ADOPTED RULES An agency may take final action on a section 30 days after a proposal has been published in the Texas Register. The section becomes effective 20 days after the agency files the correct document with the Texas Register, unless a later date is specified or unless a federal statute or regulation requires implementation of the action on shorter notice. If an agency adopts the section without any changes to the proposed text, only the preamble of the notice and statement of legal authority will be published. If an agency adopts the section with changes to the proposed text, the proposal will be republished with the changes. TITLE 4. AGRICULTURE PART X. Texas Boll Weevil Eradication Foundation CHAPTER 197. Referenda Rules and Regulations 4 TAC sec.197.1 The Texas Boll Weevil Eradication Foundation (TBWEF) adopts new sec.197.1, establishing rules and regulations regarding referenda held on a petition to discontinue the TBWEF program within established eradication zone, with changes to the proposed text as published in the July 19, 1996, issue of the Texas Register (21 TexReg 6748), along with the correction to subsection (h) as published in the August 9, 1996, issue of the Texas Register (21 TexReg 7593). This regulation is being adopted to establish the petitioning process for referenda to discontinue an eradication zone, particularly regarding the time period allowed for gathering signatures, and establishes procedures for implementing the Texas Agriculture Code, sec.74.112(f), regarding petitioning for a referendum to discontinue the program within a zone. The new section provides definitions, criteria for petitions, procedures for verification of petitions and timelines for holding referenda and completing a petition drive. On September 18, 1996, the TBWEF held a public hearing seeking comment on the regulation and received approximately 17 comments, written and oral, both supporting and opposing the regulation. Subsections (b)(4), (b)(5) and (h) have been changed in response to comments submitted by numerous individuals and by two petitioning groups currently engaged in the petitioning process who feel that the 60-day limit for gathering petition signatures is not a sufficient amount of time. The TBWEF agrees that the 60-day limit should be extended, and believes that the 90 days set forth in this final rule provides sufficient additional time for a petition. The TBWEF believes 90 days is appropriate because the TBWEF enabling legislation specifies 90 days as the amount of time within which the board shall conduct a referendum from the date of filing of a petition; without a time limit a petition drive may continue into multiple growing seasons, which would affect new cotton producers and continue to reflect the signatures of those who are no longer cotton producers: the 90-day time limit does not begin until a mailing list of producers is received by petitioners, which provides the opportunity for multiple mailings to each producer; and numerous comments were received supporting a time limit of 90 days or less. Subsections (a)(3) and (b)(1) have been changed to clarify that the petition verification will be based upon the most current zone mailing list in effect at the time of the receipt of the Letter of Intent to Petition. Subsection (b)(5) has been changed to clarify that an alternative to mailing a completed petition to the Texas Department of Agriculture (TDA) is hand-delivery of the petition. Subsection (d) has been changed to clarify that the verification committee's decision is final, and that signatures may not be withdrawn or added once the completed petition is filed with the TDA. Other wording changes have been made throughout to improve the readability of the regulation. Comments in support of the proposal were submitted by Plains Cotton Growers, Inc., South Texas Cotton and Grain Association, Inc., Farmers Cooperative Association #1, Martin County Cotton Growers, Inc., Lamesa Cotton Growers, Inc., Howard County Cotton Growers Association, Brownfield Seed & Delinting Co. Inc., and City Bank of Lubbock. Comments in opposition to the regulation were submitted by SWEEP OUT II, the High Plains Weevil Recall Organization and numerous individuals. In addition to the comments noted above, comments were received with which the TBWEF does not agree, and therefore did not incorporate into the adopted section. Several comments requested that the TBWEF include in the section the cost of the zone mailing lists. The TBWEF disagrees with including the cost in the proposed rule because these costs will vary based upon the number of producers in a zone, the crop year, the material requested by the individual and the charges set by the General Services Commission for copies of public information. Upon the written request of an individual or organization, the TBWEF will provide an estimate of the cost of any zone mailing list based upon the allowable charges under the Texas Open Records Act, Texas Government Code, Chapter 552. Several comments requested that the number of votes a producer may cast in a referendum be based on the number of bills a producer receives from the TBWEF. The TBWEF disagrees with this comment because the TBWEF's enabling legislation requires that referendum be based upon a percentage of the producers in a zone. The TBWEF believes the current definition of an eligible producer under this section is adequate and consistent with the provisions of that legislation. Several comments were received requesting that petitions currently in progress be grandfathered and not subject to the time limit in these rules. The TBWEF disagrees with these comments because from the effective date of the regulation all petition efforts will be given the same time to complete their efforts. Additionally, those petitions currently in progress have not only had the time since the petitions were initiated, but were also put on notice based on the proposed rule and therefore have received reasonable additional time to complete their efforts. Finally, numerous commenters expressed the belief that petition drives should not be open-ended and should end after a reasonable time. The TBWEF believes that petitions in progress on the date of adoption of these rules shall be verified, and signatures counted, based upon the most current mailing list provided to petitioners. A commenter suggested that observers be allowed to comment during the petition verification process. The TBWEF disagrees since the verification committee is made up of disinterested representatives and comments by observers may be submitted before or after the verification process to the TBWEF, TDA or members of the verification committee. A commenter suggested that upon written notice of a referendum, the executive director of the TBWEF "shall mail" the appropriate zone list to the petitioner. The TBWEF disagrees since the regulation allows for a petitioner to request a zone mailing list and pay the associated costs, and there may be instances when a petitioner will already have access to a current zone mailing list and would therefore not need a second list and not wish to pay the cost a second time. A comment was received suggesting that the specific information required from each producer signing a petition was burdensome. The TBWEF disagrees with this comment since each item is necessary to enable the verification committee to accurately establish which signatures are valid. Several comments were received suggesting other procedures for conducting petitions. The TBWEF believes that the regulation, as adopted, fairly and adequately balances the interests of producers supporting and opposing an eradication program. The new section is adopted under the Texas Agriculture Code sec.74.120, which provides the TBWEF with the authority to establish rules necessary to carry out the purposes of Texas Agriculture Code, Chapter 74, Subchapter D. sec.197.1. Referenda to Discontinue a Zone Eradication Program. (a) Definitions. The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise. (1) TBWEF-The Texas Boll Weevil Eradication Foundation. (2) FSA-The Farm Services Agency. (3) Eligible producer-A person, entity or joint operator who is an owner, landlord, tenant or sharecropper entitled to a share in the cotton available for marketing from a cotton