home plans and family attitudes," noting that it is often not possible or of extremely limited usefulness and requires patient consent. The commenter noted that this activity is more appropriate to longer-term interventions, and suggested that the entire section be deleted. The department responds that the rule does not specify a time limit for the development of the complete psychosocial evaluation. This standard is widely employed in hospitals that are Medicare- certified; its application does not require fragmentation of the clinical record and it is understood that the involvement of the family and others must be determined on a case-by-case basis. Also concerning this subparagraph, a commenter noted that the term "community resource contracts" must be a typographical error. The department responds that the term should be "community resource contacts." Regarding sec.401.587(e)(6)(B), a commenter noted that the use of the term "assets" suggests that the psychiatrist is obtaining a financial history, which is not appropriate. The commenter suggested that if the intent is to require a description of the patient's personal or character strengths, the language should be changed to clarify that meaning. The department responds that language has been changed from "assets" to "strengths." With reference to sec.401.587(e)(8)(A), a commenter suggested that requirements related to a continuing care plan clearly apply only to the state mental health system and should be clarified. The department responds that the continuing care requirements apply to psychiatric hospitals, not just state hospitals, pursuant to Texas Health and Safety Code, sec.241.0265. Concerning sec.401.587(e)(12), a commenter suggested that many nonprofit hospital districts, community centers, and psychiatric hospitals operated by community centers now actively market their products and services to managed care companies and other third party payors, and should be held to the same marketing standards and rules as for-profit psychiatric hospitals. The commenter noted that this subsection could be held to be an effort by the state to discriminate against one class of providers in order to secure a market advantage for another class, a potential violation of the federal restraint of trade act. The department responds that there is a statutory exemption for these entities and refers the commenter to Texas Health and Safety Code sec.164.004. With reference to sec.401.588, a commenter questioned if the term "married" includes common law relationships, i.e., minors who have children of their own and live with the child's other parent, but who are not legally married. The department responds that the provision refers to marriage within the laws of the State of Texas. Common law relationships can be legalized through the filing of an affidavit. Having a child does not change a minor's status. Concerning the same section, two commenters expressed concern that if the criteria for admission of minors is adopted, they might adversely impact the admission of minors because they require a child or adolescent psychiatrist to evaluate the patient. The commenter recommended the requirement be that the psychiatrist be one who has experience in child or adolescent psychiatry or that a consultation with a child and adolescent psychiatrist be required. The department responds that the rule does not require a child or adolescent psychiatrist to evaluate the patient. The criteria require that minors be seen and evaluated by a physician, preferably a child and adolescent psychiatrist. The requirement is framed in this manner to take into account the possible lack of psychiatrists or child and adolescent psychiatrists who would be immediately available to conduct the evaluation for admission to inpatient care in rural areas of the state. The criteria relating to supervision of care where changed on adoption in Section III.A. to require that the care of the child or adolescent be actively supervised by a psychiatrist with documented specialized training, supervised experience, and/or documentable competence in the care and treatment of children and adolescents. This change on adoption is also meant to recognized that in certain cases, psychiatrists who are not board certified in child and adolescent psychiatry nevertheless may; have acquired education and experienced in dealing with children and adolescents that can be documented and that would qualify them to supervised their care. The hospital is required to credential these individuals, who would be guided by standards of treatment specified by the Texas Society of Care and Adolescent Psychiatry. The same commenters also expressed fundamental concern that in adopting the criteria the department might inappropriately create by rule a set of criteria for admission that is more properly within the scope of the physician's professional judgment and discretion. The commenters recommended that if the department adopts the criteria, their application should be limited to minors age 12 and under. The department responds that the Texas Legislature mandated that the department develop criteria for admission to ensure that children and adolescents are admitted to inpatient care only for those conditions which properly respond in such a restrictive setting. The criteria are sufficiently broad to provide for professional judgment within the framework of disorders that are typically appropriately treated in an inpatient setting. In reference to sec.401.591, a commenter noted that psychiatric units of general hospitals do not have primary administrators and that the requirements of the section should be revised to clearly apply only to state mental health facilities and private psychiatric hospitals. Another commenter noted that the requirement is not statutory, that there is no nationally recognized standard, and that administrators of acute care, medical surgical hospitals have no such requirements. The commenter noted that the highly competitive behavioral health field as well as frequent investigations by TDH, TDMHMR, JCAHO, Champus, and TCADA promote the three proposed goals. The department responds that given that the provisions of this section are wholly elective, sufficient latitude exists for differences in organizational structure. If anything, the promotion of the goals of the section through other means should make the goals more easily achieved. One organization expressed support for the proposed rules because they recognize its members, who are marriage and family therapists licensed through the Texas State Board of Examiners of Marriage and Family Therapists, as qualified mental health professionals. The sections are adopted under sec.532.015, Texas Health and Safety Code, which provides the Texas Board of Mental Health and Mental Retardation with rulemaking powers; and under sec.577.010, Texas Health and Safety Code, which authorizes the board to adopt rules and standards necessary to ensure the proper care and treatment of patients in psychiatric hospitals. sec.401.583.Definitions. The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise. Admission - The formal acceptance of a prospective patient to a facility. Assessment- The clinical process a facility uses to gather information from a prospective patient, including a medical history and the problem for which the patient is seeking treatment, to determine whether a prospective patient should be examined by a physician to determine if admission is clinically justified. Community center - A community mental health center or a community mental retardation center administered by a board of trustees pursuant to the Texas Health and Safety Code, Chapter 534, et seq. Department - The Texas Department of Mental Health and Mental Retardation. Hospital - A general or special hospital as defined in the Texas Health and Safety Code, sec.241.003(4) and sec.241.003(11) that includes an identifiable part of the hospital for the provision of mental health services. Informed consent - Consent given by a person when each of the following conditions has been met: (A) Legal capacity. The person giving the consent is 16 years of age or older and has not been adjudicated incompetent to manage personal affairs by an appropriate court of law, or the person giving the consent is a person younger than 16 years of age who is or has been married or who has had his or her disabilities of minority removed for general purposes and who has not been adjudicated incompetent to manage personal affairs by an appropriate court of law. (B) Comprehension of information. The person giving the consent has been informed of and comprehends the nature, purpose, consequences, risks, and benefits of and alternatives to the decision, and the fact that withholding or withdrawal of consent shall not prejudice any future provision of care and services to the individual. (C) Voluntariness. The consent has been given voluntarily and free from coercion and undue influence. Intake - The administrative process for gathering information about a prospective patient and giving the prospective patient information about patient rights and the facility's treatment and services after it has been determined that admission is clinically appropriate. License - The permission granted to a person by the Texas Department of Health (TDH) to operate a psychiatric hospital as defined in this subchapter. Mental health services - Includes all services concerned with research, prevention, and detection of mental disorders and disabilities and all services necessary to treat, care for, supervise, and rehabilitate mentally disordered and disabled persons, including persons mentally disordered from alcoholism and drug addiction. Mental health services provider - An individual, licensed or unlicensed, who performs or purports to perform mental health services, including a: (A) licensed social worker as defined by Section 50.001, Human Resources Code; (B) licensed chemical dependency counselor as defined by Section 1, Chapter 635, Acts of the 72nd Legislature, Regular Session, 1991 (Article 4512o, Texas Civil Statutes); (C) licensed professional counselor as defined by Section 2, Licensed Professional Counselor Act (Article 4512g, Texas Civil Statutes); (D) licensed marriage and family therapist as defined by Section 2, Licensed Marriage and Family Therapist Act (Article 4512c-1, Texas Civil Statutes); (E) member of the clergy; (F) physician who is "practicing medicine" as defined by Section 1.03, Medical Practice Act (Article 4495b, Texas Civil Statutes) or a person employed by any agency of the United States having a license to practice medicine in any state of the United States; (G) psychologist offering "psychological services" as defined by Section 2, Psychologists' Certification and Licensing Act (Article 4512c, Texas Civil Statutes); and (H) registered nurse as defined in law. Minor - A person under 18 years of age who is not and has not been married or who has not had the disabilities of minority removed for general purposes. Person - Any individual, partnership, corporation, management entity, association, or joint stock company, and includes a receiver, trustee, assignee, or similar representative of these interests. Unless the context clearly indicates otherwise, the term also includes a political subdivision. Physician - A person licensed to practice medicine in the State of Texas or a person employed by any agency of the United States having a license to practice medicine in any state of the United States. Psychiatric hospital - (A) An establishment licensed by the TDH under Chapter 577 of the Texas Health and Safety Code offering inpatient services, including treatment, facilities, and beds generally for use beyond 24 hours, for the primary purpose of providing psychiatric assessment and diagnostic services and psychiatric inpatient care and treatment for mental illness. Such services must be more intensive than room, board, personal services, and general medical and nursing care. Although substance abuse services may be offered, 51 percent of beds must be dedicated to the treatment of mental illness in adults and/or children; or (B) that identifiable part of a hospital in which diagnosis, treatment, and care for persons with mental illness is provided and that is licensed by the TDH under Chapter 241 of the Texas Health and Safety Code. Qualified mental health professional - A person acting within the scope of his or her training and licensure or certification, who is a: (A) master's level licensed social worker as defined by Section 50.001, Human Resources Code; (B) licensed professional counselor as defined by Section 2, Licensed Professional Counselor Act (Article 4512g, Texas Civil Statutes); (C) physician who is "practicing medicine" as defined by Section 1.03, Medical Practice Act (Article 4495b, Texas Civil Statutes) or a person employed by any agency of the United States having a license to practice medicine in any state of the United States; (D) registered nurse or advanced practice nurse as defined in law; (E) licensed psychologist or licensed psychological associate offering "psychological services" as defined by Section 2, Psychologists' Certification and Licensing Act (Article 4512c, Texas Civil Statutes) which are appropriate to assessment; (F) licensed marriage and family therapist as defined by Section 2, Licensed Marriage and Family Therapist Act (Article 4512c-1, Texas Civil Statutes); or (G) physician's assistant as defined by the Physician Assistant Licensing Act (Article 4495b-1, Texas Civil Statutes). Sexual exploitation - A pattern, practice, or scheme of conduct, which may include sexual contact, that can reasonably be construed as being for the purposes of sexual arousal or gratification or sexual abuse of any person. The term does not include obtaining information about a patient's sexual history within standard accepted clinical practice. Special treatment procedures- Those procedures which include the use of any of the following: restraint; seclusion; electroconvulsive therapy; psychosurgery; behavior modification; unusual, investigational, and experimental drugs or therapy; and research projects that involve inconvenience or risk to the patient. Texas Department of Health (TDH) - The Texas Department of Health. Threat - Actions in response to a request for discharge that are illegal or unjustified by the patient's condition. sec.401.587.Patient Care Requirements for Licensure. (a) In order to be eligible for licensure as a psychiatric hospital, a proposed facility must: (1) meet the definition of a psychiatric hospital as delineated in sec.401.583 of this title (relating to Definitions); and (2) be in substantial compliance with the standards of care and treatment as described in this subchapter and applicable state and federal laws. (b) Each psychiatric hospital must provide overall operations, a physical plant, and all services and treatment in a manner consistent with recognized hospital standards. (c) Each psychiatric hospital must provide services in conformance with standards of care and treatment that are not less restrictive than those required for state hospitals. (d) For purposes of licensure, psychiatric hospitals must be in substantial compliance with inpatient standards set forth by the Joint Commission on Accreditation of Healthcare Organizations; that is, the standards for inpatient care in the current edition of the Comprehensive Accreditation Manual for Hospitals. In any case in which applicable federal and/or state law or rules are in conflict with the standards of the Joint Commission on Accreditation of Healthcare Organizations, the federal and/or state law or rule prevails. (e) The following provisions are requisite to obtaining and maintaining licensure by the TDH: (1) Assessment. An assessment for admission must be conducted by a qualified mental health professional (QMHP). If the QMHP is not a physician, the non- physician QMHP conducts the assessment to determine the need for physician evaluation for inpatient admission. (A) The non-physician QMHP must annually complete eight hours of inservice training or continuing education relating to intake and assessment procedures. Physicians may use continuing medical education (CME) hours to meet this requirement. (B) The non-physician QMHP may conduct assessments and make recommendations concerning the need for physician evaluation for inpatient admission only as consistent with the scope of their training and licensure or certification. (2) Admissions. All admissions, voluntary or involuntary, must be ordered and clinically justified by a physician. (A) Voluntary admissions. A voluntary patient cannot be admitted for treatment unless: (i) the facility has a physician's signed order admitting the prospective patient, which order may be issued orally, electronically, or in writing, signed by the physician; provided that, in the case of an oral order or an electronically transmitted unsigned order, a signed original is presented to the facility within 24 hours of the initial order, and the order is from: (I) an admitting physician who has conducted an in-person or face- to-face physical and psychiatric examination within 72 hours before the admission; or (II) an admitting physician who has consulted with a physician who has conducted an in-person or face-to-face examination within 72 hours before the admission; and (ii) the facility administrator or designee has signed a statement indicating that the patient has been accepted for admission. (B) Admission pursuant to emergency detention. No person may be admitted to the hospital for emergency detention unless the admission is supported by a written statement in the patient record by a physician who has conducted a preliminary examination of the person and who has determined that the person meets the criteria for admission outlined in the Texas Health and Safety Code, sec.573.022. (i) A person cannot be taken to a psychiatric hospital for emergency detention unless the head of the facility or designee agrees in advance to accept the individual. A facility may only accept such patients when a physician is available to immediately evaluate the person to determine whether the person meets the criteria for emergency detention outlined in the Texas Health and Safety Code, sec.573.022. Upon arrival at the hospital, the rights of persons apprehended for emergency detention, as required under Chapter 404, Subchapter E of this title, relating to Rights of Persons Receiving Mental Health Services, must be provided and explained to the patient by hospital staff. (ii) Submission of an application for voluntary admission after the person has been apprehended for emergency detention, but before the preliminary evaluation for admission for emergency detention has been conducted, does not negate the requirements for the preliminary evaluation for emergency detention under the Texas Health and Safety Code, sec.573.022. (3) Intake. The psychiatric hospital must: (A) review with the prospective patient the patient's finances and insurance benefits; (B) explain to a prospective patient the patient's rights; and (C) explain to a prospective patient the facility's services and treatment process as it relates to the prospective patient. (4) Treatment. The hospital must ensure that each patient's treatment is carried out by appropriately credentialed and privileged professionals. Patient evaluation and treatment planning and implementation are the responsibility of all participating professionals. Each patient will have a treating physician, who has final authority for care and treatment. (5) Staffing. The hospital must have adequate numbers of qualified professional, technical, and consultative staff to evaluate patients, formulate written, individualized comprehensive treatment plans, provide active treatment measures, and engage in discharge planning. (A) Inpatient psychiatric services must be under the supervision of a clinical director, service chief, or equivalent who is qualified to provide the leadership required for an intensive treatment program. The number and qualifications of doctors of medicine and osteopathy must be adequate to provide essential psychiatric services. (i) The clinical director, service chief, or equivalent must meet the training and experience requirements for examination by the American Board of Psychiatry and Neurology, or the American Osteopathic Board of Neurology and Psychiatry. (ii) The director must monitor and evaluate the quality and appropriateness of services and treatment provided by the medical staff. (B) Doctors of medicine or osteopathy and other appropriate professional personnel must be available to provide necessary medical and surgical diagnostic and treatment services. If medical and diagnostic services and treatment are not available within the institution, then the institution must have an agreement with an outside source of these services to ensure that they are immediately available or a satisfactory agreement for transferring patients to a general hospital. (C) The hospital or unit must have a qualified director of psychiatric nursing services. In addition to the director of nursing, there must be adequate numbers of registered nurses, licensed practical nurses, and mental health workers to provide nursing care necessary under each patient's active treatment program and to maintain progress notes on each patient. (i) The director of psychiatric nursing services must be a registered nurse who has a master's degree in psychiatric or mental health nursing or its equivalent from a school of nursing accredited by the National League for Nursing, or who obtains consultation from a nurse with a master's degree in psychiatric nursing. The director must demonstrate competence to participate in interdisciplinary formulation of individual treatment plans; to give skilled nursing care and therapy; and to direct, monitor, and evaluate the nursing care furnished. (ii) The staffing pattern must ensure the availability of a registered nurse 24 hours each day. (iii) The following variables may be considered in assessing adequate numbers of nursing staff: (I) organization and types of services provided to patient by the nursing department; (II) number of levels of nursing care needs of patients, including average length of stay, acuity of patients, and nursing care requirements; (III) number and levels of nursing personnel based on the roles and functions required of nursing; (IV) number of suicidal/assaultive patients; (V) seclusion/restraint incidents; (VI) number of admissions and discharges; (VII) number and type of accidents and/or injuries; (VIII) amount and complexity of medication regimen; (IX) medication errors; (X) use of PRN (as needed) medications; (XI) medical (physical) procedures; (XII) assignment and utilization of "pool" nursing personnel (those staff who are hired through a contract service and are not employees of the hospital); contractual staff should receive orientation and training necessary for assigned functions and should be supervised by employees of the hospital; (XIII) availability of RNs to supervise/consult with nursing/non- nursing personnel about patient care; (XIV) availability of RNs to assess and implement care in crisis situations; (XV) availability of RNs to interact with patients in structured activities; and (XVI) involvement of patients with personnel. (D) The hospital must provide or have available psychological services to meet the needs of the patients. (E) There must be a director of social services who monitors and evaluates the quality and appropriateness of social services furnished. The services must be furnished in accordance with accepted standards of practice and established policies and procedures. (i) The director of the social work department or service should have a master's degree from an accredited school of social work or must be qualified by education and experience in the social service needs of persons with mental illness. If the director does not hold a master's degree in social work, at least one staff member must have this qualification. (ii) Social service staff responsibilities must include, but are not limited to, participating in discharge planning, arranging for follow-up care, and developing mechanisms for exchange of appropriate information with sources outside the hospital. (F) The hospital must provide a therapeutic activities program. (i) The program must be appropriate to the needs and interests of patients and be directed toward restoring and maintaining optimal levels of physical and psychological functioning. (ii) The number of qualified therapists, support personnel, and consultants must be adequate to provide comprehensive therapeutic activities consistent with each patient's active treatment program. (6) Medical records. The medical records maintained by a psychiatric hospital must permit determination of the degree and intensity of the treatment provided to patients who are furnished services in the hospital. (A) Medical records must stress the psychiatric components of the record, including history of findings and treatment provided for the psychiatric condition for which the patient is hospitalized. (i) The identification data must include the patient's legal status. (ii) A provisional or admitting diagnosis must be made on every patient at the time of admission, and must include the diagnosis of intercurrent diseases as well as the psychiatric diagnosis. (iii) The reasons for admission must be clearly documented as stated by the patient and/or others significantly involved. (iv) The social service records, including reports of interviews with patients, family members, and others, must provide an assessment of plans for home and family attitudes, and community resource contracts as well as a social history. (v) When indicated, a complete neurological examination must be recorded at the time of admission physical examination. (B) Each patient must receive a psychiatric evaluation that must: (i) be completed within 60 hours of admission; (ii) include a medical history; (iii) contain a record of mental status; (iv) note the onset of illness and circumstances leading to admission; (v) describe attitudes and behavior; (vi) estimate intellectual functioning, memory functioning, and orientation; and (vii) include an inventory of the patient's strengths in a descriptive, not interpretive, fashion. (C) Each patient must have an individual comprehensive treatment plan. The plan must be based on a inventory of the patient's strengths and disabilities. (i) The written plan must include: (I) a substantiated diagnosis; (II) short-term and long-range goals; (III) the specific treatment modalities utilized; (IV) the responsibilities of each treatment team member; and (V) adequate documentation to justify the diagnosis and the treatment and rehabilitation activities carried out. (ii) The treatment received by the patient must be documented in such a way as to assure that all active therapeutic efforts are included. (D) Progress notes must be recorded by the doctor of medicine or osteopathy responsible for the care of the patient, or the nurse or social worker, and when appropriate, others significantly involved in active treatment programs. The frequency of progress notes is determined by the condition of the patient, but must be recorded at least daily for the first two weeks and at least weekly thereafter, and must contain recommendations for revision in the treatment plan as indicated as well as a precise assessment of the patient's progress in accordance with the original or revised treatment plan. (E) The record of each patient who has been discharged must have a discharge summary that includes a recapitulation of the patient's hospitalization and recommendation from appropriate services concerning follow-up or aftercare as well as a brief summary of the patient's condition on discharge. (7) Reportable conduct. Allegations concerning potential abuse, neglect, sexual exploitation, unprofessional conduct, or unethical conduct must be reported and actions taken, both in accordance with applicable state laws and the administrative rules of the TDH, including the requirements of the Texas Health and Safety Code, sec.161.132, concerning posting of notice of duty to report. (A) For purposes of this subchapter, threats, coercion, or restrictive actions intended to influence the treatment decisions of a patient are also considered abuse. (i) Coercive or restrictive actions that are illegal are investigated as possible abuse under this section. (ii) Coercive or restrictive actions that are not justified by the patient's condition and that are in response to a patient's request for discharge, refusal of medication, therapy, or treatment, or inquiry into or use of a right provided by law, are investigated as possible abuse under this section. (iii) Substantiated allegations may be grounds for hospital licensure review and possible revocation and other penalties as provided by law. (B) Allegations of sexual exploitation by a mental health services provider must additionally be reported as required in Chapter 81 of Title 4, Civil Practice and Remedies Code. (i) If a mental health services provider or the employer of a mental health services provider has reasonable cause to suspect that a patient has been the victim of sexual exploitation by a mental health services provider, or if a patient alleges sexual exploitation by a mental health services provider during the course of treatment, the mental health services provider or the employer must report the alleged conduct not later than the 30th day after the date the person became aware of the conduct or the allegations to: (I) the prosecuting attorney in the county in which the alleged sexual exploitation occurred; and (II) any state licensing board that has responsibility for the mental health services provider's licensing. (ii) Before making a report under this section, the reporter must inform the alleged victim of the reporter's duty to report and determine if the alleged victim wants to remain anonymous. (C) Subject to the provisions of the Texas Health and Safety Code, sec.161.134- 135, employees and non-employees of psychiatric hospitals may not be subjected to discrimination or retaliatory action for reporting violations of applicable laws and rules to authorities. This does not preclude disciplinary action being taken against an employee who intentionally makes a malicious or spurious allegation. Psychiatric hospitals must post notice of protection from discrimination and retaliation as required under law. (8) Continuing care plan. The physician responsible for the patient's treatment is responsible for ensuring the preparation of a continuing care plan for a patient to be discharged unless the patient does not require continuing care, refuses to participate in continuing care, or is not available to participate in continuing care. The physician responsible for preparing the plan must ensure that consultation occurs with the patient and mental health authority in the area in which the patient will reside before preparing the plan. The mental health authority is not required to participate in the development of a plan for a patient leaving a psychiatric hospital that is not owned or operated by a community center. (A) The physician is responsible for ensuring the delivery of the plan to a community center or other provider in the county where the patient will reside and that has been designated by the commissioner of the department to provide continuing care services, or to any other provider that agrees to accept the patient, provided that the provision of care by the center or provider is appropriate. (B) A physician who believes that a patient does not need a continuing care plan must document the reasons for this determination in the patient's clinical record. (9) Transfer or referral from any services of a psychiatric hospital to the inpatient services of an inpatient mental health facility, including a state hospital. Before transferring a patient to the inpatient services of another inpatient mental health facility, the psychiatric hospital must: (A) take necessary steps within the hospital's capability to stabilize the patient; (B) provide notice to the receiving facility of the intent to transfer the patient; (C) provide the receiving facility with information pertinent to the patient's diagnosis and condition; (D) receive verification from the receiving facility that there is space, personnel, and services necessary to provide appropriate care for the patient; (E) transfer the patient using an appropriate method of transport; and (F) upon transfer of the patient, send the original or copies of the patient's appropriate clinical records to the receiving facility. (10) Standards of care. Each psychiatric hospital must adopt policies and procedures establishing professionally recognized and accepted standards of care. In developing such policies and procedures, each psychiatric hospital must comply with the following departmental rules: (A) Chapter 404, Subchapter E of this title, relating to Rights of Persons Receiving Mental Health Services; (B) Chapter 405, Subchapter E of this title, relating to Electroconvulsive Therapy; (C) Chapter 405, Subchapter F of this title, relating to Voluntary and Involuntary Behavioral Interventions in Mental Health Programs; and (D) Chapter 405, Subchapter FF of this title, relating to Consent to Treatment with Psychoactive Medication. (11) Confidentiality. Confidential communications or records disclosure must be in compliance with the Texas Health and Safety Code, Sections 611.004 or 611.0045 and 576.006. (12) Marketing. With the exception of state hospitals, state centers, federal hospitals, hospital districts, community centers, and psychiatric hospitals operated by community centers, psychiatric hospitals must comply with the provisions of the Treatment Facilities Marketing Practice Act, Texas Health and Safety Code, sec.sec.164.001 et seq. sec.401.588.Voluntary Admissions. (a) As outlined in the Texas Health and Safety Code, sec.572.001, a person 16 years of age or older, or a person younger than 16 years of age who is or has been married, or who has had his/her disabilities of minority removed for general purposes, may request admission to an inpatient mental health facility. Such a person may not be voluntarily admitted by a parent or legally authorized representative. (1) In making application for voluntary admission, the person must: (A) agree to voluntarily remain in the hospital until discharge or the period provided under the Texas Health and Safety Code, sec.572.004; and (B) provide informed consent to diagnosis, observation, care, and treatment. (2) A person who lacks the capacity to provide informed consent as determined by a physician may be provided access to review and consideration for mental health services in an inpatient setting through an application for court-ordered treatment provided under the Texas Health and Safety Code, sec.sec.574.001 et seq., Court Ordered Mental Health Services. (b) The parent, managing conservator, or legal guardian of a minor under the age of 16 who is not or has not been married or who has not had his/her disabilities of minority removed for general purposes, may voluntarily admit the minor to services as outlined in the Texas Health and Safety Code, sec.572.001 if the minor meets admission standards as described in Figure 1: 25 TAC 401.588(b). Figure 1: 25 TAC 401.588(b) (c) If acting as an employee or agent of the state or a political subdivision, a person or agency appointed as the guardian or a managing conservator of a minor who is not or has not been married or who has not had his/her disabilities of minority removed for general purposes, may request admission of the minor if the minor meets clinical admission standards, but only if the minor consents to the admission, as outlined in the Texas Health and Safety Code, sec.572.001. 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 August 23, 1996. TRD-9612418 Ann Utley Chair, Texas MHMR Board Texas Department of Mental Health and Mental Retardation Effective date: September 13, 1996 Proposal publication date: June 21, 1996 For further information, please call: (512) 206-4516 CHAPTER 405.Client (Patient) Care SUBCHAPTER F.Restraint and Seclusion in Mental Health Facilities 25 TAC sec.sec.405.121-405.127, 405.129.405.133 The Texas Department of Mental Health and Mental Retardation (TDMHMR) adopts the repeal of sec.sec.405.121-405.127 and 405.129-405.133, concerning restraint and seclusion in mental health facilities. The sections are replaced by new sec.sec.405.121-405.134, concerning voluntary and involuntary behavioral interventions in mental health programs, which are adopted contemporaneously in this issue of the Texas Register. The repeal of the subchapter enables the adoption of new sections that update procedures consistent with the standards of the Joint Commission on Accreditation of Healthcare Organizations, reflects the department's intent to reduce the use of restraint and seclusion, and expands the stated application of the policy to psychiatric hospitals and to other programs over which the department may exercise authority pursuant to the Texas Health and Safety Code, Chapter 577. A public hearing was held on July 9, 1996, in the auditorium of the TDMHMR Central Office (main building) at 909 West 45th Street in Austin, Texas. No public comments were received regarding adoption of the repeals. The repeals are proposed under the Texas Health and Safety Code, Title 7, sec.532.015, which provides the Texas Board of Mental Health and Mental Retardation with rulemaking powers. sec.405.121.Purpose. sec.405.122.Application. sec.405.123Definitions. sec.405.124.Policy Governing the Use of Restraint or Seclusion. sec.405.125.Procedures Required to Initiate and Monitor Personal Restraint. sec.405.126.Procedures Required to Initiate and Monitor Mechanical Restraint. sec.405.127.Procedures Required to Initiate and Monitor Seclusion. sec.405.129.Restraint or Seclusion as Part of Medical or Dental Procedures. sec.405.130.Enforcement. sec.405.131.Exhibits. sec.405.132.References. sec.405.133.Distribution. 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 August 30, 1996. TRD-9612733 Ann Utley Chairman, Texas MHMR Board Texas Department of Mental Health and Mental Retardation Effective date: October 1, 1996 Proposal publication date: June 21, 1996 For further information, please call: (512) 206-4516 SUBCHAPTER F.Voluntary and Involuntary Behavioral Interventions in Mental Health Programs 25 TAC sec.sec.405.121-405.134 The Texas Department of Mental Health and Mental Retardation (TDMHMR) adopts new sec.sec.405.121-405.134, concerning voluntary and involuntary behavioral interventions in mental health programs. Sections 405.122-405.127, 405.129- 405.130, and 405.132-405.133 are adopted with changes. The new sections are adopted contemporaneously with the repeal of the sections that they would replace, sec.sec.405.121-405.127 and 405.129-405.133, concerning restraint and seclusion in mental health facilities. The purpose of the new subchapter is to update existing provisions concerning the implementation of restraint and seclusion and to reflect the department's intent to reduce the use of restraint and seclusion as much as possible and to ensure that voluntary alternatives, such as clinical timeout and quiet time, are first attempted when possible. The new subchapter expands its stated application to psychiatric hospitals and to other programs over which the department may exercise authority pursuant to the Texas Health and Safety Code, Chapter 577; defines the procedures to be followed when using restraint or seclusion in a variety of situations, including emergency situations, during medical or dental care or rehabilitation, or as a protective or supportive device; prohibits the use of chemical sprays; and includes provisions for a 30-minute trial release from restraint or seclusion. The proposed rule is consistent with standards of the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) which took effect on July 1, 1996, and which establish limitations on orders for restraint or seclusion to four hours for adults, two hours for children and adolescents ages 9-17, and one hour for children under the age of 9. On adoption, sec.405.122 has been revised to clarify that the rule applies only to campus-based (inpatient) programs of state hospitals. Section 405.123 has been revised to add a definition of "chemical restraint"; to revise the definition of "clinical timeout"; to modify the definition of an emergency to be consistent with the definition found in other rules of the department; to revise the definition of "seclusion"; and to delete the definition of "emergency restraint or seclusion" as confusing and redundant. Section 405.124 has been modified to indicate that clinical timeout, quiet time, and similar interventions are used as a preventive and de-escalating intervention to preclude the necessity for the emergency use of restraint or seclusion. Section 405.124(1)(A) has been revised on adoption to clarify that prior to participating in clinical timeout, patients shall be told that their participation is voluntary. Language has been modified to emphasize the voluntary nature of timeout. Sections 405.124(1)(C) and (1)(D) have been clarified in a similar fashion. An error has been corrected in sec.405.124(2)(B). Sections 405.125(a)(1) and 405.126(a)(2) have been revised on adoption to clarify the need to consider physical and sexual abuse in the context of medical and psychiatric contraindications to restraint or seclusion. The title and text of sec.405.125 has been revised to removed unnecessary and redundant references to the emergency nature of restraint or seclusion. The leader titles for subsections (a)-(d) of the section have been deleted as confusing and unnecessary. Paragraph (a)(8) has been revised to clarify the department's policy governing chemical restraint. Subsection (b)(3) has been revised to indicate that the environment that individuals are placed in must be observable. Subsection (b)(4) has been revised to delete unnecessary modifiers. Additionally, language has been added to require the treatment team to consult with medical director or designee if the number of restraint or seclusion are not reduced. Subsection (c) has been revised to require documentation of the reasons for personal restraint. In sec.405.126, the term "facility-approved" is replaced with the term "departmentally approved" to reflect the necessity for departmental approval of alteration of commercially available mechanical restraint devices or independently developed devices. In subsection (a)(2), an example of a possible psychiatric contraindication to restraint or seclusion is added. In (d)(1), (d)(2), and (d)(16), it is clarified that certain mechanical restraint devices that can chafe must be padded. In (d)(8), safety pins have been deleted in the list of examples of acceptable fasteners. Language concerning departmental approval of certain mechanical devices has been moved from sec.405.126(e) to sec.405.126(a)(4). In subsection 405.125(f), he department's policy on the use of multiple mechanical restraints is clarified. Subsection (a)(1) of sec.405.127 has been revised to clarify that only the physician or clinically privileged registered nurse can initiate restraint or seclusion. In the same section, (a)(2)(C) and (a)(5) have been revised to indicate that only a clinically privileged registered nurse can evaluate the need to continue restraint or seclusion on behalf of the physician. Subsection (a)(5) has also been revised to clarify that initial orders for restraint or seclusion are for up to the specified limits, and that the decision to continue restraint or seclusion must be documented in the progress notes and signed by the individual authorizing the continuation. Subsection (a)(6) of the same section is revised on adoption to state that a physician should see a secluded or restrained patient as frequently as necessary to monitor changes in the patient's physical or mental status and that although frequency of these visits may vary, a physician shall visit the patient a minimum of twice a day, no more than 12 hours apart. Subsection (a)(8) has been revised on adoption to specify that the exchange of information concerning individuals in restraint or seclusion at shift change shall be documented in the patient's record by incoming staff. In subsection (b)(1), language concerning the need for a staff member of the same gender as the individual to provide continuous face-to-face observation of an individual in a mechanical restraint has been clarified and strengthened. Language in this subsection has also been added to clarify that staff must monitor an individual placed in seclusion continuously when the individual has also been administered psychoactive medication on an emergency basis. Subsection (b)(5) has been changed on adoption to require, whenever feasible, that the patient sign the inventory of belongings prior to being restrained or secluded. Language has been modified in subsection (b)(6) of the section to emphasize the need for constant observation of an individual in mechanical restraint. Subsection (b)(7) has been changed on adoption to more clearly describe the nature of the information that must be communicated to the individual who has been placed in restraint or seclusion. Subparagraph (A) has been modified in recognition of the fact that patients in restraints are observed continuously, not every 15 minutes. Language in subsection (c)(1) has been clarified with the addition of the modifier "release" before "behaviors." In the same paragraph, a sentence referring to release after one hour and 15 minutes has been deleted since it reflects the previous policy. Language in (c)(1)(A) has been modified to reflect that only the physician or clinically privileged registered nurse can reinstate restraint or seclusion. A minor clarification in language was made in (c)(2). In (c)(3)(A) and (B), it is clarified that an individual who falls asleep must be released from restraints, or if in seclusion, the door must be unlocked and opened, and the individual must be evaluated for continued release by the clinically privileged registered nurse or the physician. In (c)(4), the procedures followed after the patient is released from restraint or seclusion are stated as a requirement and clarified to require providing the individual an opportunity to discuss the experience privately within 24 hours following release and providing the individual with an appropriate transition and the opportunity to return to ongoing activities. Subsection (d) is further clarified to require documentation of the specific behaviors meeting emergency criteria and requiring continuation of the order for restraint or seclusion. Language has been added to sec.405.129(c) and sec.405.130(e) to emphasize that protective and supportive devices shall not be used as punishment, for the purpose of convenience of staff or other individuals, or as a substitute for effective treatment or habilitation. Language has also been added to both sections that requires the treatment plan to document what is being prescribed to identify and overcome the need for the protective or supportive devices, with further documentation in the treatment plan of the goal to alleviate the need for the device or prevent further deterioration. Section 405.130 has been further modified on adoption to clarify that if the prescribed device is not specifically for assisting with sleep or safety during sleep, it must be removed during the night and other rest periods. Section 405.132 has been modified