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 16. ECONOMIC REGULATION
PART II. Public Utility Commission of Texas
CHAPTER 22.Practice and Procedure
SUBCHAPTER E.Pleadings
16 TAC sec.22.71
The Public Utility Commission of Texas (PUC) adopts an amendment to sec.22.71, 
relating to Filing of Pleadings and Other Materials without changes to the 
proposed text as published in the May 13, 1997, issue of the Texas Register (22 
TexReg 4140). The amendment is necessary to ensure that the commissioners of the 
Public Utility Commission of Texas will have adequate time to fully review all 
documents necessary to conduct an open meeting. The amendment requires that all 
documents addressed to the commissioners relating to any proceeding that has 
been placed on the agenda of an open meeting be filed with the commission filing 
clerk no later than six days prior to the open meeting on which the proceeding 
will be considered. 
No comments were received regarding adoption of the amendment. 
This amendment is adopted under the Public Utility Regulatory Act of 1995 
(PURA95), Texas Revised Civil Statutes Annotated, Article 1446c-0, sec.1.101 
(Vernon 1997), which provides the commission with the authority to make and 
enforce rules reasonably required in the exercise of its powers and 
jurisdiction, including rules of practice and procedure. 
Cross Index to Statutes: Public Utility Regulatory Act of 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 July 3, 1997.
TRD-9708669
Rhonda Dempsey
Rules Coordinator
Public Utility Commission of Texas
Effective date: July 23, 1997
Proposal publication date: May 13, 1997
For further information, please call: (512) 936-7308

CHAPTER 23.Substantive Rules
Certification
16 TAC sec.23.31
The Public Utility Commission of Texas (PUC) adopts an amendment to sec.23.31, 
relating to Certification Criteria without changes to the proposed text as 
published in the April 29, 1997, issue of the type-name="italic"> Texas Register 
(22 TexReg 3767). This amendment is necessary to conform sec.23.31 with new 
Substantive Rule sec.23.38. The amendment deletes subsections (d) and (e) of 
sec.23.31. Simultaneously, the PUC adopts Substantive Rule sec.23.38, relating 
to Standards for Granting of Certificates of Operating Authority and Service 
Provider Certificates of Operating Authority. The principles of Substantive Rule 
sec.23.31(d) and (e) are incorporated into PUC Substantive Rule sec.23.38. 
The commission did not hold a public hearing on the proposed rule and none was 
requested. The commission invited written comments. The commission received 
written comments on the proposed rule from Texas Statewide Telephone 
Cooperative, Inc. (TSTCI). TSTCI's written comments are summarized herein. 
The commission invited specific comment regarding the costs associated with, and 
benefits that will be gained by implementation of the proposed rule. No one 
commented on the costs associated with, or the benefits that will be gained by 
implementation of the proposed rule. 
TSTCI stated in its comments that the "public interest" criteria set forth in 
PURA95 sec.3.2531(e)(1) through (4), which address the additional factors the 
commission should consider in determining whether to grant a certificate of 
operating authority (COA) in an exchange of an incumbent local exchange company 
serving fewer than 31,000 access lines, should apply to all facilities-based 
providers, including service provider certificate of operating authority (SPCOA) 
holders. The commission notes that the four "public interest" factors were set 
forth in PUC Substantive Rule 23.31(d)(4) through (7). Although by this 
amendment, the commission is deleting subsections (d) and (e) of sec.23.31, 
those factors have been included in sec.23.38. 
TSTCI urges the commission to apply the "public interest" factors to SPCOAs. The 
commission has begun a project to further define the standards to be used in 
determining whether to grant a facilities-based certificate in an exchange of an 
incumbent local exchange company serving fewer than 31,000 access lines, and it 
will not be addressed in this project. 
This amendment is adopted under the Public Utility Regulatory Act of 1995 
(PURA95), Texas Revised Civil Statute Annotated, Article 1446c-O, sec.1.101 
(Vernon 1997) which provides the Public Utility Commission of Texas with the 
authority to make and enforce rules reasonably required in the exercise of its 
powers and jurisdiction, including rules of practice and procedure; and 
specifically PURA95 sec.sec.3.2531 and 3.2532, which grant the commission the 
authority to determine criteria for financial and technical qualifications of 
applicants for certificates of operating authority and service provider 
certificates of operating authority. 
Cross Index to Statutes: Public Utility Regulatory Act of 1995, sec.sec.1.101, 
3.2531 and 3.2532. 
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 July 3, 1997.
TRD-9708667
Rhonda Dempsey
Rules Coordinator
Public Utility Commission of Texas
Effective date: July 23, 1997
Proposal publication date: April 29, 1997
For further information, please call: (512) 936-7308

16 TAC sec.23.38
The Public Utility Commission of Texas (PUC) adopts new sec.23.38, relating to 
Standards for Granting Certificates of Operating Authority and Service Provider 
Certificates of Operating Authority, with changes to the proposed text published 
in the January 31, 1997, issue of the Texas Register (22 TexReg 1027). The rule 
is necessary to establish financial and technical standards for the award of 
certificates of operating authority (COA) and service provider certificates of 
operating authority (SPCOA) and to establish the procedure for amending 
certificates of operating authority and service provider certificates of 
operating authority. 
A public hearing on the rule was held at commission offices on February 7, 1997, 
at 9:00 a.m. Representatives from Southwestern Bell Telephone Company (SWBT), 
GTE Southwest, Inc. (GTE), the Texas Association of Long Distance Telephone 
Companies, (TEXALTEL), Texas Statewide Telephone Cooperative, Inc. (TSTCI), 
Texas Cable TV Association, Tele-Communications, Inc. (TCI), and Time Warner 
Communications (Time Warner) attended the hearing. To the extent the 
participants attended the hearing and made comments on the record, their 
comments are summarized herein. To the extent the participants attended the 
hearing, and filed written comments, the participants' statements largely 
reflect their written comments and are summarized herein. 
The commission received written comments on the proposed rule from the Office of 
Public Utility Counsel (OPC), the Advisory Commission on State Emergency 
Communications (ACSEC), SWBT, TEXALTEL, TSTCI, Consumers Union, and Time Warner. 
The commission invited specific comment regarding the costs associated with, and 
benefits that will be gained by, implementation of the proposed rule. Consumers 
Union expressed support for the rule stating that the protections contained in 
the rule "are overwhelmingly in the public interest and outweigh any potential 
costs to applicants who must provide additional information when requesting a 
certificate." Consumers Union further stated that the requirements do not 
constitute a barrier to entry, as they apply to all applicants. Consumers Union 
suggested, however, that the rule should also include some type of ongoing 
monitoring process, so the commission and public are assured that providers 
continue to meet the financial and technical requirements set out in the rule. 
The commission agrees that continued monitoring of SPCOA and COA holders is 
necessary to protect the public interest. The commission notes that a rule in 
Project Number 14960, addressing the quality of service standards applicable to 
COAs and SPCOAs, will be published before December, 1997. Service quality 
standards will ensure that COAs and SPCOAs continue to be technically and 
financially qualified to provide service. The commission anticipates that the 
continuing enforcement of financial and technical requirements will be addressed 
in the service quality rule. 
The commission also monitors SPCOA and COA holders by maintaining information on 
complaints received against specific COA and SPCOA holders. Many COA and SPCOA 
holders use a variety of assumed names; some even use assumed names that never 
appeared on the original application and that have not been filed with the 
commission. As a result, the commission has difficulty attributing the complaint 
to the proper COA or SPCOA holder. The commission believes that subsection 
(f)(1), which applies to all current and future COA and SPCOA holders, will 
resolve this problem, because all basic local exchange telephone service, basic 
local telecommunications service, and switched access service provided under a 
COA or SPCOA must be provided in the name under which the commission granted the 
certificate. 
TSTCI supports the proposed rule and believes it is reasonable, prudent, and in 
the public interest. TEXALTEL agrees with the purpose of the proposed rule, but 
questions whether the commission has the authority under the Public Utility 
Regulatory Act of 1995 (PURA95) to draw a distinction between facilities-based 
SPCOA holders and SPCOA resellers. TEXALTEL does not believe that PURA95 gives 
the commission clear authority to grant limited or conditional SPCOA 
certificates or to draw a distinction between facilities-based SPCOA holders and 
SPCOA resellers. In written comments, OPC also questioned the commission's 
ability to delineate two types of SPCOA holders. TEXALTEL recommended that the 
same standard be used for all SPCOA applicants, whether facilities-based or 
resale. In oral comments at the public hearing, Time Warner, Texas Cable TV 
Association, and TCI supported TEXALTEL's comments. The commission disagrees and 
believes that it does have the authority to grant restricted SPCOAs. Although 
the law allows an SPCOA holder to use its own facilities or resell other's 
facilities, PURA95 sec.3.2532(b) also requires the commission to consider 
factors such as the technical and financial qualifications of the applicant, as 
well as the applicant's ability to meet the commission's quality of service 
standards, in determining the extent to which an applicant may exercise its 
authority. The commission is also required under PURA95 to protect the public 
interest. The commission grants restricted SPCOAs in order to protect the public 
interest against entities that are not qualified to provide the more extensive 
level of service inherent in facilities- based service, but that are qualified 
to provide resale service. By so doing, the commission is striving to encourage 
the development of a healthy and competitive marketplace for local exchange 
telecommunications services that is free of unreasonable barriers to entry. SWBT 
generally supports the commission's efforts to adopt a rule that sets forth the 
standards and guidelines for the review and approval of COA and SPCOA 
applications. SWBT urges the commission to codify all of its prior decisions in 
awarding SPCOA and COA certificates into this rule. The commission notes that 
this rule does not repudiate any of the prior orders of the commission 
construing the COA and SPCOA provisions found in PURA95 sec.3.2531 and 
sec.3.2532. The commission further notes that many of the holdings from those 
orders are incorporated into this rule, and they will be addressed separately. 