farm located in the eradication zone which is the subject of the petition or shares in the proceeds thereof, as determined in accordance with 7 Code of Federal Regulations, Part 1413 (FSA and TBWEF requirements), and who is listed in the current TBWEF or FSA producer mailing list for that zone on the date of receipt of the Letter of Intent to Petition (zone mailing list). (4) Petitioner-Any eligible producer, group of eligible producers, or legal representative for an eligible producer or group of eligible producers, who initiates a Letter of Intent to Petition or otherwise initiates a petition for a referendum to discontinue the eradication program within an eradication zone. (b) Petitions. In order to be valid, petitions calling for a referendum to discontinue an eradication program within an eradication zone must meet the following criteria: (1) A petition must include verifiable signatures in ink of 40 percent or more of the eligible producers within the eradication zone based upon the zone mailing list in effect on the date of receipt of petitioner's Letter of Intent to Petition. (2) The petition shall also include the date the eligible producer signed the petition, and the following as they appear in the records of the FSA: the eligible producer's printed name, the eligible producer's address, the eligible producer's farm number or numbers, and the county or counties where the eligible producer's farm or farms within the eradication zone are located. (3) Petitioners shall notify the Executive Director of TBWEF of their intention to petition in a Letter of Intent to Petition in writing sent by certified mail, return receipt requested. If a petitioner also intends to request a copy, or copies, of the current TBWEF or FSA zone mailing list to assist in the petition effort, the request must be included in the Letter of Intent to Petition. (4) A petitioner has 90 days from the date of receipt of the zone mailing list to complete the petition drive. If a petitioner does not request a zone mailing list for the petition effort, the 90-day requirement will begin on the date TBWEF receives the Letter of Intent to Petition. (5) Petitioners shall send the completed petition to the Texas Department of Agriculture (TDA) by certified mail, return receipt requested, and the petition shall be postmarked on or before midnight of the 90th day. In the alternative, the completed petition shall be hand-delivered to the TDA headquarters office in Austin on or before the close of business of the 90th day . The filing date of the petition will be the date it is received by TDA. (c) Storing of completed petitions. TDA will keep completed petitions in a locked or sealed container until the petition verification process is begun. (d) Verification of petitions. Petitions will be verified by a Verification Committee appointed by the Foundation to be chaired by the Office of the Taylor County Judge and will also include a representative from each of the following entities: the Texas Agricultural Extension Service, the Texas Department of Agriculture and the TBWEF. The Verification Committee will convene to verify the petitions at TBWEF headquarters in Abilene. The verification committee's decision as to the number of valid signatures shall be final. Signatures may not be added or withdrawn from a completed petition, once filed with TDA. (e) Observers. Petitioners may have an observer present during the verification process, but they may not participate in or disrupt the verification process. (f) Timeline for holding referendum. After the filing with TDA of a valid petition, as set forth in these rules, TBWEF has 90 days within which to hold a referendum in the eradication zone set forth in the petition. (g) Counting of Signatures. Only one valid signature per eligible producer per zone will be counted, no matter how many separate farms the eligible producer may participate in. (h) Applicability. The 90-day completion requirement will apply to all petitions in progress on the effective date of this rule. Petitioners have 90 days from the effective date to complete their petition drive. 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 October 7, 1996. TRD-9614639 Franklin D. Myers Executive Director Texas Boll Weevil Eradication Foundation Effective date: October 28, 1996 Proposal publication date: July 19, 1996 For further information, please call: (512) 463-7583 TITLE 7. BANKING AND SECURITIES PART VI. Credit Union Department CHAPTER 91.Chartering, Operations, Mergers, Liquidations Organization Procedures 7 TAC sec.91.204 The Credit Union Commission adopts new sec.91.204, to establish procedures for filing a protest to any application made to the Commissioner, without changes to the proposed text published in the August 6, 1996, issue of the Texas Register (21 TexReg 7306). The rule clarifies the timeframe for filing a written protest. The amendment is adopted to establish a definitive timeframe for protesting any application made to the Commissioner and specifies that the written notice of protest must provide all the information that the protestant wishes the Commissioner to consider in evaluating the application. No comments were received regarding adoption of the amendment. The amendment is adopted under the provisions of Texas Civil Statutes, Article 2461-11.07 and 12.01, which provide the Credit Union Commission with the authority to adopt reasonable rules, including procedural rules, necessary for the administration of the Act and for a fair hearing of issues arising under the Act. The commission interprets those sections as authorizing it to establish protest deadlines when the Act is silent on the subject. 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 October 9, 1996. TRD-9614745 Harold E. Feeney Commissioner Credit Union Department Effective date: October 30, 1996 Proposal publication date: August 6, 1996 For further information, please call: (512) 837-9236 CHAPTER 93.Administrative Proceedings General Rules 7 TAC sec.93.14 The Credit Union Commission adopts an amendment to sec.93.14, concerning administrative procedures associated with hearings, without changes to the proposed text as published in August 6, 1996, issue of the Texas Register (21 TexReg 7307). The amendment requires the Commissioner to furnish all information used to make a preliminary decision on all applications to the ALJ. No comments were received regarding adoption of the amendment. The amendment is adopted under the provisions of Texas Civil Statutes annotated, Article 2461-11.07 and 12.01, which provide the Credit Union Commission with the authority to adopt reasonable rules, including procedural rules, necessary for the administration of the Texas Credit Union Act and for fair hearing of issues arising under the Act. The Commission interprets this section as authorizing it to adopt rules regarding appeals of any application. 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 October 9, 1996. TRD-9614743 Harold E. Feeney Commissioner Credit Union Department Effective date: October 30, 1996 Proposal publication date: August 6, 1996 For further information, please call: (512) 837-9236 7 TAC sec.93.17 The Credit Union Commission adopts an amendment to sec.93.17, concerning administrative procedures associated with hearings, without changes to the proposed text as published in August 6, 1996, issue of the Texas Register (21 TexReg 7308). The amendment deletes any reference to suspension of a credit union operations since that enforcement action is no longer authorized by statute. No comments were received regarding adoption of the amendment. The amendment is adopted under the provisions of Texas Civil Statutes annotated, Article 2461-11.07 and 12.01, which provide the Credit Union Commission with the authority to adopt reasonable rules, including procedural rules, necessary for the administration of the Texas Credit Union Act and for fair hearing of issues arising under the Act. The Commission interprets this section as authorizing it to adopt rules regarding enforcement actions described in the Act. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on October 9, 1996. TRD-9614744 Harold E. Feeney Commissioner Credit Union Department Effective date: October 30, 1996 Proposal publication date: August 6, 1996 For further information, please call: (512) 837-9236 TITLE 28. INSURANCE PART I. Texas Department of Insurance CHAPTER 5.Property and Casualty Insurance SUBCHAPTER D.Fire and Allied Lines Insurance Voluntary Inspection Program Plan of Operation 28 TAC sec.5.3800 The Texas Department of Insurance adopts new sec.5.3800, concerning the implementation of the voluntary inspection program pursuant to the Insurance Code, Article 5.33B, with changes to the proposed text published in the August 23, 1996 issue of the Texas Register (21 TexReg 7946). The new section is necessary to provide procedures that will enable persons owning real or tangible personal property at a fixed location, who desire to purchase residential property insurance, to procure an independent inspection of the condition of the property by an independent inspector authorized to perform such inspections in order to obtain a certificate of insurability. The proposal provides standards and forms governing these inspections, specifies forms and procedures for licensing and certification of qualified inspectors, outlines enforcement provisions to protect the integrity of the program, and provides complaint handling procedures. In response to comments several changes were made to the section. A change was made to subsection (i)(1)(A) regarding the individuals that may be certified by the department as qualified inspectors under the voluntary inspection program. Subsection (i)(1)(A) was changed to add new clause (v) to specify that a person holding a solicitors license may be certified by the department as a qualified inspector. This amendment is needed to broaden the field of possible qualified inspectors to include solicitors. Solicitors and local recording agents are required to fulfill the same educational requirements in obtaining their respective licenses. Since the department has determined that local recording agents should be certified as inspectors it follows that solicitors should also be certified. The language in subsection (i)(2)(A)(i), relating to qualifications of county and municipal employees that are necessary to become a licensed inspector, was changed to delete the word "risks." This change clarifies that city and county employees who have one year of actually performing inspections of residential property, such as inspections for building code compliance, would be eligible for licensing under the voluntary inspection program. Specifying residential property "risks" is overly restrictive because cities and counties do not typically have employees that inspect for purposes of assessing risks. Subsection (i) was further changed to add new paragraph (3) which added a time period for expiration, procedures for license and certification renewals and language specifying an inspector's last known address. Subparagraph (A) of new paragraph (3) specifies an expiration date of two years from date of issue. Subparagraphs (B), (C) and (D) of new paragraph (3) specify a procedure for renewal prior to expiration, a 90 day grace period allowing for renewal after expiration and a procedure for obtaining a new license or certification after the 90 day grace period. Subparagraph (E) of new paragraph (3) specifies that the department is required to give notice of an impending expiration at least 30 days before expiration of a license or certification. Subparagraph (F) of new paragraph (3) outlines the inspector's duties and responsibilities regarding his last known address. These changes were necessary to provide the department with a system for monitoring whether or not inspectors continue to meet the requirements for licensing or certification and the opportunity to remove the license or certification of those individuals who no longer met the requirements or no longer desire to maintain the license or certification. Subsection (l) which concerns the forms to be adopted by reference for use in the voluntary inspection program has been changed to include new paragraph (6) which adds a renewal application (Form VIP-6). This change was necessary to implement the renewal procedures that were added in new subsection (i)(3). Proposed subsection (a) outlines the purpose and scope of the new section. Subsection (b) defines terms used in the new section. Subsection (c) specifies the persons eligible to request an inspection and the persons who may perform such inspections. Subsection (d) outlines the procedure to follow to obtain an inspection. Subsection (e) specifies the maximum fee an inspector may charge for an initial and follow-up inspection. Subsection (f) specifies the minimum standards that the property must meet in order to qualify for a certificate of insurability. Subsection (g) outlines the inspection certification process which specifies time requirements and the inspection forms that are to be used. Subsection (h) outlines insurer processing and specifies the duties and responsibilities of the insurer and the insured. Subsection (i) addresses the procedures for certification or licensing of inspectors, expiration and renewal procedures for certification or licensing, forms for certification or licensing and those persons not eligible for certification or licensing. Subsection (j) specifies the grounds and procedures for denial, suspension, revocation or cancellation of an inspector's certification or license. Subsection (k) specifies the procedures for handling complaints relating to the voluntary inspection program. Subsection (l) proposes two forms relating to property inspections and insurability and four forms relating to licensing and certification of inspectors that are to be adopted by reference. For with changes: Texas Association of Insurance Agents and City of Dallas. No position with changes: Alliance of American Insurers. Comment: One commenter recommended clarifying subsection (i)(2)(A)(i), which specifies the experience requirements necessary for county and municipal employees to become an inspector under the voluntary inspection program, by deleting the word "risks". According to the commenter, specifying residential property "risks" is overly restrictive and might exclude many qualified inspectors because cities and counties do not typically have employees that inspect property for purposes of assessing risk. Response: The Department agrees and the word "risks" has been deleted. The Department believes that city and county employees who have one year of actually performing inspections of residential property, such as inspections for building code compliance, would be eligible for licensing under the voluntary inspection program. Comment: One commenter recommended amending subsection (i)(1)(A), which specifies the individuals who may be certified as qualified inspectors under the program, to include solicitors licensed pursuant to Article 21.14. According to the commenter, solicitors are just as competent as local recording agents to conduct property inspections in that the educational requirements are essentially the same for both types of licenses. Response: The Department agrees that licensed solicitors have the educational background to be certified as inspectors under the program. The Department has amended subsection (i)(1)(A) to include solicitors in the list of individuals eligible for certification. Comment: One commenter recommended that the Department amend the certification and licensing procedures to include provisions for expiration and renewal of licenses and certifications so that individuals who no longer meet the requirements for licensing or certification will not be able to maintain their license or certification. Response: The Department agrees that a system for expiration and renewal of licenses and certifications is needed to monitor whether or not individuals continue to meet the requirements for licensing or certification. Subsection (i) was amended to add new paragraph (3) which added a two year time period for expiration, procedures for license and certification renewals and language specifying an inspector's last known address to which the renewal notices will be sent. Comment: One commenter proposed changing the word "may" to "will" in subsection (e)(1). The effect of such a change would be to make the inspection fee mandatory. Response: The Department disagrees with this recommended change because Article 5.33B, sec.3(6) states "the fee which may be charged". The statutory language is permissive, therefore, there is no statutory authority to make the fee mandatory. Some municipalities may elect to provide these inspections without charge to their residents. Comment: One commenter recommended clarifying subsection (e)(4) by adding language to specify that a minimum of three photographs be required for the inspection report. The three photographs would include two exterior photographs including one from the right front side and the other from the left rear and side and the third photograph would be taken from the interior of the property. The commenter recommended 35 mm photographs be required due to their superior clarity over Polaroid photographs and that additional photographs be required if specific hazards exist. Response: The Department does not find it necessary to amend the text of the rule because most of the concerns expressed by the commenter have already been addressed in the Residential Property Condition Evaluation Report (Form VIP-2). Form VIP-2 requires two 35 mm photographs (front and rear) of the property and a dimensional sketch/diagram of the property. These are the generally accepted inspection procedures regarding property photographs followed by the fee service inspection entities and insurers. The department does not see any benefit in adding an interior photograph or extra photographs if specific hazards exist because these matters are already adequately addressed in the inspection report. Comment: One commenter voiced concern over subsection (f), relating to minimum standards for insurability, because it was their opinion that terms like "minor", "major" and "significant" are subjective and require further explanation and clarification. Response: The Department disagrees that terms like "minor", "major" and "significant" require further clarification. The Residential Property Condition Evaluation Report (Form VIP-2) and the criteria for determining property condition were compiled from sample inspection reports provided by the insurance industry and fee service inspection companies. These terms are used throughout the industry in property inspection reports and have a generally accepted meaning among qualified inspectors. Comment: One commenter recommends that the section be amended to specify that the inspector is required to climb up on the roof to conduct the roof inspection in order to accurately determine the presence of existing hail damage. Response: The Department disagrees that the section should be amended to specify that the inspector is required to climb up on the roof because this requirement is already implicitly stated in the section. The Department's inspection report requires the inspector to determine that: (1) no roof coverings are curling or cracking or missing shingles (2) no roof coverings show signs of significant deterioration (3) no roofs have been improperly installed or repaired In order for an inspector to accurately make these determinations, he must climb up on the roof to make the visual observation. Comment: One commenter expressed concern that the language in subsection (f)(3)(F)(iv) "properly accessible to fire equipment" is too general. The commenter recommended that the inspection report provide information such as distance to fire hydrants and closest fire station. Response: The Department agrees that such information is important and necessary, but disagrees that such detailed information is necessary in the text of the rule. The following explicit information regarding fire protection is required on page 2 of Form VIP-2: (1) Is the structure isolated? (2) Is the structure inaccessible to fire equipment? (3) Is the property inside the city limits? (4) Distance to responding fire departments (miles)? (5) Over paved roads? (6) Paid or volunteer fire department? (7) Distance to nearest fire hydrant (feet) Comment: One commenter recommends that the "Certificate of Insurability" be valid for one year rather three because "substantial changes" are not defined and too subjective. Response: The Department disagrees because insurers do not currently reinspect on an annual basis. To require the consumer to obtain a reinspection on an annual basis would be unduly burdensome. Additionally, subsection (h)(4) states that "an insurer may require a written statement by the applicant for residential property insurance stating that there have been no material or substantial changes to the property condition since the date of the inspection certificate." This gives the insurer some mechanism for checking whether or not substantial changes have occurred since the date of the inspection certificate. Furthermore, the insurer has the right to reinspect the property if they are concerned about changes in the property condition. Comment: One commenter recommends that in those instances where an insurer does reinspect and does decline to write or renew the policy for a property owner who has a Certificate of Insurability, the Certificate should be voided to prevent the insured from presenting the Certificate to another insurer. Response: The Department disagrees because although one insurer may find the property uninsurable after reinspection, this should not foreclose the property owner's right to seek insurance from another insurer. Underwriting guidelines differ from one insurer to another and this could easily result in a situation where one insurer might agree to write the policy where another might not. The licensed/certified property inspector is responsible for the issuance of the Certificate of Insurability and as long as it does not contain a false, fictitious, or fraudulent statement or entry it should not be voided. The new section is adopted pursuant to the Insurance Code, Articles 5.33B and 1.03A; and the Government Code, sec.sec.2001.004 et seq. Article 5.33B, sec.3(a) authorizes the Commissioner to adopt a plan of operation which shall include rules and standards for the voluntary inspection program. Subsection (6) of Article 5.33B, sec.3(a) authorizes the Department to set by rule the amount of the fee which may be charged to the person requesting the inspection. Subsection (5) of Article 5.33B, sec.3(a) requires the Commissioner to establish rules for the certification and licensing of persons authorized to perform inspections. Article 5.33B, sec.4 outlines the effect that the certificate of insurability has on the insurer's use of property condition as a ground for refusing to insure or renew. Article 5.33B, sec.5 authorizes the Commissioner to establish by rule disciplinary procedures to maintain the integrity of the program. Section 6 of Article 5.33B authorizes the Commissioner to promulgate rules and forms to accomplish the purposes of this article. Article 1.03A provides that the Commissioner of Insurance may 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 statute. The Government Code, sec.sec.2001.004 et seq. authorizes and requires each state agency to adopt rules of practice setting forth the nature and requirements of available procedures and to prescribe the procedures for adoption of rules by a state agency. sec.5.3800.Voluntary Inspection Program Plan of Operation. (a) Purpose and Scope. The purpose and scope of this section is to adopt a plan of operation for the Voluntary Inspection Program which specifies procedures, standards and forms for the implementation of the inspection program. This section addresses the following: (1) Procedures, standards and forms governing the independent inspection of the condition of residential property to determine insurability, pursuant to the Insurance Code, Article 5.33B; (2) Procedures and forms governing the licensing or certification of qualified inspectors to conduct inspections of the condition of residential property to determine the insurability of such property; (3) Enforcement provisions to protect the integrity of the inspection program; and (4) Procedures for handling complaints relating to these inspections. (b) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise. (1) Article 5.33B--Article 5.33B of the Texas Insurance Code entitled Voluntary Inspection Program. (2) Certificate of insurability--A certificate issued by an inspector pursuant to Article 5.33B indicating that the condition of the property