on adoption to clarify terminology and process. Section 405.133 has been revised to add a reference to rules governing consent to treatment with psychoactive medication. A public hearing was held on July 9, 1996, in the auditorium of the TDMHMR Central Office (main building) at 909 West 45th Street in Austin, Texas. Testimony was given by Mary Dees, a consumer advocate; Advocacy, Inc., Austin; the Texas Hospital Association, Austin; and the Texas Society of Psychiatric Physicians, Austin. Written comments were received from Advocacy, Inc., Austin; Healthcare America, Austin; Mary Dees, consumer advocate; Devereux Texas Treatment Network, League City; Scott & White Memorial Hospital, Temple; Texas Hospital Association, Austin; Texas Society of Psychiatric Physicians, Austin; Timberlawn Mental Health System, Dallas; and West Texas Neurology, Midland. A commenter commended the department on the rule as an improvement over the current rule. The department responds that the involvement of stakeholders such as the commenter is largely responsible for many improvements in the subchapter as adopted. A commenter recommended that Texas take the national lead and set up a five-year elimination plan for the practice of restraint and seclusion. The commenter noted that restraint and seclusion is banned for people with mental retardation in New York and possibly in Texas, and questioned why it should be banned for one group of people but not another (people with mental illness). The commenter cited research supporting the position and recommended the formulation or designation of a committee to look at the possibility of eliminating restraint or seclusion over a five-year plan. The department responds that seclusion is not used in Texas for people with mental retardation because it is prohibited by federal ICF-MR regulations. The feasibility of phasing out restraint and seclusion entirely cannot be assessed until data that accurately reflects the nature and extent of current usage is collected. The rules as adopted establish a mechanism for gathering this data. The commenter's remarks are appreciated. A commenter noted that ministers and rape crisis counselors should be involved in any task force to eliminate restraint or seclusion. The department responds that if a task force is formulated, one or more ministers and one or more rape crisis counselors will be invited to participate. A commenter requested that the department explicitly state that contingent restraint or seclusion cannot be used. The department responds that contingent restraint or seclusion is but one variation of restraint or seclusion that is not permissible in keeping with the rules. The conditions under which restraint or seclusion may be used are clearly described in the subchapter; any other application of the techniques is outside the provisions of the rule and therefore in violation of the rule. The department believes that by describing the permissible limited application of restraint or seclusion, it more comprehensively prohibits all other forms of restraint or seclusion which are not permissible, i.e., restraint or seclusion that is not initiated and monitored in strict compliance with the subchapter is out of compliance with the subchapter. The same commenter questioned whether policy decisions about restraint and seclusion were based on data or on the fears of staff and patients. The commenter indicated that this question had been posed to the Joint Commission on Accreditation of Healthcare Organizations, with special reference to the choice of 24 hours as the maximum duration for restraint or seclusion. The commenter noted the danger and injuries, including deaths, associated with restraint or seclusion, and expressed concern that restraint and seclusion are used when there is a staff shortage, not as "best practice." Two commenters noted that 24 hours is too long and requested that the maximum duration be reduced to 12 hours at most. One commenter suggested that if a reduction in the maximum duration to 12 hours was not possible, that the rule should require personal assessment by the physician after no more than 12 hours. Another commenter proposed specific language to this effect. The department responds that the adoption of the rule constitutes the inception of a data collection process on which future policy decisions will be based. There is a paucity of relevant data on either a state or national basis. Further, Joint Commission on Accreditation of Healthcare Organizations has indicated that its choice of a maximum duration of 24 hours for restraint or seclusion is not data-driven. The department has also taken into account the American Psychiatric Task Force recommendations, which state in part, "The physician should see a secluded or restrained patient as frequently as necessary to monitor any changes in the patient's physical or mental status. Frequency of these visits may vary, however, a minimum of two visits a day approximately 12 hours apart seems reasonable." The department has revised the rule on adoption to reduce the maximum duration of restraint or seclusion and the maximum period of time between physician visits to an individual in restraint or seclusion to 12 hours. This revision is also consistent in intent with the recommendations of a committee of staff and stakeholders who studied possible revisions to the policy for well over a year and recommended that the maximum duration of the order be reduced to 12 hours. A commenter suggested that the department routinely solicit patient responses to a form designed to evaluate the restraint or seclusion experience within 24 hours following release. The commenter noted that the information could be used by the CEO, the commissioner, and the task force on restraint and seclusion. The commenter noted that the evaluation would be empowering to the consumer and that the information would be valuable to the treatment team in reaching a better understanding of what lead up the behavior requiring restraint or seclusion and what could have been done prevent the behavior and/or the restraint or seclusion. The department responds that it cannot mandate the use of a process and form affecting private rights and interests that has not been proposed for public scrutiny and comment. However, a copy of a patient survey will be attached to the rule when it is distributed to all types of mental health facilities, and they will be encouraged to seek voluntary patient participation in using this approach to evaluating restraint and seclusion from the consumer perspective. A commenter stated that according to the Texas Department of Health, it is a violation of the facility's license to admit a person with mental retardation for anything other than emergency medication management or stabilization. The commenter recommended that this rule be codified in the Texas Administrative Code and the Texas Health and Safety Code so that there will be no confusion about the admission of persons with mental retardation to private psychiatric facilities. The department responds that without more information, it is difficult to respond. Although it is true that people with mental retardation who do not also have a primary psychiatric diagnosis are not appropriately served in private psychiatric hospitals, it is also true that individuals with multiple disabilities, i.e., mental illness and mental retardation, can be appropriately served in psychiatric facilities. It should be noted that for purposes of Medicare reimbursement, patients must be able to benefit from active treatment. The active treatment provided in many psychiatric hospitals might not be appropriate for individuals with severe or profound mental retardation. With reference to time-out and personal restraints lasting less than 15 minutes, the same commenter recommended that the department follow the standards of the Joint Commission on Accreditation of Healthcare Organization, which does not require documentation of these service events. The department responds that documentation of these service events ensures that unusual or unwarranted patterns of use receive appropriate clinical scrutiny. A commenter made general negative comments relating to the rule development process and the purpose of the rules. These comments were directed at all of the mental health rules adopted in this issue of the Texas Register. The comments and the department's response to them is contained in the preamble to the adoption of Chapter 401, Subchapter J, concerning standards of care and treatment in psychiatric hospitals. A commenter suggested that some of the information contained in Chapter 404, Subchapter E, concerning rights of patients receiving mental health services, should possibly be included in this subchapter as well. The commenter expressed concern that consumers would either not be informed of changes in policy or not understand them. The department responds that some rearrangement of rule provisions may be warranted at a later date. It is incumbent on staff explaining rights to ensure that to the extent possible, patients are afforded the opportunity to understand rights. By locating the provisions in question in the rights rules, it is assured that information related to limitations on rights is explained to patients. The concern that the change in policy may not be fully comprehended or understood by patients may have merit, but it is certain that the change in policy will be comprehended and understood by staff who will be held accountable for its enforcement. A commenter suggested that a mechanism be developed that would enable the patient to make decisions about restraint, seclusion, and other interventions in advance of situations requiring intervention. The department responds that the recommendation will be considered. A commenter expressed support for the rules as being consistent with standards of the Joint Commission's Comprehensive Accreditation Manual for Hospitals, including rules relating to the 24-hour cap and nonphysician evaluation. The department acknowledges and appreciates the commenter's remarks. With reference to sec.405.122, a commenter expressed support for the broadbased application of the subchapter, noting that the standards should be consistent without regard to where a patient receives services. The department concurs. With reference to the definition of "clinically privileged nurse" in sec.405.123, two commenters requested consistent guidelines for clinical privileging of nurses who make decisions about individuals in restraint or seclusion. The department responds that the criteria for clinical privileging may vary to some extent depending upon the individual facility. Concerning the same term, a commenter suggested that language stating that the CEO determines criteria for privileging with input from the director of nursing should be amended to indicate that the responsibility is exclusively that of the director of nursing. The department responds that the responsibility is a joint one given that the nurse is practicing in the context of an organization and will be affected by its policies and procedures. A commenter requested that "coercion" be defined. The department responds that the meaning of "coercion" is well understood and that the intent of the rule may be better served if it is not narrowly defined. A commenter suggested that "emergency situation" should be redefined consistent with the definition found in Chapter 405, Subchapter FF, governing consent to treatment with psychoactive medication. The department responds that the definition has been modified on adoption. With regard to sec.405.124, two commenter suggested that the rules need to specifically state that timeout is not used for punishment or for violating unit policies. The department responds that language has been added consistent with the concerns of the commenters. A commenter expressed the concern that the section makes the use of clinical timeout and intervention for children and adolescents not only difficult but from a practical standpoint inadequate to de-escalate a patient in early stages of out-of-control behavior. The requirement that the individual must agree to be placed in clinical timeout or similar intervention assumes the individual (child or adolescent) is rational and in control. Not being able to use less restrictive methods to manage an escalating behavior will generally result in further escalation and eventually use of seclusion and/or restraint in some cases. The commenter stated the belief that out of control or severely emotionally disturbed adolescents who are acutely ill enough to be admitted to a psychiatric inpatient unit are generally not rational enough to appropriately respond to reason when they are emotionally upset and out of control. The commenter recognized that there can be abuse in using restraint or seclusion but for child and adolescent patients to have to submit to voluntary use of timeout or more restrictive intervention could result in more risk to the child and staff by use of this method. The department responds that interventions are voluntary or involuntary. An intervention for which there is no choice is not a voluntary intervention. The numerous safeguards surrounding restraint or seclusion are intended to ensure patient health, welfare, and safety during procedures whose potential dangerousness is exacerbated by the fact that they are not voluntary and may be resisted. The department further questions whether an irrational child is more irrational than an irrational adult. Concerning 405.124(1)(B), a commenter stated that documentation of timeouts is too unwieldy and costly. The department responds that timeout should be documented in the same way any other intervention is documented. With reference to sec.405.124(1)(C), a commenter requested that "may" be changed to "shall." The department responds that language has been changed as requested. Concerning sec.405.124(2)(A), a commenter noted that a patient can use quiet time to decline participation which is passive resistance thus withdrawal of consent. The department responds that the conclusion is overreaching. With reference to sec.405.124(2)(B), a commenter noted the word "timeout" should be "quiet time." The department concurs and corrected the language. Regarding sec.405.125(a)(1), a commenter requested that the qualifier "when appropriate" be deleted to more fully encourage the use of de-escalative techniques prior to using restraint or seclusion. The commenter made the same request with reference to "whenever possible" in subsection (b)(2) of the section. The department responds that there are occasional situations which require the use of restraint or seclusion without first attempting less intrusive procedures. A commenter suggested that the department address the special considerations in using restraint or seclusion with individuals who have been physically or sexually abused. The commenter cited a recent study by the Massachusetts Department of Mental Health, and suggested that the report's recommendations be included in the department's rules. The department responds that the commenter and the report raise important issues for mental health services in Texas, issues whose implications extend well beyond the scope of restraint or seclusion. The department has added additional language to general principles governing restraint or seclusion in sec.405.125(a)(1) and in sec.405.126(a)(2), which requires medical and psychiatric contraindications to be taken into account by the physician ordering restraint or seclusion. However, the general issue of the special psychiatric and care needs of physically and sexually abused patients is much broader than this rule and deserves more comprehensive attention in program and policy development. As a first step in heightening staff awareness and sensitivity, the department will distribute copies of the report with the rule. With reference to sec.405.125(a)(4), a commenter noted that restraint or seclusion is frequently used in other instances which do not meet the definition of emergency situation and therefore should be highlighted in the rule. The commenter requested that the qualifiers "for extreme restlessness or agitation," "for verbal aggression," and "as a consequence of previous behavior" be added to the paragraph. The commenter noted that all of the language should be added in sec.405.128, sec.405.129, and sec.405.130. The department responds that criteria for restraint or seclusion have been further limited by the revision of the definition of "emergency." The three items requested clearly do not meet the basic criteria of imminent danger to self or imminent danger to others. With regard to sec.405.125(a)(7), a commenter requested that the language be changed to add "or continue" to the provision, "PRN orders may not be used to authorize restraint or seclusion." The department responds that additional modification of language is not necessary and may be confusing in the context of the ability of a clinically privileged registered nurse to continue restraint or seclusion if permitted by the physician. As written, the rule effectively prohibits the use of PRN orders for restraint or seclusion under all circumstances. Concerning sec.405.125(a)(8), a commenter requested that the department provide guidelines for the use of chemical restraints, such as when they can be used, how frequently they can be used, who has to order them, monitoring, and use with other forms of restraint and/or seclusion. Another commenter noted that if chemical restraint is used in addition to restraint and seclusion, the patient needs to be monitored continuously until the desired effects have taken place owing to both the effects of akathisia and of sedation. The department responds that a definition of "chemical restraint" has been added to sec.405.123. Language has also been added to sec.405.125(a)(8) that clarifies that Texas does not recognize chemical restraint of any type, and that the administration of psychoactive medications on an emergency basis can only be accomplished in keeping with Chapter 405, Subchapter FF, relating to Consent to Treatment with Psychoactive Medication. The rules require constant face-to-face observation of patients in restraint. Language has been added to require the same level of clinical observation for patients in seclusion who have been administered psychoactive medication on an emergency basis. Regarding sec.405.125(b)(4), a commenter recommended that the first three to five days of hospitalization should be a stabilization period during which time there would be opportunity for medication to start working, which would reduce the need for restraint or seclusion. The commenter suggest that a person could have several episodes in the first three to five days, but after the fifth day, the 30-day provision would take effect. The department responds that the provision, which has been in effect since 1982 and has never been the focus of a complaint on behalf of treatment teams, is intended to focus treatment team attention on patient behaviors at every phase of the inpatient stay, including the initial phase during which more attention may well be merited given that the treatment team is becoming acquainted with the patient. Concerning the same paragraph, a commenter requested that the following statement be added: "If the number of restraint or seclusion are not reduced, the treatment team will consult with the medical director or designee to explore alternative treatment strategies." The department responds that language has been added. Regarding sec.405.125(c), a commenter suggested that the documentation for use of personal restraint should specify the behaviors which necessitated the use of the restraint. The department responds that language has been added to address the commenter's concern. With reference to the list of acceptable restraint devices in sec.405.126(d), a commenter suggested that padding for anklets and arm splints should be required. The department responds that language has been changed to require padding. Regarding subsection (d)(9) of the section, dealing with restraining nets, a commenter requested that language be added to indicate that the restraining net must not be used in conjunction with wrists and ankle restraints. The department responds that it has clarified its general policy in sec.405.126(f). Concerning subsection (d)(10), dealing with restraint boards, a commenter questioned how a patient can be positioned in either prone or supine position at the discretion of the physician when the rule allows up to one hour before a physician's order must be obtained. The department responds that the physician would have to be consulted prior to implementing this form of restraint unless the physician had previously communicated a general preference in such cases. With regard to sec.405.126(f), which states that the use of more than one mechanical restraint simultaneously requires clinical justification documented in the individual's record, a commenter cited an example in which an individual was restrained using four different devices and suggested that the rule specify that the use of restraints are intended to be used independent of each other. The commenter expressed concern that the use of multiple restraints is questionable, risky, and humiliating for the patient. The department responds that language has been added to clarify the policy. With reference to sec.405.127(a), a commenter noted that restraint and seclusion are procedures prescribed by physicians for patients in acute medical settings. Patients who are restrained or secluded should be assessed periodically to determine whether or not the procedure(s) should be continued. Only medically trained professionals should perform these periodic evaluations. Since master's or doctoral level social workers and psychologists are not medically trained, these professions should not perform the periodic assessments. Only physicians and clinically privileged registered nurses should be given this responsibility and authority. The commenter suggested specific changes to subsections (a)(2) and (5). Regarding sec.405.127(a)(1), two commenters stated that a decision which restricts a person's liberty and with possible medical complications should require the use of a clinically privilege nurse to determine to impose this level of restriction. The department concurs and has altered language accordingly. Concerning sec.405.127(a)(2)(A), a commenter questioned if the requirement would necessitate a description of the facility in the written order. The department responds that the requirement necessitates sufficient documentary evidence that the need for a protected and private environment for restraint or seclusion is recognized and ordered by the physician. Regarding sec.405.127(a)(2)(B), a commenter expressed support for the timeframes suggested in the section. Concerning sec.405.127(a)(2)(C), a commenter noted that neither a social worker or a psychologist have the medical training, experience, or expertise to evaluate an individuals' medical condition nor are they trained to consider the full range of chemical as well as programmatic alternatives. The nurse would have to write and carry out the order and may be hesitant to take the order from a social worker or psychologist. The rule should specify the evaluation would be performed by a clinically privileged nurse or physician. Another commenter expressed the same concerns and suggested specific language. Another commenter stated that an RN would not take an order from a social worker or psychologist. The department responds that language has been changed to provide that other than the physician, only the clinically privileged registered nurse can initiate or continue restraint or seclusion. Regarding sec.405.127(a)(4), a commenter cited the American Psychiatric Association Task Force Report on Seclusion and Restraint, which recommends that the treating physician see the patient usually within three hours and preferable within one hour after an initiation of the seclusion or restraint episode. The commenter requested that the language be modified as follows: "A physician must perform a face to face assessment of the individual no later than three hours after the phone order was obtained, and must personally sign, time and date the order and document in the progress notes the justification for the continuation of the phone order." The department responds that the same recommendations recognize intervals of up to 12 hours between physician visits as acceptable. With reference to sec.405.127(a)(6), a commenter stated the belief that 24 hours is too long for an order for restraint or seclusion and called on the department to take a proactive role as a state that looks at the issues and promotes physician intervention as soon as possible. The commenter cited the recommendations of the American Psychiatric Association, including that a psychiatrist see the patient within one hour, but in no case more than three hours after they are placed in restraint or seclusion, and every 12 hours thereafter. A commenter suggested that the duration of an order for restraint or seclusion be limited to 12 hours; failing that modification, the commenter suggested that a physician be required to personally check in on the patient after 12 hours. The commenter indicated that this is too important an ethical, spiritual, and safety risk management issue to simply adopt national standards, and that Texas has the leadership ability now to do more. Another commenter proposed alternate language that would require the physician to visit the patient at least twice in any 24-hour period, with no longer than 12 hours between visits. Another commenter requested that the time frame be changed to "not to exceed three hours without a face to face evaluation by the physician," which is consistent with the APA Task Force recommendation. The commenter stated that a longer timeframe could only be justified in terms of staff convenience given the level of agitation that must be evidenced to justify restraint or seclusion for a longer period of time. The department responds that language has been changed to require the physician to visit the patient in restraint or seclusion at least twice in any 24-hour period, with no longer than 12 hours between visits. The physician or clinically privileged registered nurse is required to reassess the patient every four hours for adults, every two hours for patients ages 9-17, and every hour for patients under 9. A commenter requested clarification about what specifically is checked at four- hour intervals. The department responds that the purpose of the reassessment at the end of the maximum designated interval, whether it is four hours, two hours, or one hour, is to determine whether the patient continues to meet the criteria for restraint or seclusion and whether the behaviors necessary for release from restraint or seclusion are sufficiently in evidence to merit release. It should be noted that without regard to reassessment for release, staff must ensure the patient in restraint or seclusion has adequate respiration and circulation at all times (sec.405.127(b)(2)) with respiration and circulation checks of patients in restraint conducted and documented every 15 minutes or more frequently; that personal and comfort needs are attended (sec.405.127(b)(3)); and that patients in restraint are provided an opportunity for motion, range of motion or exercise for at least 15 minutes during every hour of mechanical restraint (sec.405.127(b)(6)(B)). Patients in restraint are continuously observed. Patients in seclusion are observed at 15 minute intervals, unless, under the rules as adopted, they have been administered psychoactive medication on an emergency basis as well, in which case they are also continuously observed. Concerning sec.405.125(a)(8), two commenters suggested that accurate communication between the shifts is essential for the care and treatment of the individual. A commenter suggested the following language: "A each shift change, assigned staff and nurses of both shifts shall together observe and document the current status of the individual's physical, emotional and behavioral condition, and document any medication administered, the effects of the medication, time and type of care needed, etc." The department responds that language has been added to require documentation of the review by the incoming staff. With regard to sec.405.127(b)(1), a commenter suggested that the staff member responsible for monitoring an individual in restraints should routinely be of the same gender unless the individual's history indicates this would be contraindicated, e.g., sexual or physical abuse perpetrated by someone of the same gender. The department responds language has been strengthened. With reference to sec.405.127(b)(1)(A), a commenter suggested that the rule require that the checklist be sent to the superintendent, client rights officer, and Office of Consumer Services and Rights Protection. The department responds that the information is available to all of the named parties on request and that the coordination of data collection and review may be met in other ways. Regarding sec.405.127(b)(5)(C), a commenter suggested that language be added requiring that valuable be kept in a place accessible only to a designated staff member. The commenter noted that individual often are released from restraints or seclusion to find their belongings have been lost, stolen, or borrowed without any way to track which staff member may have had access. The department responds language has been revised as requested. With regard to sec.405.127(b)(1), which requires continuous face- to-face observation of an individual in mechanical restraint, a commenter noted that the practice followed at his hospital involves using a video monitor and 15-minute personal checks to minimize agitation of the patient by the monitoring process. The commenter emphasized his belief that face-to-face observation would likely increase the duration of the use of restraint and would require greater sedation of the patient. The department responds that its interest is in continuous observation of the patient with sufficient proximity to enable swift intervention as needed. It is questionable whether the practice as described meets the intent of the rule. With reference to the potential for monitoring to increase agitation, the department questions if the commenter construes "face-to-face" as meaning extremely close personal contact. The term "face-to-face" is intended to convey the idea that observation is meaningful and takes into account whether the patient is conscious, unconscious, sleeping, breathing, vomiting, choking, experiencing a seizure, etc. A video monitor that is not continuously watched does not meet the intent of the rule. A video monitor at any distance from the location of the individual being restrained does not meet the intent of the rule. A video camera that is positioned so that a patient is not fully observable does not meet the intent of the rule. Concerning sec.405.127(b)(7), a commenter suggested that the section be revised as follows: "As soon as is feasible after restraint or seclusion has been implemented, appropriate staff..must discuss with the individual: 1. the specific behaviors that required the restraint or seclusion, 2. how the individual's behavior continues to meet the criteria, 3. what behavior must be demonstrated in order to secure release from seclusion or restraint or a reduction of physical restraints, and 4. what the individual suggests the staff can do to assist him/her to gain release from seclusion or release from restraint or a reduction of physical restraints." The department responds language has been modified to address the commenter's concerns. With reference to sec.405.127(c)(1), a commenter suggested that the word "not" had been deleted. The department responds that "not" has not been deleted from the rule. The intent of the provision is that patient exhibit behaviors that have been identified as necessary for release, not that patients not exhibit the behaviors which necessitated restraint or seclusion. This approach is more clinically therapeutic and recognizes the fact that most patients in restraint, and many patients in seclusion, are by definition unable to the continue the behaviors which necessitated the restraint or seclusion. The criteria for release is therefore not the absence of certain behaviors, but the presence of behaviors, such as demonstrating calm. Regarding sec.405.127(c)(2), a commenter requested that the term "procedure" be deleted and replaced with "restraint and seclusion." The department responds that language has been clarified as requested. Concerning the same paragraph, a commenter asked for clarification as to where trial release takes place. The department responds that the patient is returned to activities. Language has been expanded in this section of the rule. Concerning sec.405.127(c)(3), a commenter requested the rule be revised to state: "When an individual falls asleep, the individual must be released from restraints, or if in seclusion, the door must be unlocked and opened. The individual must be evaluated promptly upon awakening for continued release." The department responds that language has been modified. With regard to sec.405.127(d), a commenter suggested that the section should require the physician to document what behaviors justify continued restraint or seclusion. The justification should comply with the criteria specified in emergency situations. The department responds that language has been modified. With regard to sec.405.129 and sec.405.130, a commenter suggested that given the very long time that a patient may be using such devices, the patient's record needs to describe what is being done to improve the condition that caused the need for restraint and the steps taken to ensure that there is not further deterioration of the condition for which the device was initially needed. Another commenter suggested the following language: "The treatment plan must document what is being prescribed to identify and overcome the need for the protective device. It should be documented as an objective in the treatment plan with a goal to alleviate the need for the device or prevent further deterioration." The department responds that language has been added. Concerning sec.405.129 and sec.405.130 on protective and supportive devices, a commenter noted there is nothing in the rule that states that these cannot be used for staff convenience or for punishment. The commenter requested explicit language. The department responds that explicit language has been added to both sections in response to the commenter's concerns. With reference to sec.405.130, a commenter noted that the rule should indicate that if the prescribed device is not specifically for assisting with sleep or safety during sleep, it must be removed during the night and other rest periods. The department responds that language has been added. Concerning the use of gerichairs, a commenter stated concern about loss of muscle tone and maintenance of existing strength. The department responds that language has been added to both sec.sec.405.129 and 405.130 that requires that the treatment plan must document what is being prescribed to identify and overcome the need for the protective or supportive device, and that it should be documented as an objective in the treatment plan with a goal to alleviate the need for the device or prevent further deterioration. With reference to sec.405.131, a commenter noted that in other states, employees have experienced physical restraints as part of their orientation. This has been found to be a sensitizing experience which causes them to be more willing to utilize alternative and more caution about implementing restraint or seclusion. The commenter suggested that such training be incorporated into the orientation of employees who are involved in direct care. The department responds that it will consider the recommendation. With regard to the same section, a commenter suggested that the clinically privileged nurse should receive training in anger management, bias awareness, and dealing with fear. The department responds that it will consider the recommendation. Concerning sec.405.132, a commenter questioned how the department would ensure that all current employees are trained in the new rule. The department responds that in subsection (e), the rule specifies that local staff development offices are responsible for implementation. Compliance or lack of compliance with the rule will be evident through various survey processes, including JCAHO and QSO for state facilities. The sections are proposed under the Texas Health and Safety Code, Title 7, sec.532.015, which provides the Texas Board of Mental Health and Mental Retardation with rulemaking powers. The proposal would affect sec.sec.576.024, Texas Health and Safety Code. sec.405.121.Purpose. The purpose of this subchapter is to: (1) outline procedures for the use of clinical time-out, quiet time, and similar voluntary interventions; (2) ensure protection of the rights and physical well-being of individuals during the use of restraint or seclusion; (3) outline basic principles relating to the use of restraint or seclusion as a supplement to the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) standards and other applicable standards; (4) outline policies and procedures for initiating, monitoring, and reporting restraint or seclusion in emergency situations or as a part of usual and customary medical and dental procedures in accordance with sec.576.024, Texas Health and Safety Code; and (5) outline procedures for the use of protective and supportive devices. sec.405.122. Application. (a) This subchapter applies to all facilities providing inpatient mental health services, including: (1) the campus-based components of state centers providing mental health services and the campus-based components of state hospitals; (2) psychiatric hospitals as defined in Chapter 401, Subchapter J (relating to Standards of Care and Treatment in Psychiatric Hospitals); and (3) crisis stabilization units (CSUs) as defined in Chapter 401, Subchapter K (relating to Standards of Care and Treatment in Crisis Stabilization Units) and any other mental health program under the purview of TDMHMR through the authority granted by the Texas Health and Safety Code, Chapter 577. (b) This subchapter represents minimum standards. The facility CEO may, through written policies and procedures, promulgate additional guidelines if they are consistent with this subchapter, disseminated within the facility as required in sec.405.134 of this title (relating to Distribution), and do not conflict with: (1) departmental rules; (2) state, federal, or local laws or ordinances; (3) the current version of the JCAHO's Comprehensive Accreditation Manual for Hospitals; or (4) other applicable accreditation standards. sec.405.123.Definitions. The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise. Chemical restraint - The use of any chemical, including pharmaceuticals, through topical application, oral administration, injection, or other means, for purposes of restraining an individual. Chief executive officer (CEO) - The highest ranking administrator or designee of a department facility, psychiatric hospital, or CSU. Clinical timeout - A procedure in which an individual, in voluntary response to verbal direction from staff, cooperatively enters and remains in a designated area from which egress is not blocked for a period of time, not to exceed 30 minutes without specific joint redetermination by the individual and staff of the need for continuation of the procedure. Clinical timeout, quiet time, and similar interventions, intended to be preventive, are not appropriate in emergency situations. Clinically privileged nurse - A registered nurse who is a member of the licensed nursing staff and is qualified by experience and training in the proper use of restraint or seclusion. The facility CEO, with input from the director of nursing, determines what qualifies the nurse for assuming these specific clinical service responsibilities (i.e., type of training, experience, and documented competence). Department - The Texas Department of Mental Health and Mental Retardation (TDMHMR). Department facility - A state center providing inpatient campus- based mental health services or a state hospital providing inpatient campus-based services. Emergency - A situation in which it is immediately necessary to restrain or seclude a patient to prevent: (A) imminent probable death or substantial bodily harm to the patient because the patient overtly or continually is threatening or attempting to commit suicide or serious bodily harm; or (B) imminent physical or emotional harm to others because of threats, attempts, or other acts the patient overtly or continually makes or commits, andpreventive, de-escalative, or verbal techniques have proven ineffective at diffusing the potential for injury. These situations may include aggressive acts by the individual, including serious incidences of shoving or grabbing others over their objections. Facility - A department facility, psychiatric hospital, or CSU. Individual - Any person admitted to and receiving mental health services from a facility. MHRS (Mental Health Recordkeeping System) - The recordkeeping system used in department facilities. Mechanical restraint - The application of a mechanical device restricting the free movement of the whole or a portion of an individual's body in order to control physical activity. PMAB (Prevention and Management of Aggressive Behavior) - The department's approved risk management curriculum for minimizing the likelihood of aggressive behaviors and managing their occurrences by way of the least restrictive and least intrusive interventions. Personal restraint - The application of physical force alone restricting the free movement of the whole or a portion of an individual's body in order to control physical activity. Physical force - Pressure applied to an individual's body. Protective devices - Restraints used to prevent involuntary self-injury or to permit wounds to heal as outlined in sec.405.129 of this title (relating to Use of Protective Devices). Quiet time - A procedure in which an individual, on the individual's own initiative, cooperatively enters and remains in a designated area for a period of time. Clinical timeout, quiet time, and similar interventions, intended to be preventive, are not appropriate in emergency situations. Seclusion - The placement of an individual alone for any period of time in a hazard-free room or other area in which direct observation can be maintained and from which egress is prevented. Restraint - The use of a physical or mechanical device to involuntarily restrict the free movement of the whole or a portion of an individual's body in order to control physical activity. Supportive devices - Restraints used to posturally support an individual or to assist individuals who cannot obtain and/or maintain normal bodily functioning as outlined in sec.405.130 of this title (relating to Use of Supportive Devices). sec.405.124.Use of Clinical Timeout, Quiet Time, and Similar Interventions. (a) The facility's policies and procedures must address the use of clinical timeout, quiet time, and similar interventions as a preventive and de-escalating intervention to preclude the necessity for the emergency use of restraint or seclusion. (b) The policies and procedures must include the following requirements. (1) Clinical timeout and similar interventions. (A) Clinical timeout and similar interventions may be initiated by staff but require the individual's cooperation. Under no circumstances may clinical timeout or similar interventions be forced or the patient coerced. Prior to inception of clinical timeout, staff initiating timeout shall explain to the patient that clinical timeout is voluntary and is not enforced. (B) Each use of timeout or a similar intervention must be documented in the individual's record with information regarding the conditions under which the timeout occurred. (C) A decision by the individual to decline to begin, or remain in, clinical timeout or similar interventions may not result in staff's use of restraint or the seclusion of the individual, unless the behavior justifies those interventions. To force or coerce the patient constitutes restraint and/or seclusion and renders the procedure subject to the applicability, reporting, documentation, and monitoring requirements for restraint or seclusion described in this subchapter. (D) Staff may not use physical force or personal restraint to direct the individual to a clinical timeout area. To force or coerce the patient constitutes restraint and/or seclusion and renders the procedure subject to the reporting, documentation, and monitoring requirements for restraint or seclusion described in this subchapter. (2) Quiet time. (A) An individual may request the use of quiet time and, unless clinically contraindicated, be granted quiet time. Unless staff terminates quiet time for clinical reasons, the individual may terminate self-initiated use of quiet time at any time. (B) Each use of quiet time or a similar intervention must be documented in the individual's record with information regarding the conditions under which the timeout occurred. (C) Under no circumstances may quiet time be enforced. If the individual wishes to terminate self-initiated use of quiet time and staff requests that the individual remain, the procedure becomes subject to the requirements outlined in paragraph (1) of this subsection concerning clinical timeout. (c) Clinical timeout may not be used: (1) as punishment; (2) for the purpose of convenience of staff or other individuals; or (3) as a substitute for effective treatment or habilitation. sec.405.125.Principles for the Use of Restraint or Seclusion. (a) Each facility must have written policies and procedures consistent with this subchapter and the following general principles concerning the use of restraint or seclusion: (1) It is the department's intent to reduce the use of restraint or seclusion as much as possible and to ensure other alternatives are first attempted, when appropriate. Restraint or seclusion should only be used as an intervention of last resort following attempts to intervene in a less restrictive, less invasive manner. Before ordering restraint or seclusion, the physician should take into consideration any potential medical (including psychiatric) contraindications, e.g., history of physical or sexual abuse; (2) When restraint or seclusion is the appropriate intervention, it should be used for the shortest period of time necessary to enable the individual to effectively cope with: (A) his or her environment, if used in an emergency situation; or (B) the situation requiring its use if used in medical or dental care or rehabilitation or as a protective or supportive device. (3) The rights of the individual as described in sec.404.154 and sec.404.155 (relating to Rights of All Persons Receiving Mental Health Services and Rights of Persons Receiving Residential Mental Health Services) of Chapter 404, Subchapter E of this title, concerning Rights of Persons Receiving Mental Health Services, must be preserved at all times during the use of restraint or seclusion. (4) Restraint or seclusion may not be used: (A) as punishment; (B) for the purpose of convenience of staff or other individuals; or (C) as a substitute for effective treatment or habilitation. (5) An individual may not be restrained to a stationary object while in a standing position. (6) Restraint or seclusion