OPC commented that "SPCOA reseller" is not defined. The commission notes that it 
is defined in subsection (b) of the rule. 
TEXALTEL commented that the definition of "SPCOA reseller" does not comport with 
prior decisions of the commission in certification cases. TEXALTEL specifically 
commented that an SPCOA holder that owns a switch has not historically been 
considered by the commission to be a facilities-based carrier. The commission 
disagrees and has always considered an applicant that owned a switch or that 
intended to purchase a switch to be a facilities-based carrier for the purpose 
of certification and qualification of SPCOA and COA applicants. TEXALTEL also 
commented that an "SPCOA reseller" should not be limited to an entity that 
resells incumbent local exchange carrier (ILEC) services. The commission agrees 
and has amended the definition to include an entity that resells ILEC services 
or the services of a COA or SPCOA holder. 
SWBT commented that the commission holdings recognizing that SPCOA holders could 
use local loops to provide local exchange service should be incorporated into 
the rule. See, Order on Rehearing in Docket Number 14665, Application of 
Metropolitan Fiber Systems of Dallas, Inc., and Metropolitan Fiber Systems of 
Houston, Inc., for Service Provider Certificates of Operating Authority (March 
3, 1996); Order in Docket Number 14633, Application of Teleport Communications 
Houston, Inc. for Service Provider Certificate of Operating Authority (February 
23, 1996). The commission notes that, inasmuch as this rule sets forth criteria 
under which an SPCOA holder may utilize its own facilities, this holding has 
been incorporated into the rule. TEXALTEL commented that many Fortune 500 
companies would not be able to meet the financial standards set forth in 
(c)(1)(B)(i) and (ii). TEXALTEL appears to misinterpret this section. An 
applicant seeking to establish that it is qualified to be a COA or an SPCOA need 
only establish either that the applicant possesses the greater of $100,000 cash 
or cash equivalent or sufficient cash or cash equivalent to meet the startup 
expenses, working capital requirements, and capital expenditures or that the 
applicant is an "established business entity" able to demonstrate profitability 
as set forth in (c)(1)(B)(ii)(I), (II), and (III). Subclauses (I), (II), and 
(III) of (c)(1)(B)(ii) state that an applicant can offer certain proof as 
evidence of the fact that it is a profitable "established business entity" 
including: a long-term debt-to-capitalization ratio of less than 60%; a return-
on-assets ratio of at least 10%; and, the greater of $50,000 cash or cash 
equivalent or sufficient cash or cash equivalent to meet the startup expenses, 
working capital requirements, and capital expenditures. TEXALTEL suggests that 
in lieu of such proof, (ii) should be amended to "specify that financial 
statements must verify that there is a positive cash flow from operations of at 
least XXX dollars per year." The commission disagrees. Before an applicant is 
entitled to rely upon the "established business entity" standard, the applicant 
must be able to demonstrate evidence of profitability in existing operations for 
two years preceding the date of the application. The commission believes that a 
cash flow of XXX dollars fails to take into account the size of an applicant's 
business. If the standard set forth in the rule does not account for ranges in 
the size of potential applicants, the commission believes the standard cannot 
measure profitability. 
TEXALTEL further suggests that the $100,000 financial standard for facilities-
based providers should be treated as a "rebuttable presumption" to allow the 
applicant to prove a different cash requirement if that is appropriate. TEXALTEL 
states that this would help in situations where an applicant has only very 
limited plans to serve "but is found to fall into this 'facilities based' 
requirement." The commission does not agree that the $100,000 should be a 
rebuttable presumption. The commission is required under PURA95 to protect the 
public interest in having financially sound providers of local 
telecommunications services, and the commission believes that the minimum 
requirements set forth in this rule, $100,000 or $25,000, are necessary to 
achieve this objective. 
OPC commented that the financial qualification criteria for COA and SPCOA 
applicants may be too low to ensure that the applicant has the sufficient 
financial resources to serve a large geographic area as a reseller or with its 
own facilities. OPC suggests that the cash requirements be changed to ensure 
that the requirement is sufficient for both resale-only and facilities-based 
carriers. The commission agrees and has amended the section of the rule 
addressing the standards for SPCOA resellers to require the greater of $25,000 
or sufficient cash to meet the applicant's projected startup expenses, working 
capital requirements, and capital expenditures. Similarly, the section of the 
rule addressing the standards for SPCOA resellers that are "established business 
entities" has been amended to require the greater of $10,000 or sufficient cash 
to meet the projected startup expenses, working capital requirements, and 
capital expenditures. The section of the rule addressing the standards for 
facilities-based carriers has also been changed to require the greater of 
$100,000 or sufficient cash to meet the projected startup expenses, working 
capital requirements and capital expenditures. The section of the rule 
addressing the standards for facilities-based carriers that are "established 
business entities" has been changed to require the greater of $50,000 or 
sufficient cash to meet the projected startup expenses, working capital 
requirements, and capital expenditures. For clarification purposes, the 
commission has added a definition for capital expenditures. 
OPC further recommends that "established business entities" should be required 
to show a successful track record in a technically demanding business such as 
communications services. The commission disagrees. The rule sets forth the 
parameters for determining if an applicant is technically qualified. The 
applicant's prior telecommunications experience is appropriately considered in 
determining technical qualifications, but the commission believes that from the 
standpoint of showing financial qualifications, an applicant does not need to 
show that it is an established telecommunications business to be able to rely on 
the "established business" alternative to the $100,000 and $25,000 requirements 
for resale-only and facilities-based applicants. OPC recommends that the 
commission adopt a more flexible standard in determining financial 
qualifications that incorporates several criteria the commission could weigh, 
such as the population density, the types of services that will be provided, and 
the class of service that will be provided, when determining if an applicant is 
financially qualified. The commission agrees that a weighing must take place, 
and the commission believes that, by requiring the greater of $25,000 ($100,000 
for facilities-based carriers) or sufficient cash to meet the projected startup 
expenses, working capital requirements, and capital expenditures, the rule 
incorporates the criteria mentioned by OPC, because a direct correlation exists 
between the projected startup expenses, working capital requirements, and 
capital expenditures and the factors mentioned by OPC. Further, the commission 
notes that (c)(2) and (d)(2) allow the commission to limit the geographic scope 
of the COA or SPCOA if its finds such a limitation to be in the public interest. 
The commission further notes that the rule as written is intended to provide the 
commission with the flexibility to weigh the factors set forth in (c)(1) and 
(d)(1) to determine if the applicant is qualified to be awarded a COA or SPCOA. 
SWBT commented that the holding in the Order in Docket Number 15810, Application 
of Masters Financial Services for a Service Provider Certificate of Operating 
Authority, requiring the applicant to purchase a performance bond or bond of 
insurance in order to establish its financial qualifications and to protect 
consumers who purchased prepaid local exchange service, should be incorporated 
into this rule. The commission notes that subsection (e)(1) sets forth several 
financial instruments that will meet the cash requirements established in this 
rule. Subsection (e)(3) of the rule requires that all cash and instruments 
listed shall be unencumbered by pledges as collateral and shall be subject to 
verification and review by the commission prior to certification of the 
applicant and for a period of 12 months beyond the date of certification of the 
applicant by the commission. Failure to comply with this requirement may void an 
applicant's certification or result in such other action as the commission deems 
in the public interest. The rule as published provided that "failure to comply 
with this requirement will void an applicant's certification . . . ." The 
commission changed the "will" to "may" in order to give the commission the 
authority to do so when necessary to protect the public interest. Subsection (e) 
was designed to further define the balance that the legislature intended the 
commission to strike between ensuring that an applicant is financially qualified 
and the public interest is protected, and the countervailing policy of allowing 
free entry into the local exchange market and not erecting unreasonable, 
artificial barriers to entry. The commission agrees that this policy should be 
articulated more clearly in the rule and, thus, the rule now incorporates such a 
statement in subsection (a) relating to scope and purpose. 
OPC commented that the commission should not allow an applicant to rely upon a 
guaranty, as provided by proposed (e)(1)(F) and (G), to satisfy the cash 
requirements established in the rule to prove financial qualifications, because 
the commission has no enforcement authority over the third party guarantor. The 
commission notes that, in allowing an applicant to rely upon the guaranty of a 
third party, the commission is attempting to protect the public interest without 
erecting unnecessary barriers to entry. The commission believes that the 
guaranty achieves that objective because a consumer who has been wronged by a 
certificated carrier could take legal action against the carrier, and the 
guaranty may provide assets in the event the consumer prevails. OPC is also 
concerned about allowing an applicant to rely upon a guaranty provided by "any 
corporation, partnership, or any other person or association," because, OPC 
contends, "bad actors could set up shell entities for the sole purpose of making 
bogus guarantees to demonstrate financial ability." The commission agrees and 
has deleted that provision. OPC stated that the proposal to allow applicants to 
demonstrate financial qualifications with a guaranty is troublesome unless the 
commission verifies that the guarantor has the financial ability to make the 
guaranty. The commission agrees and has added a provision requiring the 
applicant to provide information sufficient to establish that the lender or 
guarantor possesses sufficient cash or cash equivalents to fund the loan or 
guaranty. 
SWBT commented that the Order on Certified Issues in combined Docket Numbers 
15445 and 15606, Applications of AT&T Communications of the Southwest, Inc. and 
MCIMetro Access Transmission Services for a Service Provider Certificate of 
Operating Authority that upheld PURA95's provision limiting SPCOAs to entities 
with less than 6.0% of the total intrastate switched access minutes of use, 
should be incorporated into this rule. The commission notes that this provision 
is included at (d)(1)(F). 