meets or exceeds the minimum standards for insurability that are specified in subsection (f) of this plan of operation. (3) Commissioner--Commissioner of Insurance of the State of Texas. (4) Department--Texas Department of Insurance. (5) Inspection--The physical inspection of the property for which residential property insurance is sought whether the inspection is for a new or renewal certificate of insurability. (6) Inspector--A person authorized by the Commissioner to perform inspections under Article 5.33B. (7) Program--Voluntary Inspection Program pursuant to Article 5.33B of the Insurance Code. (8) Residential property condition evaluation report--The form completed by an inspector which provides specific information regarding the condition of the property and is used to determine the insurability of the property. (c) Eligibility for Inspection. (1) Any person having an insurable interest in real or tangible personal property at a fixed location may request an independent inspection of the condition of the property proposed to be insured. (2) The independent inspection must be performed by an inspector authorized to perform inspections under Article 5.33B, Insurance Code and this plan of operation. (d) Procedures to Obtain Inspection. (1) An individual may request inspection from an inspector licensed or certified by the Department in accordance with Article 5.33B, Insurance Code and this plan of operation. The purpose of the inspection is to complete the Residential Property Condition Evaluation Report (Form VIP-2) to determine the insurability of the residential property. (2) An individual may obtain names and phone numbers of licensed or certified inspectors from the Inspections and Fire Safety Section of the Department by telephone, fax, or mail. (e) Fees. (1) Individuals requesting an inspection of their residential property may be required to pay a fee for the inspection in accordance with this subsection. The fee may be required to be paid prior to the inspection. (2) An inspector may charge a reasonable fee not to exceed $50 per inspection for the inspection of a residential property risk. (3) An inspector may charge a reasonable fee not to exceed $25 per follow-up inspection in the event repairs are made within 90 days of the initial inspection. (4) Inspection fees shall include the cost of photographs. (f) Minimum Standards for Insurability. The residential property shall comply with the following requirements for average or better condition of the property to qualify for a certificate of insurability. (1) The general physical condition of residential property shall indicate: (A) Good maintenance of structure; (B) No unrepaired previous damage; and (C) Any construction, installation and repair to the residential structure have been made in accordance with generally accepted standards applicable at the time of the construction, installation or repair. (2) Good housekeeping is maintained throughout the residential premises. (3) The residential property proposed for insurability must meet the requirements for average or better condition, as specified in this subsection. Determination of the condition shall be based on the following criteria: (A) Exterior. (i) Structural. (I) Only minor cosmetic foundation related cracks on the slab or above windows and doors; (II) No major cracks, separation or evidence of shifting or movement in walls, walks and driveway; (III) No missing window or door panes; (IV) No signs of active termites or unrepaired insect damage; (V) Exposed wood (siding, fascia, soffit, doors, steps, etc.) in good condition with no evidence of significant deterioration or significant peeling of paint; (VI) Pier and beam foundations enclosed under all outside walls; and (VII) Additions, modifications, or repairs to the exterior made in accordance with generally accepted standards at the time of construction. (ii) Premises. No accumulation of trash, brush or other debris in yard. (B) Roof. (i) No roof coverings that are curling, cracking or have missing shingles; (ii) No roof coverings that show signs of significant deterioration; and (iii) No roofs that have been improperly installed or repaired. (C) Interior. (i) No visible water damage; (ii) No major cracks or separation in interior walls, flooring and ceiling; (iii) Major appliances in good working condition; and (iv) Additions, modifications or repairs to the interior made in accordance with generally accepted standards at the time of construction. (D) Electrical. (i) Electrical wiring in good working condition; (ii) No evidence of fuses repeatedly blowing or breakers tripping; (iii) No flickering lights or evidence of overheating wiring; and (iv) Additions, modifications, or repairs to electrical wiring made in accordance with generally accepted standards applicable at the time of installation. (E) Plumbing, Heating, Cooling Systems. (i) Plumbing, heating and cooling systems in good working condition; (ii) Free from leaks; (iii) Space heaters and hot water heaters properly vented and appropriate distance maintained from walls and furnishings; and (iv) Additions, modifications, or repairs to plumbing, heating and cooling systems made in accordance with generally accepted standards applicable at the time of installation (F) Other Conditions. (i) Outbuildings and fences in good condition; (ii) No business or commercial exposures on premises; (iii) No vacancy of the property; (iv) Property accessible to fire equipment; and (v) No unfenced swimming pools, hot tubs, fish ponds, bodies of water or trampolines. (g) Inspection Certification Process. (1) An inspection for residential property insurability shall be made within 30 days from the date of the request and payment of any applicable fee. (2) The inspection process shall include the completion and issuance of a Residential Property Condition Evaluation Report (Form VIP-2) promulgated by the Department. (3) The information obtained in the Residential Property Condition Evaluation Report (Form VIP-2) shall be used to determine the insurability of the residential property. This information includes general information on the age and construction of the risk, the condition of the property, identifiable hazards of the property, and diagrams and photographs of the property. (4) The individual requesting the residential property inspection shall be provided a copy of the Residential Property Condition Evaluation Report (Form VIP-2) within ten days of the completion of the inspection. (5) If the residential property inspected meets the minimum standards provided in subsection (f) of this plan of operation, the inspector shall issue within ten days of completion of the inspection a Certificate of Insurability (Form VIP-1). (6) The Certificate of Insurability (Form VIP-1) is promulgated by the Department. (7) A Certificate of Insurability (Form VIP-1) is valid for a term of three years from the date of issuance to the individual requesting the inspection so long as no substantial changes have been made to the property. If substantial changes are made to the property, an additional inspection may be required by the insurer. (h) Insurer Processing. (1) An individual receiving a Certificate of Insurability (Form VIP-1) may provide to an insurer a copy of the certificate as part of the application for residential property insurance coverage. (2) The existence of a Certificate of Insurability (Form VIP-1) issued under this program creates a presumption that the property condition is adequate for residential property insurance to be issued. (3) If a Certificate of Insurability (Form VIP-1) is provided to an insurer as part of an application for residential property insurance, the insurer may not use property condition as grounds for refusing to issue or renew a residential property insurance policy unless the insurer reinspects the property and specifies in its declination letter the conditions of deficiency causing the residential property risk to be uninsurable. (4) As a condition of issuing a policy, when a Certificate of Insurability (Form VIP-1) is used in whole or in part to determine insurability, an insurer may require a written statement by the applicant for residential property insurance stating that there have been no material or substantial changes to the property condition since the date