must be initiated in a way that avoids undue physical discomfort, harm, or pain to the individual. Only the minimal amount of physical force that is reasonable and necessary may be used to implement restraint or seclusion, and only PMAB interventions or, at psychiatric hospitals or CSUs, those of a comparable curriculum, may be utilized. (7) PRN (pro re nata or "as needed") orders may not be used to authorize restraint or seclusion. (8) Chemical restraint is not a recognized form of patient management in the State of Texas and is prohibited. This includes, but is not limited to, chemical sprays that are intended to temporarily restrain an individual, including tear gas and pepper spray. The use of psychoactive medication in an emergency is governed by Chapter 405, Subchapter FF of this title, relating to Consent to Treatment with Psychoactive Medication. (b) Each facility must have policies and procedures concerning the use of restraint or seclusion consistent with this subchapter and the following principles: (1) Each use of restraint or seclusion must be prescribed by a physician in accordance with the procedures outlined in sec.405.127 of this title (relating to Use of Restraint or Seclusion). (2) Preventive, de-escalative, and verbal intervention techniques, such as those described in the PMAB curriculum and outlined in Exhibit A, must be utilized whenever possible to diminish the necessity for resorting to restraint or seclusion. (3) Individuals placed in restraint or seclusion must have a protected, private observable environment that safeguards their personal dignity and well-being. (4) The treatment team reviews alternative strategies for dealing with behaviors necessitating the use of restraint or seclusion more often than twice in any 30- day period. If the number of incidents of restraint or seclusion are not reduced, the treatment team will consult with the medical director or designee to explore alternative treatment strategies. (5) All uses of restraint or seclusion in an emergency situation are reported daily to the CEO or designee and appropriate action is taken to correct unusual or unwarranted utilization patterns. For each use of emergency restraint or seclusion, the CEO or designee is responsible for maintaining a central file containing the information shown on Exhibit B which is available for TDMHMR system analysis. (c) Personal restraint used for less than five minutes is not subject to the reporting and monitoring requirements of this subchapter, except that its use and the reason for its use must be documented in the individual's record. (d) This subchapter takes precedence over any other applicable standards, including those of the JCAHO's Comprehensive Accreditation Manual for Hospitals, whenever the provisions of the other standards are less restrictive sec.405.126.Mechanical Restraint Devices. (a) Only commercially available or departmentally approved devices specifically designed for the safe and comfortable restraint of humans may be used as mechanical restraints. The alteration of commercially-available devices or independent development of devices must: (1) be based on the individual's special physical needs (e.g., obesity or physical impairment); (2) take into consideration any potential medical (including psychiatric) contraindications, e.g., history of physical or sexual abuse; (3) be approved by a committee composed of the medical and nursing directors or their designees, the facility's safety officer (or equivalent), and the facility's right's officer (or equivalent); and (4) be described fully in writing, with a copy of the description forwarded within ten days of the facility approval to the commissioner or designee for review. (b) Devices must be inspected after each use to ensure that they are in good repair and are free from tears or protrusions that may cause injury. Damaged devices may not be used to restrain an individual. (c) Despite their commercial availability, the following types of devices may not be used to implement restraint: (1) those with metal wrist or ankle cuffs; (2) those with rubber bands, rope, cord, or padlocks or key locks as fastening devices; (3) long ties (e.g., leashes); or (4) bed sheets. (d) The following devices may be utilized to implement restraint. (1) Anklets - A cloth or leather band fastened around the ankle or leg and secured to a stationary object (e.g., bed or chair frame). Acceptable fasteners include Velcro and buckles. The device must not be secured so tightly as to interfere with vital functions, including circulation, nor so loose as to permit chafing of the skin. Padding on the inside of the device, which aids in preventing chafing, is required. (2) Arm splints (also referred to as "elbow immobilizers") - Strips of any material, extending from below to above the elbow, that are secured around the arm with Velcro tabs or ties. If appropriate, they should be secured so as not to impede full use of the hands. The device must not be secured so tightly as to interfere with vital functions, including circulation, nor so loose as to permit chafing of the skin. Padding on the inside of the device, which aids in preventing chafing, is required. (3) Belts - A cloth or leather band fastened around the waist. The belt may either be attached to a stationary object (e.g., chair frame) or used for securing the arms to the sides of the body. The device must not be secured so tightly as to interfere with vital functions, including breathing and circulation. (4) Camisole - A cloth jacket without sleeves that covers the arms and upper trunk. The device is secured with strings tied behind the individual's back. The device must not be secured so tightly as to interfere with vital functions, including breathing and circulation, or cause muscle strain. Caution should be exercised when using this device because it may impair balance and the individual's ability to break a fall. (5) Chair restraint - A well-padded stabilized chair that supports all body parts and prevents the individual's voluntary egress from the chair without assistance (e.g., table top chair, Geri-chair). Mechanical restraint devices (e.g., wristlets, anklets) are attached or may be easily attached to restrict movement. The devices must not be secured so tightly as to interfere with vital functions, including breathing and circulation. (6) Enclosed bed - A bed with high side rails or other type of side enclosure - and, in some cases, an enclosure (e.g., mesh, rails, etc.) on the top of the bed - that prevents the individual's voluntary egress from the bed. (7) Helmets - A plastic, foam rubber, or leather head covering. The various types of sport helmets belong to this category of restraint devices. If appropriate, a face guard may be attached to the helmet. The device must be the proper size and the chin strap should not be so tight as to interfere with vital functions, including breathing and circulation. (8) Mittens - A cloth, plastic, foam rubber, or leather hand covering fastened around the wrist or lower arm. Boxing and other types of sport gloves belong to this category of restraint devices, as do socks and stockings. Acceptable fasteners include elastic, Velcro, ties, paper tape, pull strings, buttons, and snaps. The device must not be secured so tightly as to interfere with vital functions, including circulation. (9) Restraining net - Mesh fabric (e.g., Posey restraining net) over the upper and lower trunk of the body, with head, arms and lower legs exposed, secured over a mattress to a bed frame. The restraining net must be loose enough to allow some movement. Under no circumstances may the net be placed over the individual's head. The device must not be secured so tightly as to interfere with vital functions, including breathing and circulation. (10) Restraint board (also referred to as a "papoose board") - An upholstered, rigid board with several closing canvas flaps with Velcro fasteners attached. These flaps are folded across a person's body in a criss-cross fashion. A strap designed to go across the forehead is also a common feature. The device is intended for use only while the person is in a horizontal position, either prone or supine at the discretion of the prescribing physician. (11) Restraint bed - A collapsible stretcher of steel frame construction with a fabric cover. The restraint bed has an adjustable backrest and a padded mat to be used under the patient's head and upper body to prevent injury. Approved wristlets, anklets, and belts are used to safely and securely limit the individual's physical activity. (12) Straight jacket - A heavy canvas jacket with sleeves that are stitched together so that the individual's arms are crossed in front of the body. The device is secured with strings tied behind the individual's back. The device must not be secured so tightly as to interfere with vital functions, including breathing and circulation, or cause muscle strain. Caution should be exercised when using this device because it may impair the individual's balance and ability to break a fall. (13) Ties - A length of cloth or leather used to secure approved mechanical restraints (i.e, mittens, wristlets, arm splints, belts, anklets, vests, etc.) to a stationary object (i.e., bed or wheelchair frame) or to other approved mechanical restraints. Ties must not be secured so tightly as to interfere with vital functions, including breathing and circulation. (14) Transport jacket - A heavy canvas jacket without sleeves that encases the arms and upper trunk. It is fastened with Velcro closures and roller buckles and held in place with a strap between the legs. The device is used only as a temporary measure during transport. (15) Vest - A sleeveless cloth jacket that covers the upper trunk and is fastened in the back or front with ties or Velcro. The vest may be secured to a stationary object (e.g., bed or chair frame). The vest and ties must not be secured so tightly as to interfere with vital functions, including breathing and circulation. (16) Wristlets - A cloth or leather band fastened around the wrist or arm and secured to a stationary object (e.g., bed or chair frame, waist belt). Acceptable fasteners include Velcro and buckles. The device must not be secured so tightly as to interfere with vital functions, including circulation nor so loose as to permit chafing of the skin. Padding on the inside of the device, which aids in preventing chafing, is required. (e) Restraints are intended to be used independent of each other. The use of more than one mechanical restraint simultaneously requires clinical justification documented in the individual's record. sec.405.127.Use of Restraint or Seclusion. (a) Initiating restraint or seclusion. (1) Only a physician or a clinically privileged registered nurse may initiate restraint or seclusion in an emergency situation. A physician, or clinically privileged nurse if a physician is not available, must be contacted immediately. (2) The physician or clinically privileged nurse must conduct a face-to-face assessment of the individual to determine whether the behavior requires restraint or seclusion and may approve continuation of the procedure, if indicated. The physician, if available, shall write an order for the procedure's use. The written order must: (A) designate the specific procedure authorized, including any specific measures for ensuring the individual's safety, health, and well-being and the protected, private nature of the setting; (B) specify the date, time of day, and maximum length of time, not to exceed four hours for adults, two hours for adolescents and children ages 9-17, and one hour for children under the age of 9, for which the procedure may be used, unless continuation is authorized; (C) stipulate if the physician's order may be continued based on a face-to-face evaluation by a clinically privileged registered nurse; (D) if the order can be continued, state the maximum duration for renewal, not to exceed 12 hours total, including the original order; (E) describe the specific behaviors which resulted in the need for restraint or seclusion; and (F) describe the specific behaviors necessary for the individual to be removed from restraint or seclusion. (3) If a physician is not immediately available, a clinically privileged nurse must obtain and document a physician's verbal order by phone no later than one hour following initiation of restraint or seclusion. (4) The physician must personally sign, time, and date the phone order within 12 hours of the time the order was issued. (5) If provided on the original order, after the original order expires, a clinically privileged registered nurse may perform a reassessment and make a decision to continue the original order after the initial time on the original order for up to four hours for adults, two hours for adolescents and children ages 9-17, and one hour for children under the age of 9. The basis for the decision must be documented in the progress notes and signed by the individual authorizing the continuation. (6) Restraint or seclusion cannot be ordered and continued for more than 12 hours. A physician should see a secluded or restrained patient as frequently as necessary to monitor any changes in the patient's physical or mental status. Frequency of these visits may vary; however, a physician shall visit the patient a minimum of twice a day, no more than 12 hours apart. Prior to issuing a new order that would continue restraint or seclusion beyond 12 hours, the physician must perform a face-to-face evaluation of the individual and personally sign, time, and date the original order and the new order. (7) Staff who initiated restraint or seclusion must document in the individual's record the use of alternative strategies, including preventive, de-escalative, and verbal intervention techniques, which were attempted before the use of the restraint or seclusion. A summary of less restrictive alternatives to restraint and seclusion as outlined in the PMAB curriculum is referenced as Exhibit A. If alternative strategies were not used, the rationale must be documented. (8) Information regarding the time the procedure was initiated, the current status of the individual's physical, emotional, and behavioral condition, any medication administered, time and type of care needed, etc., shall be reviewed by staff of both shifts at each shift change and this review shall be documented by incoming staff. (b) Monitoring and care of the individual. (1) A staff member of the same gender as the individual, unless the individual's history indicates this would be contraindicated, e.g., sexual or physical abuse perpetrated by someone of the same gender, must provide continuous face-to-face observation of an individual in a mechanical restraint. Staff must monitor an individual placed in seclusion at least every 15 minutes, or more often as clinically indicated, e.g., continuous observation is required when a patient in seclusion has also been administered psychoactive medication on an emergency basis, and must monitor the individual continuously during mealtimes. (A) Department facilities must document monitoring and other care activities on the Restraint/Seclusion Checklist included in the MHRS as Form 7-4. (B) Psychiatric hospitals and CSUs may use the MHRS 7-4 form to document monitoring activities in the individual's record, but are not required to do so. The hospital or CSU must address documentation in its policies and procedures. Documentation must, at a minimum, reflect the type and amount of information required in the MHRS 7-4. Copies of the MHRS 7-4 form may be obtained by writing the TDMHMR Office of Policy Development, P.O. Box 12668, Austin, Texas 78711- 2668. (2) Adequate respiration and circulation must be ensured at all times. (3) The individual must be allowed: (A) bathroom privileges at least once every two hours (or more frequently, if indicated); (B) an opportunity to drink water or other appropriate liquids every two hours (or more frequently, if indicated); ) (C) a bath at least once daily (or more frequently, if indicated); (D) regularly prescribed medications, unless otherwise ordered by the physician; (E) regularly scheduled meals and snacks served on ware that is appropriate for safety; and (F) an environment that is free of safety hazards, adequately ventilated during warm weather, adequately heated during cold weather, and appropriately lighted. (4) The individual must be protected (e.g., from assault by others) while in restraint or seclusion. (5) Articles that an individual might use to inflict self-injury must be removed (e.g., belts, shoes, matches, cigarette lighters.) (A) The individual's right to retain personal possessions and personal articles of clothing may be suspended during restraint or seclusion when necessary to ensure the safety of the individual or others as described in sec.404.155(a)(2) of this title (relating to Rights of Persons Receiving Residential Mental Health Services). (B) An inventory of any personal possessions or personal articles of clothing taken from the individual must be listed in the individual's record. The inventory must be signed by the individual whenever feasible and witnessed by two staff members who must sign the individual's record. If personal articles of clothing are taken from the individual, appropriate other clothing will be issued. (C) The items must be kept in a locked place. (D) Upon release, the individual and two staff members must be asked to sign the individual's record to indicate the status of items returned. (6) In addition to constant observation, individuals placed in restraint using mechanical devices must also be provided: (A) checks for circulation, skin color, and respiration at least every 15 minutes (or more often if deemed necessary by the prescribing physician); and (B) an opportunity for motion, range of motion or exercise for at least 5 minutes during every hour in mechanical restraint. (7) As soon as is feasible after restraint or seclusion has been implemented, appropriate staff (as designated in the facility's policies and procedures) must discuss with the individual the specific behaviors that necessitated restraint or seclusion, how the individual's behavior continues to meet the criteria, the behaviors that must be demonstrated to be released from restraint or seclusion or have a reduction of physical restraint, and the individual's suggestions about what staff can do to assist the individual in gaining release from restraint or seclusion. Communication with the individual must be conducted in a language or method that is understandable to the individual (e.g., signing). (A) If the individual does not appear to understand the information, staff must attempt to re-explain it every 15 minutes until understanding is reached or the order for restraint or seclusion has expired. (B) Staff must document all attempts to communicate the information. (8) Staff shall implement procedures to ensure the proper management of individuals in restraint or seclusion during evacuation of facilities due to drills or actual disasters. (c) Release from restraint or seclusion. (1) If staff determine that the release behaviors described in the written order have been exhibited by the individual for 15 minutes, the individual must be evaluated by the clinically privileged nurse or physician for release on a 30- minute trial period even if the maximum length of time prescribed in the order has not expired. The determination for release must be based on present behavior. A determination that the individual who is exhibiting the required behaviors is not ready for release must be documented in the individual's record with justification. (A) If the individual's behavior escalates during the trial period and the individual's record clearly describes that the escalating behavior is part of the same episode that promoted the initial order, the physician or clinically privileged registered nurse may reinstate restraint or seclusion under the existing order if it has not expired. Staff must document the specific behaviors that resulted in the decision to reinstate restraint or seclusion. (B) If the escalating behavior is not related to the behaviors that initiated the restraint or seclusion, a new order must be obtained. (2) If an emergency health situation (e.g., seizure) occurs, the individual must be released from restraint or seclusion as soon as possible as dictated by the emergency. If the specific conditions that required the initiation of restraint or seclusion still exist after the emergency health situation is resolved, a physician must conduct a face-to-face examination of the individual to determine if restraint or seclusion may be initiated without adverse effects. The physician's examination must be documented in the individual's record, and the physician must write a new order before the procedure may be initiated. (3) An individual who falls asleep while in restraint or seclusion must be evaluated by the clinically privileged registered nurse or the physician upon awakening for continued release without regard to how long the individual was asleep or whether the maximum length of time prescribed in the order has expired. (A) When an individual falls asleep in restraint, he or she must be released from restraints. If full release is not accomplished or is not possible, the clinical justification must be documented in the patient's clinical record. Continuous observation of the patient will be maintained until the patient awakens and is evaluated. (B) When an individual falls asleep in seclusion, the door must be unlocked and opened within the nearest 15-minute period of monitoring. If the door is not unlocked and/or opened, the clinical justification must be documented in the patient's clinical record. (4) Staff must take appropriate actions to facilitate the individual's reentry into the social milieu following release from restraint or seclusion. These actions shall include: (A) providing the individual an opportunity to discuss the experience privately within 24 hours following release; (B) providing the individual with an appropriate transition and the opportunity to return ongoing activities; and (C) observing the individual for at least 15 minutes with comments documented in the individual's record. (d) New order for restraint or seclusion. If the individual is not exhibiting the required release behaviors at the end of the time period designated in the physician's written order and, after a face-to-face assessment by the physician, the physician believes restraint or seclusion is still necessary, the physician may write a new order, including a description of the behaviors that meet the definition of "emergency" and necessitate the new order. sec.405.128.Use of Restraint or Seclusion During Medical or Dental Care or Rehabilitation. (a) Restraint or seclusion may be used during medical and dental care or rehabilitation if necessary and a regular and customary part of care or rehabilitation treatment (e.g., seclusion as part of isolation procedures for an individual with a contagious disease; body restraint during surgery; arm restraint during intravenous administration; restraints to prevent an individual who is unable to ambulate independently and safely from falling out of bed or out of a wheelchair; restraint devices to carry out dental procedures, etc.). (1) Medical care or rehabilitation. Restraint or seclusion may be used without a physician's written order only if its use is part of the facility's written medical or nursing procedures. The procedures used must be recorded in the individual's record. (2) Dental care or rehabilitation. A dentist may order restraint or seclusion for dental procedures only. In order to determine potential contraindications to restraint or seclusion, the dentist must consult with the individual's treating physician before the individual's initial dental treatment (and subsequently as necessary) and document the consultation and recommendations. The procedures used must be recorded in the dental section of the individual's record. (b) The facility's medical and nursing staff must develop specific procedures for monitoring the individual's physical condition while in restraint (i.e., skin integrity checks, circulation checks, range of motion, etc.), and the procedures must be included in the facility's written policies and procedures. sec.405.129.Use of Protective Devices. (a) Protective devices may be used for the following purposes: (1) To prevent self injury. Protective devices may be used for individuals with physical disabilities if the individual exhibits involuntary movements that are potentially self-injurious (e.g., helmets for individuals with seizures, use of bedrails to prevent individuals from falling out of bed, seat belts to prevent individuals from falling out of wheelchairs) and other, less restrictive interventions are not appropriate. Protective devices include any device which cannot be removed by the individual. (A) The temporary use of protective devices requires a physician's order. A separate order must be obtained if a protective device is used for emergency restraint. (B) If the use of a protective device continues after one week, its use must be reviewed by the individual's treatment team, and a plan describing the use of protective devices documented in the treatment plan. The treatment plan must document what is being prescribed to identify and overcome the need for the protective device. It should be documented as an objective in the treatment plan with a goal to alleviate the need for the device or prevent further deterioration. The plan for use of the protective device must be approved by the staff physician and reviewed and renewed, as appropriate, at each treatment plan review. (2) To permit the healing of wounds. Protective devices may be employed to allow wounds to heal. (A) The use of protective devices to permit wounds to heal may be implemented only with a physician's written order. (B) The order must be reviewed and, if appropriate, renewed by the physician at least weekly. (C) Once the wound has healed, the protective device is considered a mechanical restraint and is subject to the requirements outlined in sec.405.127 of this title (concerning Use of Restraint or Seclusion). (b) The facility's medical and nursing staff must develop specific procedures for monitoring the individual's physical condition while in restraint (i.e., skin integrity checks, circulation checks, range of motion, etc.), and the procedures must be included in the facility's written policies and procedures. (c) Protective devices may not be used: (1) as punishment; (2) for the purpose of convenience of staff or other individuals; or (3) as a substitute for effective treatment or habilitation. sec.405.130.Use of Supportive Devices. (a) Types of mechanical restraints may be used as supportive devices to posturally support an individual or assist in obtaining and maintaining normative bodily functioning (e.g., use of posey vests for individuals who are not able to posturally support themselves). The facility must have written policies and procedures that address the proper implementation and monitoring of supportive devices. (b) The use of a supportive device is considered an adjunct to proper care of an individual, and may not be used as a substitute for appropriate nursing care. (c) If an individual cannot obtain or maintain normal body functioning, the treatment team may consider the need for a supportive device and make recommendations to the physician. When considering the need for a supportive device, the treatment team must include an occupational or physical therapist or registered nurse who is familiar with the individual being discussed. The treatment plan must document what is being prescribed to identify and overcome the need for the supportive device. It should be documented as an objective in the treatment plan with a goal to alleviate the need for the device or prevent further deterioration. (1) The use of a supportive device is a temporary solution to a situation. A separate order must be obtained if a supportive device is used for emergency restraint. (2) In recommending a supportive device, the treatment team must document in the individual's treatment plan record the: (A) device's therapeutic purpose; (B) conditions necessitating its use; and (C) alternative strategies that have been attempted and failed. (d) The use of a supportive device must be prescribed by a physician whose written order designates the: (1) specific device authorized; (2) maximum length of time for its use; (3) intervals for release from the device for exercise; and (4) monitoring of physical conditions while in the device, if needed. (e) The use of supportive devices must be reviewed at each treatment plan review and may be reordered, if indicated. (f) If the prescribed device is not specifically for assisting with sleep or safety during sleep, it must be removed during the night and other rest periods. (g) Supportive devices may not be used: (1) as punishment; (2) for the purpose of convenience of staff or other individuals; or (3) as a substitute for effective treatment or habilitation. sec.405.131.Briefing of Staff on Policy. Within 90 days after the effective date of this subchapter, the facility CEO will inform all staff who are likely to have direct contact with an individual (including current employees, contractors, agents, and physicians) of changes to policies and procedures as a result of this subchapter. sec.405.132.Staff Training. (a) Employees whose work responsibilities involve direct contact with individuals receiving mental health services shall be informed of their roles and responsibilities under this subchapter. (b) Before assuming job duties involving responsibility for individuals in clinical timeout, quiet time, and similar interventions, employees will receive training on the contents of this subchapter. (c) Before assuming job duties involving the implementation of verbal, physical, or mechanical restraint interventions, employees will receive training and demonstrate competence in: (1) preventive, de-escalative, verbal, protective, and personal restraint intervention techniques as described in PMAB (psychiatric hospitals and CSUs may use a comparable curriculum) as appropriate to the employee's position and responsibilities; and (2) the use and application of approved mechanical restraints appropriate to the employees' position and responsibilities. (d) Employees will reassessed for competence and retrained, if needed, whenever their duties or responsibilities under this subchapter change. (e) Documentation of training and demonstrated competence for each employee will be kept by the facility office for staff development. Documentation shall include the date of training, the name of the instructor, a list of successfully demonstrated skills, the date skills were assessed, and the name of the person who assessed competence. sec.405.133. References. Reference is made to the following federal and state statutes, rules of the department, and standards: (1) Texas Health and Safety Code, sec.576.024; (2) Joint Commission on Accreditation of Health Care Organizations (JCAHO) Comprehensive Accreditation Manual for Hospitals; (3) Texas Health and Safety Code, Chapters 241 and 577; (4) Chapter 404, Subchapter E of this title, concerning Rights of Persons Receiving Mental Health Services; and (5) Chapter 405, Subchapter FF of this title, concerning Consent to Treatment with Psychoactive Medication. sec.405.134. Distribution. (a) This subchapter will be distributed to: (1) members of the Texas Mental Health and Mental Retardation Board; (2) management and program staff in the department's Central Office; (3) CEOs of all state hospitals and state centers; (4) CEOs of all psychiatric hospitals and CSUs in Texas; and (5) advocacy organizations. (b) CEOs are responsible for distributing this subchapter to appropriate staff. (c) Upon request, this subchapter will be made available to any staff member, individual, family member of an individual, counsel of record of an individual, or any other interested party. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas, on August 30, 1996. TRD-9612732 Ann Utley Chairman, Texas MHMR Board Texas Department of Mental Health and Mental Retardation Earliest possible date of adoption: October 1, 1996 For further information, please call: (512) 206-4516 SUBCHAPTER FF.Consent to Treatment with Psychoactive Medication 25 TAC sec.sec.405.801-405.808, 405.810-405.812 The Texas Department of Mental Health and Mental Retardation (TDMHMR) adopts the repeal of sec.sec.405.801-405.808 and sec.sec.405.810-405.812 of Chapter 405, Subchapter FF, relating to consent to treatment with psychoactive medication. The repeal is adopted contemporaneously with the adoption of new sec.sec.405.801-405.808, also relating to consent to treatment with psychoactive medication, in this issue of the Texas Register. The repeal enables the adoption of new sections to implement provisions of Senate Bills 572 and 96, 74th Texas Legislature. A public hearing was held in the auditorium of TDMHMR Central Office, 909 West 45th Street, Austin, Texas, on July 9, 1996. There was no public testimony concerning the repeal. Public comments were received from Advocacy, Inc., Austin, calling for the reinstatement of matters related to judicial orders discussed in sec.405.809. The department responds that it is not repealing sec.405.809. The sections are adopted under the Texas Health and Safety Code, Title 7, sec.532.015, which provides the Texas Board of Mental Health and Mental Retardation with rulemaking powers. sec.405.801.Purpose. sec.405.802.Application. sec.405.803.Definitions. sec.405.804.Information Required to be Given. sec.405.805.Who May Give Informed Consent. sec.405.806.Documentation of Informed Consent. sec.405.807.Patients Admitted Under Texas Statutes. sec.405.808.Patients Committed Under Texas Statutes. sec.405.810.Rights of Patients for Whom an Order to Authorize the Administration of Psychoactive Medication is Filed. sec.405.811.Documentation. sec.405.812.Emergencies. 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 August 30, 1996. TRD-9612731 Ann Utley Chairman, Texas MHMR Board Texas Department of Mental Health and Mental Retardation Effective date: October 1, 1996 Proposal publication date: June 21, 1996 For further information, please call: (512) 206-4516 25 TAC sec.sec.405.801-405.808 The Texas Department of Mental Health and Mental Retardation (TDMHMR) adopts new sec.sec.405.801-405.808 of Chapter 405, Subchapter FF, relating to consent to treatment with psychoactive medication. Section 405.803 is adopted with changes. The new sections are adopted contemporaneously with the repeal of the sections they replace, sec.sec.405.801-405.808 and 405.810-405.812 of Chapter 405, Subchapter FF, also relating to consent to treatment with psychoactive medication. Existing sec.405.809 is retained. The new sections implement provisions of Senate Bill 572, 74th Legislature, which revises procedures found in the Texas Health and Safety Code relating to obtaining a judicial order authorizing administration of psychoactive medication regardless of the patient's refusal. The new sections also implement provisions of Senate Bill 96, 74th Legislature, which clarifies conditions under which psychoactive medication may be administered to a patient. The new sections extend the application of the judicial process to all patients committed under the temporary or extended commitment procedures of the Texas Health and Safety Code; incorporate new definitions for "psychiatric hospital" and "order for temporary or extended mental health services"; clarify conditions under which psychoactive medications may be administered to individuals admitted voluntarily and committed involuntarily; and clarify procedures to be followed in administering psychoactive medication in an emergency situation. In sec.405.803, a typographical error was corrected in the definition of "psychoactive medication." In the department's form for consent to treatment with psychoactive medication (MHRS 9-7 form), a line was added for the signature of a witness to a telephone consent for a minor. A public hearing was held in the auditorium of TDMHMR Central Office, 909 West 45th Street, Austin, Texas, on July 9, 1996. The Texas Hospital Association, Austin, provided testimony. Written comments were received from Advocacy, Inc., Austin; The Cohn Center Psychiatry, Houston; The Haven, DeSoto; and Scott & White Memorial Hospital, Temple. A commenter stated that it is the department's responsibility to provide access to information about judicial orders and requested rules that reiterate the law. The department responds that it is not adopting the repeal of sec.405.809. A commenter addressed a number of general comments concerning the policy development process for several departmental proposals that would be adopted in this issue of the Texas Register. The department's response to the commenter's concerns is contained in the preamble to the adoption of Chapter 401, Subchapter J, concerning standards of care and treatment in psychiatric hospitals. With reference to the definition of "mental health services" in sec.405.803, a commenter noted that the language should be corrected to read "order for temporary or extended mental health services." The department responds that mental health services is not defined and questions the reference. Concerning sec.405.807(b), a commenter questioned the application of the proposed rules to programs operated by a CMHMRC or the department within a jail or prison. The commenter noted that subsection (b) refers to patients committed to TDMHMR mental health facilities under provisions other than those found in the Texas Health and Safety Code (i.e., Code of Criminal Procedure, Family Code). This section requires a documented clinical review before medication can be administered to a patient who refuses to consent to psychoactive medication. The commenter noted that some jail and prison inmates have not been committed by any court but are nevertheless confined in a closed unit housing only psychiatric patients. The commenter requested a clear statement of whether the proposed rule applies to CMHMRCs having contractual responsibility for mental health services in jail and prison settings. The department responds that standards of Texas Department of Criminal Justice govern prisons. Jails are governed by Texas Commission on Jail Standards. The same commenter noted that if the department determines that the clinical review constitutes an appropriate mechanism for requiring inmates who are not committed to take psychoactive medication, it might be helpful to acknowledge an administrative, i.e., nonmedical presence and contribution as one factor in the review as part of the state's interest in prison safety and security as a legitimate penological interest distinct from the best interest of the patient/inmate. The commenter stated that although the department has no desire nor right to impose requirements on any other state agency, it does have an interest in clarifying the rights of mentally ill persons and does impose rules on CMHMRCs where such entities provide services. The department responds that it does not have purview in those settings. Concerning the "Classes of Psychoactive Medications Determined by the Texas Department of Mental Health and Mental Retardation," form, a commenter requested that neurontin be added to the classes of psychoactive medication. The department responds that the list is not intended to be comprehensive. The sections are adopted under the Texas Health and Safety Code, Title 7, sec.532.015, which provides the Texas Board of Mental Health and Mental Retardation with rulemaking powers. sec.405.801.Purpose. The purpose of these rules is to prescribe procedures to be followed in administering psychoactive medications to patients receiving voluntary or involuntary mental health services. sec.405.802.Application. This subchapter applies to all persons receiving inpatient mental health services at: (1) TDMHMR mental health facilities; (2) community mental health and mental retardation centers (CMHMRCs); (3) other mental health facilities operated by the department or a CMHMRC; and (4) psychiatric hospitals as defined in Chapter 401, Subchapter J of this title (relating to Standards of Care and Treatment in Psychiatric Hospitals). sec.405.803.Definitions. The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise. Capacity - A patient's ability to (A) understand the nature and consequences of a proposed treatment, including the benefits, risks, and alternatives to the proposed treatment; and (B) make a decision whether to undergo the proposed treatment. Emergency situation - A situation in which it is immediately necessary to administer medication to a patient to prevent: (A) imminent probable death or substantial bodily harm to the patient because the patient: (i) overtly or continually is threatening or attempting to commit suicide or serious bodily harm; or (ii) is behaving in a manner that indicates that the patient is unable to satisfy the patient's need for nourishment, essential medical care, or self- protection; or (B) imminent physical or emotional harm to others because of threats, attempts, or other acts the patient overtly or continually makes or commits. Informed consent - Consent given by a person admitted to a mental health facility or the person's legally authorized representative when each of the following conditions have been met: (A) Comprehension of information. The person giving the consent has been provided the information outlined in sec.405.804 of this title (relating to Information Required to be Given) and has the capacity to give consent; and (B) Voluntariness. The consent has been given voluntarily. Legally authorized representative - The parent, managing conservator or guardian of a minor; the guardian of the person of an adult; or a person to whom authority to make health care decisions is delegated under a durable power of attorney for health care as provided by Chapter 135 of the Texas Civil Practice and Remedies Code. Medically appropriate treatment - Treatment with psychoactive medication based on a physician's judgment that such medication is clinically indicated and that the medication's potential benefits outweigh its potential risks. Medication class - A group of medications with similar actions and indications for use, as outlined in the department's "Classes of Psychoactive Medications Determined by the Texas Department of Mental Health and Mental Retardation," a copy of which may be obtained by contacting TDMHMR, Office of Policy Development, P.O. Box 12668, Austin, Texas 78711-2668. Mental health facility - A facility that can provide 24-hour residential and psychiatric services and that is: (A) a TDMHMR mental health facility; (B) a psychiatric hospital as defined in Chapter 401, Subchapter J of this title (relating to Standards of Care and Treatment in Psychiatric Hospitals); (C) a community center; or (D) a facility operated by a community center or other entity the department designates to provide mental health services. Minor - A person under 16 years of age who is not and has not been married or who has not had his/her disabilities of minority removed for general purposes. Order for temporary or extended mental health services - A court- ordered commitment to mental health services under sec.574.034 or sec.574.035 of the Texas Health and Safety Code. Psychoactive medication - (A) A medication prescribed for the treatment of symptoms of psychosis or other severe mental or emotional disorders and that is used to exercise an effect on the central nervous system to influence and modify behavior, cognition, or affective state when treating the symptoms of mental illness. "Psychoactive medication" includes the following categories when used as described in this subchapter: (i) antipsychotics or neuroleptics; (ii) antidepressants; (iii) agents for control of mania or depression; (iv) antianxiety agents; (v) sedatives, hypnotics, or other sleep-promoting drugs; and (vi) psychomotor stimulants. (B) Classes of medication are identified in the department's "Classes of Psychoactive Medication Determined by the Texas Department of Mental Health and Mental Retardation." Refusal to consent to administration of psychoactive medication (refusal) - Actions which include the following behaviors: (A) The patient or legally authorized representative communicates orally, through sign language, or in writing that he/she refuses psychoactive medication. (B) The patient communicates through behavior that he/she refuses psychoactive medication, e.g., refusing to swallow oral medication, refusing to submit to hypodermic injection of psychoactive medication. (C) The patient pretends to swallow oral psychoactive medications, and the attending physician determines that the pretending behavior is due to an unwillingness to take the medication. (D) The patient gives an unacceptable response, which is a lack of response, no response, or an inadequate or a noncommittal response from the patient after he/she has received the standard risk/benefit explanation. TDMHMR mental health facilities - All state hospitals and state centers providing mental health services. sec.405.804.Information Required to be Given. (a) Before administering psychoactive medication to any patient in a mental health facility, the treating physician will explain to the patient and/or to the patient's legally authorized representative, if the representative is available, the following in simple, nontechnical language in the person's primary language, if possible (this explanation may be given by the registered nurse (RN), licensed vocational nurse (LVN), physician's assistant (PA), or registered pharmacist (R.Ph.) if the treating physician cannot be present, but the treating physician must confirm the explanation with the patient and/or the patient's legally authorized representative, if the representative is available, within two working days, not including weekends or legal holidays): (1) the nature of the patient's mental illness and condition; (2) the beneficial effects on the patient's mental illness and/or condition expected as a result of treatment with the medication; (3) the probable health and mental health consequences to the patient of not taking the medication, including the occurrence, increase, or reoccurrence of symptoms of mental illness; (4) the existence of generally accepted alternative forms of treatment, if any, that could reasonably be expected to achieve the same benefits as the medication and why the physician rejects the alternative treatment; (5) a description of the proposed course of treatment with medication; (6) the fact that side effects of varying degrees of severity are a risk of all medication; (7) the relevant side effects of the medication, including: (A) any side effects which are known to frequently occur in most persons; (B) any side effects to which the particular patient may be predisposed; and (C) the nature and possible occurrence of the potentially irreversible symptoms of tardive dyskinesia; (8) the need to advise mental health facility staff immediately if any of these side effects occur; (9) an instruction that the patient may withdraw consent at any time without negative actions on the part of staff; and (10) the patient's rights under this rule (as outlined in the MHRS 9-7.1 form, revised 6/95, or the MHRS 9-7.2 form, revised 6/94, copies of which may be obtained by contacting TDMHMR, Office of Policy Development, P.O. Box 12668, Austin, Texas 78711-2668.). (b) The patient and his/her legal representative must also be provided a summary