OPC supports the inclusion of prior complaint and prior compliance history in 
determining if an applicant is technically qualified but notes that limiting 
this history to the applicant may create an unintended loophole, because a 
person or entity with a bad track record could start a new company to circumvent 
the requirements of the rule. The commission agrees and has amended the rule to 
include the prior complaint and compliance history of applicant, applicant's 
affiliates and predecessors in interest, and shareholders or principals of 
applicant. For clarity purposes, a definition of "affiliate" and "control" has 
been added. 
SWBT commented that the certified issues decided in Docket Number 16658, 
Applications of AT&T Communications of the Southwest, Inc. and MCIMetro Access 
Transmission Services, Inc. for Facilities-Based Certificates of Operating 
Authority, should be codified into this rule. The commission notes that the 
issues addressed in those dockets relate to waiver of the build-out requirement 
in PURA95 sec.3.2531 and whether a COA holder is precluded from purchasing 
SWBT's flat-rate service. Pursuant to PURA95 sec.3.2531, waiver of the build-out 
requirement is done on a case-by-case basis, and the decision in the AT&T and 
MCIMetro Order on Certified Issues, as well as the commission's final order in 
both dockets, will be dispositive on the issues addressed in those dockets 
without the necessity of including them in this rule. The commission believes 
that whether a COA holder is precluded from purchasing SWBT's flat-rate service 
or whether a COA holder may purchase such service under the federal 
Telecommunications Act of 1996, 47 U.S.C. sec.sec.151 et seq., is not an 
appropriate issue to address at the certification stage, which is the subject of 
this rule. 
OPC commented that (c)(1)(J) is confusing and OPC does not understand what is 
meant by "the ability of the exchange (not the company) to support more than one 
service provider." The commission notes first that this language is taken 
directly from PURA95 sec.3.2531(e)(4). The commission has added language to 
clarify that "the company" is the incumbent local exchange company. The 
commission further notes that this section applies to COA applications in an 
exchange of an incumbent local telephone company serving fewer than 31,000 
access lines. The commission has begun Project Number 17619 to further define 
what that provision, among others, requires and it will not be addressed in this 
rule. 
OPC commented that whether an SPCOA is able to meet the commission's quality of 
service standards has been an issue in previous SPCOAs and should be addressed 
here. The commission notes that a rule in Project Number 14960, addressing the 
quality of service standards applicable to COAs and SPCOAs, will be published 
before December, 1997 and will therefore not be addressed in this project. SWBT 
commented that the holding in the Order in Docket Number 15810, Application of 
Masters Financial Services for a Service Provider Certificate of Operating 
Authority, wherein the commission restricted the geographic and service scope in 
order to find that the applicant was financially and technically qualified, 
should be incorporated into this rule. The commission notes that both (c)(2) and 
(d)(2) of the rule allow the commission to limit the geographic scope of an 
SPCOA or COA if, after considering all the factors including technical and 
financial qualifications, the commission determines that limiting the geographic 
scope is in the public interest. The commission further notes that an SPCOA 
applicant seeking to provide facilities-based service needs to establish greater 
financial qualifications under the rule than an applicant seeking to provide 
resale only. Similarly, (c)(1)(C) and (d)(1)(C) allow the commission to 
determine whether a COA or SPCOA applicant is technically qualified by weighing 
the information such as prior experience in the telecommunications or a related 
industry; complaint history with the commission, other state commissions, and 
the attorneys general in all states where applicant is conducting business; 
whether applicant is able to meet the commission's quality of service standards; 
and compliance with statutes and rules enforced by the Texas Comptroller's 
Office. The rule was drafted with the intent of allowing the commission to 
balance all the factors set forth to determine if a COA or SPCOA applicant is 
technically qualified in order to protect the public interest by assuring a 
certain level of technical qualifications without erecting unnecessary barriers 
to entry. 
SWBT commented that the affiliate issues addressed in Docket Number 17025, 
Application of Time Warner Connect to Expand the Service Territory of its 
Service Provider Certificate of Operating Authority, should be incorporated into 
this rule. The commission notes that no final order has been approved in Docket 
Number 17025. The commission further notes Project Number 17549 has been 
established to draft a rule on affiliate issues; those issues, therefore, will 
not be addressed in this rule. 
The rule as published allowed an incorporated COA or SPCOA holder to provide 
basic local exchange telephone service, basic local telecommunications service, 
and switched access service only in the corporate name, and not the assumed 
name, of the corporation. The commission has revised (f)(1)(A) to allow a 
corporation to be granted a certificate in its incorporated name or its assumed 
name. The commission believed that, in order to track the complaint record of 
COA or SPCOA holders, it was necessary to limit a corporation to use of its 
corporate name. The commission, however, believes that the original objective 
can be achieved by allowing a COA or an SPCOA holder to conduct business only in 
one name, the name in which the commission grants the certificate. Therefore, 
(f)(1)(A) has been changed to allow the commission to issue a corporation's 
certificate in either its corporate name or its assumed name. Paragraph (1) was 
amended to state that "the commission shall grant the certificate in only one 
name." 
Time Warner commented that the commission lacks the authority to approve, 
reject, or condition the sale, transfer, or lease of an entity holding a COA or 
SPCOA. Time Warner suggested that it would be reasonable to require commission 
approval of the transfer of a COA or SPCOA. The commission disagrees that the 
rule as published purports to give the commission the ability to approve, 
reject, or condition the actual sale, transfer, or lease of an entity holding a 
COA or SPCOA. Instead, the rule as published delineates the commission's 
authority to grant or deny a COA or SPCOA to a non-certificated entity that is 
purchasing, or merging with, a COA or SPCOA holder to the same extent the 
commission has the power to grant or deny an initial application for a COA or 
SPCOA by any other non-certificated entity. The commission believes it has the 
duty to protect the public against companies that are unable to meet the 
requirements the legislature established for certification. The commission 
further believes that it would be leaving a gap in the law if a company that had 
been denied certification because it failed to meet the standards could merely 
purchase a COA or SPCOA holder and begin offering basic local exchange telephone 
service, basic local telecommunications service, or switched access service. The 
rule as published requires a person or entity granted a COA or SPCOA to file an 
application to amend the COA or SPCOA in order to "sell, transfer, or lease the 
entity holding the COA or SPCOA" because the commission is endeavoring to 
clearly state that the non-certificated company that acquired either the 
certificate itself or the entity holding the certificate, must gain commission 
approval to be a certificated provider. In the event that, as Time Warner 
suggested, the acquiring non-certificated company "has business plans which do 
not necessitate a certificate," the commission would note that in such an 
instance the SPCOA or COA holder that is being acquired should relinquish its 
certificate. 
Time Warner also commented that the rule implies that the sale, transfer, or 
lease of a COA or SPCOA holder will necessitate a transfer of the certificate 
even when the acquiring company is already certified. The commission did not 
intend this section to apply when both companies hold certificates that are 
identical in geographic scope and scope of service. The commission has, 
therefore, modified the rule to require commission approval of the transfer of 
the COA or SPCOA whenever a certificate holder is selling, merging, assigning, 
or leasing the certificate or its company with a non-certificated company; a 
company holding a different type of certificate, whether a COA, SPCOA, or SPCOA 
reseller; or a COA or SPCOA holder whose certificate is more limited in 
geographic scope than the acquiring or merging company. 
ACSEC supports the requirements in the rule relating to amendments of a COA or 
SPCOA. ACSEC suggests that the rule also incorporate notice to the affected 9-1-
1 entity when the utility seeks to increase its geographic scope, change its 
name, sell, transfer or lease the certificate or entity holding the certificate, 
or change the nature of the services provided from resale-only to facilities. 
The commission agrees that such a change is in the public interest and 
incorporates that requirement in the rule. 
This new section is adopted under the Public Utility Regulatory Act of 1995 
(PURA95), Texas Revised Civil Statute Annotated, Article 1446c-0, sec.1.101 
(Vernon 1997), which provides the Public Utility Commission with the authority 
to make and enforce rules reasonably required in the exercise of its powers and 
jurisdiction, including rules of practice and procedure; and specifically, 
PURA95, sec.3.2531 and sec.3.2532, which grant the commission the authority to 
determine the criteria for financial and technical qualifications of applicants 
for certificates of operating authority and service provider certificates of 
operating authority. 
Cross Index to Statutes: PURA95, sec.sec.1.101, 3.2531 and 3.2532.

sec.23.38.Standards for Granting of Certificates of Operating Authority and 
Service Provider Certificates of Operating Authority.
(a) Scope and purpose. This section applies to the certification of persons and 
entities to provide basic local exchange telephone service, basic local 
telecommunications service, and switched access service as holders of 
certificates of operating authority and service provider certificates of 
operating authority, established in sec.3.2531 and sec.3.2532 of the Public 
Utility Regulatory Act of 1995 (PURA95), Texas Revised Civil Statutes Annotated, 
Article 1446c-0 (Vernon 1997). Through this section, the commission strives to 
protect the public interest against entities that are not qualified to provide 
basic local exchange telephone service, basic local telecommunications service, 
and switched access service, while also encouraging the development of a 
competitive marketplace for local exchange telecommunications services that is 
free of unreasonable barriers to entry that restrict or impede the development 
of a market that will provide consumers with the best services at the lowest 
cost. 
(b) Definitions. The following words and terms, when used in this section, shall 
have the following meanings, unless the context clearly indicates otherwise. 
(1) Affiliate - Any entity that, directly or indirectly, owns or controls, is 
owned or controlled by, or is under common ownership or control with a company 
that applies for a certificate of operating authority or a service provider 
certificate of operating authority under this section. 
(2) Assumed name - Has the meaning assigned by Texas Business & Commerce Code, 
sec.36.10. 
(3) Capitalization - Long-term debt plus total equity.
(4) Capital expenditures - The expenditures for assets that have a useful life 
greater than one year. 
(5) COA - Certificate of operating authority. 
(6) Control - The ability to exercise substantial influence over the policies 
and actions of another. 