of the inspection certificate. (i) Certification or Licensing of Inspectors (1) Certification. (A) The following individuals may be certified by the Department as qualified inspectors under this program: (i) Persons licensed to perform real property inspections under the Real Estate Licensing Act; (ii) Designated employees or agents of a county or municipality which elects to establish a voluntary inspection program for the inspection of residential properties within the territorial limits of the county or municipality. These employees or agents must be Certified Building Officials or Building Inspectors certified by a model code organization; (iii) Persons holding an insurance adjusters license pursuant to Article 21.07- 4, Insurance Code; (iv) Persons holding a local recording agents license pursuant to Article 21.14, Insurance Code; (v) Persons holding a solicitors license pursuant to Article 21.14, Insurance Code; or (vi) Licensed Texas Professional Engineers. (B) Certification procedures shall be as follows: (i) Each applicant for a certification to act as a qualified inspector for the Voluntary Inspection Program shall file with the Department a completed Application for Residential Property Inspector Licensing/Certification (Form VIP-3) accompanied by such documents and attachments necessary to support the application; (ii) No certification shall be approved by the Department until a completed Application for Residential Property Inspector Licensing/Certification (Form VIP-3) has been filed with the Department; (iii) Upon review and approval of each completed application, a certification will be issued by the Department to the applicant; (iv) If an applicant is disapproved the Department shall issue to the applicant a letter of disapproval specifying the reasons for such disapproval; and (v) Certification remains valid so long as the applicant remains qualified under subparagraph A of this subsection. (2) Licensing. (A) The following individuals may be licensed by the Department as qualified inspectors under this program. (i) Designated employees or agents of a county or municipality which elects to establish a voluntary inspection program for the inspection of residential property located within the territorial limits of a county or municipality and having at least one year of experience actively performing field inspections of residential property and not licensed as specified in subparagraph A of this subsection; (ii) Individuals who complete at least 60 college semester hours of Engineering, Safety, or related fields and one year experience of actively performing inspections of real property for the purpose of rating, underwriting, building code compliance or real estate appraisals; (iii) Individuals who have two years experience actively performing inspections of real property for the purpose of rating, underwriting, building code compliance or real estate appraisals; or (iv) Individuals who are employed by an entity that is responsible for and specializes in rating, underwriting, building code compliance or real estate appraisal and who have been actively performing inspections of real property for those purposes for a minimum of one year. (B) Licensing procedures shall be as follows: (i) Each applicant for a license to act as a qualified inspector for the Voluntary Inspection Program shall file with the Department a completed Application For Residential Property Inspector License/Certification (Form VIP- 3) accompanied by such documents and attachments necessary to support the application; (ii) No license shall be approved by the Department until a completed Application for Residential Property Inspector Licensing/Certification (Form VIP-3) has been filed with the Department; (iii) Upon review and approval of each completed application a license will be issued by the Department to the applicant; and (iv) If an applicant is disapproved the Department shall issue to the applicant a letter of disapproval specifying the reasons for the disapproval. (3) Expiration and Renewal of Certification or License. (A) Each license or certification issued to an inspector under the Voluntary Inspection Program shall expire two years following the date of issue unless it is suspended or revoked by the Commissioner prior to this expiration date. (B) A person may renew an unexpired license or certification by filing a Renewal Application (Form VIP-6) with the Department. (C) If a person's license or certification has been expired for 90 days or less, the person may renew the license or certification by filing a Renewal Application (Form VIP-6) with the Department. (D) If a person's license or certification has been expired for longer than 90 days, the person may not renew the license. The person may obtain a new license or certification by complying with the requirements and procedures, as outlined in subsection (i), for obtaining an original license or certification. (E) At least 30 days before the expiration of a person's license or certification, the Department shall send written notice of the impending expiration to the person at the person's last known address according to the records of the Department. (F) Each inspector shall at all times keep the Department informed of the inspector's current address. Such address shall be included in each original application and renewal application. In the absence of the submission of a specific written request to change that address, which must be separate from any other submission, the inspector's current address is presumed to be the address on the most recent renewal or original application form, whichever is latest. Such address shall be considered the inspector's last known address for the purposes of notice to the inspector by the Department. Any request for a change of address shall be addressed to the Inspections and Fire Safety Section of the Property and Casualty Program, Texas Department of Insurance, 333 Guadalupe, P. O. Box 149104, Austin, Texas 78714-9104. (4) Persons Not Eligible for Certification or Licensing. The following individuals may not be certified or licensed as qualified inspectors under this program. (A) Individuals employed by an insurance company except local recording agents, solicitors or insurance adjusters; (B) Individuals employed by the Department; or (C) Individuals whose qualifying license under subparagraph A of this subsection have been revoked or suspended. (5) Persons Authorized To Perform Inspections. An inspection of residential property for the purposes of determining property condition insurability pursuant to Article 5.33B, Insurance Code, and this plan of operation shall only be performed by an individual licensed or certified by the Department as a qualified inspector in accordance with this subsection. (j) Denial, Suspension, Cancellation or Revocation of an Inspector's Certification or License. (1) The Commissioner may discipline a licensee or certificate holder or deny an application for inspector's license or certification if the Commissioner finds that the licensee or applicant: (A) Has knowingly, willfully, fraudulently, or with gross negligence, signed or cause to be prepared an inspection report or issued a Certificate of Insurability that contains a false, fictitious, or fraudulent statement or entry; (B) Has willfully violated any provision of the insurance laws of this State; (C) Has intentionally made a material misstatement in the application for such license or certification; (D) Has obtained, or attempted to obtain, such license or certification by fraud or misrepresentation; (E) Has been guilty of fraudulent or dishonest acts; or (F) Is convicted of a felony. (2) After notice and opportunity for a hearing, the Commissioner may cancel or revoke any license or certification issued under this section if the holder or possessor of the license or certification is found to be in violation of, or to have failed to comply with, any provisions of this section or any other rule or regulation of the Department or any specific provision of the Texas Insurance Code. In lieu of cancellation or revocation, the Commissioner, upon determination from the facts that it would be fair, reasonable or equitable, may order one or more of the sanctions specified in subparagraphs (A) - (D) of this paragraph. (A) The Commissioner may