of this information in writing, along with an offer to answer any questions concerning the treatment. If the representative is not present, the information must be mailed to the representative (via certified letter) within 24 hours, except on weekdays and legal holidays when the information will be mailed on the next business day. sec.405.805.Documentation of Informed Consent. (a) Informed consent for the administration of psychoactive medication will be evidenced by a completed copy of the department's form for consent to treatment with psychoactive medication (MHRS 9-7 form) - a copy of which may be obtained by contacting TDMHMR, Office of Policy Development, P.O. Box 12668, Austin, Texas 78711-2668 or another form which includes all the information found on the MHRS 9-7 form executed by the patient or his/her legally authorized representative. (1) Any time the medication regimen is altered in a way which would result in a significant change in the risks or benefits for the patient, an explanation of the change will be provided to the patient and/or the patient's legally authorized representative. The explanation will include notification of the right to withdraw consent at any time. (2) A new consent will be obtained if a change in medication class is proposed. (b) If the patient or his/her legally authorized representative consents to the administration of psychoactive medication but refuses or is unable to execute the form, the treating physician will document the consent in the patient's clinical record and on the MHRS 9-7 form (or other form including the same information). (c) The treating physician and/or RN/LVN/PA/R.Ph. will discuss the administration of psychoactive medication with all patients for whom such medication has been prescribed, and will provide to them the explanation described in sec.405.804 of this title (relating to Information Required to be Given). This requirement will include patients for whom an order to authorize the administration of psychoactive medications is filed. If the RN/LVN/PA/R.Ph gives the initial explanation for the consent information to the patient, then the treating physician must confirm the explanation and sign the MHRS 9-7 form (or other form including the same information) within 2 working days, not including weekends or legal holidays. (d) A patient's refusal or attempt to refuse to receive psychoactive medication, whether given verbally or by other indications or means, will be documented in the progress notes of the patient's clinical record, and on the consent form (MHRS 9-7 form or other form including the same information). (e) All consents will be reviewed with the patient or his/her legally authorized representative at least every 90 days. The review will include a discussion of the information outlined in sec.405.804 of this title (relating to Information Required to be Given) as well as a discussion of the patient's or his/her legally authorized representative's wishes regarding continuation of the medication. A new consent form must be executed annually or upon a new admission to inpatient mental health services. sec.405.806.Patients Admitted Under Texas Statutes. Psychoactive medications will not be administered to patients admitted to a mental health facility under the voluntary provisions of the Texas Health and Safety Code or detained at a mental health facility under the emergency detention or order of protective custody (OPC) provisions of the Texas Health and Safety Code without informed consent from the patient or the patient's legally authorized representative unless the patient is in an emergency situation and medication is administered as provided in sec.405.808 of this title (relating to Emergencies). sec.405.807.Patients Committed Under Texas Statutes. (a) Patients Committed to Mental Health Facilities Under Provisions of the Texas Health and Safety Code. Psychoactive medications will not be administered to patients committed to a mental health facility under an order for temporary or extended mental health services if the patient or the patient's legally authorized representative refuses the medication unless: (1) the patient is in an emergency situation and medication is administered as provided in sec.405.808 of this title (relating to Emergencies); or (2) the patient does not have a legally authorized representative and the administration of the medication regardless of the patient's refusal is authorized by an order as outlined in sec.sec.574.101-574.110, Texas Health and Safety Code. (b) Patients committed to TDMHMR Mental Health Facilities Under Provisions Other Than Those Found in the Texas Health and Safety Code (i.e., Code of Criminal Procedure, Family Code). The decision to administer medications to a patient committed to a TDMHMR mental health facility under provisions other than those found in sec.574.034 or sec.574.035 of the Texas Health and Safety Code is within the discretion of the treating physician during the first fourteen days of the patient's commitment. If, following the initial 14-day period, a committed patient or the patient's legally authorized representative refuses the administration of psychoactive medication, the following review procedure will be initiated. (1) The chief physician of the facility or chief physician designee who does not work on the patient's unit will, within six calendar days of the patient's refusal or that of his or her legally authorized representative, personally examine the patient; interview the patient and the patient's legally authorized representative, if available; review the patient's clinical records; discuss the case with the treating physician; and make a determination concerning the appropriateness of treatment with psychoactive medication. (2) Except as limited by paragraphs (6) and (7) of this subsection, psychoactive medications may be administered if the chief physician or chief physician designee determines that the administration of such medication is medically appropriate treatment. In making this determination the chief physician or chief physician designee will consider the following factors: (A) the accuracy of the diagnosis; (B) indications for the medication; (C) probable benefits and risks of the medication; and (D) the existence and value of alternative forms of treatment, if any. (3) In addition, the chief physician or chief physician designee will make a determination as to whether the patient's ability to understand the consequences of the decision to refuse the administration of such medication is impaired as a result of the patient's mental illness. (4) If, at any time, the chief physician or chief physician designee determines that the administration of a psychoactive medication is not medically appropriate treatment, the administration of such medication will be discontinued within a reasonable period of time following that determination if the patient or the patient's legally authorized representative continues to refuse the medication. The period of time within which the medication must be discontinued will be based on the condition of the patient and the type and dosage of medication being administered. (5) If psychoactive medication is administered pursuant to a determination under paragraph (2) of this subsection, the chief physician or chief physician designee will personally monitor the patient's progress on a monthly basis to determine whether the administration of psychoactive medication continues to be medically appropriate treatment. (6) If the chief physician or chief physician designee determines that the administration of psychoactive medication is medically appropriate treatment but also determines that the patient's ability to understand the consequences of the decision to refuse the administration of such medication has not been impaired as a result of the patient's mental illness, the head of the facility will ensure that a consultant psychiatrist not employed by the TDMHMR will, within six calendar days of the physician's determination, personally examine the patient; interview the patient and the patient's legally authorized representative, if the representative is available; review the patient's clinical records; discuss the case with the treating physician and with the chief physician or chief physician designee; and make a determination concerning the appropriateness of treatment with psychoactive medication. The provisions of this section will also apply to those situations in which the decision to refuse the medication was made by the committed patient's legally authorized representative. (7) If the consultant psychiatrist determines that treatment with psychoactive medication is medically appropriate treatment, such medication may be administered, and the chief physician or chief physician designee will monitor the patient's progress as described in paragraph (5) of this section. (8) After the first 14 days of a commitment under provisions other than those found in sec.574.034 or sec.574.035 of the Texas Health and Safety Code, psychoactive medication will not be initiated without consent of the patient or the patient's legally authorized representative until the appropriate review procedures set out in this section have been completed and documented. If psychoactive medication was initiated during the first fourteen days, and the patient or the patient's legally authorized representative refuses the medication after the first fourteen days, the medication may be continued until the review process set out in paragraphs (1)-(6) of this subsection has been conducted. (9) If psychoactive medication has been administered to a patient with consent and the patient or the patient's legal guardian later refuses the medication, administration of the medication may be continued until the review process set out in paragraphs (1)-(6) of this subsection has been conducted. (10) Nothing in this section is intended to preclude the administration of psychoactive medication to any patient in an emergency situation as provided for in sec.405.808 of this title (relating to Emergencies). (11) Each step of this procedure will be clearly documented in the patient's clinical record. sec.405.808.Emergencies. (a) Nothing herein is intended to preclude the administration of psychoactive medication to any patient in an emergency as defined herein. (b) If a physician issues an order to administer psychoactive medication to a patient without the patient's consent because of an emergency situation, then the physician will document in the patient's clinical record: (1) in specific medical or behavioral terms the necessity of the order; (2) other generally accepted, less intrusive forms of treatment, if any, that the physician has evaluated but rejected; and (3) the reasons those treatments were rejected. (c) Treatment of the patient with the psychoactive medication will be provided in the manner, consistent with clinically appropriate medical care, least restrictive of the patient's personal liberty. (d) When the emergency condition is no longer imminent or present, medication prescribed without consent on an emergency basis must be safely discontinued. If continued use of medication is recommended on a regular basis, the physician must comply with provisions outlined in sec.405.806 of this title (relating to Patients Admitted Under Texas Statutes) or sec.405.807 of this title (relating to Patients Committed Under Texas Statutes), as appropriate. (e) In no case may inappropriate designation of a situation as an emergency be used to circumvent the process of obtaining consent or applying to the court for an order authorizing administration of psychoactive medication. 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 August 30, 1996. TRD-9612730 Ann Utley Chairman Texas Board of Mental Health and Mental Retardation Effective date: October 1, 1996 Proposal publication date: June 25, 1996 For further information, please call: (512) 206-4516 TITLE 28. INSURANCE PART I. Texas Department of Insurance CHAPTER 5.Property and Casualty Insurance SUBCHAPTER N.Residential Property Insurance Assistance Program Plan of Operation 28 TAC sec.sec.5.10001-5.10015 The Commissioner of Insurance adopts new sec.sec.5.10001-5.10015, concerning the plan of operation of the Residential Property Insurance Market Assistance Program (MAP), pursuant to the Insurance Code, Article 21.49-12. The new sections were considered by the Commissioner of Insurance in a public hearing on August 6, 1996, Docket Number 2238. Sections 5.10003, 5.10007, 5.10008, 5.10009, and 5.10011 are adopted with changes to the proposed text published in the June 28, 1996, issue of the Texas Register (21 TexReg 5923). Sections 5.10001, 5.10002, 5.10004, 5.10005, 5.10006, 5.10010, 5.10012, 5.10013, 5.10014, and 5.10015 are adopted without changes, and the text of these sections will not be republished. Article 21.49-12 was enacted by the Texas Legislature in 1995 (Acts 1995, 74th Legislature, page 3008, chapter 415, sec.5, effective August 28, 1995) to require the Commissioner to establish a voluntary market assistance program to assist consumers in obtaining residential property insurance coverage in underserved areas that are to be determined and designated by the Commissioner under separate rule. The plan of operation was developed by an executive committee appointed by the Commissioner pursuant to Article 21.49-12, sec.3, and recommended to the Commissioner for adoption by rule. The new sections, which constitute the MAP plan of operation, are necessary to implement Article 21.49- 12 by specifying the procedures and methods of operation of the MAP, including eligibility requirements, policy forms and types of coverage, rates, application forms and procedures, procedures for monitoring the operation of the MAP, criteria and procedures for mandatory participation by insurers, procedures for amendment of the plan of operation, and procedures for termination of the MAP; the role and responsibilities of the MAP Executive Committee; the role and responsibilities of participating agents and insurers; and the role and responsibilities of the Commissioner, the Texas Department of Insurance (Department), and the Department's contracting entity. The purpose of the MAP is to increase the availability of residential property insurance through the licensed admitted market for risks located in those areas of the state that are designated as underserved areas for purposes of the MAP. Consumers in these designated underserved areas are currently unable to purchase residential property insurance through the licensed admitted market because insurers are unwilling to write such coverage and are, therefore, forced either to purchase residential property insurance from unlicensed non-admitted insurers at very high costs or to go without this coverage. The adopted sections are necessary to implement an efficient, cost-effective MAP. The operation of the MAP will provide a fair, efficient, and economical voluntary mechanism to assist Texas consumers in obtaining residential property insurance in designated underserved areas of the state, including rural areas. Through the operation of the MAP, consumers will be afforded opportunities to purchase residential property insurance from licensed admitted insurance carriers based on each insurers' underwriting guidelines and rates determined in accordance with the provisions of the Insurance Code applicable to that insurer. Sections 5.10003, 5.10007, 5.10008, 5.10009, and 5.10011 are adopted with changes to the proposed text as published. None of the changes introduce new subject matter or affect additional persons than those subject to the proposal as originally published. The changes do not affect the purpose, intent, or implementation of the MAP. The changes to Sections 5.10003, 5.10007, 5.10008, and 5.10009 are necessary to address the concerns of the Department's contracting entity with its possible liability exposure in the event that the contracting entity incorrectly enters information on the bulletin board that results in insurance coverage not being written. These changes include: (1) The definition of "application" in sec.5.10003 is changed to provide that the "application" is for assistance in obtaining residential property insurance, instead of an application for coverage, through the Residential Property Insurance Market Assistance Program. Also, in sec.5.10003, the definition of "originating agent" is changed in subparagraph (A) to refer to the completion of an application for assistance instead of an application for insurance. (2) In sec.5.10007, subsection (b)(2), the words "for quote" are deleted for consistency with the change in sec.5.10009(d) relating to the underwriting of risks in accordance with an insurer's applicable underwriting procedures. (3) In sec.5.10008, subsection (b)(1), relating to functions of an originating agent, the proposed text is changed to clarify that the originating agent shall complete the application for assistance in obtaining residential property insurance, instead of the application for insurance, on behalf of the MAP applicant. (4) In sec.5.10009, subsection (d), relating to insurers' processing of selected applications, paragraph (1) is amended to: (i) address property inspection in addition to application review; (ii) provide, in a newly designated subparagraph (A), that an insurer may select MAP applications for review based on criteria contained on the electronic bulletin board; and (iii) to include a new subparagraph (B) to provide that prior to issuing a quote or writing a policy, an insurer should underwrite the risk in accordance with the insurer's applicable underwriting procedures, including inspecting the property and obtaining the insurer's own application for insurance. (5) In sec.5.10009(f), paragraphs (2)(A) and (2)(B), relating to confidentiality of documents, the applicant's authorization to forward the applications and related documents to the contracting entity for placement of application information on the electronic bulletin board is changed to clarify that the authorization for placement of the information on the bulletin board is for use by prospective insurers in selecting risks for review for purposes of writing residential property insurance. In addition, as a result of public comments, sec.5.10011(b), relating to implementation of mandatory MAP on Commissioner's own motion, is adopted with changes to the proposed text in paragraphs (1) and (3) as published. Subsection (b)(1) of sec.5.10011 is changed to delete the reference to paragraph (3); subsection (b)(3) is deleted to remove the authorization for the Commissioner to, after notice and hearing, implement mandatory participation by insurers in one or more designated underserved areas in the MAP based on a determination that the purposes of the MAP pursuant to Article 21.49-12 of the Insurance Code are not being accomplished through voluntary participation by insurers. This change is necessary to ensure that the plan of operation provides clear and specific criteria to assist the Commissioner in determining whether to implement a mandatory MAP. The effects of the new sections include an increase in the availability of residential property insurance through the licensed admitted market for risks located in those areas of the state that are designated as underserved areas for purposes of the MAP. The new sections specify procedures for operation of the MAP as required by Article 21.49-12 and provide for the computerization of MAP operations for more efficient, cost-effective operations of the MAP to better serve consumers with residential property insurance availability problems in designated underserved areas of the state. Under the provisions of the new sections, the Department will contract with a qualified information service vendor (referred to as the "contracting entity") to develop, maintain, and operate the computerized functions. The contracting entity is defined in sec.5.10003 as the qualified information service vendor with whom the Department has contracted to develop and maintain software and to provide services for the MAP as specified in this plan of operation, including processing of applications; development, use, and maintenance of an electronic bulletin board and integrated database; and production of data reports. Under the adopted procedures, an originating agent, on behalf of a consumer in a designated underserved area, will submit to the Department a MAP application form (which is adopted by reference in sec.5.10016, relating to MAP Forms) and certain necessary documents evidencing the consumer's inability to obtain residential property insurance. The Department will review the application for certain information and log in the names and addresses of the applicant and the originating agent. The Department will forward the applications to the Department's contracting entity for verification for compliance with requirements for completeness and eligibility. Information from eligible MAP applications, including information on the applicant, originating agent, location and rating of the risk, and Voluntary Inspection Program certification pursuant to Article 5.33B of the Insurance Code, will be placed by the Department's contracting entity on the electronic bulletin board which will be accessible to all participating insurers. Based on the criteria transferred from the applications to the electronic bulletin board, insurers will select applicants from the bulletin board for purposes of underwriting the risk in accordance with the insurer's applicable underwriting guidelines, including inspecting the property and obtaining the insurer's own application for insurance. The insurer has 45 days from the date of the selection of the application on the electronic bulletin board to issue a quote or refuse to quote. The insurer shall send the quote directly to the MAP applicant and also report the quote to the Department via the electronic database. The quote is valid for at least 30 days from the date the quote is issued. Applications for which a policy has not been issued remain on the bulletin board for one year from the date of entry on the bulletin board for selection and quoting by other insurers. In addition to specifying the procedures and methods of operation of the MAP, the new sections specify eligibility requirements, policy forms and types of coverage, rates, application forms and procedures, procedures for monitoring the operation of the MAP, criteria and procedures for mandatory participation by insurers, procedures for amendment of the plan of operation, and procedures for termination of the MAP; the role and responsibilities of the MAP Executive Committee; the role and responsibilities of participating agents and insurers; and the role and responsibilities of the Commissioner, the Department, and the Department's contracting entity. Section 5.10001 specifies the purpose and scope of the MAP and the purpose and scope of the plan of operation. Section 5.10002 states the statutory and regulatory authority for the operation of the MAP. Section 5.10003 defines terms used in the plan of operation, including the terms agent commissions, contracting entity, application, designated underserved area, issuing agent, manufactured home, originating agent, residence premises, residential property insurance, residential risk, and unaffiliated. Section 5.10004 specifies the policy forms and types of coverage that are available for use through the MAP and the forms rules that govern the writing of the policies. The policy forms and types of coverage authorized for use depends on whether the property to be insured is located in a Class 1 or Class 2 designated underserved area. Subsection (a) of sec.5.10004 defines a Class 1 designated underserved area as an area determined and designated by rule as an underserved area by the Commissioner of Insurance, pursuant to both Articles 21.49-12 and 5.35-3 (Property Protection Program for Underserved Areas) of the Insurance Code and defines a Class 2 designated underserved area as an area determined and designated by rule as an underserved area by the Commissioner of Insurance, pursuant to Article 21.49-12 of the Insurance Code. Under sec.5.10004(b), in Class 1 designated underserved areas insurers may issue policy forms promulgated pursuant to both Articles 5.35 and 5.35-3 (Property Protection Program for Underserved Areas) and any additional endorsements filed pursuant to Article 5.35 and approved by the Commissioner. In Class 2 designated underserved areas insurers may issue policy forms promulgated pursuant to Article 5.35 and any additional endorsements filed pursuant to Article 5.35 and approved by the Commissioner. Under sec.5.10004(d), the types of coverage that may be provided through the MAP for residential risks located in Class 1 designated underserved areas include (i) basic fire and extended coverage; (ii) named perils; (iii) broad form named perils; (iv) additional named perils, either separately or in combination; (v) all risk coverage; and (vi) any other coverage available under policy forms and endorsements promulgated pursuant to Articles 5.35 or 5.35-3 or filed pursuant to Article 5.35 and approved by the Commissioner. The types of coverage that may be provided through the MAP for residential risks located in Class 2 designated underserved areas include (i) basic fire and extended coverage; (ii) named perils; (iii) broad form named perils; (iv) all risk coverage; and (v) any other coverage available under policy forms and endorsements promulgated pursuant to Article 5.35 or filed pursuant to Article 5.35 and approved by the Commissioner. Pursuant to Article 21.49-12 sec.1(b), coverage for the perils of windstorm and hail for those risks that are eligible for windstorm and hail insurance coverage through the Texas Catastrophe Property Insurance Association (Insurance Code, Article 21.49) cannot be provided for a risk located in either Class 1 or Class 2 designated underserved areas. Section sec.5.10005(a) provides, in accordance with Article 21.49-12 sec.2(b)(3), that each insurer has the right to individually evaluate the risk to be insured through the MAP and to apply the rates that are in accordance with the provisions of the Insurance Code that are applicable to that insurer. Section 5.10005(b), in accordance with Article 21.49-12 sec.2(b)(4), provides that each insurer has the option of providing a premium quote on the same coverage basis for which it normally provides insurance in this state using its own underwriting guidelines and the rates determined in accordance with the provisions of the Insurance Code applicable to that insurer. Section 5.10006 addresses eligibility for referral, including general eligibility requirements; insurable property requirements; provision for using certification of insurability issued through the Voluntary Inspection Program operated pursuant to Article 5.33B of the Insurance Code; specification of factors that cannot be used to deny application to the MAP or to determine eligibility for referral through the MAP; required documentation of cancellation, non-renewal or declination; ineligible applicants; and re-submission procedures. Section 5.10007 specifies requirements relating to participating insurers, including eligibility, notification of the Department of an insurer's intent to participate, authorization for an insurer to use any of the criteria transferred from the MAP application to the electronic bulletin board to select applications for review, agent notification requirements, and required compliance with insurance laws and regulations. Section 5.10008 addresses the role and responsibilities of participating agents--both originating agents and issuing agents--including qualifications, functions, and agent commissions. Article 21.49-12 sec.4(d) provides that an originating agent shall share commissions, as required by the plan of operation, with the issuing agent if the originating agent holds a license as a local recording agent or is a salaried representative for those companies whose plan of operation does not contemplate the use of local recording agents. Section 5.10008(d) provides that the originating agent's share of the commission for the original policy term shall be $25 when the policy premium is $500 or less and $50 when the policy premium is over $500. If the issuing agent is a licensed local recording agent, the originating agent's share of the commission for policy renewals shall be 25 percent of the amount of the commission paid to the issuing agent by the insurer; and if the issuing agent is a salaried representative, the originating agent's commission fee for policy renewals shall be $15. The renewal commission and renewal commission fee requirements shall apply only to policy renewals in which the insurer is the same insurer as when the original policy was issued through the MAP. Under sec.5.10008(d), the issuing agent is responsible for the payment of the originating agent's share of the commission and commission fee and must make payment within 30 days after the date the commission payment is made to the issuing agent by the insurer. The issuing agent's commission is paid by the insurer for which the issuing agent is appointed and is based on the contract or agreement between the insurer and the issuing agent. Section 5.10009 specifies the overall operational procedures of the MAP, including the application process; application review and property inspection; the process for referral of applications through placement of certain specified application information on an electronic bulletin board accessible to participating insurers to select applications for purposes of underwriting the risk in accordance with the insurer's applicable underwriting guidelines, including inspecting the property and obtaining the insurer's own application for insurance; the insurers' processing of selected applications and issuance of premium quotes; the Department's data collection and analysis; confidentiality of documents; educational initiatives; and complaints procedures. Section 5.10009(d) addresses the insurers' processing of selected applications and issuance of premium quotes, requires insurers after selecting an application on the electronic bulletin board to make a premium quote or indicate refusal to quote within 45 days after selecting the application and requires insurers to enter into the electronic database that the insurer has quoted or has refused to quote. Subsection (d) of sec.5.10009 further provides that insurers shall send quotes directly to MAP applicants and simultaneously report the quote to the Department via the electronic database. It provides that an insurer's quote shall be valid for at least 30 days after the date the quote is issued and requires insurers, within 35 days after issuance of the quote, to enter into the electronic database that the quote has been accepted or rejected by the applicant. Subsection (d) of sec.5.10009 also requires insurers, within five business days after the issuance date of the policy, to notify the Department via the electronic database and the originating agent in writing or via electronic means that the insurance policy was issued. Subsection (f) of sec.5.10009 addresses confidentiality requirements. The disclosure of information collected, assembled, or maintained by the Department in operating the MAP is governed by the Texas Open Records Act, Article 21.49-12 of the Insurance Code and other laws, either constitutional, statutory, or judicial decision, which govern the disclosure of specific types of information. All confidentiality and disclosure requirements that apply to the Department shall apply to the Department's contracting entity. Pursuant to Article 21.49-12 sec.5(a), all application files and related documents received by the Department pursuant to Article 21.49-12 and this plan of operation are confidential. Pursuant to Article 21.49-12 sec.5(b), the Department shall not permit the application files and related documents to be made available to the public except that the Department shall allow access to such files and related documents to the originating agent, the issuing agent, the applicant for their own file, or an insurer who agrees to insure the applicant. However, under sec.5.10009(f)(2), the Department upon authorization by the applicant shall forward, on the applicant's behalf, copies of the completed application form for the property proposed to be insured, and if applicable, declination letter or letters or letter or letters of non-eligibility, and cancellation or non-renewal notice to the Department's contracting entity for the sole purpose of placement of application information on the electronic bulletin board for use by prospective insurers in selecting risks for review for the purpose of writing residential property insurance. The applicant's authorization to so forward the application and related documents is contained in the application form and the applicant's signing of the application form effectuates the authorization. If the applicant does not sign the application form authorizing the Department to forward copies of the applicant's completed application form and related documents, the application shall not be forwarded to the Department's contracting entity for the placement of application information on the electronic bulletin board and shall be returned to the originating agent. Section 5.10010 addresses the membership and operations of the MAP Executive Committee, which is authorized by Article 21.49-12 sec.3, including membership composition, qualifications, terms, replacement and reappointment, voting, and removal for cause; election of officers; functions; subcommittees; and open meetings requirements. In accordance with the requirements of Article 21.49-12, sec.5.10011 specifies criteria and procedures for implementation of mandatory participation by insurers, either on the Commissioner's own motion or on the recommendation of the Executive Committee. Pursuant to Article 21.49-12 sec.2(b)(8), the Commissioner may make insurer participation in the MAP mandatory based on criteria contained in the plan of operation. Pursuant to Article 21.49-12 sec.6(b), the Executive Committee, after periodic review, shall report to the Commissioner on the need for establishment of a mandatory program. Section 5.10012 specifies methods and procedures for amending the plan of operation. Section 5.10013 specifies, in accordance with Article 21.49-12 sec.7, that the MAP, its executive committee members, participating insurers and agents are not personally liable for any act performed in good faith within the scope of the person's authority as determined under Article 21.49-12 or for damages occasioned by his or her official acts or omissions except for an act or omission that is corrupt or malicious. Section 5.10014 specifies the procedures for the termination of the MAP. In accordance with Article 21.49-12 sec.6(b), the Executive Committee may recommend termination of the MAP to the Commissioner, but not earlier than 48 months following the commencement date of the initial plan of operation. The recommendation shall be made in writing to the Commissioner and supported by findings as to why the MAP should be terminated and must be approved by at least two-thirds of the members of the Executive Committee. The MAP shall be terminated only upon the approval of the Commissioner, but in no event earlier than 48 months following the commencement date of the initial plan of operation. Such termination by the Commissioner may be made only after notice and hearing. Section 5.10015 contains a severability provision. This plan of operation is adopted to be effective on October 1, 1996. For with changes: Two commenters--Consumers Union and American Insurance Association--indicated support for the proposal as published with changes. Against: No commenters objected to the adoption of the proposal. Other: The Texas Surplus Lines Association requested clarification on the surplus lines market in relation to the MAP. Section 5.10003. Definitions. Comment: One commenter suggested that the rule be clarified to make sure surplus lines agents may make referrals of qualified applicants to the MAP. In proposed sec.5.10003, both "issuing agents" and "originating agents" are referred to as either licensed local recording agents or salaried representatives for insurers whose plan of operation does not contemplate the use of local recording agents. According to the commenter, it is not clear if surplus lines agents fall into either category. Response: The Department does not agree that any clarification is needed. Under the plan of operation an individual is eligible to make referrals of qualified applicants if the individual, at the time the application to the MAP is completed, is duly licensed by the Department as a local recording agent. A surplus lines agent, unless the agent is licensed as a managing general agent, must be licensed as a local recording agent in order to be licensed as a surplus lines agent (Article 1.14-2 sec.2(a)(1)). Therefore, surplus lines agents licensed as local recording agents may make referrals of qualified applicants to the MAP. sec.5.10011. Criteria and Procedures for Mandatory Participation Comment: Another commenter argued that the mathematical triggers for mandatory participation in sec.5.10011 may be irrelevant to the existence of a genuine availability problem. For example, the MAP could receive 10 applications. If five of these applicants received premium quotes, it would result in a failure rate of 50%, triggering mandatory participation. Yet, according to the commenter, five unplaced applicants is not an indication of an unavailability problem. The commenter argues that, in fact, a low number of total applicants would be a strong indication of a healthy market. Response: In proposed sec.5.10011, subsection (b), which addresses implementation of mandatory MAP on the Commissioner's own motion, the notice and hearing is at the Commissioner's discretion. The Commissioner just cannot implement mandatory participation in MAP without notice and hearing. In addition, even after notice and hearing, the implementation of a mandatory MAP is at the Commissioner's discretion--even if the specified criteria are present. Thus, in the scenario cited by the commenter, the Commissioner would not be required to implement a mandatory MAP. Comment: This same commenter recommended, instead of the 60% trigger, a threshold based upon the number of policies that do not receive premium quotes in relation to the total number of policies written in a rating territory or underserved area. Specifically, the commenter recommended that if the MAP is unable to obtain premium quotes for a number of applicants equal to or greater than 2% of the policies in a rating territory, the Commissioner should hold a hearing to determine whether to activate the mandatory MAP for that rating territory. Response: The Department disagrees. Although the Department agrees that premium quotes are an appropriate measure for determining the success of the voluntary MAP, such a measurement must be based on the number of eligible applications received, either statewide or from one or more designated underserved areas. It is the Department's position that it does not matter whether the measurement is on the number of premium quotes issued or the number of applications not quoted. The issue is to what standard is that measurement compared--number of applications received from a designated underserved area or 2% of the total policies in a rating territory. Under the commenter's proposed criteria, before the Commissioner could hold a hearing to determine if a mandatory MAP is necessary, very large numbers of applicants would have to apply to the MAP and very large numbers of applicants would have to be unable to obtain a premium quote. For example, in the Harris County rating territory, in which there were 617,942 residential property insurance policies of all types in force in calendar year 1995, 12,359 or more applicants would have to be unable to obtain premium quotes; in the Dallas County rating territory, in which there were 442,776 residential property insurance policies of all types in force in calendar year 1995, 8,856 or more applicants would have to be unable to obtain premium quotes; and in the Tarrant County rating territory, in which there were 311,086 residential property insurance policies of all types in force in calendar year 1995, 6,222 or more applicants would have to be unable to obtain premium quotes. It is the Department's position that the commenter's proposal, which relies on such large numbers of applicants, propounds an unreasonable standard. The Department believes that the number of eligible applicants applying to the MAP does not have to be this large to determine whether the voluntary MAP is achieving its purpose of increasing availability in a specified underserved area. The Department believes that a valid assessment of the success of the voluntary MAP is an assessment based on the number of eligible applications received by the MAP--and not based on some arbitrary percentage of the policies in a rating territory. Comment: This same commenter criticized the 40% trigger for determining whether to implement a mandatory MAP. According to the commenter, this trigger is based upon the number of policies issued and may not recognize the state of the market. For example, an eligible applicant may receive a premium quote which is based upon an approved rate, but the applicant may reject the offer because the applicant requires special coverage or is able to find more appropriate or less expensive coverage in the voluntary market. Because all premium quotes are already determined not to be excessive, inadequate, or unfairly discriminatory, the mathematical trigger should be based solely upon premium quotes and not policy issuance. Response: The Department disagrees. The number of policies issued is an important standard of review for determining whether the MAP is addressing availability problems. Even though policies may be offered through the MAP, if consumers cannot afford to buy them, the MAP has not succeeded in addressing the availability problem. A high number of quotes and a low number of policies issued may indicate an affordability problem. It could mean that companies are not offering reasonable coverage that is affordable to the majority of MAP applicants and that a FAIR Plan is needed in Texas to address both availability and affordability. In addition, non-rate regulated companies represent 60-70% of the residential property insurance market and are not required to meet the rate standards set forth in Article 5.101. MAP applicants may receive premium quotes from non-rate regulated companies which are not based upon promulgated benchmark rates. Therefore, the Department strongly believes that the number of policies issued is an important standard of measurement for the state of the market addressed by MAP--that is the market in designated underserved areas. Comment: This commenter also argues that the proposed rules lack clear criteria to assist the Commissioner when deciding to activate the mandatory MAP. According to the commenter, it is difficult to determine how the criteria may be measured or described if it is based upon the subjective determination that the MAP is not accomplishing its goals. The general authority, according to the commenter, under sec.5.10011(b)(3) for activating the mandatory MAP allows the Commissioner to ignore the mathematical triggers and any criteria that may be established. The commenter recommends deleting this provision. Response: The Department agrees with the deletion of proposed sec.5.10011(b)(3) and has amended sec.5.10011(b) accordingly. This provision was proposed to enable the Commissioner to act on factors that were not taken into account under subparagraphs (2)(A) and (B), which provide specific criteria for implementation of a mandatory MAP on the Commissioner's own motion, and was not intended to allow the Commissioner to ignore the mathematical triggers or any other criteria adopted in the plan of operation. It is the Department's position that the authority and discretion granted to the Commissioner in the plan of operation to, either on the Commissioner's own motion or on the recommendation of the Executive Committee, hold a hearing and implement a mandatory MAP is sufficient at this time to enable the Commissioner to ensure that the voluntary MAP is accomplishing the statutory purpose. Surplus Lines Market Comment: This same commenter pointed out that Article 1.14-2, sec.5(a) clearly requires surplus lines eligibility only after a diligent effort to find coverage in the licensed market. The commenter recommended the adoption of a requirement that surplus lines agents make referrals to the MAP. If there were such a requirement, according to the commenter, consumers who might end up in high- priced, limited coverage surplus lines policies will have the opportunity to purchase coverage in the standard market. The commenter urged the Department to adopt a new provision to require that in order to comply with the "diligent effort" requirement in Art. 1.14-2, sec.5(a), a surplus lines agent licensed under Art. 21.14, Insurance Code, shall submit applications on behalf of qualified applicants seeking to purchase residential property insurance coverage to the Residential Property Insurance Market Assistance Program as an originating agent. Response: The Department disagrees. Article 21.49-12 is silent on the subject of the surplus lines market. There is no provision in Article 21.49-12 that requires any agent or any type of agent to participate in the MAP. The Department, therefore, does not believe that it is the intent of Article 21.49- 12 to require surplus lines agents to participate in the MAP. The Department does not agree that surplus lines agents should be required to participate in the MAP. Comment: One commenter requested clarification that the rules implementing the market assistance program do not preclude placement of a residential property risk in the surplus lines market pursuant to Article 1.14-2 of the Insurance Code and, specifically that a local recording agent is not required to submit an application to the market assistance program prior to contracting a surplus lines insurer to place the risk in the surplus lines market. Response: The Department agrees with this interpretation. General Comment: One commenter raised the issue of group policies under Article 21.79. According to the commenter, group sales stand to greatly improve access to insurance and avoid some of the administrative costs associated with the sale of insurance. The commenter urged the Department to urge companies to develop group policies and market these policies in underserved areas through churches, community groups, social organizations, or other groups. The commenter urged the Department to work to facilitate the group sales of insurance in order to efficiently find coverage for groups in underserved areas. Response: The proposed MAP plan of operation does not address group policies at this time, and therefore, this comment is not relevant to this proposal. The Department, however, accepts the suggestion in the spirit in which it is offered and intends to proceed in implementing Article 21.79 in the near future. Comment: This same commenter urged the Department to closely monitor the implementation of the MAP, as required by Article 21.49-12, sec.6, including whether standard, full-coverage policy forms are being offered and purchased; whether consumers fully understand limits to coverage provided through the property protection program; the pricing of endorsements that