(7) Corporate name - Has the meaning assigned by Texas Business Corporation Act, 
Article sec.2.05. 
(8) Geographic scope - The geographic area in which the holder of a COA or an 
SPCOA is authorized to provide service. 
(9) Incumbent local exchange company (ILEC) - Has the meaning assigned by 
PURA95, sec.3.002(3). 
(10) SPCOA reseller - A holder of a service provider certificate of operating 
authority that uses only resold telecommunications services provided by an ILEC 
or a COA or SPCOA holder. 
(11) Return on assets - After-tax net operating income divided by total assets. 
(12) SPCOA - Service provider certificate of operating authority. 
(13) Telecommunications facilities - Conduits, ducts, poles, wires, cables, end-
office switches, telecommunications circuit equipment, telecommunications 
signaling systems, and telecommunications transmission facilities used to 
provide basic local exchange telephone service, basic local telecommunications 
service, and switched access service. 
(14) Working capital requirements - The additional capital required to fund the 
increased level of accounts receivable necessary to provide the proposed 
telecommunications service. 
(c) Standards for granting certification to COA applicants.
(1) The commission shall consider the factors listed in subparagraphs (A)-(F) of 
this paragraph in deciding whether to grant a COA to an applicant proposing to 
serve an exchange of an ILEC serving more than 31,000 access lines. The 
commission shall consider the factors listed in subparagraphs (A)-(J) of this 
paragraph in deciding whether to grant a COA to an applicant proposing to serve 
an exchange of an ILEC serving fewer than 31,000 access lines. However, the 
commission may not, before September 1, 1998, grant a COA for service in an 
exchange of an ILEC serving fewer than 31,000 access lines. 
(A) Whether the applicant has satisfactorily provided all of the information 
required in the Application for a Certificate of Operating Authority. 
(B) Whether the applicant is financially qualified. To prove financial 
qualification as a COA, an applicant shall provide evidence sufficient to 
establish that: 
(i) applicant possesses the greater of $100,000 cash or cash equivalent or 
sufficient cash or cash equivalent to meet start up expenses, working capital 
requirements and capital expenditures, liquid and readily available to meet the 
applicant's startup expenses, working capital requirements and capital 
expenditures for the first two years of Texas operations; or 
(ii) applicant is an established business entity and is able to demonstrate 
evidence of profitability in existing operations for two years preceding the 
date of application by submitting a balance sheet and income statement audited 
or reviewed by a certified public accountant establishing all of the following: 
(I) a long-term debt to capitalization ratio of less than 60%;
(II) a return-on-assets ratio of at least 10%; and, 
(III) the greater of $50,000 cash or cash equivalent or sufficient cash or cash 
equivalent to meet startup expenses, working capital requirements and capital 
expenditures, liquid and readily available to meet the applicant's startup 
expenses, working capital requirements and capital expenditures for a minimum of 
the first two years of Texas operations. 
(C) Whether the applicant is technically qualified. The commission shall 
determine whether an applicant possesses sufficient technical qualifications to 
be awarded a COA based upon a review of the following information. 
(i) Prior experience by the applicant or one or more of the applicant's 
principals or employees in the telecommunications industry or a related 
industry. 
(ii) Any complaint history regarding the applicant, applicant's affiliates, 
predecessors in interest, shareholders, and principals on file at the Public 
Utility Commission of Texas. 
(iii) Any complaint history regarding the applicant, applicant's affiliates, 
predecessors in interest, shareholders, and principals with Public Utility 
Commissions or Public Service Commissions in other states where the applicant is 
doing business. 
(iv) Any complaint history regarding the applicant, applicant's affiliates, 
predecessors in interest, shareholders, and principals on file with the Office 
of the Texas Attorney General and the Attorney General in other states where the 
applicant is doing business. 
(v) The compliance record of the applicant, applicant's affiliates, predecessors 
in interest, shareholders, and principals at the Texas Comptroller's Office. 
(vi) The compliance record of the applicant, applicant's affiliates, 
predecessors in interest, shareholders, and principals at the Public Utility 
Commission of Texas. 
(D) Whether the applicant is able to meet the commission's quality of service 
standards. 
(E) Whether certification of the applicant is in the public interest. 
(F) Whether the applicant's build-out plan pursuant to PURA95, sec.3.2531(c) and 
(d) is adequate. 
(G) The effect of granting the certificate on any public utility already serving 
the area and on the utility's customers. 
(H) The existing utility's ability to provide adequate service at reasonable 
rates. 
(I) The impact on the existing utility's ability as the provider of last resort. 
(J) The ability of the exchange (not the incumbent local exchange company) to 
support more than one service provider. 
(2) If, after considering the factors in this subsection, the commission finds 
it to be in the public interest to do so, the commission may limit the 
geographic scope of the COA. 
(d) Standards for granting certification to SPCOA applicants.
(1) The commission shall consider the following factors in deciding whether to 
grant an SPCOA: 
(A) Whether the applicant has satisfactorily provided all of the information 
required in the Application for a Service Provider Certificate of Operating 
Authority. 
(B) Whether the applicant is financially qualified as an SPCOA or whether 
applicant should be restricted to an SPCOA reseller. To prove financial 
qualifications as an SPCOA, applicant shall meet the standards set forth in 
subsection (c)(1)(B) of this section. To prove financial qualifications as an 
SPCOA reseller, an applicant shall provide evidence sufficient to establish 
that: 
(i) applicant possesses the greater of $25,000 cash or cash equivalent or 
sufficient cash or cash equivalent to meet startup expenses, working capital 
requirements and capital expenditures, liquid and readily available to meet the 
applicant's startup expenses, working capital requirements and capital 
expenditures for the first year of Texas operations; or 
(ii) applicant is an established business entity and is able to demonstrate 
evidence of profitability in existing operations for two years preceding the 
date of application by submitting a balance sheet and income statement audited 
or reviewed by a certified public accountant establishing all of the following: 
(I) a long-term debt to capitalization ratio of less than 60%;
(II) a return-on-assets ratio of at least 10%; and, 
(III) the greater of $10,000 cash or cash equivalent or sufficient cash or cash 
equivalent to meet startup expenses, working capital requirements and capital 
expenditures, liquid and readily available to meet the applicant's startup 
expenses, working capital requirements and capital expenditures for the first 
year of Texas operations. 
(C) Whether the applicant is technically qualified. The commission shall 
determine whether an applicant possesses sufficient technical qualifications to 
be awarded an SPCOA or whether applicant should be restricted to an SPCOA 
reseller based upon a review of the following information. 
(i) Prior experience by the applicant or one or more of the applicant's 
principals or employees in the telecommunications industry or a related 
industry. 
(ii) Any complaint history regarding the applicant, applicant's affiliates, 
predecessors in interest, shareholders, and principals on file at the Public 
Utility Commission of Texas. 
(iii) Any complaint history regarding the applicant, applicant's affiliates, 
predecessors in interest, shareholders, and principals with Public Utility 
Commissions or Public Service Commissions in other states where applicant is 
doing business. 
(iv) Any complaint history regarding the applicant, applicant's affiliates, 
predecessors in interest, shareholders, and principals on file with the Office 
of the Texas Attorney General and the Attorney General in other states where 
applicant is doing business. 
(v) The compliance record of the applicant, applicant's affiliates, predecessors 
in interest, shareholders, and principals at the Texas Comptroller's Office. 
(vi) The compliance record of the applicant, applicant's affiliates, 
predecessors in interest, shareholders, and principals at the Public Utility 
Commission of Texas. 
(D) Whether the applicant is able to meet the commission's quality of service 
standards. 
(E) Whether certification of the applicant is in the public interest. 
(F) Whether the applicant, together with affiliates, had in excess of 6.0% of 
the total intrastate switched access minutes of use as measured by the most 
recent 12-month period preceding the filing of the application for which data is 
available. 
(2) If, after considering the factors in this subsection, the commission finds 
it to be in the public interest to do so, the commission may limit the 
geographic scope of the SPCOA. 
(e) Financial instruments that will meet the cash requirements established in 
this rule. 
(1) Applicants for COAs or SPCOAs shall be permitted to use any of the financial 
instruments set out in subparagraphs (A)-(F) of this paragraph to satisfy the 
cash requirements established in this rule to prove financial qualification. 
(A) Cash or cash equivalent, including cashier's check or sight draft. 
(B) A certificate of deposit with a bank or other financial institution. 
(C) A letter of credit issued by a bank or other financial institution, 
irrevocable for a period of at least 12 months beyond certification of the 
applicant by the commission. 
(D) A line of credit or other loan, issued by a bank or other financial 
institution, irrevocable for a period of at least 12 months beyond certification 
of the applicant by the commission and payable on an interest-only basis for the 
same period. 
(E) A loan issued by a subsidiary or affiliate of applicant, or a corporation 
holding controlling interest in the applicant, irrevocable for a period of at 
least 12 months beyond certification of the applicant by the commission, and 
payable on an interest-only basis for the same period.
(F) A guaranty issued by a shareholder or principal of applicant, a subsidiary 
or affiliate of applicant, or a corporation holding controlling interest in the 
applicant, irrevocable for a period of at least 12 months beyond the 
certification of the applicant by the commission. 
(2) To the extent that the applicant relies upon a loan or guaranty provided in 
paragraph (1)(E) or (F) of this subsection, the applicant shall provide evidence 
sufficient to establish that the lender or guarantor possesses sufficient cash 
or cash equivalent to fund the loan or guaranty. 
(3) All cash and instruments listed in subparagraphs (A)-(F) of this subsection 
shall be unencumbered by pledges as collateral and shall be subject to 
verification and review by the commission prior to certification of the 
applicant and for a period of 12 months beyond the date of certification of the 
applicant by the commission. Failure to comply with this requirement may void an 
applicant's certification or result in such other action as the commission deems 
in the public interest, including, but not limited to, assessment of reasonable 
penalties and all other available remedies under PURA95. 