order the suspension of the license or certification for a specific period, not to exceed one year. (B) The Commissioner may issue an order directing the holder or possessor of the license or certification to cease and desist from the specified activity determined to be in violation of any provisions of this section or any rule or regulation of the Department or any specific provision of the Texas Insurance Code. (C) The Commissioner may issue an order directing the holder of possessor of the certification or license to pay an administrative penalty in accordance with Article 1.10E of the Insurance Code. (D) The Commissioner may order any other statutory sanction that may be enacted pursuant to the Insurance Code, Article 5.33B. (3) If it is found after notice and hearing that any person approved and appointed by the Commissioner to conduct inspections pursuant to this section and Article 5.33B of the Insurance Code has failed to comply with an order lawfully issued by the Commissioner pursuant to this section or Article 5.33B of the Insurance Code, the Commissioner shall, unless the Commissioner's order is lawfully stayed, cancel the license or certification. (4) The Commissioner may informally dispose of any matter under this subsection by consent order or default. (k) Complaint Procedures. (1) The Department shall have the responsibility for handling and processing all complaints relating to property inspections conducted under the Voluntary Inspection Program that have not been resolved within 30 days after receipt by the qualified inspector. (2) All complaints as specified in paragraph (1) of this subsection shall be forwarded by the qualified inspector to the Department's Inspections and Fire Safety Section. The Inspections and Fire Safety Section shall immediately notify the complainant that the complaint has been forwarded to the Department's Inspections and Fire Safety Section. (3) All forwarded complaints and all complaints submitted directly to the Department shall be assigned to and handled by the Department's Inspections and Fire Safety Section. (4) The qualified inspector shall provide assistance in handling complaints as requested by the Department's Inspections and Fire Safety Section. (5) Until final disposition of any complaint that is forwarded to the Department by a qualified inspector or that is submitted directly to the Department, the complainant shall be notified by the Department's Inspections and Fire Safety Section of the status of the complaint at 30-day intervals. (6) Any affected insured, any affected insurer, or any affected qualified inspector may appeal the Inspections and Fire Safety Section staff disposition of any complaint to the Commissioner within 30 days after such disposition. (l) Forms. The Department adopts by reference the Voluntary Inspection Program forms. Specimen copies of these forms are available from the Inspections and Fire Safety Section of the Property and Casualty Program, Texas Department of Insurance, 333 Guadalupe Street, P. O. Box 149104, Austin, Texas 78714-9104. The forms are more specifically identified as follows: (1) Form VIP-1, Certificate of Insurability. (2) Form VIP-2, Residential Property Condition Evaluation Report. (3) Form VIP-3, Application for Residential Property Inspector License/Certification. (4) Form VIP-4, License. (5) Form VIP-5, Certificate. (6) Form VIP-6, Renewal Application 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 October 9, 1996. TRD-9614746 Robert Carter Assistant General Counsel Texas Department of Insurance Effective date: October 30, 1996 Proposal publication date: August 23, 1996 For further information, please call: (512) 463-6327 CHAPTER 7.Corporate and Financial Regulation SUBCHAPTER C.Transfer of Securities Under Certain Agreements 28 TAC sec.sec.7.301-7.308 The Commissioner of Insurance adopts an amendment to sec.sec.7.301-7.308, concerning the transfer of securities under certain agreements. The adoption allows qualified banks to act as an agent of the insurance company in these transactions and bring technical provisions up to date with current practices. The sections are adopted without changes to the proposed text published in the September 3, 1996, issue of the Texas Register (21 TexReg 8380). The commissioner of insurance received a petition from American General Corporation on behalf of its subsidiary Texas insurers, American General Life Insurance Company, The National Life and Accident Insurance Company, and the Variable Annuity Life Insurance Company, requesting a revision to Texas Administrative Code, Title 28, Insurance, Chapter 7, Corporate and Financial, Subchapter C, Transfer of Securities Under Certain Agreements. Subchapter C regulates transactions involving an insurance company lending its investment securities to a securities dealer. The loan of the securities is secured by cash or other marketable securities provided by the securities dealer. The petition requested that Subchapter C be amended to authorize insurance companies to use qualified banks as agents in securities lending transactions and to bring regulatory standards in line with current securities lending practices. Pursuant to Government Code, Chapter 2001, Subchapter A, sec.2001.021, the commissioner initiated this rulemaking procedure. Financial institutions find it necessary to borrow investment securities from time to time to complete transactions within prescribed limits and meet regulatory standards. Securities dealers are a primary borrower of securities and also lend securities to their customers. Insurance companies, as owners of investment securities, are able to provide these securities. A fee is charged for the lending of securities so insurance companies can increase their income by engaging in this activity. Subchapter C regulates transactions involving an insurance company lending its investment securities to a securities dealer. The loan of the securities is secured by cash or other marketable securities provided by the securities dealer. The addition of banks as agents of insurance companies provides expertise in securities lending which will allow more insurance companies to engage in this activity. The adoption of the amendments allows qualified banks to act as an agent of the insurance company in these transactions and makes technical provisions consistent with current practices. No comments were received regarding adoption of the amendments. The amendments are adopted under the authority of the Insurance Code, Articles 1.03A, 1.11, 1.32, 3.33, sec.9 and 21.39-B and Government Code, sec.sec.2001.004-2001.038. Article 1.03A authorizes the commissioner to adopt rules for the conduct and execution of the duties and functions of the department. Article 1.11 authorizes the commissioner to adopt rules in the form of changes to the annual statement for the purpose of eliciting a true exhibit of an insurer's condition. Article 1.32 authorizes the commissioner to fix standards for evaluating the financial condition of an insurer. Article 3.33, sec.9 authorizes the commissioner to adopt rules, minimum standards, or limitations which are fair and reasonable and appropriate for the augmentation and implementation of the article. Article 21.39-B authorizes the commissioner to adopt rules necessary to carry out the provisions of Article 21.39-B which regulates an insurance company's transactions in its assets. 