restore coverage; and reliance of consumers on the representations of the agent selling the policy. Response: Both Article 21.49-12 and the plan of operation require periodic review of the performance of MAP. The plan of operation in proposed sec.5.10009(e) requires the Department to provide, on at least a quarterly basis, data analysis reports to enable the Executive Committee to fully evaluate the operations of the MAP. In addition, the Department intends to closely monitor the operations of the MAP using a comprehensive database to produce and analyze data on several different aspects of MAP operations, including types of policy forms issued, coverage amounts, and premium costs. The new sections are adopted pursuant to the Insurance Code, Articles 21.49-12 and 1.03A, and the Government Code sec.sec.2001.004-2001.038. Article 21.49-12, sec.1(a) requires the Commissioner to establish a voluntary market assistance program to assist Texas consumers in obtaining residential property insurance coverage in underserved areas, which shall be determined and designated by the Commissioner by rule using the standards specified in Article 5.35-3, sec.1 of the Insurance Code. Article 21.49-12, sec.2(a) provides that the MAP Executive Committee shall develop and submit the plan of operation to the Commissioner for adoption by rule. Article 21.49-12, sec.2(a) further provides that the plan of operation shall indicate types of coverage, policy forms and terms, application forms, eligibility, and overall operation of the program. Article 21.49-12, sec.2(b) provides that the plan of operation shall include, but is not limited to, certain specified provisions relating to applications, rates, premium quotes, ineligible applicants, criteria under which the Commissioner may make insurer participation in the MAP mandatory, and subcommittees. Article 21.49-12, sec.4(d) provides that an originating agent shall share commissions, as required by the plan of operation, with the issuing agent if the originating agent holds a license as either a local recording agent or as a salaried representative for those companies whose plan of operation does not contemplate the use of local recording agents. Article 1.03A authorizes the Commissioner of Insurance to adopt rules and regulations, which must be for general and uniform application, for the conduct and execution of the duties and functions of the Texas Department of Insurance only as authorized by a statute. The Government Code sec.sec.2001.004-2001.038 (Administrative Procedure Act) authorize and require each state agency to adopt rules of practice stating the nature and requirements of available formal and informal procedures and prescribe the procedures for adoption of rules by a state agency. sec.5.10003.Definitions. The following words and terms when used in this plan of operation, which is contained in sec.sec.5.10001-5.10015 of this title (relating to the Residential Property Insurance Market Assistance Program Plan of Operation), shall have the following meanings unless the context clearly indicates otherwise. Agent commissions--The portion of the premium paid by an insurer participating in the Residential Property Insurance Market Assistance Program for production of the residential property insurance business pursuant to Article 21.49-12 sec.4 of the Insurance Code. Application-- The form promulgated by the Texas Department of Insurance to be completed by an applicant and the originating agent and submitted to the Texas Department of Insurance to apply for assistance in obtaining residential property insurance through the Residential Property Insurance Market Assistance Program. Commissioner--Commissioner of Insurance of the State of Texas. Contracting entity--The qualified information service vendor with whom the Texas Department of Insurance has contracted to develop and maintain software and to provide services for the Residential Property Insurance Market Assistance Program as specified in this plan of operation, which is contained in sec.sec.5.10001-5.10015 of this title (relating to the Residential Property Insurance Market Assistance Program Plan of Operation), including processing of applications; development, use, and maintenance of an electronic bulletin board and integrated database; and production of data reports. Department--Texas Department of Insurance. Designated underserved area--An area determined and designated by rule as an underserved area by the Commissioner of Insurance, pursuant to Article 21.49-12 of the Insurance Code, using the standards specified in Article 5.35-3 sec.1 of the Insurance Code. Executive Committee--The 11-member body appointed by the Commissioner of Insurance and authorized pursuant to Article 21.49-12 of the Insurance Code to advise and consult with the Commissioner with regard to the administration of the Residential Property Insurance Market Assistance Program. Insurer--Any insurer licensed to write property or casualty insurance and actually writing residential property insurance in Texas, including Lloyd's, reciprocals, or interinsurance exchanges; an insurer is actually writing residential property insurance in Texas if the insurer has reported under the statistical plan a positive number for residential property insurance direct written premium during the last reporting period. Issuing agent-- (A) A licensed local recording agent appointed to represent the insurer providing residential property insurance coverage through the Residential Property Insurance Market Assistance Program who signs, executes, and delivers the policies of insurance; maintains a record of the business; examines and inspects the risk; receives and collects premiums; and performs other customary duties of a local recording agent; or (B) A salaried representative for an insurer whose plan of operation does not contemplate the use of local recording agents appointed to represent the insurer providing residential property insurance coverage through the Residential Property Insurance Market Assistance Program who signs, executes, and delivers the policies of insurance; maintains a record of the business; examines and inspects the risk; and receives and collects premiums; and performs other customary duties of a local recording agent. Manufactured home--Mobile home, manufactured housing, or manufactured home as defined in the Texas Manufactured Housing Standards Act (Texas Revised Civil Statutes, Article 5221f). MAP--the Residential Property Insurance Market Assistance Program authorized and operated pursuant to Article 21.49-12 of the Insurance Code to assist consumers in Texas in obtaining residential property insurance coverage in underserved areas as determined and designated by the Commissioner of Insurance by rule. Originating agent-- (A) A licensed local recording agent authorized by Article 21.49-12 of the Insurance Code to complete an application for assistance on behalf of an applicant for submission to the Residential Property Insurance Market Assistance Program without being appointed to represent the insurer providing the coverage through the Residential Property Insurance Market Assistance Program; or (B) A salaried representative for an insurer whose plan of operation does not contemplate the use of local recording agents authorized by Article 21.49-12 of the Insurance Code to complete an application for insurance on behalf of an applicant for submission to the Residential Property Insurance Market Assistance Program without being appointed to represent the insurer providing the coverage through the Residential Property Insurance Market Assistance Program. Residence premises--The residence premises shown on the declarations page of the insured's residential property insurance policy and which includes the one-family or two- family dwelling and other private structures and grounds. Residential property insurance--Insurance against loss to real or tangible personal property at a fixed location provided in a homeowners policy, residential fire and allied lines policy, farm and ranch policy, or farm and ranch owners policy. Residential risk--Dwelling, manufactured home, or other private structure located on the residence premises, and personal property contained therein. Unaffiliated--Not an affiliate or not affiliated with another insurer or insurers as "affiliate" is defined in the Insurance Holding Company System Regulatory Act (Article 21.49-1 of the Insurance Code). sec.5.10007.Participating Insurers. (a) Eligibility. An insurer as defined in sec.5.10003 of this plan of operation (also sec.5.10003 of this title, relating to Definitions) is eligible to participate in the MAP. (b) Voluntary participation. (1) An insurer who wishes to participate in the MAP shall notify the Department in writing of the insurer's intent to voluntarily participate in the MAP. (2) An insurer may use any of the criteria transferred from the MAP application to the electronic bulletin board to select applications for review. (3) A participating insurer shall notify all agents appointed with the insurer that the insurer is voluntarily participating in the MAP and shall provide to its agents information about the MAP and its procedures. (4) A participating insurer shall provide the Department with no less than 30 days advance written notice when the insurer decides to terminate its voluntary participation in the MAP. (c) Required compliance with insurance laws and regulations. (1) A participating insurer shall comply with all laws, rules and regulations governing the operation of the MAP. (2) A participating insurer is subject to all other applicable laws, rules, and regulations governing the writing of residential property insurance in this state. sec.5.10008.Participating Agents. (a) Qualifications. (1) An individual is eligible to perform the functions of an originating agent for a MAP applicant if the individual, at the time the application to the MAP is completed, is duly licensed by the Department as a local recording agent or is a salaried representative for an insurer whose plan of operation does not contemplate the use of local recording agents. (2) An individual is eligible to perform the functions of an issuing agent for an insurer voluntarily participating in the MAP if the individual is duly licensed by the Department as a local recording agent and is appointed to represent the insurer or is a salaried representative for an insurer whose plan of operation does not contemplate the use of local recording agents. (b) Functions of an originating agent. (1) The originating agent shall complete the application for assistance in obtaining residential property insurance on behalf of the MAP applicant. (2) The originating agent shall submit the application and documentation required by subsection (e) of sec.5.10006 of this plan of operation (also subsection (e) of sec.5.10006 of this title, relating to Eligibility for Referral) regarding cancellation, non-renewal, or declination to the MAP as soon as possible, but no later than the fifth business day following completion of the application. (3) Pursuant to Article 21.49-12 sec.4(e) of the Insurance Code, if the originating agent and the issuing agent are not the same person, the originating agent may not be held to be the agent of the insurer unless there is an appointment as specified by Article 21.14 of the Insurance Code. (c) Functions of an issuing agent. (1) The issuing agent shall perform all of the customary duties of a local recording agent including, but not limited to, the following: (A) signing, executing and delivering policies of insurance; (B) maintaining a record of the business; (C) examining and inspecting the risk; and (D) receiving and collecting premiums. (2) The issuing agent may also be the originating agent. (d) Agent commissions. (1) Originating agent's commission. (A) Pursuant to Article 21.49-12 sec.4(d) of the Insurance Code, the originating agent shall share commissions with the issuing agent. (B) The originating agent's share of the commission for the original policy term shall be as follows: $25 when the policy premium is $500 or less, and $50 when the policy premium is over $500. (C) If the issuing agent is a licensed local recording agent, the originating agent's share of the commission for policy renewals shall be 25 percent of the amount of the commission paid to the issuing agent by the insurer. If the issuing agent is a salaried representative, the originating agent's commission fee for policy renewals shall be $15. The renewal commission and renewal commission fee requirements shall apply only to policy renewals in which the insurer is the same insurer as when the original policy was issued through the MAP. (D) Within five working days after the issuance date of the insurance policy issued through the MAP, the insurer shall notify the Department via the electronic database and the originating agent in writing or via electronic means that the insurance policy was issued. The notice shall include the insurance policy number and the name, address, telephone number, and fax number of the issuing agent. (E) The issuing agent shall be responsible for payment of the originating agent's share of the commission and commission fee as specified in subparagraphs (B) and (C) of this paragraph within 30 days after the date the commission payment is made to the issuing agent by the insurer. (2) Issuing agent's commission. The payment of the commission to the issuing agent is based on the contract or agreement between the insurer and the issuing agent. sec.5.10009.Operations. (a) Application process. (1) Applications will be accepted only from a duly licensed local recording agent or from a salaried representative for an insurer whose plan of operation does not contemplate the use of local recording agents. (2) The Department may establish a process to enable applicants to contact the Department for referral of their residential risks to participating insurers. (3) Agents submitting applications to the MAP shall use the application promulgated by the Department for use with the MAP, shall submit a completed application packet as specified in paragraph (4) of this subsection, and shall submit such applications to the Department's Property and Casualty Intake Unit. (4) A completed application packet shall consist of the following to be eligible for referral to participating insurers: (A) a completed application form signed by both the applicant and the originating agent; (B) declination letter or letters or non-eligibility letter or letters as provided in sec.5.10006 of this plan of operation (also sec.5.10006 of this title, relating to Eligibility for Referral); and (C) cancellation or non-renewal notices as provided in sec.5.10006 of this plan of operation (also sec.5.10006 of this title, relating to Eligibility for Referral). (5) An application shall indicate if the applicant has a voluntary inspection property condition evaluation report and certificate of insurability, as specified in sec.5.10006 of this plan of operation (also sec.5.10006 of this title, relating to Eligibility for Referral). The applicant may provide a copy of the report and the certificate to the insurer at the time of the insurer's inspection of the residential risk. (b) Application review. (1) After preliminary processing, including review for signatures of the applicant and originating agent and logging in of names and addresses of applicant and originating agent, the Department's Property and Casualty Intake Unit shall forward all MAP applications to the contracting entity for further processing as specified in this subsection and subsection (c) of this section. The Property and Casualty Intake Unit shall notify the originating agent in writing or via electronic means of the receipt of the application. (2) Applications, including the information on the residential risks proposed to be insured, will be verified by the contracting entity for compliance with the requirements specified in this section and in sec.5.10006 of this plan of operation (also sec.5.10006 of this title, relating to Eligibility for Referral). (3) Applications ineligible for referral through the MAP will be returned to the originating agent within 14 calendar days of receipt by the Department with written documentation stating the reason or reasons for the ineligibility. A copy of the notice of ineligibility shall be sent to the applicant. (c) Referral of applications. (1) Information from eligible MAP applications as specified in paragraph (2) of this subsection shall be placed on an electronic bulletin board accessible to all participating insurers for selection for purposes of issuing a quote. (A) If a policy has not been issued within 90 days from the date the application is entered on the bulletin board, the contracting entity shall notify the originating agent in writing or via electronic means. (B) The MAP application shall remain as an active MAP application on the electronic bulletin board available for selection and quoting by an insurer until a policy is issued but for no longer than one year from the date the application is entered on the electronic bulletin board. (C) If a policy has not been issued within one year from the date the application is entered on the bulletin board, the application shall be removed from the system, and the contracting entity shall notify the applicant in writing and the originating agent in writing or via electronic means. (2) The information provided to participating insurers on the electronic bulletin board shall include the following: (A) originating agent's name, mailing address, telephone number, fax number, and agent's TDI identification number; (B) name of applicant and co-applicant, mailing address, and phone number; (C) applicant's military status; (D) designated underserved area in which property to be insured is located, including location zip code, whether in Class 1 designated underserved area or Class 2 designated underserved area, and the county where the property is located; (E) location of property to be insured, including if same as applicant's mailing address, and if not, street address and city; (F) rating Information: (i) fringe area if applicable; (ii) key rate used and whether in protected or in unprotected area; (iii) type of construction; (iv) policy form requested; (v) dwelling and personal property coverage amounts; (vi) deductible; (vii) year built; (viii) structure type; (ix) usage type; (x) owner or tenant occupancy; (G) availability of Voluntary Inspection Program certification. (3) The contracting entity shall return application packets to the Department's MAP Division upon completion of entering application information on the electronic bulletin board. (d) Insurers' processing of selected applications. (1) Application review and property inspection. (A) An insurer may select MAP applications for review based on criteria contained on the electronic bulletin board. (B) Prior to issuing a quote or writing a policy, an insurer should underwrite the risk in accordance with the insurer's applicable underwriting procedures, including inspecting the property and obtaining the insurer's own application for insurance. An insurer shall evaluate each risk in accordance with the provisions set forth in sec.sec.5.10004 and 5.10005 of this plan of operation (also sec.5.10004 of this title, relating to Policy Forms and Types of Coverage, and sec.5.10005 of this title, relating to Rates). (2) Determination of whether to issue premium quote. (A) An insurer shall make its premium quote or indicate the insurer's refusal to quote within 30 days after selecting the application. (B) If the insurer, however, has not quoted or refused to quote by the 30th day after selecting an application, the insurer shall be considered to have requested additional time and shall have an additional 15 days to quote or to refuse to quote. Within 45 days after selecting an application, the insurer shall enter into the electronic database that the insurer has quoted or has refused to quote. (C) An insurer shall issue a premium quote as specified in paragraph (3) of this subsection. (3) Issuance of premium quote. Insurers shall issue premium quotes in accordance with the following provisions: (A) An insurer shall send its quote directly to the MAP applicant and simultaneously report the required information as specified in subparagraph (C) of this paragraph to the Department via the electronic database. (B) An insurer's quote shall be valid for at least 30 days after the date the quote is issued. Within 35 days after issuance of the quote, the insurer shall enter into the electronic database that the quote has been accepted or rejected by the applicant. If an applicant has not affirmatively rejected the quote by the thirty-first day after the quote is issued, the insurer shall enter into the electronic database that the quote has been rejected. (C) An insurer's quote shall contain the following information: (i) name and address of MAP applicant; (ii) MAP application TDI reference number; (iii) location of the residential risk to be insured; (iv) insurer's name, mailing address, and phone number; (v) type of policy being quoted; (vi) the amount of premium due for the policy quoted, limits of liability, applicable deductible, and term of the policy; (vii) issuance date and expiration date of the quote; (viii) instructions for the applicant to contact the issuing agent to accept the offered quote; (ix) issuing agent's name, mailing address, phone number, and fax number. (4) Notification of issuance of policy. Within five business days after the issuance date of the insurance policy, the insurer shall notify the Department via the electronic database and the originating agent in writing or via electronic means that the insurance policy was issued. The notification shall include the policy number and the name, address, telephone number, and fax number of the issuing agent. (5) Removal from bulletin board. An application shall be removed from the electronic bulletin board upon acceptance of a quote by the applicant. (e) MAP data collection and analysis. (1) The Department shall provide quarterly data analysis reports to the Executive Committee to enable the Executive Committee to fully evaluate the operations of the MAP. (2) Upon the Executive Committee's request, the Department shall provide additional data and analyses of data for purposes of review of the MAP or for other purposes related to the administration of the MAP as deemed appropriate by the Executive Committee. (f) Confidentiality of documents. Disclosure of information collected, assembled, or maintained by the Department in operating the MAP is governed by the Texas Open Records Act (Texas Government Code Chapter 552); Article 21.49-12 of the Insurance Code; and other laws, either constitutional, statutory, or judicial decision, which govern the disclosure of specific types of information. All confidentiality and disclosure requirements that apply to the Department shall apply to the Department's contracting entity. (1) Article 21.49-12 sec.5 confidentiality requirements. (A) Pursuant to Article 21.49-12 sec.5(a) of the Insurance Code, all application files and related documents received by the Department pursuant to Article 21.49-12 and this plan of operation shall be confidential. (B) Pursuant to Article 21.49-12 sec.5(b) of the Insurance Code, the Department shall not permit the application files and related documents to be made available to the public except that the Department shall allow access to such files and related documents to: (i) the originating agent, (ii) the issuing agent, (iii) the applicant for their own file, or (iv) an insurer who agrees to insure the applicant. (2) Applicant's authorization. (A) Pursuant to the Commissioner's authority in Article 21.49-12 sec.2(a) of the Insurance Code to promulgate this plan of operation and the Commissioner's rulemaking authority in Article 21.49-12 sec.8 of the Insurance Code to promulgate rules appropriate to accomplish the purposes of the MAP, the Department upon authorization by the applicant shall forward, on the applicant's behalf, copies of the completed application form for the property proposed to be insured, and, if applicable, declination letter or letters or letter or letters of non-eligibility, and cancellation or non-renewal notice to the Department's contracting entity for the sole purpose of placement of application information on the electronic bulletin board for use by prospective insurers in selecting risks for review for the purpose of writing residential property insurance." (B) The applicant's authorization as specified in subparagraph (A) of this paragraph shall be provided by the applicant's signing the MAP application form which shall contain the Applicant's Authorization. The Applicant's Authorization shall read as follows: "I hereby authorize the Texas Department of Insurance to forward, on my behalf, copies of my completed application form for the property proposed to be insured, and, if applicable, declination letter(s) or letter(s) of non-eligibility, and cancellation or non-renewal notice to the Department's contracting entity for the sole purpose of placement of application information on the electronic bulletin board for use by prospective insurers in selecting risks for review for the purpose of writing residential property insurance." (C) If the applicant does not sign the application form thereby authorizing the Department to forward copies of the applicant's completed application form and documents as specified in subparagraph (A) of this paragraph, the application shall not be forwarded to the Department's contracting entity for placement on the electronic bulletin board to be accessed by prospective insurers and shall be returned to the originating agent. (g) Educational initiatives. (1) The Department may provide educational information to consumers, agents, and insurers through: (A) the development and distribution of educational materials outlining the operation of the MAP; (B) seminars and workshops; (C) the print and electronic media, including public service announcements, press releases, TV and radio community programs, and local TV access stations. (D) coordination of speaking and training programs with trade associations and consumer organizations; and (E) use of the Internet System. (2) Participating insurers may provide information to their appointed agents for distribution to consumers. (3) Participating insurers may include a brief description of the MAP with any cancellation or non-renewal notice issued on residential property insurance located in a designated underserved area. (h) Complaints procedures. (1) Complaints relating to the operation of the MAP shall be received and processed by the Department's MAP Division. (2) The complaints shall be handled in accordance with the Department's standard complaints handling procedures. (3) Until final disposition of the complaint, the complainant shall be notified quarterly by the Department's MAP Division of the status of the complaint. (4) The MAP Executive Committee shall be notified as part of its review and monitoring of the MAP of all complaints relating to the operation of the MAP. sec.5.10011.Criteria and Procedures for Mandatory Participation by Insurers. (a) Purpose of this section. The purpose of this section is to specify: (1) the criteria and procedures for implementation of mandatory participation by insurers on the Commissioner's own motion without the need for a recommendation by the Executive Committee pursuant to Article 21.49-12 sec.2(b)(8) of the Insurance Code which provides that the Commissioner may make insurer participation in the MAP mandatory based on criteria contained in this plan of operation; and (2) the criteria and procedures to be used by the Executive Committee in determining the need to recommend to the Commissioner implementation of mandatory participation by insurers pursuant to Article 21.49-12 sec.6(b) of the Insurance Code which provides that the Executive Committee, after periodic review, shall report to the Commissioner as to the need for establishment of a mandatory program. (b) Implementation of mandatory MAP on Commissioner's own motion. (1) The criteria and procedures for implementation of mandatory participation in the MAP by insurers on the Commissioner's own motion and without a recommendation from the Executive Committee are as specified in paragraph (2) of this subsection. (2) The Commissioner may, after notice and hearing, implement mandatory participation by insurers in the MAP if any of the circumstances specified in subparagraph (A) or subparagraph (B) of this paragraph occur. An application shall not be counted for purposes of subparagraphs (A) and (B) of this paragraph unless the application has been either on the electronic bulletin board for 90 days or a policy has been issued, whichever occurs first. (A) Less than 60% of the eligible applications, either on a statewide basis, or in one or more designated underserved areas, or in unprotected portions of designated underserved areas, referred to participating insurers in the preceding 12 months, or in any other period as determined by the Commissioner, result in the issuance of at least one premium quote per application. (B) Less than 40% of the eligible applications, either on a statewide basis, or in one or more designated underserved areas, or in unprotected portions of designated underserved areas, referred to participating insurers in the preceding 12 months, or in any other period as determined by the Commissioner, result in the issuance of residential property insurance policies. (c) Executive Committee's determination of the need to recommend implementation of mandatory MAP. (1) Periodic review. Pursuant to Article 21.49-12 sec.6(b) of the Insurance Code, the Executive Committee shall review the demand for and performance of the program six months following the approval of this plan of operation and at least annually thereafter, as necessary, and may make recommendations to the Commissioner on the need to implement mandatory participation by insurers in the MAP. (2) Criteria for recommendation. (A) The Executive Committee shall propose a recommendation for mandatory participation by insurers if the committee determines that the level of voluntary participation by insurers is not sufficient to provide adequate opportunities for placement of residential property insurance through the program. The Executive Committee shall base its determination on the following factors: (i) the number of applications eligible for referral received by the Department statewide, in each designated underserved area, and in unprotected portions of designated underserved areas; (ii) the number of premium quotes made per application statewide, in each designated underserved area, and in unprotected portions of designated underserved areas; (iii) the number of policies issued by participating insurers to MAP applicants statewide, in each designated underserved area, and in unprotected portions of designated underserved areas; and (iv) any other factor that the Executive Committee determines reflects a lack of residential property insurance availability through the MAP. (B) The Executive Committee may not make a recommendation for mandatory participation by insurers for any designated underserved area unless the MAP has been operational in that underserved area for at least six months. (3) Procedures for consideration of recommendation. (A) Consideration of a recommendation for mandatory participation by insurers in one or more designated underserved areas may be initiated as follows: (i) the chairperson may place the item on the agenda for consideration; or (ii) any three members of the Executive Committee may make a written request to the chairperson for consideration for mandatory participation by insurers. The chairperson shall place the item on the agenda for consideration at the next meeting of the Executive Committee. (B) Consideration shall occur at the next meeting of the Executive Committee if the Subcommittee on Data Collection determines that any of the circumstances specified in clauses (i) or (ii) or (iii) of this subparagraph has occurred. An application shall not be counted for purposes of clauses (i) and (ii) of this subparagraph unless the application has been either on the electronic bulletin board for 90 days or a policy has been issued, whichever occurs first. (i) Less than 60% of the eligible applications, either on a statewide basis, or in one or more designated underserved areas, or in unprotected portions of designated underserved areas, referred to participating insurers in the preceding 12 months resulted in the issuance of at least one premium quote per application. (ii) Less than 40% of the eligible applications, either on a statewide basis, or in one or more designated underserved areas, or in unprotected portions of designated underserved areas, referred to participating insurers in the preceding 12 months resulted in the issuance of residential property insurance policies. (iii) The number of participating insurers for any designated underserved area is less than five. (4) Public comment. (A) The public shall be given the opportunity to provide comment to the Executive Committee prior to the time the Executive Committee votes on the proposed recommendation. (B) If written comments are solicited by the Executive Committee, such comments should be addressed to the Executive Committee, Market Assistance Program, Texas Department of Insurance. (C) Any written comments that are received shall be attached to the copy of the minutes of the Executive Committee meeting at which the proposed recommendation is considered. If minutes are not prepared, the written comments shall be maintained with the tape recording of the meeting. (D) The Executive Committee may, at its discretion, take oral comments from the public at any meeting. (5) Possible actions. The Executive Committee may take action on the recommendation for mandatory participation as follows: (A) the Executive Committee may withdraw the recommendation; (B) the Executive Committee may defer action on the recommendation, pending further consideration; (C) the Executive Committee may withdraw its recommendation and propose an amendment to this plan of operation; or (D) the Executive Committee may recommend to the Commissioner the implementation of mandatory participation by insurers. (6) Effect of withdrawal of recommendation. Withdrawal of a recommendation for mandatory participation by insurers for any designated underserved area shall not prohibit the Executive Committee from making another recommendation for the same or different designated underserved area at a later date. (7) Approval of recommendation. A recommendation to the Commissioner by the Executive Committee for implementation of mandatory participation by insurers must: (A) be approved by at least eight members of the Executive Committee; (B) state that the Executive Committee believes the level of voluntary participation by insurers does not provide adequate opportunities for placement of residential property insurance to qualified applicants; and (C) state the specific factors that are the basis for the recommendation. (8) Commissioner's action on recommendation. Upon receipt of a recommendation from the Executive Committee, the Commissioner may, after notice and hearing, implement mandatory participation by insurers in one or more designated underserved areas in the MAP. 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 August 29, 1996. TRD-9612677 Caroline Scott General Counsel and Chief Clerk Texas Department of Insurance Effecitive date: October 1, 1996 Proposal publication date: June 28, 1996 For further information, please call: (512) 463-6327 28 TAC sec.5.10016 The Commissioner of Insurance adopts new sec.5.10016, concerning the adoption by reference of two new forms to be used in the Residential Property Insurance Market Assistance Program (MAP) pursuant to the Insurance Code, Article 21.49- 12. The adoption of the new forms was considered by the Commissioner of Insurance in a public hearing on August 6, 1996, Docket Number 2239. The new section is adopted with changes to the proposed forms and to the proposed text published in the June 28, 1996, issue of the Texas Register (21 TexReg 5937). Article 21.49-12 was enacted by the Texas Legislature in 1995 (Acts 1995, 74th Legislature, page 3008, chapter 415, sec.5, effective August 28, 1995) to require the Commissioner to establish a voluntary market assistance program to assist consumers in obtaining residential property insurance coverage in underserved areas that are to be determined and designated by the Commissioner under separate rule. The purpose of the MAP is to provide a fair, efficient, and economical voluntary mechanism to assist Texas consumers in obtaining residential property insurance in designated underserved areas of the state, including rural areas. Form TMAP-10, Texas MAP Application, is to be used to apply for assistance in obtaining residential property insurance through the MAP. The form is necessary to implement Article 21.49-12, sec.2(b)(1)-(2) and new sec.5.10003 (relating to Definitions). Article 21.49-12, sec.2(b) requires the use of applications to apply for assistance through the MAP. New sec.5.10003 requires that the MAP application form be promulgated by the Texas Department of Insurance (Department). Form TMAP-10 is adopted with three changes to the form as proposed and one change to the text of the section as proposed. None of the changes introduce new subject matter or affect additional persons than those subject to the proposal as originally published. The changes do not affect the purpose, intent, or implementation of the MAP. Two of the changes are necessary to address the concerns of the Department's contracting entity with its possible liability exposure in the event that the contracting entity incorrectly enters information on the bulletin board that results in insurance coverage not being written. These changes include: (1) Question No. 5 in the eligibility section of the form is changed to read "Has the applicant had a policy obtained through the MAP canceled or nonrenewed for non-payment of premium?" (2) The applicant's authorization to forward the applications and related documents to the contracting entity for placement of application information on the electronic bulletin board is changed to clarify that the authorization for placement of the information on the bulletin board is for use by prospective insurers in selecting risks for review for purposes of writing residential property insurance. In addition, language is added to the form requesting that the original application and attachments and a copy of each be sent to the Department; the Department's mailing address is also included. The addition of this information to the form will increase efficiency in forwarding applications to the Department and to the contracting entity. Form TMAP-11, Letter of Non-eligibility for Residential Property Insurance, is necessary to enable applicants who are unable to obtain declination letters from insurers, which are required of applicants to the MAP pursuant to Article 21.49-12, sec.2(b)(2), to have an alternative means to submit such declination letters. The form is authorized in sec.5.10006 (relating to Eligibility for Referral). Under new sec.5.10006, a MAP applicant may submit a letter or letters of non- eligibility in lieu of the declination letter or letters required in Article 21.49-12, sec.2(b)(2). Article 21.49-12, sec.2(b)(2) requires (i) that each MAP application must be accompanied by a copy of a current nonrenewal or cancellation notice and a current declination letter from at least one other insurer writing the coverage sought and (ii) that applicants not having previous residential property insurance coverage must provide copies of current declination letters from at least two unaffiliated insurers writing the coverage sought. Form TMAP-11 is adopted with no changes to the form as proposed. Both forms are adopted to be effective on October 1, 1996, and the proposed text as published is changed accordingly. Form TMAP-10 may be used by consumers in designated underserved areas who meet the requirements specified in Article 21.49-12 and the MAP plan of operation to apply for assistance in obtaining residential property insurance coverage, including homeowners, dwelling, farm and ranch owners, and farm and ranch coverage. The form is part of the complete application packet to be submitted by the originating agent to the Department for forwarding to the Department's contracting entity for verification for compliance with requirements for completeness and eligibility and for placement of information on the electronic bulletin board, pursuant to sec.5.10009 (relating to Operations of the MAP). The form provides information necessary to the Department and the Department's contracting entity to determine if the risk complies with completeness and eligibility requirements in the MAP plan of operation and is, therefore, eligible for placement on the electronic bulletin board. Participating insurers may select risks from the bulletin board for review. The information provided on Form TMAP-10 will assist insurers in determining whether to select an application for further review and quote. Pursuant to sec.5.10009(d)(1) of the plan of operation (also sec.5.10009(d)(1) of this title, relating to Operations), prior to issuing a quote or writing a policy, an insurer should underwrite the risk in accordance with the insurer's applicable underwriting procedures, including inspecting the property and obtaining the insurer's own application for insurance. The application form requires the following to be provided: (i) originating agent's licensing and address information, including name, TDI identification number, telephone and fax numbers; (ii) applicant and co-applicant information, including name, mailing address, and military status; (iii) information on designated underserved area in which risk is located, including location zip code, class area, and county; (iv) location of risk, including if same as applicant's mailing address and if not, address and city; (v) rating information, including fringe area if applicable, key rate and whether in protected or unprotected area, type of construction, policy form requested, dwelling and personal property coverage amounts, deductible, year built, structure type, usage type, owner or tenant occupancy; (vi) availability of Voluntary Inspection Program certification, pursuant to the Insurance Code, Article 5.33B; and (vii) MAP eligibility information. Applicants with risks located in areas that are designated by separate rule as underserved pursuant to Article 21.49-12 of the Insurance Code will be able to select standard residential property insurance forms promulgated pursuant to Article 5.35 of the Insurance. Applicants with risks located in areas that are designated by separate rule as underserved pursuant to both Articles 21.49-12 and 5.35-3 (Property Protection Program for Underserved Areas) of the Insurance Code will be able to select, in addition to the standard residential property insurance forms promulgated pursuant to Article 5.35 of the Insurance Code, property protection forms adopted pursuant to Commissioner's Order No. 95-1285 (December 8, 1995). The property protection forms will be available for use upon adoption of Texas Personal Lines Manual form and rating rules governing their use. Form TMAP-10 also contains the applicant's authorization to the Department to enable the Department to forward, on the applicant's behalf, a copy of the application packet to the Department's contracting entity for the sole purpose of placement of application information on the electronic bulletin board for use by prospective insurers in selecting risks for review for the purpose of writing residential property insurance for the applicant. This authorization is necessary because of the confidentiality requirements in Article 21.49-12, sec.5, which provide that the Department shall maintain as confidential all application files and related documents received under Article 21.49-12, except to certain specified persons and entities, including the originating and issuing agents, the applicant for their own file, or an insurer who agrees to insure the applicant. This authorization is promulgated pursuant to the Commissioner's rulemaking authority in Article 21.49-12, sec.8 to promulgate rules in addition to the plan of operation that are appropriate to accomplish the purposes of Article 21.49-12. Form TMAP-11 is to be completed by a licensed local recording agent or by a salaried representative for an insurer whose plan of operation does not contemplate the use of local recording agents. The agent or salaried representative must represent at least one licensed insurer who is actually writing residential property insurance in Texas. The form enables the agent or salaried representative to certify that, based on known underwriting guidelines, they are unable to place the applicant's risk with a licensed insurer available to that agent or salaried representative. Other information to be included on the form is the name of the proposed insured; address of the residential risk proposed to be insured; originating agent's name, address, and TDI identification number; and the name or names of the insurers with whom the agent or salaried representative is unable to place the risk. No comments were received regarding the adoption of the new section. The new section is adopted pursuant to the Insurance Code, Articles 21.49-12 and 1.03A; and the Government Code sec.sec.2001.004-2001.038. Article 21.49-12, sec.1(a) provides that residential property insurance shall be provided through the MAP under a homeowners policy, a residential fire and allied lines policy, and a farm and ranch policy. Article 21.49-12, sec.2(b)(1)-(2) requires the use of applications for assistance to apply for coverage through the MAP. Article 21.49-12, sec.2(b)(2) requires that each MAP application must be accompanied by a copy of a current nonrenewal or cancellation notice and a current declination letter from at least one other insurer writing the coverage sought and that applicants not having previous residential property insurance coverage must provide copies of current declination letters from at least two unaffiliated insurers writing the coverage sought. Article 21.49-12, sec.8 authorizes the Commissioner to adopt rules in addition to the plan of operation that are appropriate to accomplish the purposes of Article 21.49-12. Article 1.03A authorizes the Commissioner of Insurance to adopt rules and regulations, which must be for general and uniform application, for the conduct and execution of the duties and functions of the Texas Department of Insurance only as authorized by a statute. The Government Code sec.sec.2001.004-2001.038 (Administrative Procedure Act) authorize and require each state agency to adopt rules of practice stating the nature and requirements of available formal and informal procedures and prescribe the procedures for adoption of rules by a state agency. sec.5.10016.Forms Promulgated for Use in the Residential Property Insurance Market Assistance Program. The Commissioner of Insurance adopts by reference the forms specified in this section for use in the Residential Property Insurance Market Assistance Program, which is operated pursuant to Article 21.49-12 of the Insurance Code. Specimen copies of these forms are available from the Texas Department of Insurance, MAP Division, MC #104-MA, 333 Guadalupe Street, P.O. Box 149104, Austin, Texas 78714-9104. These forms are: (1) Form TMAP-10--Texas MAP Application. Effective October 1, 1996. (2) Form TMAP-11--Letter of Non-eligibility for Residential Property Insurance. Effective October 1, 1996. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas, on August 29, 1996. TRD-9612676 Caroline Scott General Counsel and Chief Clerk Texas Department of Insurance Earliest possible date of adoption: October 1, 1996 For further information, please call: (512) 463-6327 TITLE 30. ENVIRONMENTAL QUALITY PART I. Texas Natural Resource Conservation Commission CHAPTER 291.Water Rates The Texas Natural Resource Conservation Commission (TNRCC or commission) adopts amendments to sec.sec.291.3, 291.21, 291.28, 291.76, 291.81, 291.112, 291.131, 291.132, 291.134 and 291.137, relating to water rates. Sections 291.3 and 291.21, are adopted with changes to the proposed text as published in the April 16, 1996, issue of the Texas Register (21 TexReg 3315). Amendments to sec.sec.291.28, 291.76, 291.81, 291.112, 291.131, 291.132, 291.134, and 291.137 are adopted without changes and will not be republished. The purpose of the adopted amendments is to allow the implementation of a previously approved temporary water rate during times of mandatory water use reductions. Additionally, the adopted amendments would change references from the Texas Water Commission to the Texas Natural Resource Conservation Commission; would change the references from the office of hearings examiners to the State Office of Administrative Hearings and the reference from examiners to the proper title of administrative law judge; would bring the rules on interest paid on late payments of regulatory assessment fees into conformance with statutory limits; and would correct typographical errors. A public hearing on the proposed rules was conducted on May 3, 1996. Oral and/or written testimony on these rules was provided by thirteen commenters. Oral and/or written testimony in support of the proposed rules was provided by the Edwards Underground Water District. Oral and/or written testimony in support of a temporary drought water rate, but which opposed the specific proposed temporary drought rate and offered an alternative was provided by the following groups: Bulverde Utility Company, Inc., Elim Water Company, Inc., Independent Water & Sewer Companies of Texas, Inc., and other interested individuals. A petition in support of the comments by the Independent Water & Sewer Companies of Texas, Inc. was submitted with signatures of twenty-four individuals representing different water or sewer utilities. Oral and/or written testimony in opposition to certain sections of the proposed rules was also provided by the Consumers Union. The following paragraphs summarize the comments received. The Bulverde Utility Company, Inc., Elim Water Company, Inc., the Independent Water & Sewer Companies of Texas, Inc., and several individuals, approved of the concept of a temporary rate increase during times of a mandatory water conservation order. However, these commenters suggested that the proposed rule would not fully compensate the utilities for their lost revenue. The commenters noted that while some variable costs will decrease in a drought, many other utility expenses will increase, including expenses associated with enforcing any water rationing program, higher repairs and maintenance expenses, and increased labor costs due to responding to customer complaints. The commenters noted the proposed rule will be difficult to implement from the standpoint of both the utilities and the TNRCC because of the amount of information required by the proposed rule and because of the difficulty in calculating the drought rate under the proposed rule. These commenters suggested an alternative that would adjust the volume water rate by adding the volume rate times the percent ordered reduction divided by one minus the percent ordered reduction. The commission agrees that the temporary water rate could be easier to calculate. The commission is concerned, however, that the formula suggested by the commenters, in some cases, could overcompensate the utility. Without the full information required of the utility by the proposed rule, it will not be possible to determine if the temporary water rate is fully compensating the utilities or overcompensating the utility. Therefore, the commission's adopted rule provides the utility an option. Either the utility can seek a temporary rate using the simplified formula to recover fifty percent of the otherwise lost revenues based on limited information filed with the commission, or the utility can seek a temporary rate to recover up to one hundred percent of the otherwise lost revenues as a result of the ordered water use reduction. In that case, the utility will have to file a more detailed rate application with the commission in order to justify the specific temporary rate necessary to compensate the utility for potential lost revenue. The Independent Water & Sewer Companies of Texas, Inc., requested that a provision be inserted in the rule to the effect that a rate proceeding filed only for the limited purpose of obtaining or modifying a temporary water rate provision should not otherwise prevent the utility from filing another rate application within 12 months. The commission agrees as it applies to a utility filing a request under sec.291.21(l)(3) using a limited filing. But for a utility filing a request under sec.291.21(l)(4) using a complete rate filing package, the utility should be required to be required to wait 12 months as otherwise required by statute unless a financial hardship occurs. The Independent Water & Sewer Companies of Texas, Inc., and several individuals, objected to the proposed provision that would require the commission to impose interim rates during a rate proceeding that are equal to a utility's then existing rates, when a utility files for a temporary water rate with a mandatory water conservation measure in effect after January 1, 1998. The commission agrees that this provision is unnecessary and it has been deleted from the adopted rule. The Independent Water & Sewer Companies of Texas, Inc., commented that continuing regulatory oversight over the utility's collection of increased revenues is necessary, but the proposed rules fall short of effectively doing so. The commission agrees with the necessity for continued oversight; however, the commission notes that current commission rules already provide oversight and the changes to the published rule will further clarify and ensure effective oversight. The Independent Water & Sewer Companies of Texas, Inc., commented that the proposed rule may be attempting to regulate interim rates of a utility that is subject to the original jurisdiction of a city. The commission disagrees with the commenter. The adopted rule only applies to "utilities" as defined in the Texas Water Code, sec.13.002(23), that are subject to the original jurisdiction of the commission and will not impact rates subject to a city's jurisdiction. The Consumers Union expressed concern that the rule as proposed exceeds the commission's statutory authority because it represents a process not contemplated by the Water Code and therefore fails to incorporate provisions to ensure water utility customers are assured "...rates, operations, and services are just and reasonable..." as required under sec.13.001 Texas Water Code. The commission responds that the Water Code is not so restrictive as to prohibit the commission from adopting new classes of rates. Section 13.187(d) of the Water Code contemplates the implementation of a previously approved rate adjustment provision. The commission further notes that the adopted rule ensures just and reasonable rates in mandatory water use reduction situations by requiring the water utility to file a complete rate application in order to justify a temporary rate to recover up to one hundred percent compensation for lost revenues. With the full information required under this circumstance, the commission will be able to make the required determination under the Water Code. If the utility wishes to avoid the burden of a full rate filing, the utility will only receive fifty percent of its lost revenues due to mandatory water use restrictions. The commission has prepared a Takings Impact Assessment for these rules pursuant to Texas Government Code Annotated, sec.2007.043. The specific purpose of the rule is to preserve the financial integrity of a utility when a court, government agency, or other authority, orders mandatory water use reduction, thus reducing water sales and the revenues that would have been received from those sales. The rules will substantially advance this specific purpose by allowing a utility to implement a previously approved temporary water rate without an expensive and time consuming rate case. The promulgation and enforcement of these rules will not adversely affect private real property rights. SUBCHAPTER A.General Provisions 30 TAC sec.291.3 The amendment is adopted under the Texas Water Code sec.sec.5.103, 5.105, and 13.041 which provides the commission with rulemaking authority relating to the regulation and supervision of retail public utilities' rates, fees, operations, and services. sec.291.3.Definitions. The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise. Commission-The Texas Natural Resource Conservation Commission. Executive director-The executive director of the commission, or any authorized individual designated to act for the executive director. Mandatory Water Use Reduction-The temporary reduction in the use of water imposed by court order, government agency, or other authority with appropriate jurisdiction. This does not include water conservation measures which seek to reduce the loss or waste of water, improve the efficiency in the use of water, or increase the recycling or reuse of water so that a water supply is made available for future or alternative uses. Temporary Water Rate Provision -A provision in a utility's tariff that allows a utility to adjust its rates in response to mandatory water use reduction. 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 August 27, 1996. TRD-9612682 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: September 20, 1996 Proposal publication date: April 16, 1996 For further information, please call: (512) 239-4640 SUBCHAPTER B.Rates, Rate Making and Rate/Tariff Changes 30 TAC sec.291.21, sec.291.28 The amendments are adopted under the Texas Water Code sec.sec.5.103, 5.105, and 13.041 which provides the commission with rulemaking authority relating to the regulation and supervision of retail public utilities' rates, fees, operations, and services. sec.291.21.Form and Filing of Tariffs. (a) (No change.) (b) Requirements as to size, form, identification, minor changes and filing of tariffs. (1) (No change.) (2) Minor Tariff Changes. Except for an affected county, a public utility's approved tariff may not be changed or amended without commission approval. An affected county can change rates for water or wastewater service without commission approval but must file a copy of the revised tariff with the commission within 30 days after the effective date of the rate change. The executive director may approve the following minor changes to tariffs: (A)-(B) (No change.) (C) implementation of a purchased water or sewage treatment provision, a temporary water rate provision in response to mandatory reductions in water use imposed by a court, government agency, or other authority, or water use fee provision previously approved by the commission; (D)-(G) (No change.) (3)-(5) (No change.) (c)-(k) (No change.) (l) Temporary water rate. (1) A utility's tariff may include a temporary water rate provision which will allow the utility to increase its retail customer rates during periods when a court, government agency, or other authority orders mandatory water use reduction measures which affect the utility customers' use of water service and the utility's water revenues. Implementation of the temporary water rate provision shall allow the utility to recover from customers revenues the utility would otherwise have lost due to mandatory water use reductions in accordance with the temporary water rate provision approved by the commission. If a utility obtains a portion of its water supply from another unrestricted water source or water supplier during the time the temporary water rate is in effect, the rate resulting from implementation of the temporary water rate provision must be adjusted to account for the supplemental water supply and to limit over-recovery of revenues from customers. A temporary water rate provision cannot be implemented by a utility if there exists an available, unrestricted, alternative water supply which the utility can use to immediately replace, without additional cost, the water made unavailable because of the action requiring a mandatory reduction of use of the affected water supply. (2) The temporary water rate provision must be approved by the commission in a rate proceeding before it may be included in the utility's approved tariff or implemented as provided in this subsection. A proposed change in the temporary water rate must be approved in a rate proceeding. A utility that has filed a rate change within the last 12 months may file a request for the limited purpose of obtaining a temporary water rate provision. (3) A utility may request a temporary water rate provision using the formula in this paragraph to recover 50% or less of the revenues that would otherwise have been lost due to mandatory water use reductions through a limited rate proceeding. The formula for a temporary water rate provision under this paragraph is: Figure 1: 30 TAC sec.291.21 Subsection l(3) (A) The utility must file a temporary water rate application prescribed by the executive director and provide customer notice as required in the application, but is not required to provide complete financial data to support its existing rates. Notice must include a statement of when the temporary water rate provision would be implemented, the classes of customers affected, the rates affected, information on how to protest the rate change, the required number of protests to ensure a hearing, the address of the commission and the time frame for protests and any other information which is required by the executive director in the temporary water rate application. The utility's existing rates will not be subject to review in the proceeding and the utility will only be required to support the need for the temporary rate. A request for a temporary water rate provision under this paragraph is not considered a statement of intent to increase rates subject to the 12 month limitation in sec.291.23 of this title, (relating to Time Between Filings.) (B) The utility must be able to prove that the projected revenues that will be generated by the temporary water rate provision are required by the utility to pay reasonable and necessary expenses that will be incurred by the utility during the time mandatory water use reductions are in effect. (4) A utility may request a temporary water rate provision using the formula in paragraph (3) of this subsection or any other method acceptable to the commission to recover up to 100 % of the revenues that would otherwise have been lost due to mandatory water use reductions. (A) If the utility requests authorization to recover more than 50% of lost revenues it must submit financial data to support its existing rates as well as the temporary water rate provision even if no other rates are proposed to be changed. The utility must complete a rate application and provide notice in accordance with the requirements of sec.291.22 of this title (relating to Notice of Intent To Change Rates). The utility's existing rates will be subject to review in addition to the temporary water rate provision. (B) The utility must be able to prove that the projected revenues that will be generated by the temporary water rate provision are required by the utility to pay reasonable and necessary expenses that will be incurred by the utility during the time mandatory water use reductions are in effect; that the rate of return granted by the commission in the utility's last rate case does not adequately compensated the utility for the foreseeable risk that mandatory water use reductions will be ordered; and revenues generated by existing rates do not exceed reasonable cost of service. (5) The utility may place the temporary water rate into effect only after: (A) the temporary water provision has been approved by the commission and included in the utility's approved tariff in a prior rate proceeding; (B) there is an action by a court, government agency, or other authority requiring mandatory water use reduction measures which affect the utility's customers' use of utility services; and, (C) issuing notice as required by paragraph (7) of this subsection. (6) The utility can readjust its rates using the temporary water rate provision as necessary to respond to modifications or changes to the original order requiring mandatory water use reductions by reissuing notice as required by paragraph (7) of this subsection. The executive director's review of the proposed implementation of an approved temporary water rate provision is an informal proceeding. Only the commission, the executive director, or the utility may request a hearing on the proposed implementation. (7) A utility that wishes to place a temporary water rate into effect shall take the following actions prior to the beginning of the billing period in which the temporary water rate takes effect: (A) submit a written notice, including a copy of the notice received from the court, government agency, or other authority requiring the reduction in water use, to the executive director; and (B) mail notice to the utility's customers. Notice may be in the form of a billing insert and shall contain the effective date of the implementation and the new rate the customers will pay after the temporary water rate is implemented. The notice shall include the following language: "This rate change is being implemented in accordance with the temporary water rate provision approved by the Texas Natural Resource Conservation Commission to recognize the loss of revenues due to mandatory water use reduction ordered by (name of entity issuing order). The new rates will be effective on (date) and will remain in effect until the mandatory water use reductions are lifted or expired. The purpose of the rate is to ensure the financial integrity of the utility. The utility will recover through the rate (the percentage authorized by the temporary rate) percent of the revenues the utility would otherwise have lost due to mandatory water use reduction by increasing the volume charge from ($ per 1,000 gallons to $ per 1,000 gallons)." (8) A utility must stop charging a temporary water rate as soon as is practical after the order which required mandatory water use reduction is ended but in no case later than the end of the billing period which was in effect when the order was ended. The utility must notify its customers of the date that the temporary water rate ends and that its rates will return to the level authorized before the temporary water rate was implemented. (9) If the commission initiates an inquiry into the appropriateness or the continuation of a temporary water rate, it may establish the effective date of its decision on or after the date the inquiry is filed. 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 August 27, 1996. TRD-9612683 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: September 20, 1996 Proposal publication date: April 16, 1996 For further information, please call: (512) 239-4640 SUBCHAPTER D.Records and Reports 30 TAC sec.291.76 The amendment is adopted under the Texas Water Code sec.sec.5.103, 5.105, and 13.041 which provides the commission with rulemaking authority relating to the regulation and supervision of retail public utilities' rates, fees, operations, and services. 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 August 27, 1996. TRD-9612684 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: September 20, 1996 Proposal publication date: April 16, 1996 For further information, please call: (512) 239-4640 SUBCHAPTER E.Customer Service and Protection 30 TAC sec.291.81 The amendment is adopted under the Texas Water Code sec.sec.5.103, 5.105, and 13.041 which provides the commission with rulemaking authority relating to the regulation and supervision of retail public utilities' rates, fees, operations, and services. 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 August 27, 1996. TRD-9612685 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: September 20, 1996 Proposal publication date: April 16, 1996 For further information, please call: (512) 239-4640 SUBCHAPTER G.Certificates of Convenience and Necessity 30 TAC sec.291.112 The amendment is adopted under the Texas Water Code sec.sec.5.103, 5.105, and 13.041 which provides the commission with rulemaking authority relating to the regulation and supervision of retail public utilities' rates, fees, operations, and services. 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 August 27, 1996. TRD-9612686 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: September 20, 1996 Proposal publication date: April 16, 1996 For further information, please call: (512) 239-4640 SUBCHAPTER I.Wholesale Water or Sewer Service 30 TAC sec.sec.291.131, 291.132, 291.134, 291.137 The amendments are adopted under the Texas Water Code sec.sec.5.103, 5.105, and 13.041 which provides the commission with rulemaking authority relating to the regulation and supervision of retail public utilities' rates, fees, operations, and services. 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 August 27, 1996. TRD-9612687 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: September 20, 1996 Proposal publication date: April 16, 1996 For further information, please call: (512) 239-4640 TITLE 31. NATURAL RESOURCES AND CONSERVATION PART II. Texas Parks and Wildlife Department CHAPTER 65.Wildlife SUBCHAPTER P.Alligators 31 TAC sec.sec.65.351-65.364, 65.368, 65.369 The Texas Parks and Wildlife Commission adopts the repeal of existing sec.sec.65.351-65.364, 65.368 and 65.369, and new sec.sec.65.351-65.363, concerning alligators. Section 65.355, is adopted with changes to the proposed text as published in the July 26, 1996, issue of the Texas Register (21 TexReg 7010). The repeals, sec.sec.65.351-65.354 and 65.356-65.363 are adopted without changes and will not be republished. The change to sec.65.355(e) increases the number of lines that may be set per unused hide tag from one to three. The repeals and new sections are necessary to streamline and simplify regulations governing the take, possession, propagation, transport, and sale of alligators in this state. The repeals and new sections will function by defining terminology; establishing general requirements for licensure, possession of alligators, and tagging of hides; setting open seasons and bag limits; specifying the means and methods by which alligators may be lawfully taken; setting forth specific tagging requirements for the various classes of licensees; establishing permit and license restrictions; specifying requirements for importation and exportation of alligators; providing for control of dangerous alligators; setting forth reporting requirements; establishing facility requirements for alligator farms; and providing for penalties for violations. The department received a total of 14 comments concerning adoption of the proposed regulations. Ten commenters opposed the ratio of one line per unused hide tag in possession for the hunting of alligators. The department agrees with the commenters and the change has been made accordingly. Three comments requesting the banning of alligator hunting were received. The department disagrees with the commenters and responds that Parks and Wildlife Code, sec.65.003 and sec.65.004 authorize the commission to regulate the taking and possession of alligators as necessary to manage the species and require such regulation to be based upon sound biological management practices. No change was made as a result of the comments. One commenter requested that the department adopt regulations that restrict the means and methods for the take of alligators to wire cages and nets; restrict the devices used to kill alligators to firearms and captive bolt mechanisms; and to outlaw alligator farming. The department disagrees with the commenter, and responds that the present methods permitted for the taking and killing alligators are suitable for that purpose; and that Parks and Wildlife Code, sec.65.003, authorizes the commission to regulate the possession, propagation, and sale of alligators as necessary to manage the species. People for the Ethical Treatment of Animals, Inc. commented on the proposed rules. The repeals and new sections are adopted under Parks and Wildlife Code, Chapter 65, which provides the Commission with the authority to regulate the taking, possession, propagation, transportation, exportation, importation, and sale of alligators. sec.65.351.Application. sec.65.352.Definitions. sec.65.353. General Rules. sec.65.354.Licenses, Permits, and Fees. sec.65.355.Means and Methods. sec.65.356.Hide Tag Procurement and Tagging Requirements. sec.65.357.Open Seasons, Open Areas, and Bag Limits. sec.65.358.Possession. sec.65.359.Importation, Exportation, Purchase, and Sale. sec.65.360.Nuisance Alligator Control. sec.65.361.Report Requirements. sec.65.362.Disposal of Alligators by the Department. sec.65.363.Alligator Egg Collection. sec.65.364.Alligator Farm Facility Requirements. sec.65.368.Exceptions. sec.65.369.Penalty for Violation. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 29, 1996. TRD-9612666 Bill Harvey, Ph.D. Regulatory Coordinator Texas Parks and Wildlife Department Effective date: September 19, 1996 Proposal publication date: June 26, 1996 For further information, please call: (512) 389-4642 31 TAC sec.sec.65.351-65.364 The new sections are adopted under Parks and Wildlife Code, Chapter 65, which provides the Commission with the authority to regulate the taking, possession, propagation, transportation, exportation, importation, and sale of alligators. sec.65.355.Means and Methods. (a) Legal devices for taking alligators in the wild are as follows: (1) hook and line (line set); (2) harpoon or gig; (3) lawful archery equipment and barbed arrow; and (4) hand-held snare with integral locking mechanism. (b) A line of at least 300-pound test shall be securely attached to all taking devices being used to hunt alligators. Hook-bearing lines must be attached to a stationary or floating object capable of maintaining a portion of the line above water when an alligator is caught on the line. (c) Alligator hunters shall neither remove alligators from line sets nor use any taking device other than line sets from sunset to one-half hour before sunrise. (d) Alligators caught on legal taking devices may be killed by firearms, axes, or hatchets. (e) A hunter shall set no more than three lines per unused hide tag in possession. (f) Alligator hunters shall inspect their line sets and remove captured alligators daily. (g) Each baited line shall be labeled with a plainly visible, permanent, and legibly marked gear tag that contains the full name and current address of the licensed alligator hunter or hunters who set it. (h) Hook-bearing lines may not be set prior to the general open season and shall be removed no later than sunset of the last day of the open season. (i) All taking devices shall be used only on the tracts of land or water specified for the hide tags. All line sets shall be secured at one end on the tract of land or water specified for the hide tags. Issued in Austin, Texas on August 29, 1996. TRD-9612665 Bill Harvey, Ph.D. Regulatory Coordinator Texas Parks and Wildlife Department Effective date: September 19, 1996 Proposal publication date: July 26, 1996 For further information, please call: (512) 389-4642 TITLE 34. PUBLIC FINANCE PART I. Comptroller of Public Accounts CHAPTER 3.Tax Administration SUBCHAPTER K.Hotel Occupancy Tax 34 TAC sec.3.161 The Comptroller of Public Accounts adopts an amendment to sec.3.161, concerning definitions, without changes to the proposed text as published in the March 19, 1996, issue of the Texas Register (21 TexReg 2201). The purpose of the amendment is to clarify the types of organizations that may qualify for exemption as charitable, educational or religious and to make the definitions in this section consistent with the definitions in Franchise Tax sec.3.541 and State Sales and Use Tax sec.3.322. No comments were received regarding adoption of the amendment. The amendment is adopted under the Tax Code, sec.111.002, which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of the Tax Code, Title 2. The amendment implements the Tax Code, sec.156.102. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Issued in Austin, Texas on August 28, 1996. TRD-9612587 Martin Cherry Chief, General Law Comptroller of Public Accounts Effective date: September 19, 1996 Proposal publication date: March 19, 1996 For further information, please call: (512) 463-4062 CHAPTER 3.Tax Administration SUBCHAPTER O.State Sales and Use Tax 34 TAC sec.3.322 The Comptroller of Public Accounts adopts an amendment to sec.3.322, concerning exempt organizations, with changes to the proposed text as published in the April 5, 1996, issue of the Texas Register (21 TexReg 2995). The reason for amending the rule is to implement changes to the Tax Code, sec.151.309, which was amended to exempt sales, leases, or rentals of taxable items to a state or governmental unit of a state that borders Texas only to the extent that state or a governmental unit of that state reciprocates and exempts the State of Texas or a political subdivision of the State of Texas. The Tax Code, sec.151.310, was amended to exempt two tax-free sales or auctions during a calendar year by an organization exempt under subsection (a)(1) as religious, educational, or charitable and (a)(2) as Internal Revenue Code, sec.501(c)(3), (4), (8), (10), or (19). The amendment also clarifies the definitions of organizations exempt as religious, educational, or charitable. Changes have been made to subsection (b)(2), to retain the word educational in the first sentence of that paragraph, and to subsection (b)(3), to retain the word religious in the first sentence of that paragraph. Comments were received from an attorney regarding the amended definitions of charitable, educational and religious organizations found in subsection (b)(1)- (3) of the section. The attorney expressed his concerns that the amended definitions are setting new, stricter standards for organizations to qualify for the exemptions. The proposed language reflects past and current policy regarding the exemption of organizations claimed under the Tax Code, sec.151.310(a)(1), and the proposed language is intended to clarify existing policy rather than change it. Therefore, the comptroller has declined to make changes to the amended definitions as the result of the comments received. This amendment is adopted under the Tax Code, sec.111.002, which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of the Tax Code, Title 2. The amendment implements the Tax Code, sec.151.309 and sec.151.310. sec.3.322.Exempt Organizations. (a) General policy. This section will be administered using these guidelines. (1) Since exempt status is not favored under the laws of the State of Texas, the provisions of this section shall be strictly interpreted. (2) An organization must show, without doubt, that it meets the requirements of this section and the statutes. Any unresolved question about the qualifications of an organization will result in denial of exempt status. (b) Entities that must prove exempt status. Entities or organizations that may qualify for exempt status include: (1) a nonprofit charitable or eleemosynary organization devoting all or substantially all of its activities to the alleviation of poverty, disease, pain, and suffering by providing food, clothing, drugs, treatment, shelter, or psychological counseling directly to indigent or similarly deserving members of society with its funds derived primarily from sources other than fees or charges for its services. If the organization engages in any substantial activity other than the activities described in this section, it will not be considered as having been organized for purely public charity, and therefore, will not qualify for exemption under this provision. No part of the net earnings of the organization may inure to the benefit of any private party or individual other than as reasonable compensation for services rendered to the organization. Some examples of organizations that do not meet the requirements for exemption under this definition are fraternal organizations, lodges, fraternities, sororities, service clubs, veterans groups, mutual benefit or social groups, professional groups, trade or business groups, trade associations, medical associations, chambers of commerce, and similar organizations. Even though not organized for profit and performing services that are often charitable in nature, these types of organizations do not meet the requirements for exemption under this provision. Although these organizations do not qualify for exemption under this category of exemption as charitable organizations, they may qualify for the exemption under the Tax Code, sec.151.310(a)(2), if they obtain an exemption from the Internal Revenue Service (IRS) under the Internal Revenue Code, sec.501(c) . Chambers of Commerce may qualify under paragraph (6) of this subsection; (2) a nonprofit educational organization or governmental entity whose activities are devoted solely to systematic instruction, particularly in the commonly accepted arts, sciences, and vocations, and has a regularly scheduled curriculum, using the commonly accepted methods of teaching, a faculty of qualified instructors, and an enrolled student body or students in attendance at a place where the educational activities are regularly conducted. An organization that has activities consisting solely of presenting discussion groups, forums, panels, lectures, or other similar programs, may qualify for the exemption under this provision, if the presentations provide instruction in the commonly accepted arts, sciences, and vocations. The organization will not be considered for exemption under this provision if the systematic instruction or educational classes are incidental to some other facet of the organization's activities. No part of the net earnings of the organization may inure to the benefit of any private party or individual other than as reasonable compensation for services rendered to the organization. Some examples of organizations that do not meet the requirements for exemption under this definition are professional associations, business leagues, information resource groups, research organizations, support groups, home schools, and organizations that merely disseminate information by distributing printed publications. Although these organizations do not qualify for exemption under this category of exemption as educational organizations, they may qualify for the exemption under the Tax Code, sec.151.310(a)(2), if they obtain an exemption from the IRS under the Internal Revenue Code, sec.501(c); (3) a nonprofit religious organization that is an organized group of people regularly meeting for the primary purpose of holding, conducting, and sponsoring religious worship services according to the rites of their sect. The organization must be able to provide evidence of an established congregation showing that there is an organized group of people regularly attending these services. An organization that supports or encourages religion as an incidental part of its overall purpose, or one whose general purpose is furthering religious work or instilling its membership with a religious understanding, will not qualify for exemption under this provision. No part of the net earnings of the organization may inure to the benefit of any private party or individual other than as reasonable compensation for services rendered to the organization. Some examples of organizations that do not meet the requirements for exemption under this definition are conventions or associations of churches, evangelistic associations, churches with membership consisting of family members only, missionary organizations, and groups who meet for the purpose of holding prayer meetings, bible study, or revivals. Although these organizations do not qualify for exemption under this category of exemption as religious organizations, they may qualify for the exemption under the Tax Code, sec.151.310(a)(2), if they obtain an exemption from the IRS under the Internal Revenue Code, sec.501(c); (4) a youth athletic organization that is a nonprofit corporation or association engaged exclusively in providing athletic competition among persons under 19 years of age; (5) a nonprofit organization that qualifies for exemption from federal income tax under the Internal Revenue Code, sec.501(c)(3), (4), (8), (10), or (19); (A) Under a federal/state exchange agreement, the Internal Revenue Service notifies the comptroller when an organization no longer qualifies for federal exemption. Upon notification, an organization's exempt status will be immediately revoked, and all subsequent purchases by the organization will be subject to tax. (B) The organization must immediately notify its suppliers of the loss of exempt status. Failure to so notify a supplier is a violation of the sales tax law. (C) After revocation, the organization may re-apply for exempt status under other provisions of this section. (6) a nonprofit chamber of commerce representing at least one Texas city, county, or geographic locality. For the purpose of this section, a chamber of commerce is a perpetual organization devoted exclusively to promoting the general economic interest of all commercial enterprises in the city, county, or areas it represents. The term does not include chamber-like organizations such as trade associations or business leagues which serve a single line or closely related lines of business within a single industry; (7) a nonprofit convention and tourist promotional agency organized or sponsored by at least one Texas city or county; (8) an electric cooperative formed under the Electric Cooperative Corporation Act (Texas Civil Statutes, Article 1528b) and nonprofit electric cooperatives located outside the state; and (9) a telephone cooperative formed under the Telephone Cooperative Act (Texas Civil Statutes, Article 1528c) and nonprofit telephone cooperatives located outside the state. (c) Entities always exempt. The following entities and organizations are exempt under the law and are not required to request and prove exempt status except to send information as requested by the comptroller to verify its exempt status under this subsection: (1) the United States, its unincorporated agencies and instrumentalities; (A) The United States includes all parts of the executive, legislative, and judicial branches and all independent boards, commissions, and agencies of the United States government. (B) Instrumentalities and agencies of the United States include: (i) various military entities under the supervision of a base commander; (ii) organizations contracting with the United States whose contracts explicitly and unequivocably state that they are agents of the United States; (iii) organizations wholly owned by the United States or wholly owned by an organization which is itself wholly owned by the United States; and (iv) organizations specifically named as agents of the United States or exempted as instrumentalities of the United States by federal statutes. (C) Instrumentalities and agencies of the United States also include organizations having substantially all of the following characteristics: (i) they are funded by the United States; (ii) they carry out a specific program of the United States; (iii) they are managed or controlled by officers of the United States; (iv) their officers are appointed by the United States; (v) they perform commitments of the United States under an international treaty; and (vi) they are not organized for private profit. (2) any incorporated agency or instrumentality of the United States wholly owned by the United States or by a corporation wholly owned by the United States. "Wholly owned" means total or 100% ownership; (3) federal credit unions organized under 12 United States Code, sec.1768; (4) the State of Texas, its unincorporated agencies and instrumentalities; (5) any county, city, special district or other political subdivision of the State of Texas, and any college or university created or authorized by the State of Texas; (6) any company, department, or association organized for the purpose of answering fire alarms and extinguishing fires or for the purpose of answering fire alarms, extinguishing fires, and providing emergency medical services, the members of which receive nominal or no compensation for their services; (7) nonprofit corporations formed under the Development Corporation Act of 1979, the Health Facilities Development Act of 1981, the Texas Hospital Equipment Financing Act of 1983, or the Agricultural Development Act of 1983 when purchasing items for their exclusive use and benefit. The exemption does not apply to items purchased by the corporation to be lent, sold, leased, or rented. See sec.3.291 of this title (relating to Contractors); and (8) nonprofit corporations established by the Texas National Research Laboratory Commission under the Government Code, sec.465.008(g). Taxable items purchased or leased from these corporations are also exempt from tax if the items are used in or for carrying out an eligible undertaking as defined by the Government Code, sec.465.021. (d) Qualification requirements. To qualify for exempt status under subsection (b) of this section, an organization must satisfy all of the following requirements. (1) An organization must be organized or formed solely to conduct one or more exempt activities. All documents necessary to prove the purpose for which an organization is formed will be considered when exempt status is sought. (2) An organization must devote its operations exclusively to one or more exempt activities. (3) An organization must dedicate its assets in perpetuity to one or more exempt activities. (4) No profit or gain may pass directly or indirectly to any private shareholder or individual. All salaries or other benefits furnished officers and employees must be commensurate with the services actually rendered. (e) How to obtain exempt status. (1) To receive a letter of exemption from the comptroller, an organization must submit to the comptroller a written statement setting out in detail the nature of the activities conducted or to be conducted, a copy of the articles of incorporation if the organization is a corporation, a copy of the bylaws, a copy of any applicable trust agreement or a copy of its constitution, and a copy of any letter granting exemption from the Internal Revenue Service. (2) The comptroller may require an organization to furnish additional information including, but not limited to, documentation showing all services performed by the organization and all income, assets and liabilities of the organization. (3) After a review of the material, the comptroller will inform an organization in writing if it qualifies for exemption. (4) The comptroller or an authorized representative of the comptroller may audit the records of an organization at any time during regular business hours to verify the validity of the organization's exempt status. (f) Purchases by an exempt organization. (1) The purchase, lease, or rental of a taxable item which relates to the purpose of an exempt organization listed in subsection (b)(1), (2), (3), or (5) of this section is exempt from tax when the organization or an authorized agent of the organization pays for the item and provides the vendor an exemption certificate in the form prescribed by the comptroller. See sec.3.287 of this title (relating to Exemption Certificates). (2) The purchase, lease, or rental of a taxable item to an exempt organization listed in subsections (c) and (b)(4), (6), (7), (8), or (9) of this section is exempt from tax when the organization or an authorized agent pays for the taxable item and provides the vendor an exemption certificate in lieu of tax. (3) A purchase voucher issued by any one of the entities identified in subsection (c) of this section is sufficient proof of the entity's exempt status. (4) An exemption certificate must be given to the vendor when an authorized agent makes a cash purchase of merchandise for an exempt organization. (5) An employee of an exempt organization cannot claim an exemption from tax when purchasing taxable items of a personal nature even though the employee receives an allowance or reimbursement from the organization. (6) A person traveling on official business for an exempt organization must pay sales tax on taxable purchases whether reimbursed on a per diem basis or reimbursed for actual expenses incurred. (g) Sales by an exempt organization. (1) An exempt organization which sells taxable items must obtain a sales tax permit and is responsible for collecting and remitting tax on all sales of taxable items made by the organization unless such sales are otherwise exempt from the tax. See sec.3.293 of this title (relating to Food; Food Products; Meals; Food Service), sec.3.299 of this title (relating to Newspapers, Magazines, Publishers, Exempt Writings), and sec.3.298 of this title (relating to Amusement Services). (2) A religious, educational, charitable, eleemosynary organization, or an organization exempt under Internal Revenue Code, sec.501(c)(3), (4), (8), (10), or (19) that has qualified for exemption under this section, and each bona fide chapter of a qualifying organization, is not required to collect sales tax on the sales price of taxable items sold at a sale or auction held by the organization or chapter only twice a calendar year and each sale or auction lasting only one day. (A) One day is a consecutive 24-hour period. If a designated tax-free sale or auction exceeds a consecutive 24-hour period, the organization or chapter may not hold another tax-free sale or auction that calendar year. An organization or chapter may hold the two tax-free sales or auctions consecutively, but the two tax-free sales or auctions by that organization or chapter cannot exceed a maximum of 48 consecutive hours in a calendar year. (B) The organization may employ an auctioneer to conduct the sale or auction and pay the auctioneer a reasonable fee not to exceed 20% of the gross receipts. (C) If two or more exempt organizations or chapters jointly hold a tax-free sale or auction, each is considered to have held a tax-free sale or auction during that calendar year. (3) Sales by agencies and instrumentalities of the federal government are subject to tax, and except where the collection is specifically prohibited by federal law, the tax shall be collected and remitted by the agency or instrumentality. If the collection is prohibited by specific federal law, the purchaser of the property shall be liable for reporting the tax directly to the state. (h) Organizations that do not qualify for exempt status. Some organizations which cannot qualify for exempt status include professional groups, certain mutual benefit or social groups, political, trade, business, bar, or medical associations. For information on exempt sales by senior citizens' organizations or exempt sales by student organizations affiliated with a college or university, see sec.3.316 of this title (relating to Occasional Sales and Other Tax-Free Sales). (i) Consular officers, administrative, and technical employees. (1) Foreign diplomatic personnel stationed in the United States are exempt from the payment of sales or use tax if they hold a photo-identification card issued by the United States Department of State. Cards are not transferable and may not be used by others, including spouses. (2) Procedure for retailers. (A) The retailer should retain a copy of the sales invoice or contract signed by the consular official bearing the consular exemption certificate number appearing on the back of the card. (B) Certain cards are limited in what and how much may be purchased tax free. This information is contained on the card itself. Retailers making sales to persons holding cards which require purchases to exceed a certain dollar limit should include only those taxable items purchased in the same transaction when determining if the appropriate level has been reached. Purchases made in separate transactions may not be added together to reach minimum exemption levels. (j) The Alabama-Coushatta, Kickapoo, and the Tigua indian tribe. (1) The purchase, lease, or rental of a taxable item to a tribal council or a business owned by a tribal council of these indian tribes is exempt from sales tax. An exemption certificate or purchase order from the tribal council is sufficient proof of the exempt sale. (2) Sales made by a tribal council or a business owned by a tribal council of these indian tribes within the boundaries of the reservation are exempt from sales tax if: (A) the taxable item being sold is made by a member of the tribe, and (B) the taxable item is a cultural artifact of the tribe. (3) Sales made off the reservation or sales made on the reservation of items which are not cultural artifacts are taxable. (k) Bordering states and governmental units of states that border Texas. (1) The State of Arkansas, State of Louisiana, State of New Mexico, State of Oklahoma, or a governmental unit of a state that borders Texas may qualify for exemption on the purchase, lease, or rental of taxable items, but only to the extent that the bordering state or governmental unit of a state that borders Texas exempts or does not impose a tax on similar sales of items to the State of Texas or a political subdivision of the State of Texas. (2) A bordering state or a governmental unit of a state that borders Texas may enter into a reciprocal agreement with the comptroller for the exemption of taxable items purchased, leased or rented to the State of Texas or a political subdivision of the State of Texas. (3) The purchase, lease, or rental of a taxable item to a bordering state or a governmental unit of a bordering state is exempt from sales tax to the extent allowed under the terms of the reciprocal agreement. An exemption certificate from a qualifying bordering state or a governmental unit of a bordering state is sufficient proof of the exempt sale. 