(f) Name on certificates. 
(1) All basic local exchange telephone service, basic local telecommunications 
service, and switched access service provided under a COA or SPCOA shall be 
provided in the name under which certification was granted by the commission. 
The commission shall grant the certificate in only one name. 
(A) If the applicant is a corporation, the commission shall issue the 
certificate in the corporate or assumed name of the applicant. 
(B) If the applicant is an unincorporated business entity or an individual, the 
commission shall issue the certificate in the assumed name of the entity or the 
individual. 
(2) The holder of a COA or SPCOA may request commission approval to change the 
name on the certificate by filing an application to amend its certificate with 
the commission. 
(g) Amendment of COA or SPCOA. 
(1) A person or entity granted a COA or an SPCOA by the commission shall be 
required to file an application to amend the COA or an SPCOA on a commission 
approved form in order to: 
(A) change the corporate name or assumed name of the certificate holder; 
(B) change the geographic scope of the COA or SPCOA; 
(C) sell, transfer, assign, or lease the COA or the SPCOA or sell, transfer, or 
lease the entity holding the COA or the SPCOA if: 
(i) a COA or SPCOA holder is selling, merging, assigning, or leasing the 
certificate or the entity holding the certificate to a non-certificated company; 
(ii) a COA holder or an SPCOA holder is selling, merging, assigning, or leasing 
the certificate or the entity holding the certificate to an SPCOA reseller; or 
(iii) a COA or SPCOA holder is selling, merging, assigning, or leasing the 
certificate or the entity holding the certificate to a COA or SPCOA holder whose 
certificate is more limited in geographic scope than the acquiring or merging 
company. 
(D) remove the resale-only restriction on an SPCOA reseller certificate. 
(2) If a COA holder sells, merges, assigns, or leases its certificate or the 
entity holding the certificate to an SPCOA holder with an identical geographic 
scope, the surviving entity shall hold a COA certificate and shall have all the 
obligations of a COA holder set forth under state and federal law; the surviving 
entity shall also notify the commission within 30 days of the sale, merger, 
assignment, or lease. 
(3) If the application to amend is for a name change of the certificate holder 
and is not a sale, transfer, assignment, or lease of the COA or the SPCOA or a 
sale, transfer, or lease of the entity holding the COA or the SPCOA, applicant 
will be required to provide a general description of the applicant, including 
the following: 
(A) Legal name and all assumed names of the entity to which the commission 
issued the certificate. 
(B) All other assumed names, if any, under which the certificate holder does 
business. 
(C) Certificate number of the COA or SPCOA. 
(D) Address and telephone number of the principal office of certificate holder.
(E) Name, address, and office location of each partner, officer, and the five 
largest shareholders of certificate holder. 
(F) Proposed amendment to legal name or assumed name of certificate holder. 
(4) If the application to amend requests the changes set forth in this 
subsection, paragraph (1), subparagraphs (B), (C) or (D), the commission shall 
consider the factors set forth in subsections (c) and (d) of this section in 
determining whether to approve the amendment to the certificate. 
(5) No later than five days after filing an application to amend, the applicant 
shall notify the Advisory Commission on State Emergency Communications and all 
affected 9-1-1 entities by providing a copy of the application to amend. 
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 July 3, 1997.
TRD-9708668
Rhonda Dempsey
Rules Coordinator
Public Utility Commission of Texas
Effective date: July 23, 1997
Proposal publication date: January 31, 1997
For further information, please call: (512) 936-7308

TITLE 25. HEALTH SERVICES
PART I. Texas Department of Health
CHAPTER 29.Purchased Health Services
SUBCHAPTER L.General Administration
25 TAC sec.29.1126
On behalf of the State Medicaid Director, the Texas Department of Health 
(department) submits for adoption an amendment to sec.29.1126, concerning in-
home total parenteral hyperalimentation services provided to Medicaid 
recipients. The amendment is adopted without changes to the proposed text as 
published in the April 11, 1997, issue of the Texas Register (22 TexReg 3376), 
and therefore the section will not be republished. 
The amendment will allow enteral solutions and services as an optional treatment 
service to Medicaid recipients eligible for total parenteral hyperalimentation. 
The amendment also establishes benefits and limitations for covered enteral 
services, defines eligibility requirements and reimbursement methodology for 
enteral services. 
No comments were received on the proposal during the comment period.
This section is adopted under the Human Resources Code, sec.32.021 and 
Government Code, sec.531.021, which provide the Health and Human Services 
Commission with the authority to adopt rules to administer the state's medical 
assistance program and is submitted by the Texas Department of Health under its 
agreement with the Health and Human Services Commission to operate the purchased 
health services program and as authorized under Chapter 15, sec.1.07, Acts of 
the 72nd Legislature, First Called Session (1991). 
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 July 2, 1997.
TRD-9708632
Susan K. Steeg
General Counsel
Texas Department of Health
Effective date: July 22, 1997
Proposal publication date: April 11, 1997
For further information, please call: (512) 458-7236

CHAPTER 115. Home and Community Support Services Agencies
The Texas Department of Health (department) adopts amendments to sec.sec.115.1, 
115.2, 115.13-115.15, 115.22-115.28, 115.51-115.54, and 115.61-115.62; the 
repeal of sec.sec.115.4-115.7, 115.11, 115.12, and 115.21; and new 
sec.sec.115.11, 115.12, 115.16, 115.21, 115.71, and 115.72 concerning the 
licensing of home and community support services agencies (HCSSAs). Sections 
115.2, 115.11, 115.12, 115.13, 115.14, 115.15, 115.16, 115.21, 115.22, 115.24, 
115.25, 115.26, 115.27, 115.51, 115.52 and 115.54 are adopted with changes to 
the proposed text as published in the March 14, 1997, issue of the Texas 
Register (22 TexReg 2678). Sections 115.1, 115.23, 115.28, 115.53, 115.61, 
115.62, 115.71, and 115.72 are adopted without changes and will not be 
republished. The repeals are adopted without change, and will not be 
republished.
The amended sections cover purpose, definitions, change of ownership or 
services, application and issuance of branch office license, application and 
issuance of an alternate delivery site license, standards for licensed home 
health services, standards for licensed and certified home health services, 
standards for home dialysis designation, standards for hospice services, 
standards for personal assistance services, standards for branch offices, 
standards for alternate delivery sites, survey procedures, enforcement action, 
complaints, criminal history checks, home health aides, and home health 
medication aides. The repealed sections cover exemptions, unregulated agencies, 
Home and Community Support Services (HCSS) Advisory Committee, Texas Department 
of Health/Board of Nurse Examiners for the State of Texas Memorandum of 
Understanding (TDH/BNE MOU) Advisory Committee, application and issuance of 
temporary license for first-time applicants (unregulated agencies, new agencies, 
and certain relocations), issuance and renewal of annual license, and licensure 
requirements and standards for all home and community support services agencies 
(HCSSAs). The new sections cover application and issuance of initial license; 
issuance and renewal of license; time periods for processing and issuing a 
license; licensure requirements and standards for agencies providing licensed 
home health, licensed and certified home health, or hospice services; HCSS 
Advisory Committee; and TDH/BNE MOU Advisory Committee. New sec.sec.115.11, 
115.12, 115.21, 115.71, and 115.72 contain new and existing text replacing 
repealed sec.sec.115.6, 115.7, 115.11, 115.12, and 115.21. New sec.115.16 
contains new text specific to time periods for processing HCSSA license 
applications. 
The final rules are the collaborative product of the HCSS Advisory Committee, 
Informal Task Force for Home and Community Support Services Agencies (Informal 
Task Force), department staff, and the state agencies involved in developing the 
memoranda of understanding specified in the Health and Safety Code, 
sec.142.009(k) and sec.142.016. The department recognizes one commenter's 
concern that representatives from the Texas Department of Mental Health and 
Mental Retardation's (TXMHMR) home and community-based services (HCS) and home 
and community-based services - Omnibus Budget Reconciliation Act (HCS-OBRA) 
programs and the Texas Department of Human Services' (TDHS) community living 
assistance and support services (CLASS) program did not hold appointment to the 
Informal Task Force. The department opted for membership on the Task Force to 
include provider representation; however, TXMHMR and TDHS did participate in the 
development of the final rules through attendance at the Task Force meetings and 
the department's regular solicitation of input and comments from these state 
agencies. Other state agencies included in this process were the Health and 
Human Services Commission, Board of Nurse Examiners for the State of Texas, 
Texas Commission for the Blind, Texas Rehabilitation Commission, and Texas 
Department of Protective and Regulatory Services. Except for sec.115.21, the 
rules will become effective on October 1, 1997, in order to allow the department 
to conduct surveyor orientation and training on implementation of the rules. 
Section 115.21 will become effective August 1, 1997; however, all subsections in 
sec.115.21 except for subsection (e)(1) will not be enforced until October 1, 
1997. 
At their meeting on May 28, 1997, the Home and Community Support Services 
Advisory Committee approved the final rules and recommended an earlier effective 
date for sec.115.21(e)(1) relating to physician direction of psychoactive 
treatments. The change to sec.115.21(e)(1) allows any physician to direct 
psychoactive treatments, relieving HCSSAs from the current onerous requirement 
that psychoactive treatments be provided under the direction of a psychiatrist. 
The rule was changed to recognize that many areas in Texas do not have access to 
a psychiatrist, and therefore would be denied psychoactive treatment under the 
current rule language. The department added a new subsection (g) to sec.115.21 
explaining that the section is effective date August 1, 1997, but that the 
department will begin enforcing all subsections in sec.115.21 other than 
subsection (e)(1) on October 1, 1997. 