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 October 9, 1996. TRD-9614748 Robert Carter Assistant General Counsel Texas Department of Insurance Effective date: October 30, 1996 Proposal publication date: September 3, 1996 For further information, please call: (512) 463-6327 TITLE 40. SOCIAL SERVICES AND ASSISTANCE PART I. Texas Department of Human Services CHAPTER 15. Medicaid Eligibility SUBCHAPTER E. Income 40 TAC sec.15.461 The Texas Department of Human Services (DHS) adopts an amendment to sec.15.461, without changes to the proposed text as published in the August 20, 1996, issue of the Texas Register (21 TexReg 7791). The justification for the amendment is to include additional exemptions from income and resources of Indian-related settlement funds, as required by federal law. The amendment will function by ensuring that DHS will be in compliance with federal regulations. No comments were received regarding adoption of the amendment. The amendment is adopted under the Human Resources Code, Title 2, Chapters 22 and 32, which provides the department with the authority to administer public and medical assistance programs and under Texas Government Code sec.531.021, which provides the Health and Human Services Commission with the authority to administer federal medical assistance funds. The amendment implements the Human Resources Code sec.sec.22.001-22.024 and sec.sec.32.001-32.042. This agency hereby certifies that the 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 October 8, 1996. TRD-9614678 Glenn Scott General Counsel, Legal Services Texas Department of Human Services Effective date: November 1, 1996 Proposal publication date: August 20, 1996 For further information, please call: (512) 438-3765 CHAPTER 48. Community Care for Aged and Disabled 1915(c) Medicaid Home and Community-based Waiver Services for Aged and Disabled Adults Who Meet Criteria for Alternatives to Nursing Facility Care 40 TAC sec.48.6003 The Texas Department of Human Services (DHS) adopts an amendment to sec.48.6003, without changes to the proposed text as published in the May 10, 1996, issue of the Texas Register (21 TexReg 4008). Justification for the amendment is to ensure the quality of services available to eligible clients. The amendment will function by specifying the settings in which a client may reside and receive Community Based Alternatives services. The department received no comments regarding adoption of the amendment. The amendment is adopted under the Human Resources Code, Title 2, Chapters 22 and 32, which authorizes the department to administer public and medical assistance programs and under Texas Government Code sec.531.021, which provides the Health and Human Services Commission with the authority to administer federal medical assistance funds. The amendment implements the Human Resources Code, sec.sec.22.001-22.030 and sec.sec.32.001-32.042. 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 October 8, 1996. TRD-9614679 Glenn Scott General Counsel, Legal Services Texas Department of Human Services Effective date: November 1, 1996 Proposal publication date: May 10, 1996 For further information, please call: (512) 438-3765 Minimum Standards for Adult Foster Care 40 TAC sec.48.8906 The Texas Department of Human Services (DHS) adopts an amendment to sec.48.8906, without changes to the proposed text as published in the May 10, 1996, issue of the Texas Register (21 TexReg 4008). Justification for the amendment is to ensure that the residents of four-bed adult foster care homes are protected through the personal care licensure rules and oversight by DHS. The amendment will function by complying with Chapter 247, Texas Health and Safety Code, which requires that four-bed adult foster care homes must be licensed as personal care facilities. The department received no comments regarding adoption of the amendment. The amendment is adopted under the Human Resources Code, Title 2, Chapter 22, which authorizes the department to administer public assistance programs. The amendment implements the Human Resources Code, sec.sec.22.001-22.030. 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 October 8, 1996. TRD-9614680 Glenn Scott General Counsel, Legal Services Texas Department of Human Services Effective date: November 1, 1996 Proposal publication date: May 10, 1996 For further information, please call: (512) 438-3765 CHAPTER 92. Personal Care Facilities The Texas Department of Human Services (DHS) adopts amendments to sec.92.2, sec.92.4, and sec.92.18, with changes to the proposed text as published in the May 10, 1996, issue of the Texas Register (21 TexReg 4009). Justification for the amendments is to ensure that the residents of four-bed adult foster care homes are protected through the personal care licensure rules and oversight by DHS. The amendments will function by complying with Chapter 247, Texas Health and Safety Code, which requires that four-bed adult foster care homes must be licensed as personal care facilities. The department received comments from the Texas Association of Residential Care Communities regarding adoption of the amendment. Comment: Four-bed foster care facilities should have to meet the existing personal care standards, rather than being deemed licensed when they are enrolled in and meet the standards of the TDHS adult foster care program. Response: The department disagrees. The proposed rules establish a separate category for the four-bed foster care facilities because foster care is delivered in a home-like environment and meeting the existing personal care standards would be financially prohibitive to the foster care providers. To allow providers enough time to file a timely application, DHS has changed the phrase, "after the effective date of this rule," in sec.92.4(3)(A) and (C) to "after January 1, 1997." SUBCHAPTER A. Introduction 40 TAC sec.sec.92.2, 92.4 The amendments are adopted under the Health and Safety Code, Chapter 247, which authorizes the department to license personal care facilities. The amendments implement the Health and Safety Code, sec.sec.247.001-247.066. sec.92.2.Scope. (a) A personal care facility does not include an establishment which furnishes food, shelter, and care to fewer than four persons unrelated to the owner. (b)-(c) (No change.) sec.92.4. Types of Personal Care Facilities. Types of personal care facilities are as follows. (1)-(2) (No change.) (3) Type C. A four-bed facility which meets the minimum standards and program rules for enrollment with the Texas Department of Human Services as an adult foster care facility and is so enrolled on the effective date of this rule will be deemed licensed as a Type C facility without having to apply for a personal care facility license. (A) After January 1, 1997, and at least 45 days prior to the renewal of its enrollment as an adult foster care facility, the facility must submit an application and fee for a personal care license. (B) Failure to submit the application and fee prior to the date of re-enrollment as an adult foster care facility will result in loss of deemed licensure. (C) After January 1, 1997, a facility seeking licensure as a Type C facility must meet the requirements of this chapter with the exception of those found in sec.92.41 of this title (relating to Standards for Personal Care Facilities) and sec.sec.92.61-92.63 of this title (relating to Introduction and Application; General Requirements; and Plans, Approvals, and Construction Procedures), in lieu of which the facility must meet the minimum standards found in sec.sec.48.8901-48.8907 of this title (relating to Minimum Standards; Provider Qualifications; Substitute Provider Qualifications; Individuals Who May Not Provide Adult Foster Care Services; Home Enrollment Requirements; Enrollment and Licensure Requirements; and Provider Responsibilities). 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 October 8, 1996. TRD-9614681 Glenn Scott General Counsel, Legal Services Texas Department of Human Services Effective date: November 1, 1996 Proposal publication date: May 10, 1996 For further information, please call: (512) 438-3765 SUBCHAPTER B. Application Procedures 40 TAC sec.92.18 The amendment is adopted under the Health and Safety Code, Chapter 247, which authorizes the department to license personal care facilities. The amendment implements the Health and Safety Code, sec.sec.247.001-247.066. sec.92.18. License Fees. (a) Basic fees. (1) Type A and Type B. The license fee is $100 plus $3.00 for each bed for which a license is sought, with a maximum of $400. The fee must be paid with each initial application and annually with each application for renewal of the license. (2) Type C. The license fee is $50. The fee must be paid with each initial application and annually with each application for renewal of the license. (3) Increase in beds. An approved increase in beds is subject to an additional fee of $3.00 for each bed. (b) (No change.) This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on October 8, 1996. TRD-9614682 Glenn Scott General Counsel, Legal Services Texas Department of Human Services Effective date: November 1, 1996 Proposal publication date: May 10, 1996 For further information, please call: (512) 438-3765