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 August 28, 1996. TRD-9612655 Martin Cherry Chief, General Law Comptroller of Public Accounts Effective date: September 19, 1996 Proposal publication date: March 19, 1996 For further information, please call: (512) 463-4028 SUBCHAPTER V.Franchise Tax 34 TAC sec.3.541 The Comptroller of Public Accounts adopts an amendment to sec.3.541, concerning exemptions, without changes to the proposed text as published in the March 19, 1996, issue of the Texas Register (21 TexReg 2202). The proposed changes to this existing rule reflect amendments made by Senate Bills 373 and 644, 74th Legislature, 1995, and also conform the definitions of corporations qualifying for franchise tax exemption as religious, educational, or charitable with existing policy. Added to the corporations qualifying for franchise tax exemption are corporations exempted from federal income tax under the provisions of Internal Revenue Code, sec.501(c)(8), (10), or (19). An electric cooperative corporation participating in a joint powers agency on or after September 1, 1995, is subject to franchise tax. The franchise tax exemption for a homeowners' association is clarified as confined to residential condominium projects and residential real estate developments. Additionally, the resident owners of a homeowners' association must control at least 51% of the votes of the corporation. No comments were received regarding adoption of the amendment. This amendment is adopted under the Tax Code, sec.111.002, which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of the Tax Code, Title 2. The amendment implements Senate Bills 373 and 644, 74th Legislature, 1995. 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 August 28, 1996. TRD-9612656 Martin Cherry Chief, General Law Comptroller of Public Accounts Effective date: September 19, 1996 Proposal publication date: March 19, 1996 For further information, please call: (512) 463-4028 TITLE 40. SOCIAL SERVICES AND ASSISTANCE PART IX. Texas Department on Aging CHAPTER 254.Operation of the Texas Department on Aging 40 TAC sec.sec.254.1 254.3, 254.17, 254.25 The Texas Department on Aging adopts amendments to sec.sec.254.1 254.3, 254.17, and 254.25, relating to the Operation of the Texas Department on Aging as proposed and published in the June 28, 1996, issue of the Texas Register (21 TexReg 5942). Sections 254.1, 254.3, and 254.17 are adopted with changes to the proposed text and sec.254.25 is adopted without changes and will not be republished. These rules have been amended in order to establish new procedures and policies for imposing penalties and for providing rewards to ensure contractor compliance. The purpose of the amendments is to clarify existing language in the current rules regarding governing documents, to establish new appeal procedures and policies for subcontractors, vendors and applicants contracted to provide services for Older Americans Act programs and to establish new procedures and policies regarding a contractor's performance level and participation eligibility in the distribution of carryover reallocation pools. Changes to the proposed amendments were made in response to comments received from the public, to reflect paragraph renumbering in sec.254.1(d) and 254.17(g), to reflect a change in wording from "calendar days" to "working days" throughout the rules, as appropriate, in order to allow area agencies on aging a more reasonable time frame for corrective actions to be undertaken, and to correct grammatical defects. Comments on these rules were received from the Texas Association of Regional Councils, one individual commenter, the operations committee of the Department, staff and the Board of the Department. The summary of comments are as follows: Comment: One commenter would like more detail about what rewards are available to area agencies. Agency Response: At this time, the Department has not determined what rewards may be used. As they are developed, all contractors will be notified through technical assistance memorandum. Comment: One commenter suggested a change in the composition of the dispute resolution committee to: (1) reduce the number of department division directors from two to one; and (2) include one executive director of a contractor agency not involved in the matter in question. The commenter also suggested identifying the executive director as the "TDoA executive director" in sec.254.1(d)(19). Agency Response: The Department does not concur with a change in the composition of the dispute resolution committee because the Department believes the currently proposed committee structure is appropriate. However, the Department does concur to modifying the language to identify the executive director as the Department's executive director. Comment: One commenter suggested a change in the definition to: "Reimbursement of allowable expenses by the Department to a contractor following submission of expenses on an accrual basis with proof of the contractor's obligation." Agency Response: Obligation does not ensure payment. The definition proposed by the commenter would be for a "modified" reimbursement, where only obligation is required. The intent is that payment be made prior to receiving any Department funds for the expense. Comment: One commenter suggested tying our definition to the Uniform Grant and Contract Management Standards (UGCMS). Agency Response: Changes being recommended for UGCMS differentiate between a contract and grant only when the contract is a pure procurement contract. The Department's relationship with its Area Agency Contractors always relates to a grant situation. Therefore, the proposed definition is appropriate. Comment: One commenter suggested that the definition of an officer in sec.254.1(d) should be deleted. Agency Response: The Department concurs and the definition has been deleted and the proceeding paragraphs renumbered. Comment: One commenter suggested a wording change in sec.254.1(d)(36) to: "The action taken by the Department or the sum to be forfeited by a contractor resulting from a violation as described in sec.254.13 of this title (relating to Contractor Responsibilities, Rewards, and Penalties). Agency Response: The Department concurs. This change maintains the intent of the definition. Comment: One commenter suggested removing the following words from the definition regarding public hearings in sec.254.l(d): ". . . issues of fact regarding Department rules or regulations are heard . . ." Agency Response: The Department concurs. While the deleted text might be the purpose of a public hearing, other issues may also be addressed through public hearings. Comment: One commenter suggested deleting the following words from the definition regarding reports in sec.254.1(d): " . . . which is or may be Agency Response: The Department concurs that the language is unnecessary. Comment: One commenter believes that the 10 calendar days following the date of notice to secure correction for non-compliance is too short and recommends 21 days. Another commenter suggested that the word "calendar" be changed to "working." Agency Response: The Department concurs that changing the word "calendar" to "working" will allow a more reasonable time for corrective actions to be undertaken, and has made the change, as appropriate, throughout the adopted rules. Comment: One commenter noted that "Administrative" should read "Administration." Agency Response: The Department concurs and has changed the text in sec.254.3(a)(2) and (3). Comment: One commenter suggested a wording change in sec.254.3(b) from ". . . for older adults. . ." to ". . .operated by the Texas Department on Aging". Agency Response: The Department concurs but prefers the wording "...administered by the Texas Department on Aging." Comment: One commenter suggests that facsimile transmission is not reliable enough to use as their date-of-notice and that the notice should be sent by certified or registered mail, return receipt requested. Agency Response: Facsimile transmission is generally recognized as an effective way to conduct business. Once sent, a FAX transmission report indicates that the transmission was completed. Often, the mail system would delay notice by several days. Follow-up by mail copy will be conducted for all FAX notices. Comment: One commenter suggested that there should be uniformity for subcontractor hearing procedures in sec.254.17(b). Agency Response: The Department concurs. The proposed statement does not prohibit the area agencies from working together to set hearing procedures and the Department does not believe that it should direct specific hearing procedures at the subcontractor level. Comment: One commenter suggested minor word changes in sec.254.17(c)(1)-(5) in order to be more readable. Agency Response: The Department concurs and has made minor word changes for the purpose of clarification. Comment: One commenter suggested minor word changes to sec.254.17(e)(5) to clarify the time lines for a contractor to furnish a subcontractor with documentation. Agency Response: The Department concurs and has modified the text for better clarification. Comment: One commenter questioned whether sec.254.17(e)(5)(G) was being removed and suggested the word "and" be removed from the end of (F) if it is. Agency Response: The Department concurs. (G) is being removed and the "and" should be at the end of (E). Comment: One commenter suggested minor word changes to sec.254.17(f) in order to clarify the action to be taken when referring a dispute to the Department. Agency Response: The Department concurs and has modified the text for better clarification. Comment: One commenter suggested word changes to sec.254.17(g)(1) to be more consistent in the time frames of actions regarding the Department's responses to requests for a final determination and for simplification of structure. Agency Response: The Department concurs and has modified and added new text for better clarification. Comment: One commenter suggested in sec.254.17(g)(2) that the reference to sec.254.15(1) should be expanded to include paragraph (2)(A-D). Agency Response: The Department concurs and has modified the text in conjunction with the preceding comment. Comment: One commenter would like to see the quarters divided into small time frames. Agency Response: The Department believes that the use of quarters is appropriate. In unusual circumstances, when large amounts of funding are issued late in the third quarter, staff has requested a waiver from the Board. Comment: One commenter does not believe ". . .it is appropriate to limit an agency's ability to receive additional funds based on meeting targets." Additionally, the commenter would like exact criteria to determine "acceptable reasons for variances". Agency Response: The Department believes it is appropriate to hold contractors responsible for their performance targets in the same way the Department is held responsible to the Legislative Budget Board. Criteria will be developed for staff to use to be consistent with the review of variance explanations. The amendments are adopted under the Human Resources Code, Chapter 101, which provides the Texas Department on Aging with the authority to promulgate rules governing the operation of the Department. The Human Resources Code, Chapter 101, relating to the operation of the Texas Department on Aging, is affected by this adopted action. sec.254.1.Operation of the Texas Department on Aging (a)-(b) (No change.) (c) Scope of Responsibility. The Department has the sole responsibility for providing services authorized under the Act to qualified older Texans, performing those general functions of the Department as specified in the Human Resources Code, sec.101.022, and performing other specific functions as identified in the Human Resources Code, Chapter 101. In addition, the Department will establish policy, develop procedures, provide technical assistance, conduct monitoring programs, and give rewards and impose penalties as may be necessary to ensure compliance with the laws and regulations adopted by reference under sec.254.3 of this title (relating to Governing Documents). (d) Definitions. The following words and terms, when used in this part, shall have the following meanings, unless the context clearly indicates otherwise: (1) Action - A move taken by the Department to enforce contractor compliance with the terms of the contract, policies, procedures, standards, supplements or technical assistance memoranda, and the governing documents as specified in sec.254.3 of this title (relating to Governing Documents). (2) Abuse, Neglect and/or Exploitation - Abuse, neglect and/or exploitation is any action or failure to take action which results in the endangerment of an individual's health, safety and welfare. (3) Act-The Older Americans Act (42 USC, sec.sec.3001 et seq). (4) Aging Funds-All funds which are awarded by the Department or that are designated for the specific use of administering or providing services for older persons. Aging funds include Older Americans Act funds, USDA Cash-in-lieu of commodities, State of Texas general revenue funds awarded by the Department, program income funds, and other funds generated by the presence of or existence of Older Americans Act programs. (5) Amendment-A modification to a contract, plan and or budget. (6) Appeal-The process, as specified in sec.254.13 of this title (relating to Compliance with Contractor Responsibilities) by which a contractor can request a review of the imposition of an administrative penalty or sanction. (7) Area Agency on Aging-The office designated by the contractor in a planning and service area to develop and administer the area plan for a comprehensive and coordinated system of services for older persons. Referred to as the Area Agency. (8) Area Plan-The document submitted by an area agency to the Department in order to receive grants or contracts from the Department. (9) Assistant Secretary on Aging-The assistant secretary of the Administration on Aging, U.S. Department of Health and Human Services. (10) Board-The nine members appointed by the governor to direct the work of the Department. (11) Budget Period-The interval, usually 12 months, into which the period covered by a contract is divided for budgetary and funding purposes. (12) Chairman-The presiding officer of the Board, appointed by the governor. (13) Contract-A legally binding and enforceable agreement by which goods, services, or property are to be provided in return for compensation. (14) Contract Management-A process whereby the quality of a contractor's program-related activities, financial management, and compliance with rules and regulations, as specified in 40 TAC, sec.sec.260.1, et. seq., (relating to Area Agency on Aging Administrative Requirements) and sec.sec.270.1, et, seq, (relating to General Service Requirements) are reviewed through performance of site visits, completion of reports, assessment of source documents and a variety of other means. (15) Contract Monitoring-The on-site review of the quality of a contractor's program-related activities, financial management, and compliance with rules and regulations, as specified in 40 TAC, sec.sec.260.1, et seq, (relating to Area Agency on Aging Administrative Requirements) and sec.sec.270.1, et seq. (relating to General Service Requirements). (16) Contractor-The performing agency in a contract with the Department. The word grantee when used in Department rules, procedures, or governing documents specified in sec.254.3 of this title (relating to Governing Documents), is synonymous with contractor. (17) Department-The Texas Department on Aging. The single state agency designated to develop and administer the state plan and be the focal point on aging philosophy, policies, procedures, and programs in the State of Texas. (18) Discretionary Funds-Any funds received by the Department through appropriations, grant or private source that is made available to grantees or contractors for demonstration projects that would further the goals of the Department and aging network; or any unexpended funds from the administration of the state agency under the Older Americans Act that are made available to grantees or contractors by the Department for projects that further the goals of the Department and aging network. (19) Dispute Resolution Committee-A five-member committee of the Department to which a formal protest may be submitted by a contractor who is aggrieved in connection with the imposition of a penalty or penalties. The committee is comprised of the executive director of the Department, two Department division directors not connected with the matter in question, the Citizen's Advisory Council chair, and the president of the Texas Association of Area Agencies on Aging, or designee. If the president of the Texas Association of Area Agencies on Aging is involved in the dispute, the president shall be required to designate another area agency director to serve. (20) Employee-A regular, acting, or exempt full or part-time employee of the Department. (21) Enforcement Fees-A specified amount of money to be paid by the area agency contractor for non-compliance. (22) Executive Director-The chief executive and administrative officer of the Department appointed by the Board. (23) Final Decision, or Determination-A decision which is written, and made by the Department's executive director or Dispute Resolution Committee, or an administrative law judge, or the U.S. Secretary on Aging, which determines the cause of action between the Department and a contractor and the final resolution. (24) Finding-An area of non-compliance found during contract monitoring of the contractor and/or area agency on aging conducted by the Department. (25) Float-An amount of money represented by checks outstanding and in process of collection. (26) Formal Protest-The procedure used for requesting an appeal before the Department's Executive Director or Dispute Resolution Committee. (27) Fraud-Fraud is an intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit to himself/herself or to some other person. It includes any act that constitutes fraud under applicable Federal or State law. (28) Full Reimbursement Basis-Reimbursement of allowable expenses by the Department to a contractor following full payment of the obligation by the contractor. (29) Funding Formula-A formula developed by the Department to distribute funds in an equitable manner based on the requirements of the Older Americans Act. (30) Grant-An award of financial assistance by the federal government or the Department to an eligible recipient. The word grant when used in Department rules, procedures, or governing documents specified in sec.254.3 of this title (relating to Governing Documents), is synonymous with contract. (31) Hearing-A proceeding conducted before the Department's Dispute Resolution Committee, an administrative law judge, or the U.S. Secretary on Aging, during which a contractor protesting a Department action has right to be heard and to present arguments in support of the protest. (32) Interest-A percentage return on cash balances in interest-bearing accounts. (33) Mutual Agreement-Consensus or resolution reached between a contractor and the Department regarding a proposed action against the contractor by the Department. (34) Notice-A written letter sent from the Department to the contractor indicating an action taken or about to be taken and for what reason. (35) Penalty-The action taken by the Department or the sum to be forfeited by a contractor resulting from a violation as described in sec.254.13 of this title (relating to Contractor Responsibilities, Rewards and Penalties). (36) Planning and Service Area-A geographic area of a state that is designated for purposes of planning, development, delivery, and overall administration of services under an area plan. (37) Private Donor-One or more individuals or organizations that give non-public financial assistance to the Department. (38) Proposed Action-A notification made by the Department to a contractor of its intent to impose a penalty or penalties for a specific violation or violations. (39) Public Hearing-A proceeding conducted by the Department and open to the public in a contractor's region or in the state at large, during which witnesses may be heard, and parties being proceeded against (if applicable) have the right to be heard. (40) PSA-Planning and service area. (41) Report-An area plan, an area plan amendment, monitoring responses, budgets, budget amendments or any other report required by the Department. (42) Rewards-A reward is a benefit granted by the Department to an area agency on aging for exceptional performance. (43) Right of First Refusal-A provision in the Older Americans Act which requires the State agency to give the right of first refusal to a unit of general purpose local government if such unit can meet the requirements established in the Older Americans Act, sec.305(b)(5)(B). (44) State Agency-The single state agency designated to develop and administer the State Plan and to be the focal point on aging in the State. (45) State Plan-The document submitted by a state in order to receive grants from the Federal Government for Older Americans Act programs. (46) State Regional Planning Commission or Council of Governments (COG)-A political subdivision of the State, the general purpose of which is to make studies and plans to guide the unified, far-reaching development of the area, to eliminate duplication, and to promote economy and efficiency in the coordinated development of the area. (47) Subcontractor-An agency with which the area agency contracts to provide services in the planning and service area. Any reference in the Department's policies, procedures, or governing documents to subrecipient or service provider are synonymous with subcontractor. (48) TDoA-The Texas Department on Aging, referred to as the Department. (49) Termination of Contract-An action taken by the Department in which a contractor is notified that its contract is being terminated prior to the original contract expiration date, or as a result of penalties. Termination of the contract results in the dedesignation of the area agency on aging. (50) Unit of General Purpose Local Government-A political subdivision of the State whose authority is general and not limited to only one function or combination of related functions; or an Indian tribal organization. (51) Withholding of Funds-An action taken by the Department to either temporarily or permanently retain a specific portion of funds from a specified category of funding. Temporarily means beginning on tenth working day following the date of notice to the contractor, and continuing until the violation is rectified but no longer than 90 calendar days without further corrective action. Permanently means a decision not to release funds after final determination to retain funds withheld. (e)-(f) (No change.) (g) Interagency Agreements. When an interagency agreement is needed, including those legislatively mandated, the Department shall provide a 30 calendar day comment period for contractors and subcontractors affected by the agreement prior to the execution of the agreement. The comment period shall begin five calendar days from the date the agreement is distributed by mail to concerned entities. sec.254.3.Governing Documents. (a) The Department adopts by reference the following governing documents: (1) (No change.) (2) Department of Health and Human Services, Office of Human Development Services, 45 Code of Federal Regulations (CFR), Parts 1321, 1326 and 1328, Grants for State and Community Programs on Aging; and Grants to Indian Tribes and Organizations Serving Older Native Hawaiians for Supportive and Nutrition Services, and any amendments or revisions as issued thereto by the Department of Health and Human Services, Administration on Aging. (3) Department of Health and Human Services, Office of Human Development Services, 45 Code of Federal Regulations, (CFR), Part 74, Administration of Grants, and any amendments or revisions as issued thereto by the Department of Health and Human Services, Administration on Aging. (4) 45 Code of Federal Regulations, Part 92, Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments, and any amendments or revisions as issued thereto by the Department of Health and Human Services. (5) Part III, Department of Labor, Employment and Training Administration 20 Code of Federal Regulations, Part 626, 627, 628, 631, and 637, Job Training Partnership, and any amendments or revisions as issued thereto by the Department of Labor. (6) Office of Management and Budget Circular A-87, Cost Principles for State and Local Governments, and any amendments or revisions as issued thereto by the Office of Management and Budget (OMB). (7) OMB Circular A-88, Indirect Cost Rates, Audit, and Audit Follow up at Educational Institutions and any amendments or revisions as issued thereto by the OMB. (8) OMB Circular A-102, Grants and Cooperative Agreements with State and Local Governments, and any amendments or revisions issued thereto by the OMB. (9) OMB Circular A-110, Grants and Agreements with Institutes of Higher Education and Other Non-Profit Organizations and any amendments or revisions thereto as issued by OMB. (10) OMB Circular A-122, Cost Principles for Non-Profit Organizations, and any amendments or revisions thereto as issued by OMB. (11) OMB Circular A-123, Internal Control Systems and any amendments or revisions thereto as issued by OMB. (12) OMB Circular A-128, Audits of State and Local Governments. (13) OMB Circular A-133, Audits of Institutions of Higher Education and Other Non-Profit Institutions and any amendments or revisions thereto as issued by OMB. (14) The Civil Rights Act of 1991, Title I, and any amendments or revisions thereto as issued by the Congress of the United States. (15) Americans with Disabilities Act of 1990, as amended (P.L. 101-336), 42 USC, sec.sec.12101 et seq., and any amendments or revisions thereto as issued by the Congress of the United States. (16) Document titled "the Texas Department on Aging State Plan," as amended. (17) Document titled "the Texas Department on Aging Strategic Plan," as amended. (18) Legislative Appropriations Act, currently enacted by the Texas Legislature. (19) State Office of Administrative Hearings, 1 TAC Chapter 155, Rules of Procedure. (b) These will be the basic, comprehensive and governing documents for administration and management of Older Americans Act programs in the State of Texas. In instances where they appear to be contradictory, conflicting or divergent in their requirements, the Department shall issue policies, procedures, standards, rules, technical assistance memorandums and/ or supplements to the documents. The Department will be the final authority in interpreting these documents and how the requirements of these documents will be implemented in the State of Texas as they pertain to programs for administered by the Texas Department on Aging. The Department will promulgate penalties and sanctions and initiate appropriate corrective actions to secure compliance with the governing documents identified in this chapter, and any policies, procedures, standards, rules, or supplements enacted by the Department. Copies of the documents are available from the Department, P.O. Box 12786, Austin, Texas 78711. sec.254.17.Appeal Procedures for Subcontractors, Vendors, and Service Provider Applicants. (a) Definitions. Definitions for the words and terms used in this section are located in sec.254.1 of this title (relating to the Operation of the Texas Department on Aging). For the purpose of this section, the following terms shall have these meanings: (1) Date of Notice-The date of notification, and the date the facsimile transmission (FAX) is sent from the contractor to the subcontractor, or from the subcontractor to the contractor. If the notice is a notice of intent to appeal from the subcontractor, and transmission by FAX is not possible, the notice shall be sent by certified or registered mail, return receipt requested. The date of notice shall be the date recorded on the return receipt, when delivered. If the notice is either transmitted or recorded as delivered after 5:00 p.m. on a business day, or on the weekend, the next business day will be considered the date of notice. (2) Hearing-A proceeding conducted before the contractor during which a subcontractor appealing a contractor's action has the right to be heard and to present arguments in support of the appeal. (3) Subcontractor-A subcontractor is defined in sec.254.1 of this title (relating to Operation of Texas Department on Aging) In this section, vendors and applicants for subcontracts or vending agreements shall be referred to as subcontractors, and all shall have the same access to the procedures specified herein, as applicable. (b) Implementation of Hearing Procedures for Subcontractors. It shall be the responsibility of the area agency on aging contractor to establish and implement procedures for conducting hearings for subcontractors seeking to appeal to the contractor through such means. (c) Right to An Appeal: Any subcontractor right to appeal any of the following actions by a contractor: (1) denial of subcontractor's application under an approved area plan; (2) termination or non-renewal of a contract or subgrant; (3) issuance of a notice of noncompliance with federal and state requirements; (4) issuance of a notice of action to recover disallowed and/or questioned costs; and/or (5) issuance of a notice of noncompliance with contract stipulations mutually agreed upon by the area agency and the subcontractor. (d) Notice of Intent to Appeal. A subcontractor shall give notice of an intent to appeal to both the contractor and the Department within 30 calendar days from the date of notice of the contractor's action. The notice of intent to appeal shall be in writing and must state with specificity the grounds upon which the action by the contractor is appealed. Specific areas shall include, at a minimum; (1) the grounds upon which the subcontractor refutes the basis of the action or the authority of the contractor to take such action; (2) a copy of the subcontractor's letter of notification of action from the contractor; (3) the names of individuals and organizations involved in the appealed action; and (4) a certified copy of the resolution or of the minutes of the meeting where the subcontractor's governing body, by majority vote of a quorum, authorized the appeal and designated one or more persons to represent it during the appeal. (e) Informal Disposition. (1) Upon receipt of a notice from the subcontractor of an intent the contractor and the subcontractor shall immediately schedule a meeting to attempt to informally resolve the issues in the appeal within 30 calendar days from the date of notice. (2) If the contractor and the subcontractor resolve their dispute, they shall jointly notify the Department of this fact in writing within five working days following the date of resolution. (3) If the dispute cannot be resolved informally, the contractor and the subcontractor shall notify the Department of this fact in writing within ten working days following the end of the informal resolution period, by certified or registered mail return receipt requested. (4) Within ten working days following the end of the informal resolution period, the contractor shall send the subcontractor a notice for a hearing to be conducted before the contractor. The notice shall be sent by certified or registered mail, return receipt requested. Within five working days of receipt of such notice, the contractor and the subcontractor shall establish a hearing date. (5) Ten working days prior to the established date for the hearing, the contractor shall furnish the subcontractor the following documentation: (A) the current approved area plan; (B) the minutes of the meeting of the area agency's governing body at which the appeal was considered and action taken; (C) the minutes of the meeting of the area agency's advisory council at which the appeal was considered and action recommended; (D) area agency memoranda, staff reports, and evaluations relevant to the action; (E) the criteria used in awarding the contract; and (F) the criteria used in determining that an action was necessary. (f) Referral to the Department. If the contractor and the subcontractor do not formally resolve the dispute it shall be referred to the Department, along with a request for a final determination. The request shall be signed by the executive officer of the contractor agency and be accompanied by the documents specified in subsection (e) (5) (B) - (F) of this section (relating to Informal Disposition). (g) Department Responses to a Request for Final Determination (1) Upon receipt of a request for final determination, the Department shall, within ten working days: (A) determine whether the matter is appropriate for consideration by the Department; and, if so, (B) determine whether the matter is appropriate for the Department's Dispute Resolution Committee, or a hearing before an administrative law judge; and (C) issue a written notice to the contractor and to the subcontractor informing them of this determination. (2) If the matter is determined appropriate for consideration by the Department, it shall: (A) carry out procedures and include in the written notice the information outlined in sec.254.15 (l)(2)(A)-(D) of this title (relating to Appeal Procedures for Area Agencies on Aging Contractors); (B) include in the written notice a statement that the contractor has the opportunity to establish that the findings cited by the Department in the official notification of proposed action are not valid; and (C) send the written notice by registered or certified mail, return receipt requested. (3) Each request for final determination shall be subject to the applicable procedures outlined in sec.254.15, relating to Appeal Procedures for Area Agency on Aging Contractors. For purposes of this section, the term contractor used in sec.254.15 of this title (relating to Appeal Procedures for Area Agencies on Aging Contractors), shall also apply to subcontractors, as used in this section. 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 September 3, 1996. TRD-9612770 Mary Sapp Executive Director Texas Department on Aging Effective date: September 24, 1996 Proposal publication date: June 28, 1996 For further information, please call: (512) 424-6872 40 TAC sec.254.13, sec.254.15 The Texas Department on Aging adopts the repeal of sec.254.13 and sec.254.15, concerning the operations of the Texas Department Aging without changes to the proposed text as published in June 28, 1996, issue of the Texas Register (21 TexReg 5947). These chapters are no longer required as a complete revision to these rules have been proposed to clarify the Department's responsibilities for imposing sanctions and the appeal procedures for service providers and applicants. No comments were received regarding adoption of the repeals. The repeals are adopted under the Human Resources Code, Chapter 101, which provides the Texas Department on Aging with the authority to promulgate rules governing the operation of the Department. The Human Resources Code, Chapter 101, relating to the operation of the Texas Department on Aging, is affected by these repeals. 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 September 3, 1996. TRD-9612767 Mary Sapp Executive Director Texas Department on Aging Effective date: September 24, 1996 Proposal publication date: June 28, 1996 For further information, please call: (512) 424-6872 40 TAC sec.254.13, sec.254.15 The Texas Department on Aging adopts new sec.254.13 and sec.254.15, relating to the compliance with contractor responsibilities, rewards and penalties and appeal procedures for area agencies on aging with changes to the text as published in the June 28, 1996, issue of the Texas Register (21 TexReg 5948). The new rules are a complete revision of the previous rules relating to the Department's responsibilities for imposing sanctions and penalties. The purpose of the new rules is to clarify the rewards available for compliance with a contract and the sanctions and penalties for noncompliance with contract terms and conditions as well as the appeal procedures for area agencies wishing to contest any agency sanctions. Numerous changes were made throughout sec.254.13 in response to comments received from the public, to reflect paragraph renumbering within sec.254.13(f) in response to comments received, and to correct grammatical defects. Within sec.254.13(f) and (g) wording was changed from "calendar days" to "working days" in order to allow a more reasonable time frame for area agencies on aging to rectify a potential violation or while incurring a financial penalty for a violation already committed. In addition, the time frame for submitting an amended report to correct incomplete and/or inaccurate data before incurring a violation has been extended from five working days to ten working days. In sec.254.15 minor, non-substantive editorial changes have been made to the text of the rule in order to correct grammatical defects, to correct references to other Texas Administrative Code rules of the Department, and in sec.254.15(k) a change in wording from "calendar" to "working" was made to allow a more reasonable time frame for submitting and responding to written amendments to an appeal. Comments on these rules were received from the Texas Association of Regional Councils, Concho Valley Area Agency on Aging, Sunset Center, one individual commenter, the operations committee of the Department, staff and the Board of the Department. Comment: One commenter believes that the new rules are "extraordinarily complex and excessive." The same commenter questioned a reward system built on "exceptional performance." Agency Response: Unfortunately, a set of rules that attempts to adequately and fairly respond to a variety of possible non-compliance issues is somewhat complicated. The Department does not, however, believe the rules are excessive. They seek only to encourage contractual compliance. Exceptional performance will be determined using benchmarks that will be established using area agency "best practices." Comment: Another commenter believes that the statement "There will be no effect on small businesses," in the preamble of sec.254.13 is in error and that costs will be incurred to implement this rule. Agency Response: This rule sets out procedures for area agencies wishing to contest any agency action. Costs may occur only in instances when an area agency elects to use the procedures established. The rule itself institutes no action which, in and of itself, creates costs to area agencies or other small businesses. Comment: In sec.254.13(a) one commenter suggested removal of redundant wording. Agency Response: The Department Staff concurs and has amended the text. Comment: One commenter suggested that in sec.254.13(c)(4)(E) the wording ". . .other administrative requirements . . ." is too general and should be deleted. Agency Response: The Department concurs and has elected to remove this subparagraph completely. Comment: One commenter questioned what the rewards for exceptional performance were. Agency Response: At this time, the Department has not determined what rewards may be used. As they are developed, all contractors will be notified through technical assistance memoranda. Comment: Regarding sec.254.13(g), comments were received from two individuals suggesting that the penalty fees being assessed on a ". . . per calendar day" basis are too harsh. Agency Response: Though the Department believes the penalty rates are appropriate, the Department concurs to change the assessing of penalties to read as ". . . per working day" in order to allow a more reasonable time to allow a violation to be rectified. Comment: One commenter questioned how the Department will ensure service delivery if an area agency is directed to stop provision of a direct service. Agency Response: Staff will have to determine the best method of continuing direct service delivery based on the specific circumstances surrounding an issue. It may be necessary to secure service provision from another area agency. The Department can carry out such an action on an emergency basis without an Request for Proposal (RFP) process. Comment: In sec.254.13(h) regarding penalty fees, two commenters stated that most area agencies may pass these sanctions and penalties to their provider and questioned what will happen if a provider does not have local funds to pay penalties. An additional commenter suggested adding language to read as "Collected enforcement fees will be re-paid to the contractor within 15 calendar days if the violation and penalty is appealed and the decision is in favor of the contractor." Agency Response: The intent of the sanction and penalties rule is to secure compliance with Department rules. If a provider cannot pay an assessed penalty, it will be up to the area agency to determine its next actions. However, the Department has added language to this subsection regarding the policy for the refunding of monies by the Department in the event a violation has been appealed and the finding is favor of the contractor. Comment: In sec.254.13(j) one commenter suggested that the language " . . .or unacceptable ethical conduct . . ." is too subjective and should be removed. Agency Response: The Department concurs and has removed the language. Comment: In sec.254.13(l) one commenter stated that if this subsection is included all other proposed language is unnecessary and that this should be removed from the rule. Agency Response: The Department does not concur because this allows for remedies to be imposed that may be necessary for violations that could not have been predicted. Comment: One commenter suggested that the definition for sec.254.13(m) regarding the Date of Notice of a violation should be the same as the new language being proposed in 254.17(a)(1). Agency Response: The Department concurs and has amended the language to be materially the same as sec.254.17(a)(1). Comment: One commenter suggested that all levels of penalty notices should be sent by certified mail. Agency Response: The Department does not concur. Comment: One commenter suggested a change in the language to sec.254.13(p)(1) to read "If the Department proceeds to withdraw designation . . ." Agency Response: The Department concurs and the language has been changed to be consistent with the section heading. Comment: One commenter suggested that the designation of an interim or new area agency in the planning and service area should be done within 180 days. Agency Response: The Department concurs and the language has been amended in sec.254.13(p)(2)(D). Comment: One commenter questioned whether administrative funds will be made available if another agency is assigned the responsibilities of a dedesignated area agency. Agency Response: Along with any assignment of responsibilities adequate funds would have to be provided. This would occur in only the most extreme situations and the Department would have made the plans necessary to ensure continuation of services by whatever means. Comment: One commenter suggested that the statement "There will be no effect on small businesses" in the preamble of sec.254.15 is in error and that costs will be incurred to implement the new rule. Agency Response: This rule sets out procedures for area agencies wishing to contest any agency actions. Costs may occur only in instances when an area agency elects to use the procedures. This rule itself institutes no action, which, in and of itself, creates costs to area agencies or small businesses. The new sections are adopted under the Human Resources Code, Chapter 101, which provides the Texas Department on Aging with the authority to promulgate rules governing the operation of the Department. The Human Resources Code, Chapter 101, relating to the operation of the Texas Department on Aging, is affected by these new rules. sec.254.13.Compliance with Contractor Responsibilities, Rewards and Penalties. (a) Background. To the extent feasible, and subject to the availability of funds and other resources, the Department will give rewards to those area agencies on aging which the Department finds have demonstrated exceptional performance. When a contractor has failed to comply with the terms of a contract which governs the use of monies appropriated under that contract, the Texas Department on Aging may take actions as may be legally available and appropriate to the circumstance. It is the intent of this rule to outline the rewards available for compliance with a contract and