Specifically, the amendment to sec.115.1 clarifies that the rules are in 
addition to any requirements of private or public funding sources and that an 
HCSSA is responsible for researching the availability of such funding sources. 
The amendment to sec.115.2 clarifies or adds to the definitions of 
"administrative support site," "alternate delivery site," "assistance with 
medication or treatment regimen," "branch office," "client," "dietitian," 
"director," "functional need," "licensed vocational nurse," "medication list," 
"occupational therapist," "personal assistance services," "physical therapist," 
"practitioner," "psychoactive treatment," "registered nurse," "respiratory 
therapist," "social worker," and "speech-language pathologist." New definitions 
include "advanced practice nurse," "audiologist," "notarized copy," "nutritional 
counseling," "physician assistant," "physician delegated tasks," "registered 
nurse delegation," "service area," "supervising nurse," and "survey." As a 
result of public comment, the department has amended the proposed definitions 
for "nutritional counseling" and "social worker"; the reasons for the changes 
are more specifically addressed in the summary of comments concerning the 
definitions. 
The amendment to sec.115.13 clarifies existing language, changes the time frame 
a new owner is required to submit a change of ownership application to the 
department, requires a new owner to notify the department of the effective date 
of the change of ownership, and requires a new owner to submit a notarized 
affidavit that the previous owner agrees with the change of ownership and a copy 
of the documents filed with the secretary of state (for a corporation) or the 
sales agreement (for other business entities). Changes to the proposed text were 
made in sec.115.13(a)(1)(C), sec.115.13(c)(1) and (2), and sec.115.13(d) for 
clarification purposes and are more specifically addressed in the summary of 
comments. 
The amendments to sec.115.14 and sec.115.15 clarify the application process for 
a branch office and an alternate delivery site. Changes to the proposed text in 
sec.115.14(e)(3), sec.115.14(l), and sec.115.15(e)(3) were made to correct a 
grammatical error. A change to the proposed text in sec.115.15(j) was made for 
consistency and clarification. These changes are more specifically addressed in 
the summary of comments. 
The amendment to sec.115.22 includes new language for clarification purposes and 
some existing text in current sec.115.22 was relocated to sec.115.21 and 
sec.115.26. The changes made to the proposed text are in sec.115.22(b)(2)(A), 
and sec.115.22(b)(6) and (7); the changes are more specifically addressed in the 
summary of comments. 
The amendment to sec.115.23 is for clarification purposes. There were no 
additional changes to the text as proposed. 
The amendment to sec.115.24 includes clarifying language; deletes provisions 
relating to dialysis technicians; expands provisions for hepatitis B screening 
and vaccination of clients and staff; changes the qualifications of the medical 
director of a home dialysis provider to mirror those of a licensed end stage 
renal disease facility; changes the qualifications of a registered nurse 
performing an initial assessment of a client for home dialysis and supervising 
the provision of dialysis in the home setting; sets qualifications of a licensed 
nurse providing dialysis services in the home setting; establishes provisions 
for preventive maintenance of dialysis equipment used by clients; and adds 
provisions for reuse of dialyzers, if practiced. There are presently three 
licensed HCSSAs with the home dialysis designation, none of which utilize 
dialysis technicians. The change to the proposed text in sec.115.24(p)(2) was 
for consistency in response to comments; other changes in sec.115.24 were to 
correct errors in form and style, punctuation and grammar; these changes are 
more specifically addressed in the summary of comments. 
The amendment to sec.115.25 include clarifying language; provisions that a 
comprehensive assessment be performed for each client to identify the client's 
needs for hospice care, including palliation and management of a terminal 
illness, and medical, nursing, social, emotional, and spiritual care; provisions 
relating to a hospice client's rights; and provisions relating to an inpatient 
hospice's development of a quality assessment and performance improvement 
program. Changes to the proposed text were made in sec.115.25(g)(2), 
sec.115.25(j)(9), sec.115.25(r), sec.115.25(s), and sec.115.25(t)(4); the 
reasons for the changes are more specifically addressed in the summary of 
comments.
The amendment to sec.115.26 includes clarifying language; requirements that an 
HCSSA providing personal assistance services establish a service area; 
qualifications for an administrator of an HCSSA providing personal assistance 
services; requirements for client records; qualifications for a supervisor of 
personal assistance services; provisions describing required policies; and 
provisions implementing the memorandum of understanding between the Texas 
Department of Health and the Board of Nurse Examiners relating to feeding and 
medication administration via a permanently placed gastrostomy tube in a respite 
situation. Changes to the proposed text were made in sec.115.26(a), 
sec.115.26(h)(3)(A) and (B), 115.26(i)(3)(A), sec.115.26(j)(3) and 
sec.115.26(k). New paragraph (6) was added to sec.115.26(g). The changes are 
more specifically addressed in the summary of comments. 
The amendment to sec.115.27 clarifies eligibility requirements for the 
establishment and supervision of a branch office. Changes to the proposed text 
were made in sec.115.27(b) and (g) as a result of comments and are specifically 
addressed in the summary of comments. The amendment to sec.115.28 clarifies 
eligibility requirements for the establishment and supervision of an alternate 
delivery site; no changes were made to the text as proposed. The amendment to 
sec.115.51 clarifies the department's and an HCSSA's responsibilities in the 
survey process, including certain exclusions from the 18-month and 36-month 
survey cycle; an HCSSA's responsibility to submit a plan of correction; and an 
HCSSA's request that the department reconsider deficiencies cited during a 
survey. Changes to the proposed text were made in sec.115.51(a)(3), 
sec.115.51(c)(1) and (2), sec.115.51(g)(6), sec.115.51(h)(2), sec.115.51(l), and 
sec.115.51(o) and are explained in the summary of comments.
The amendment to sec.115.52 clarifies the department's enforcement action 
process and an HCSSA's responsibilities in this process. Changes to the proposed 
text were made in sec.115.52(a), sec.115.52(I), and sec.115.52(k) as a result of 
comments and are specifically explained in the summary of comments. The 
amendment to sec.115.53 reflects the correct address for registering complaints 
against an agency. No changes were made to the text as proposed. The amendment 
to sec.115.54 implements changes to the Health and Safety Code, Chapter 250, 
relating to criminal history checks of unlicensed personnel. One minor change 
was made to the proposed text in sec.115.54(b) for clarification; the word "and" 
was inserted after the word "employment." 
The amendments to sec.115.61 and sec.115.62 are for clarification purposes and 
change the time period a medication aide permit holder or program may request a 
hearing relating to a proposed enforcement action against the medication aide or 
program. No changes were made to the text as proposed. 
Section 115.4 is being repealed because it duplicates language in the Health and 
Safety Code, sec.142.003 relating to exemptions and it is not necessary to 
repeat as a rule. Section 115.5 relating to application procedures is being 
repealed because it is covered in the Health and Safety Code, sec.142.002 and 
sec.142.009 and it is not necessary to repeat as a rule. 
New sec.115.11 replaces repealed sec.115.11 relating to application procedures. 
New sec.115.11 provides for the issuance of an initial license valid for 12 
months unless suspended, revoked, or denied and contains new provisions 
requiring an HCSSA to establish a service area. Further, the new section 
requires an applicant for an initial HCSSA license to submit with the 
application form the names and titles of management personnel; submit a 
curriculum vitae for the supervising nurse (if the HCSSA provides skilled 
services) and the administrator; consider and submit a longer history of certain 
events concerning the applicant and the applicant's affiliates and managers; 
have available and ready for review at the time of the initial survey a list of 
the HCSSAs clients and the client record for each client admitted during the 
licensing period prior to survey; and assure that the administrator and 
supervising nurse or designee(s) are present at the entrance conference, 
available during the survey, and present at the exit conference. In addition, 
clarifying language was added describing the initial license application process 
and the HCSSA's responsibilities in the initial application process. Changes to 
the proposed text were made in sec.115.11(g)(1), sec.115.11(g)(2)(B), 
(g)(2)(k)(iv), (g)(2)(O)(I) and (g)(2)(Q), sec.115.11(I)(2), sec.115.11(j)(2), 
and sec.115.11(k)(2) and (3) for the reasons described in the department's 
summary of comments. 
New sec.115.12 replaces repealed sec.115.12 concerning the renewal application 
process. New sec.115.12 clarifies an HCSSA's responsibilities in the renewal 
application process. Changes to the proposed text were made in sec.115.12(a)(3) 
and (5) and sec.115.12(b)(2)(C)(I) and (E) for the reasons described in the 
department's summary of comments. 
New sec.115.16 establishes time periods for processing and issuing an HCSSA 
license in Chapter 115. Presently, time periods for processing HCSSA license 
applications are covered in 25 TAC, sec.113.2 relating to special health 
services permits, which includes time periods for processing license 
applications for ambulatory surgical centers, birthing centers, and abortion 
facilities in addition to HCSSAs. The time periods in sec.115.16 are the same as 
is described in current sec.113.2. Changes to the proposed text were made in 
sec.115.16(a)(1) and sec.115.16(b)(1) for clarification purposes as specifically 
stated in the summary of comments. 
New sec.115.21 replaces the repealed sec.115.21 concerning licensure 
requirements and standards. New sec.115.21 contains new and existing text, and 
was renamed to apply to HCSSAs providing licensed home health, licensed and 
certified home health, and hospice services. Section 115.21 no longer contains 
provisions applicable to an HCSSA providing personal assistance services. 