the penalties for noncompliance with contract terms and conditions. (b) Definitions. Definitions for the words and terms used in this section are located in sec.254.1 of this title (relating to the Operation of the Texas Department on Aging). (c) Contractor Responsibilities. A contractor is responsible for compliance with the terms of the contract and shall: (1) comply, as applicable, with all governing documents set forth in sec.254.3 of this title (relating to Governing Documents); (2) comply with the requirements of approved contracts or plans; (3) meet the administrative and service requirements as published by the Department, including but not limited to all budget documents and required reporting in a timely, complete, and accurate manner, consistent with sec.260.1 of this title (relating to Area Agency on Aging Administrative Requirements), and sec.260.2 of this title (relating to Area Agency on Aging Fiscal Responsibilities); (4) respond to requests by the Department for specific corrective action as a result of: (A) the area plan or area plan amendment review; (B) program and fiscal reviews, monitoring and assessments; (C) investigation and response to complaints; or (D) erroneous or incomplete information on program performance or financial reports. (d) Department Responsibilities. The Department shall evaluate area agency performance and take appropriate actions to reward and/or secure the continuing administrative compliance of the contractor. (e) Rewards. Rewards for exceptional performance will be determined by the Department based on the results of annual monitoring of an area agency on aging by the Department. Actual rewards are not limited to but may include any one or a combination of: notification of outstanding performance to the public in the Area Agency's region and/or the Board on Aging; scholarships to conferences, or leadership workshops; payment of in-state travel or purchase of computer equipment; and decreased frequency of monitoring and other review processes. (f) Administrative Violations. Administrative violations shall result in disciplinary action as specified in this section, unless the violation was due to an act of God or action by the Department. Violations will be documented and greater levels of administrative penalties may be assigned accordingly, whether or not a penalty has been imposed for a violation. A contractor commits a violation if the contractor: (1) fails to submit a report required by the Department by the due date or approved extension. This violation is subject to a level one penalty; (2) submits a report to the Department which is found during desk review to be incomplete. This violation is subject to a level one penalty; however, an amendment of incomplete data within a time frame established by the Department, not to exceed ten working days, shall not be considered a violation; (3) submits a report to the Department which is found during desk review to contain inaccurate information. This violation is subject to a level one penalty; however, an amendment of inaccurate data within a time frame established by the Department, not to exceed ten working days, shall not be considered a violation; (4) fails to submit responses to all compliance issues raised in monitoring reports which address the findings and achieve compliance. This violation is subject to a level one penalty; (5) fails to comply with the Department's requirements related to the Cash Management Improvement Act, a Treasury-State agreement (CMIA), 31 Code of Federal Regulations Part 205, for the first time within a budget period. This violation is subject to a level one penalty; (6) fails to comply with sec.260.1 of this title (relating to Area Agency on Agency Administrative Requirements) subsections (c) (relating to Structure), (d) (relating to Titles), (k) (relating Uniform Logo for Area Agencies on Aging Contractors) , and/or (m) (relating to Listing of the Texas Department on Aging as Primary Funding Source by Area Agency on Aging Contractors). This violation is subject to a level one penalty; (7) wholly fails to submit a required report for a reporting period. This violation is subject to a level two penalty; (8) commits a third violation, as defined in subsection (f)(1)-(4) of this section, within one budget period; This violation is subject to a level two penalty; (9) fails to rectify a violation subject to a level one penalty within the time specified in the letter of deficiency, which will be not less than seven working days following notice. This violation is subject to a level two penalty; (10) fails to rectify and achieve compliance in addressing monitoring report findings within the time frames established in the report. This violation is subject to a level two penalty; (11) fails to rectify all Independent Audit findings and/or questioned costs related, directly or as cross-cutting issues, to the Department within the time frames established by law, rule, or regulation. This violation is subject to a level two penalty; (12) commits a second violation, within a budget period, of the Department's requirements related to the Cash Management Improvement Act, a Treasury-State agreement (CMIA), 31 Code of Federal Regulations Part 205. This violation is subject to a level two penalty; (13) has not corrected or has repeated an action which as previously cited as a finding in a monitoring report issued by the Department, as revealed in on-site monitoring. This violation is subject to a level two penalty; (14) fails to comply with sec.260.1 of this title, (relating to Area Agency on Agency Administrative Requirements), subsections (h)(relating to Monitoring), (l) (relating Uniform Telephone Listings), (n) (relating to Identification of Area Agency on Aging Facilities), and/or (o) (relating to Compliance with Interagency Agreements). This violation is subject to a level two penalty; (15) fails to meet annual programmatic and financial performance targets, (units, persons, unit costs), as outlined in the area agency's approved area plan without reason acceptable to the Department. A variance of up to 5.0% is allowable. Violation occurs if achievement of the target amounts is off by greater than 5.0% up to 10%. This violation is subject to a level two penalty; (16) fails to rectify reported threats to the health and safety of program participants, within the time frame specified by the Department. This violation is subject to a level two penalty; (17) fails to rectify any violation subject to a level two penalty, within the time specified in the letter of deficiency which will be not less than 15 working days following notice. This violation is subject to a level three penalty; (18) fails to rectify a violation identified in paragraph 16, of this subsection, within 72 hours of the time frame established in accordance within paragraph 16 of this subsection following notice to the contractor of the violation. This violation is subject to a level three penalty; (19) fails to comply with sec.260.1 of this title (relating to Area Agency on Agency Administrative Requirements), subsections (f)(relating to Records), and/or (j) (relating to Responsibilities for Imposing Penalties and Sanctions). This violation is subject to a level three penalty; (20) fails to meet, annual programmatic and financial performance targets, (units, persons, unit costs) as outlined in the area agency's approved area plan without reason acceptable to the Department. A variance of up to 5.0% is allowable. Violation occurs if achievement of the target amounts is off by greater than 10%. This violation is subject to a level three penalty; (21) wholly fails to submit an independent audit in accordance with the requirements of OMB Circular A-128 or A-133, as applicable, within the time frame established within such circular for submission. This violation is subject to a level three penalty; (22) fails to rectify any violation subject to a level three penalty, within the time specified in the letter of deficiency which will be not less than 15 working days following notice, with the exception of subsection (f) (1)-(4) and (7). This violation is subject to a level four penalty; (23) commits two violations subject to a level three penalty, within any two consecutive years. This violation is subject to a level four penalty; (24) commits three violations subject to a level three penalty, within any five successive years. This violation is subject to a level four penalty; (25) commits six violations subject to a level two penalty, within a budget year. This violation is subject to a level four penalty; (26) fails to appropriately report and respond to allegations of abuse, neglect or exploitation, allegations of fraud or ethics code violations. This violation is subject to a level four penalty; or (27) fails to pay an enforcement fee imposed as a penalty. This violation is subject to a level four penalty. (g) Penalties. The Department may impose anyone or a combination of the following penalties: (1) Level One Penalties. The following shall be considered level one penalties: (A) A letter of deficiency sent to the contractor after the first time a report is submitted as specified in subsection (f)(1)-(4) of this section. A letter of deficiency sent to the contractor after the second time a report is submitted as specified in subsection (f)(1)-(4) of this section. If the late report is received within three working days, a violation will be documented but this penalty will not be imposed. (B) Assessment of an enforcement fee of $50 per working day, beginning four working days following a contractor's failure to submit a report as specified in subsection (f)(1)-(4) of this section may be assessed, until the violation is rectified. (C) A letter of deficiency and a flat enforcement fee of $50 may be imposed for a contractor's first failure to comply with the Department's requirements related to the Cash Management Improvement Act, a Treasury-State agreement (CMIA), 31 Code of Federal Regulations Part 205. The enforcement fee shall be payable by the date specified in the letter of notification. (D) A letter of deficiency which requires the submission of a plan including a time line for the implementation of corrective action which is acceptable to the Department. The plan must be received by the Department within 15 working days of the date of notice. (2) Level Two Penalties. The following shall be considered level two penalties: (A) Assessment of an enforcement fee of $100 per working day, beginning on the date of notice. This penalty is applicable for a third violation as specified in subsection (f)(1)-(4), of this section and may be assessed until the violation is rectified. (B) Temporarily withholding a specific portion of the federal and state funds contracted to the contractor, in a specified category of funding relating to the violation. Once compliance has been demonstrated, funds will be released to the contractor no later than 20 working days from the date of demonstrated compliance. If the matter is not rectified by the end of the temporary 90 calendar day period, the Department will notify the contractor of intent to impose additional penalties. (See sec.306(e)(1) of the Older Americans Act). (C) A letter of deficiency and imposition of a level two penalty which requires the submission of a plan including a time line for the implementation of corrective action, which is acceptable to the Department. The plan must be received by the Department within 15 working days of the Date of Notice. (D) The Department may require increased detail in reporting requirements and/or place the contractor on an accelerated schedule of monitoring. (3) Level Three Penalties. The following shall be considered level three penalties: (A) Continuation of the assessment of an enforcement fee of $100 per working day originated as a level two penalty, as specified in paragraph (2)(A) of this subsection; (B) Written notification from the Department that the contractor must stop contracting with a specified provider of services within 45 calendar days of notification, and either find another service provider or assume service delivery directly until another provider can be obtained. (C) Continued temporary withholding of a specific portion of the federal and state funds contracted to the contractor, in a specified category of funding relating to the violation, initiated as a level two penalty as specified in paragraph (2)(B) of this subsection, until rectified but no longer than 90 calendar days, pending final determination of withholding funds, as specified in paragraph (4)(B) of this subsection. Once compliance has been demonstrated, funds will be released to the contractor no later than 20 working days from the date of demonstrated compliance. If the matter is not rectified by the end of the 90 day period, the Department will notify the contractor of intent to impose additional penalties. (See sec.306(e)(1) of the Older Americans Act, relating to area plans.) (D) Temporarily withholding a specific portion of the federal and state funds contracted to the contractor, in a specified category of funding relating to the violation. Once compliance has been demonstrated, funds will be released to the contractor no later than 20 working days from the date of demonstrated compliance. If the matter is not rectified by the end of the temporary 90 day period, the Department will notify the contractor of intent to impose additional penalties. (See sec.306(e)(1) of the Older Americans Act.) (E) A written notice from the Department to the contractor prohibiting the contractor from being awarded any subsequent discretionary funding from the Department for the remainder of the current contract year and two successive years; (F) Placing a contractor on full reimbursement basis for the remainder of the current contract year and one successive year for all requests for funds. (4) The following shall be considered level four penalties: (A) In cases of non-compliance with service performance requirements and standards identified in the Department's rules: (i) written notice by the Department to the contractor to: suspend or cause to be suspended service delivery of the service(s) in non-compliance; corresponding reduction of the awarded contract amount; and required submission of an amendment to the area plan; or (ii) where the area agency is the direct service provider, written notice will be sent by the Department to the contractor to suspend service delivery by a specified date. In such cases, and to prevent or minimize service interruption, the Department will find another service provider or assume provision of the service directly. Funds for the service will be withheld from the contractor, until non-compliance is rectified but no longer than 90 days, pending final determination of withholding funds, as specified paragraph (4)(B) of this subsection. Once compliance has been demonstrated, funds will be released to the contractor no later than 20 working days from the date of demonstrated compliance. If the matter is not rectified by the end of the 90 day period, the Department will notify the contractor of intent to impose additional penalties. (B) Reduction of awarded contract amount. A contract amount may be reduced for such reasons as a final determination regarding permanently withholding funds, or for required suspension of services. When a final determination is made not to return funds withheld, the Department will also reduce the contract amount based on funding for the service in question and either directly administer the service and/or find another service provider to administer the service within the planning and service area. (See sec.306(e)(1),(2) and (3) of the Older Americans Act, relating to Area Plans, and sec.254.15 of this title, (relating to Appeal Procedures for Area Agency on Aging Contractors.) (C) Deobligation of current year funds due to non-performance determined in contract monitoring and/or review of independent audit. (D) Termination of the contract and withdrawal of an area agency on aging designation may be initiated by the Department whenever the Department, for specific reasons and after reasonable notice and opportunity for a hearing as provided in sec.254.15, of this title (relating to Appeal Procedures for Area Agency on Aging Contractors), finds that: (i) the contractor does not meet the requirements of federal or state regulations, as specified in sec.254.3 (relating to Governing Documents), in the current or previous funding periods; (ii) the contractor has failed to comply with the terms of a contract which governs the use of monies appropriated under that contract, or with Federal and/or State statutes, codes, rules and/or policies, procedures, standards, supplements, or technical assistance memoranda which detail the legal obligations and responsibilities incurred as a result of agreeing to the terms of a contract; (iii) the area plan or area plan amendment is not approved; (iv) there is substantial failure to meet the administrative, program or service requirements as specified in sec.260.1 of this title (relating to Area Agency on Aging Administrative Requirements), sec.260.2 of this title (relating to Area Agency Fiscal Responsibilities), and sec.sec.270.1 et seq of this title (relating to Service Requirements), in the current or previous budget period; (v) the area agency has failed to rectify a lesser penalty within a budget year or the time specified in the letter of deficiency. If, in the Department's judgement, an emergency situation exists, the dedesignation/termination may be made effective immediately and so stated in the letter of notification to the contractor. Emergency dedesignation does not preclude processing appeals under sec.254.15 of this title (relating to Appeal Procedures for Area Agency on Aging Contractors); or (vi) there is an emergency situation, including but not limited to serious threats to the health and welfare of elderly in the planning and service area and conviction of fraud. (h) Fees. All enforcement fees assessed under this section shall be paid from local, non-match funds only and shall be excluded from calculation of any indirect rate established by the contractor. Enforcement fees which have been collected shall be processed by the Department for refund within 15 working days following rendering of an appeal's decision if the decision is found in favor of the contractor. (i) Fraud. All allegations of fraud, will be investigated by the Department. Complaints will be referred to the appropriate agency for action. Since payments to contractors are made from both State and Federal funds, submission of false or fraudulent claims, statements, documents, or the concealment of a material fact may be prosecuted as a felony in either Federal or State Court. (1) The Department will inform the contractor of the exact nature of the complaint and may require the contractor to conduct its own internal investigation. (2) The Department will document its investigation's findings and conclusions and inform the contractor and the complainant of the results. If an investigation indicates there is a substantiated situation in which there is a question of fraud, the Department will require the contractor to take corrective action, may assess penalties under this section and/or refer the complaint to Texas Attorney General's Office, the United States Attorney General's Office and other appropriate law enforcement agencies. (j) Ethics Code Violations. Violations of the Ethics Code requirements, Texas Government Code 572, related to ethics, as specified in the contract, will be investigated by the Department and referred by the Department to the appropriate law enforcement agency. Ethics violations may result in criminal prosecution and may be pursued based on the provisions of the Texas Government Code, the Election Code, the Penal code, or other pertinent laws and regulations. (1) The Department will inform the contractor of the exact nature of the complaint and may require the contractor to conduct its own internal investigation. (2) The Department will document its investigation's findings and conclusions and inform the contractor and the complainant of the results. If an investigation indicates there is a substantiated situation in which there is a question of ethics code violations, the Department will require the contractor to take corrective action, may assess penalties under this section and/or refer the complaint to appropriate law enforcement agencies. (k) Abuse, Neglect, and Exploitation. Abuse, neglect, exploitation and other violations of client rights will be reported by the Department to the appropriate authorities. Such actions are a violation of state law and are punishable by criminal prosecution. (l) Other Remedies. The Department may take and/or impose other remedies that are legally available based on the circumstances involved. (m) Date of Notice. For purposes of this section, the date the facsimile transmission (FAX) notice is sent to the contractor by the Department shall be considered the date of notification, if transmitted or recorded as delivered by 5:00 pm on a business day. If transmitted after hours or on the weekend, the next business day will be considered the Date of Notice. (n) Notice Transmittal. All administrative violation and penalty notices shall be sent by the Department: (1) via facsimile (FAX) transmission, and (2) via letter by regular mail for violations subject to a level one and level two penalty or certified mail, return receipt requested, for a violation subject to a level three or level four penalty. (3) Notice will be addressed to: (A) the Contractor's Executive Director or designated representative; (B) the Director of the Area Agency on Aging; and (C) the Chairman of the Contractor's Board of Directors. (o) Date of Satisfaction, Remedy, Rectification, Resolution. The Department will send notice to the contractor specifying the date the violation was rectified. Such notice will include the basis for the determination. (p) Procedures for the Withdrawal of Area Agency on Aging Designation. (1) If the Department proceeds to withdraw Area Agency on Aging designation, action shall be taken to assure that appropriate individuals and agencies are informed in advance of the reasons which make it necessary. Correspondence shall be prepared summarizing the basis for the action. This correspondence shall be mailed, by certified mail, return receipt requested, to the contractor and other interested parties, including subcontractors or vendors for the contract involved. Such notification will be sent at least ten working days prior to the effective date of the dedesignation as an area agency on aging. Such notification shall explain the right of the contractor to appeal such decisions as outlined in sec.254.15 (relating to Appeal Procedures for Area Agencies on Aging Contractors). (2) Procedures following withdrawal of designation. If the Department withdraws an area agency's designation, the Department shall take the following action: (A) Notify Appropriate Entities. The Department shall notify, by certified mail, return receipt requested, the Assistant Secretary on Aging, Department of Health and Human Services, and those individuals and agencies specified in paragraph (1) of this subsection. (B) Continue Services. The Department shall provide a plan for the continuity of services in the affected planning and service area and will: (i) discontinue reimbursement to the contractors concerned; (ii) notify service providers to submit requests for reimbursement directly to the Texas Department on Aging or to the designated contractor; (C) place a notice in local and regional newspapers advising that claims against the contractor related to Older Americans Act programs shall be referred to the Texas Department on Aging; and (D) designate an interim or new area agency in the planning and service area within 180 calendar days, or extension of time approved by the Administration on Aging. (3) Administration by the Department. If necessary to ensure continuity of services in a PSA, the Department may for a period of up to 180 calendar days after withdrawing designation of an area agency: (A) perform the area agency responsibilities; (B) assign the responsibilities of the area agency to another agency in the planning and service area; (C) assign the responsibility to an area agency on aging in a contiguous planning and service area; or (D) if necessary, may request an extension of the 180 day limit from the assistant secretary. The Assistant Secretary may extend the period an additional 180 calendar days if the need for the extension is demonstrated. (q) Appeals. Appeals will be provided as specified in sec.254.15 of this title (relating to Appeal Procedures for Area Agency on Aging Contractors). sec.254.15.Appeal Procedures for Area Agency on Aging Contractors. (a) Definitions. Definitions for the words and terms used this section are located in sec.254.1, relating to the Operation of the Texas Department on Aging. (b) Purpose. The purpose of this section is to establish procedures for any area agency on aging contractor who is aggrieved in connection with penalties imposed by the Department, as described in sec.254.13 of this title, (relating to Compliance with Contractor Responsibilities, Rewards and Penalties). All notifications sent from the Department to a contractor during the proposed imposition of a penalty shall contain information informing the contractor of the right to appeal, as well as the level of appeal appropriate for the matter, as described in this section. (c) Appeal to the Executive Director. The imposition of a level one penalty may be appealed by presenting a formal protest to the executive director of the Texas Department on Aging. (1) The protest shall follow the format described in subsection (f) of this section. (2) The contractor shall submit three copies of the protest to the Executive Director. (3) The Executive Director shall investigate the protest and issue a written determination within 30 calendar days upon receipt of the protest. The decision of the Executive Director is final. (d) Dispute Resolution Committee. The imposition of a level two or level three penalty may be appealed by the contractor by presenting a formal protest, as described in subsections (f)-(h) of this section, to the Dispute Resolution Committee of the Texas Department on Aging. When two Department division managers not connected with the matter cannot be identified, the Department may choose to refer the protest to a Dispute Resolution Center in Austin, Texas. (e) Exception. In the event of the level two and level three penalties relating to the temporary withholding of funds, as described in sec.254.13(g)(2)(B) and sec.254.13(g)(3)(C) of this title (relating to Compliance with Contractor Responsibilities, Rewards and Penalties) and/or relating to the disallowance of costs as described in sec.260.2(a)(3) of this title (relating to Area Agency on Aging Fiscal Responsibilities), and prior to presenting a formal protest to the Dispute Resolution Committee, a contractor may choose to request a public hearing from the Department, in accordance with the Older Americans Act, sec.306(e)(1)-(3). (f) Formal Protest. A formal protest must contain: (1) a specified identification of the statutory or regulatory provision or the contract provision that the contractor is alleged to have violated; (2) a specific description of the violation or violations; (3) a precise statement of the relevant facts; (4) an identification of the issue or issues to be resolved; and (5) arguments and authorities in support of the protest. (g) Copies. In making a formal protest to the Dispute Resolution Committee, the contractor shall send five copies of the protest to the Department. Copies of the protest shall also be sent by the protesting contractor to other interested parties, i.e., subcontractors or vendors for the contract(s) involved. (h) Settlement/Resolution. The Dispute Resolution Committee shall have the authority to settle and resolve the dispute. The committee may solicit written responses to the protest from other interested parties. If the protest/dispute is not resolved by mutual agreement during the meeting between the contractor and the Dispute Resolution Committee, the committee will issue a determination which shall be final. The committee will issue a written determination on the protest within 30 calendar days following the dispute resolution meeting. (i) Request for a Hearing before an Administrative Law Judge. The imposition of a level four penalty may be appealed by a request from the contractor for a hearing before an administrative law judge. The request shall be in writing and must state with specificity the grounds upon which the proposed penalty is appealed and all grounds upon which the contractor refutes the basis of the proposed penalty. The request must include: (1) the dates of all relevant actions; (2) the names of individuals or organizations involved in the proposed penalty; (3) specific statements and documentation which disprove the findings made by the Department, and/or that the sections of the Older Americans Act, state law or any rules or regulations cited in the letter of notification have not been violated; and (4) A certified copy of the minutes or resolution which indicates adoption by a majority of the quorum of the contractor's governing body a request for a hearing before an administrative law judge. (j) Conduct of a Hearing before an Administrative Law Judge. The person or persons so designated in the contract between the Department and the contractor shall act on behalf of the contractor. The proceedings and conduct of the hearing shall follow the rules promulgated in Title 1, Part VII, State Office of Administrative Hearings, Chapter 155, Rules of Procedure, et seq. The hearing examiner shall issue a final decision on behalf of the Department. (k) Time Limitations. A request to appeal any level of penalties as described in this subsection must be received by the Department within 30 calendar days following the contractor's receipt of notification of proposed action by the Department. (1) In the event that a request for an appeal is not timely, the appeal will not be considered and the protesting contractor will be notified in writing. (2) The contractor may submit written amendments to a request for an appeal, which must be received by the Department not less than ten working days prior to the date set for the appeal. (l) Department responses to a request for an appeal. Upon receipt of a request for an appeal, the Department shall, within ten working days: (1) set a date for the appeal consideration, and/or hearing, if a hearing is applicable; and (2) issue a written notice to the contractor by registered or certified mail, return receipt requested, which shall provide: (A) a statement of time, date and location of the appeal consideration or hearing, if a hearing is applicable; (B) a statement of the legal authority and jurisdiction under which the appeal is to be held; (C) a reference to the particular sections of statues, regulations and rules involved; and (D) a summary of the reasons for the proposed penalty that is being appealed and the evidence on which the proposed penalty is based. (m) Effective Date of Penalties. In the event of a timely appeal under this section, the Department may not make a final determination regarding its proposed penalties until a requested appeal and hearing, if applicable, has been granted. (1) During the appeal process, the Department shall not proceed with the next levels of penalties, unless it makes the written determination that by delaying the next levels of penalties, service interruptions or poor service quality will occur, and/or that the health and safety of older people will be at risk, and/or an emergency exists. (2) If the appeal process results in a final determination in support of the department's imposition of the penalties, the penalties will be effective upon the original date of the notification of deficiency sent by the Department to the contractor. (n) Appeal to the Assistant Secretary on Aging, United States Department of Health and Human Services. In accordance with sec.305(b)(5)(C) of the Older Americans Act, and 45 CFR, Part 1321, a contractor may make an appeal to the Assistant Secretary, and the Department shall conduct a public hearing, when the Department has made a final determination to: (1) withdraw the designation of an area agency on aging; (2) designate an additional planning and service area; or (3) divide the state into different planning and services areas, or otherwise affect the boundaries of the current planning and service areas. 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 September 3, 1996. TRD-9612771 Mary Sapp Executive Director Texas Department on Aging Effective date: September 24, 1996 Proposal publication date: June 28, 1996 For further information, please call: (512) 424-6872 CHAPTER 260.Area Agency on Aging Administrative Requirements 40 TAC sec.260.15 The Texas Department on Aging adopts an amendment to sec.260.15, relating to the responsibilities of a contractor for carryover of unexpended Older Americans Act funds and any other unexpended funds issued by the Department with changes to the proposed text as published in the July 5, 1996, issue of theTexas Register (21 TexReg 6231). This rule was amended in order to clarify who may request authorization to expend Older Americans Act funds. This rule establishes the criteria under which a contractor may request authorization to expend unexpended Older Americans Act funds and any other unexpended funds issued by the Department during the fiscal year immediately following the fiscal year for which the funds were initially awarded. Minor, non-substantive editorial changes have been made to the text of the rule in order to correct grammatical defects, to correct references to other Texas Administrative Code rules of the Department, and in sec.260.15(b)(2) to clarify that "15 days" is meant to be "15 calendar days." No comments were received regarding adoption of the amendment. The amendment is adopted under the Human Resources Code, Chapter 101, which provides the Texas Department on Aging with the authority to promulgate rules governing the operation of the Department. The Human Resources Code, Chapter 101, relating to the operation of the Texas Department on Aging, is affected by this adopted action. sec.260.15.Responsibilities of Contractor for Carryover of Unexpended Older Americans Act Funds and Any Other Unexpended Funds Issued by the Department. (a) Purpose. This policy establishes the criteria under which a contractor may request authorization to expend unexpended Older Americans Act funds and any other unexpended funds issued by the Department, during the fiscal year immediately following the fiscal year for which the funds were initially awarded. (b) Procedures. Contractors seeking approval for carryover funds and to receive funds from the carryover pool/s, as described in sec.254.25(e) of this title, (relating to Department Responsibilities for Carryover of Unexpended Department Awarded Funds), shall comply with procedures established by the Department including, but not limited to, the following: (1) submission of a final report at the end of the 90 day closeout period, including but not limited to, the unexpended balance of funds and return of any over-payments made to the contractor by the Department; (2) full and final payment of obligation, including receipt of the goods and services, under the contract no later than 15 calendar days prior to the due date of the final report; (3) (No change.) (c) Eligibility for participation in reallocation pools. Participation in each of the separate reallocation pools shall be limited to contractors that meet the following criteria for the source of funding for which carryover is being sought: (1) the contractor shall not have unexpended funds in excess of 5.0% of the overall funds awarded for Older Americans Act Title III during the grant period, when considered separately; (2) the contractor eligible for reallocated Older Americans Act Title III funds shall have met the performance requirements and financial standards outlined in sec.260.2(e)(1)(A) and (D) of this title (relating to Area Agency on Aging Fiscal Responsibilities); (3) the contractor eligible for reallocated funds, other than Older Americans Act Title III, shall not have unexpended funds in excess of the following percentages of the overall funds awarded, when considered separately: (A) 5.0% of the awarded funds if awarded during the first quarter of the contract period; or (B) 15% of the awarded funds if awarded during the second quarter of the contract period, or (C) 25% of the awarded funds if awarded during the third quarter of the contract period; or (D) 35% of the awarded funds if awarded during the fourth quarter of the contract period. (4) the contractor shall not have any unpaid amounts due to the Department for disallowed costs for the fiscal year for which carryover funds are being sought unless a prior payment agreement has been established or is pending final Department approval; and (5) the contractor shall have met all requirements for: adequate proportion for eligible in-home services; access services; and legal services; unless waiver from such requirements has been obtained, and for maintenance of effort for Ombudsman activities. (d) Justification Requirements. The format for requests for carryover approval shall be prescribed each year by the Department. Requirements for establishing justification for carryover include but are not limited to sec.254.25(c) of this title (relating to Department Responsibilities for Carryover of Unexpended Department Awarded Funds), submission of a narrative which supports the approved area plan strategies, and financial information as required by the Department. 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 September 3, 1996. TRD-9612769 Mary Sapp Executive Director Texas Department on Aging Effective date: September 24, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 424-6872 CHAPTER 270.General Service Requirements 40 TAC sec.270.1, sec.270.15 The Texas Department on Aging adopts amendments to sec.270.1 and sec.270.15, relating to general service requirements and emergency response service standards as proposed in the July 5, 1996, issue of the Texas Register (21 TexReg 6231). Section 270.1 is adopted with changes to the proposed text and sec.270.15 is adopted without changes and will not be republished. The rules have been amended in order to establish new policies and procedures for contractors and subcontractors relating to the compliance of service delivery rules adopted by area agencies through contracts and to eliminate the policy relating to an area agency's failure to maintain records for emergency response services. The purpose of the amendments is to clarify language in the current rules regarding who may request authorization to expend Older American Act funds and that the funds are to be from unexpended funds and to relocate issues regarding the maintenance of records to a new section of the Texas Administrative Code. Minor, non-substantive editorial changes to the text of sec.270.1 have been made to correct grammatical defects. No comments were received regarding adoption of the amendments. The amendments are adopted under the Human Resources Code, Chapter 101, which provides the Texas Department on Aging with the authority to promulgate rules governing the operation of the Department. The Human Resources Code, Chapter 101, relating to the operation of the Texas Department on Aging, is affected by these amendments. sec.270.1General Service Requirements. (a) Purpose. The requirements contained in this section are to be used by subcontractors in conjunction with the service delivery rules adopted for each service provided by area agency contractors through contracts. They have been developed and included in this section to eliminate duplication in each of the service delivery rules. (b) Scope. These rules apply to all services provided under contract funded in whole or in part with funds provided by the Department under the Older Americans Act, as amended, or State general revenue, other funding source granted or contracted to the Department for use in providing services, or other funds pooled with such funds to meet the costs for services under the Older Americans Act. (c) (No change.) (d) Confidentiality of Client Records. Contractors shall ensure through contractual requirements that subcontractors protect client information records, according to the following minimum requirements: (1) no information about a client, or obtained from a client by the service provider or the contractor is disclosed by the service provider or contractor in a form that identifies the person without the informed consent of the person or of his legal representative, unless the disclosure is required by court order, or for program monitoring by authorized Federal, State, or the contractor as the local monitoring agency; (2) only authorized personnel of the Department, the contractor or the service provider shall have access to confidential client information records; (3) (No change.) (4) Subcontractors and contractors are not required to disclose those types of information or documents that are exempt from disclosure under the Federal Freedom of Information Act, as amended; (5) the contractor may not require a provider of legal assistance under this part to reveal any information that is protected by attorney client privilege, as required in section 705(b) of the Older Americans Act, as amended; and (e) Client Complaint Procedures. The contractor shall ensure that written client complaint procedures are established for use by each service provider. These procedures shall provide all clients with the opportunity and means for communicating aspects of the service which have negative impact on them. Each client must be informed of his right to make such complaints and of the procedures for filing such complaints prior to initiation of the service. (f) Client Appeals Procedures. The contractor shall ensure that written appeals procedures are established for use by each service provider. These procedures shall provide all clients or their advocates with the opportunity to appeal staff decisions concerning the provision of services to the client, including, but not limited to, the initiation or termination of services, and increases or decreases in service. The intent of these procedures must be to assure client satisfaction with the services provided and it is the responsibility of the service provider to give specific consideration to the client's concerns. These procedures are intended to precede client appeals to the Department and shall include procedures for referral to the Department using procedures for such appeals as adopted by the Department only after local appeals have been exhausted. (g) Services to Private Membership Prohibited. The contractor shall ensure that those subcontractors with contracts to operate a facility such as a nutrition site, senior center, adult day care center or provide other support services under the Older Americans Act shall not limit such facilities and services to membership in a specific private organization, group, association, or fraternal organization, nor show discriminating preference for such membership. (h) Record keeping. (1) Contractors are responsible for ensuring that each service provider maintains documentation of the following: (A) contract documents; (B) - (D) (No change.) (E) other records which are required by the terms of the contract agreement or program rules and regulations, or are otherwise reasonably considered as pertinent to program regulations or contract agreement. (2) (No change.) (3) All records must be retained for a minimum of five years after termination of the contract and until any pending litigation, claim or audit involving these records is resolved. (4) The contractor, the Department and/or their authorized representative shall have access to these records for purpose of audit or to make examinations, excerpts, and transcripts for hearings or other administrative proceedings. The Federal Freedom of Information Act (5 U.S.C. 552) does not apply to such records. Unless required by Federal, State, or local law, contractors are not required to permit public access to such records. (i) Reporting. (1) All contractors and subcontractors except those identified in subsection (i)(2) of this section (relating to reporting), shall use the Department's automated information system. The automated information system shall be used to meet the requirements relating to financial and program performance reporting, including client information and other such reporting as may be required by Department funding sources. (2) For contracts for service under an approved area plan that have been executed after August 31, 1993, each contractor and subcontractor shall use the automated information system software provided by the Department to maintain reporting records and prepare reports required by the Department. The department shall provide the necessary system software and specific reporting requirements to contractors at the beginning of the contract period. Subcontractors under contract using the direct purchase of service method of procurement are not required to use the Department's automated information system. (j) Contributions. (1) The contractor shall ensure that written procedures for contributions for the cost of providing services are established for use by each service provider. These procedures shall: (A) - (D) (No change.) (E) allow subcontractors to establish suggested contribution schedules which considers the income ranges of the client population and the service provider's other resources. (2) (No change.) (k) Insurance. The contractor is responsible for ensuring that the service provider maintains insurance that protects health and safety of clients and employees that comply with all applicable state and federal statutes. (l) Facilities. The contractor shall ensure that those subcontractors with contracts to operate a congregate facility, such as a nutrition site, senior center, adult day care center or other such facility funded by the Older Americans Act shall: (1)- (2) (No change.) (m) Facilities Identification. Offices and/or areas within service provider facilities shall be identified by an appropriate sign which identifies the service provider and the contractor. Signs need not be elaborate but should be sufficiently visible to permit ease of location by participants and clients. (n) (No change.) (o) Contractor and subcontractor responsibilities for compliance. Failure to comply with any of these requirements as evidenced through program evaluation activities of the department or validated complaints made about an area agency on aging or its subcontractor shall result in penalties described in sec.254.13, of this title (relating to Compliance with Contractor Responsibilities, Rewards and Penalties), and sec.260.1(j) of this title (relating to the Area Agency on Administrative Requirements). Validated complaints are those complaints that have been found to be true through a thorough and impartial investigation of such complaint and which has been conducted in accordance with procedures established by the Department, or by a court of law with jurisdiction over the complaint. 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 September 3, 1996. TRD-9612768 Mary Sapp Executive Director Texas Department on Aging Effective date: September 24, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 424-6872