Requirements presently in sec.115.21 which are applicable to HCSSAs providing 
personal assistance services were moved to sec.115.26 (relating to personal 
assistance services). New provisions of sec.115.21 include requirements that an 
HCSSA establish a service area which is adequately staffed and supervised; 
investigate complaints filed by its clients concerning treatment or respect for 
property; provide its clients with information relating to supervision of 
services provided, advance directives, durable power of attorney for health 
care, and out-of-hospital do-not-resuscitate (DNR) orders; and meet payroll 
obligations. Further, the new requirements in sec.115.21 describe an HCSSA's 
responsibilities when transferring or discharging a client and when accepting 
physician delegation; increase the qualifications for an administrator; 
establish qualifications for a supervising nurse; and allow psychoactive 
treatments to be provided under the direction of any physician (presently, the 
requirement is that psychoactive treatments be provided under the direction of a 
psychiatrist). Existing text was reorganized for clarification purposes and 
better readability. Changes to the proposed text were made to 
sec.115.21(b)(1)(B), sec.115.21(b)(2)(G)(ii), sec.115.21(b)(3)(B)(I)(III), 
sec.115.21(b)(3)(C)(v), sec.115.21(b)(4)(A) and (b)(4)(I)(iv), 
sec.115.21(b)(5)(C), sec.115.21(c)(8), sec.115.21(d)(2), sec.115.21(f)(7) and 
sec.115.21(f)(12). New sec.115.21(g) was added for the reason previously 
explained in this preamble. Reasons for the other changes are explained in the 
department's summary of comments. 
New sec.115.71 relating to Home and Community Support Services Advisory 
Committee contains existing text currently in sec.115.6 which is being repealed. 
New sec.115.72 relating to Texas Department of Health/Board of Nurse Examiners 
for the State of Texas Memorandum of Understanding contains existing text 
currently in sec.115.7 which is being repealed. No changes were made to the text 
as proposed. 
The rules as adopted will result in increased quality of care for clients 
receiving home and community support services through increased qualifications 
for the administrator and supervising nurse; the provision of more information 
to the department by an HCSSA applicant relating to background (e.g., felony 
criminal convictions) so that the department is in a better position to identify 
"bad actors" prior to issuing a license; and a clearer understanding for an 
HCSSA of the application requirements, the survey process, and its 
responsibilities to the clients served. In certain instances, the standards were 
strengthened to better protect the health and safety of clients of HCSSAs. 
The following is the summary of comments concerning the proposed rules. The 
department's response and any resulting change(s) follows each comment.
Comment: Concerning the proposed preamble, one commenter stated that the process 
used in developing the rules was not as inclusive as described and added that 
representatives from the HCS, HCS - OBRA, and CLASS programs were not appointed 
to the Informal Home and Community Support Services Agency Task Force (task 
force). The commenter further stated that any efforts to obtain representation 
on the task force were ignored by department staff and that efforts to 
communicate the commenter's concerns have been difficult with "no real avenue" 
for participation in the process or to assist in developing the rules. The 
commenter claimed that the resulting proposed rules are of no added value or 
benefit to the individuals served by the previously mentioned programs.
The commenter also suggested that the fiscal impact statement be reviewed, 
citing that providers of HCS and CLASS services and the state agencies 
administering these programs will significantly be affected. The commenter did 
not provide more specific information to support the comment. 
Response: The department disagrees. The department solicited and received much 
participation and feedback from the HCS, HCS-OBRA, and CLASS program staff. In 
addition, the department provided as requested notices to and copies of all 
agendas and working drafts of the rules to representatives of three providers of 
HCS and HCS-OBRA services and one major personal assistance services provider 
association. Neither the department nor the task force restricted participation 
by any interested party. All meetings of the task force and the HCSS Advisory 
Committee were posted as open meetings in accordance with the Government Code, 
Chapter 551. 
Comment: Concerning the rules in general, one commenter recommended the rules 
include language: that is specific to the developmental needs of children; that 
requires nursing assessments of pediatric clients include a developmental 
assessment; that requires agencies include the developmental needs of children 
and families into the plan of care and health care delivery; that establishes 
minimum educational and experiential requirements in pediatrics for all 
registered nurses providing direct care or supervision; that requires agencies 
providing care to pediatric clients to also have written policies and procedures 
for ensuring the qualifications and training of unlicensed personnel in the care 
of children (including normal growth and development); that requires that 
agencies have written policies and procedures relating to the reporting of child 
abuse or neglect; that requires agencies to perform criminal history checks on 
all caregivers who provide services to pediatric clients; that requires the HCSS 
Advisory Committee to have representation for children with special health care 
needs and their families; to define the term "adequate;" to require that all 
clients or their families affected by program or administrative changes within 
an agency be informed of these changes via adequate notice; to require that all 
surveys include a sample of pediatric clients if pediatric clients are served by 
an agency; and to require an agency notify prospective clients of any 
limitations relating to the availability of services, including but not limited 
to the hours the licensee is staffed during a given shift. 
Response: The department agrees that children have special developmental needs 
and that agencies choosing to care for children must consider these needs when 
providing home and community support services to children. The commenter's 
suggestions will be considered during the next revision of the rules. 
Comment: Concerning the rules in general, one commenter expressed opposition to 
the rules as proposed. The commenter stated that House Bill (HB) 1551, 73rd 
Legislature, 1993, did not intend to replace with a medical model approach the 
"current best practices" of state agency programs (e.g., TXMHMR's HCS and HCS-
OBRA and TDHS's Intermediate Care Facility for the Mentally Retarded and CLASS 
programs). The commenter added that a misapplication of HB 1551 has occurred 
resulting in a contradiction of certain tenets for outcome-oriented support 
services inherent in these programs. The commenter did not specify sections of 
the rules reflecting misapplication of HB 1551. 
Response: The department disagrees that a misapplication has occurred in 
implementing HB 1551. Section 115.26 conforms with the Health and Safety Code, 
sec.142.001(20) and sec.142.021 and other applicable state laws governing the 
provision of health-related services. The department believes that the memoranda 
of understanding with TXMHMR, TDHS, Texas Department of Protective and 
Regulatory Services, Texas Department on Aging, Texas Rehabilitation Commission, 
and Texas Commission for the Blind addresses the department's coordination with 
other state agency programs. 
Comment: Concerning the definition of "applicant" in sec.115.2, three commenters 
stated the department's intent in sec.115.51 to prevent owners of agencies who 
have had revocation of a license from opening another agency under the same 
ownership may not be prevented if the agency is either a non-profit or a for-
profit corporation. Two of the commenters recommended legal review of the 
definition to be sure that enforcement action will be effective in the case of 
non-profit or for-profit corporate ownership. 
Response: The department appreciates the commenter's concern, but believes the 
definition of the term "applicant" is sufficiently stated as written to cover 
the opening of another agency under the same corporate ownership as an agency 
whose license was revoked. In such a case, the department will be able to 
consider enforcement action (e.g. denial of the license). No change was made. 
Comment: Concerning the definition of "assistance with medication or treatment 
regimen" in sec.115.2, one commenter stated that while the amendment is intended 
to clarify the definition for functionally limited, cognitively able persons, it 
may be interpreted in a way that will discriminate against groups of people who 
do not match that description, e.g. cognitively dysfunctional, but functionally 
unlimited. The commenter recommended that the statement "unless the client has 
the cognitive ability to direct...." be omitted in order to make absolutely 
clear that the exception for a functionally limited person is not interpreted as 
a part of the definition and recommended clarifying language. 
Response: The department disagrees that the definition needs clarification and 
believes the definition is clearly stated as written. No change was made.
Comment: Concerning the definition of "functional need" in sec.115.2, two 
commenters stated they could not locate where the term is used in the rules and 
that the terms functional need or disability are in common usage and do not 
require further definition. The commenter recommended the definition be deleted 
as unnecessary. 
Response: The department disagrees that the definition be deleted as the term 
"functional need" appears in sec.115.26(f). No change was made. 
Comment: Concerning the definition of "nutritional counseling" in sec.115.2, one 
commenter recommended subparagraph (C) include "practitioner, as defined in this 
section" in order to expand who the dietitian could take orders from. Three 
other commenters suggested replacing the word "groups" with the word "families" 
in the first sentence of definition. These three commenters also believed the 
definition is too detailed, too prescriptive, and is not appropriate as a 
definition or for inclusion elsewhere in the rules and recommended deletion of 
the last sentence of the definition and subparagraphs (A)-(E). 
Response: The department agrees to replace the word "groups" with the word 
"families" and to add "or practitioner" to subparagraph (C) as suggested, and 
has made this change. The department disagrees that the definition is too 
detailed or prescriptive. The department believes such a definition is necessary 
in order to be clear what is meant by the home health service "nutritional 
counseling." The provision of this service requires a home and community support 
services agency license. Subparagraphs (A)-(E) were not deleted. 
Comment: Concerning the definition of "service area" in sec.115.2 and its use in 
the rules, at sec.115.11(g)(2)(B), one commenter stated the rules do not 
adequately specify how a service area is designated or if there are any 
limitations or guidelines on the designation of service area. The commenter 
questioned if an agency can designate the State of Texas as its service area.
Response: The department disagrees that the definition of "service area" should 
be narrowed. The department believes that each agency is responsible for 
determining the size and configuration of their service area. The limitations in 
establishing a service area would be determined by the location of the agency's 
clients and the agency's ability to provide quality care and services to these 
clients. No change was made. 
Comment: Concerning the definition of "social worker" in sec.115.2, numerous 
commenters opposed, some with strong complaints, the changes to the definition. 
The commenters stated that social workers who act as primary service providers 
of medical social services in the home health and hospice arenas should hold a 
master of social work; pointed out that increasingly early discharge from 
hospitals results in a larger number of home health and hospice beneficiaries 
with complex treatment and family issues and urged the department to allow a 
social worker associate or licensed social worker to practice only under the 
guidance of an experienced social worker holding a master's degree in social 
work; that a social worker associate or licensed social worker is not qualified 
to provide a complete assessment or the range of services without the 
supervision of a individual with a master's degree in social work; and that the 
Medicare Conditions of Participation require social work assistants and social 
workers to work under the supervision of a social worker with a master's degree 
in social work. One commenter stated for the social worker and the social worker 
associate, provisions are needed by employers and other organizations for time 
and financial assistance to complete the educational requirements. 
Response: The department agrees that a social worker associate or licensed 
social worker does not have the education and experience to perform complex 
psychosocial evaluations required in the provision of many home health or 
hospice services. Therefore, the proposed text, "This term includes a social 
worker associate, licensed social worker, or licensed master social worker," was 
deleted. The department believes it more appropriate to address the social 
worker qualifications in the sections of the rules relating to the provision 
social services. The department believes that a bachelor's degree in social work 
is appropriate as the minimum level of education to perform or supervise 
assessments in home health or hospice. Changes were made in sec.115.22(c)(6) and 
sec.115.25(r) reflecting that the social worker must have at least a bachelor's 
degree in social work from an accredited college or university. The requirement 
that a social worker providing social services in the home dialysis setting have 
a master's degree was retained in sec.115.24(s)(3).
Comment: Concerning sec.115.11 in general, two commenters recommended the rules 
require agencies to submit the agency's policies and procedures at the time of 
the initial application (1) in order to assure that an agency was operating with 
appropriate and complete policies and procedures during the interim between the 
start of operations and the initial survey and ensure health and safety; (2) to 
decrease surveyor time in the field; and (3) to prevent the inconsistencies that 
currently exist in surveyor interpretation of an agency's policies. The 
commenters stated revised policies could be submitted to the surveyor at the 
time of resurvey. 
Response: The department agrees it is important that an agency have policies and 
procedures developed prior to initiating services and encourages such 
preparation. However, the department does not have the resources to review at 
the time of application the policies and procedures for each new applicant 
without imposing increased delays in application processing times. Therefore, 
the suggested changes were not made 
Comment: Concerning sec.115.11(g)(2)(B) and sec.115.11(g)(2)(K)(iv), one 
commenter recommended adding a cross-reference to the provisions for service 
area and curriculum vitae of administrator in sec.115.26 relating to personal 
assistance services. 
Response: The department agrees and has added cross-referencing language 
accordingly. 
Comment: Concerning sec.115.11(g)(2)(O)(I), sec.115.11(j)(2), 
sec.115.12(b)(2)(C)(I), and sec.115.13(a)(1)(A) one commenter stated that the 
Health Care Financing Administration (HCFA) is discussing the three-year Joint 
Commission on Accreditation of Hospitals (JCAHO) accredited program as meeting 
the Medicare Conditions of Participation and recommended the rule be written 
with more flexibility in order to prepare for any HCFA policy change regarding 
the acceptance of JCAHO accreditation (3 year) in lieu of the Medicare survey. 
Three other commenters questioned how an agency can be JCAHO accredited if they 
are not licensed and requested clarification. Two of the commenters also 
questioned why the requirement for JCAHO accreditation is required to be for one 
year for agencies other than Medicare certified agencies when the licensure 
survey requirements are for three years and recommended three year certification 
should be sufficient for agencies with categories of services other than 
Medicare. 
Response: The department agrees to delete the one-year JCAHO accreditation 
language and has changed the wording to include both the one-year and three-year 
JCAHO accreditation. The Health and Safety Code, sec.142.009(h) provides that an 
HCSS is not subject to additional surveys (complaints excepted) while the HCSS 
maintains accreditation from the JCAHO, Community Health Accreditation Program 
(CHAP), or other accrediting body as long as the accreditation standards meet or 
exceed the licensing requirements for HCSSAs. After reviewing the JCAHO's 
accreditation standards and the CHAP standards, the department determined that 
the CHAP, the JCAHO one-year accreditation standards and the more stringent 
JCAHO three-year accreditation standards met the intent of sec.142.009(h) as 
long as HCSSAs establish, implement, and enforce policies addressing compliance 
with certain laws unique to Texas (e.g., rights to the elderly in Human 
Resources Code, Chapter 102). The required policies are listed in sec.115.21(c). 
In response to the commenters questioning how an agency can be accredited prior 
to licensure, the department reminds the commenters that an agency undergoing a 
change of ownership (CHOW) must submit its application and fee in accordance 
with sec.115.11 (as an initial applicant). The agency may hold JCAHO 
accreditation at the time of the CHOW; the department recognizes that the JCAHO 
commonly extends accreditation status to the new owner and honors such JCAHO 
accreditation.
Comment: Concerning sec.115.11(j)(2)(B), one commenter stated the rule is too 
specific and should be general enough to accommodate any of the memoranda of 
understanding (MOUs) between the department and another state agency. The 
commenter recommended the reference to the Texas Department of Mental Health and 
Mental Retardation be deleted and replaced with "another state agency."
Response: The department agrees and has deleted reference to an MOU with the 
Texas Department of Mental Health and Mental Retardation in sec.115.11(j)(2)(B). 
The department has also changed the language in sec.sec.115.11(g)(2)(Q) and 
115.12(b)(2)(E) for consistency. 
Comment: Concerning sec.115.11(o), two commenters recommended the rule be moved 
to the beginning of the section because of its importance. 
Response: The department understands the commenter's rationale; however, no 
change was made. 
Comment: Concerning sec.115.13(c), two commenters stated that some agencies 
thought the word "services" as used in "category of services" referred to 
skilled nursing, physical therapy, occupational therapy, etc. and recommended 
the rule be rewritten to eliminate the confusion. 
Response: The department agrees that the terminology is confusing and has 
changed the language to delete "of services" and just use "category" or 
"categories" in sec.sec.115.11(g)(1), 115.11(I)(2), 115.11(k)(2) and (3), 
115.12(a)(3) and (5), 115.13(c)(1), (2) and (3), 115.14(l), 115.21(b)(4)(A), 
115.21(d)(2), 115.26(a), 115.26(k), 115.27(b), 115.27(g), and 115.51(o). 
Comment: Concerning sec.115.13(d), one commenter suggested changing the first 
sentence to read "If an agency changes the name under which is doing business as 
but not the ownership" for clarification purposes and changing the word "local" 
to "governmental." 
Response: The department agrees and has changed the language as suggested.
Comment: Concerning sec.115.14(a), two commenters recommended the rule not apply 
to agencies during the transition of branch office sites. The commenters stated 
that agencies believed that they might have a new subunit or parent and a new 
branch site that would be transitioning simultaneously and that these sites 
should be able to be surveyed together during the branch office transitions. 
Response: The department understands the commenter's confusion; however, the 
comment does not correspond to the rule language. The rule requires that in 
order to have a branch office, an agency must: (1) be licensed to operate as a 
parent agency and, (2) receive and pass its initial survey; or be an existing 
agency in compliance with the rules. The language further requires that the 
agency not have any enforcement actions pending against the license. The rule 
does not relate to the transition of a branch office to a parent agency. Such a 
transition would require submission of an application and fee for an initial 
license (as a parent agency). The licensing rules do not contain provisions for 
subunits since subunits are only part of Medicare certification. No change was 
made. 
Comment: Concerning sec.115.14(c)(3), and sec.115.15(c)(3), two commenters 
recommended the addition of "; if applicable" to the end of the rule since all 
the staff mentioned in the rule may not be present in every agency. 
Response: The department believes the rule is sufficiently clear and did not 
change the language. The department expects each branch office to have staff 
performing management, supervisory, and administrative duties. The department 
also recognizes that in some cases these duties may be performed by one 
individual, and would not expect a branch office to have a separate staff person 
in each.
Comment: Concerning sec.115.14(c)(4), and sec.115.15(c)(4) three commenters 
recommended the requirement be deleted because a branch office or alternate 
delivery site is considered to be a part of the parent agency or hospice and as 
such does not typically have a separate budget from the parent agency or hospice 
but rather is included in the parent agency's or hospice's budget.
Response: The department agrees that the branch office or alternate delivery 
site operating budget is included in the parent agency's or hospice's budget. 
The rule does not require the branch office or alternate delivery site to submit 
a separate budget for the branch office or alternate delivery site, but requires 
that the parent agency or hospice submit a proposed budget which has either been 
extracted from the parent agency budget to show that the agency has considered 
the additional costs in establishing a branch office or alternate delivery site, 
or submit a revised parent agency or hospice budget which clearly describes the 
revenues and expenditures anticipated as a result of adding the branch office or 
alternate delivery site. No change was made. 
Comment: Concerning sec.115.14(e)(3) and sec.115.15(e)(3), one commenter noted 
the grammatical errors "it application." 
Response: The department appreciates the notice and has changed the word "it" to 
"its" in both places. 
Comment: Concerning sec.115.15(j), one commenter suggested adding to the end of 
the second sentence, "and sec.115.28 of this title (relating to Standards for 
Alternate Delivery Sites)" because alternate delivery sites are also required to 
comply with sec.115.28. 
Response: The department agrees and has added the language. 
Comment: Concerning sec.115.16(a)(1), one commenter asked if the word 
"Licensure" should be "Licensing" when naming the Health Facility Licensing 
Division. 
Response: The department agrees that the word "Licensure" should be "Licensing" 
and has made the correction. 
Comment: Concerning sec.115.16(b)(1), one commenter asked if the first time 
period should begin on the date the "department" receives the application or if 
the time period should begin on the date the Health Facility Licensing Division 
receives the application. 
Response: The department agrees that the time period should begin on the date 
the Health Facility Licensing Division receives the application and has changed 
the word "department" to "division." 
Comment: Concerning sec.115.21(b)(1)(B), and sec.115.25(j)(9), one commenter 
recommended requiring an agency to complete and document within a specific time 
period an investigation of a complaint filed with the agency by a client. 
Response: The department agrees and has changed the language to require 
completion of an agency investigation and documentation of the investigation 
within 30 days unless the agency has a reasonable cause for delay. 
Comment: Concerning sec.115.21(b)(1)(F), one commenter stated that in 1995 Texas 
Civil Statutes, Article 4525b was amended to address licensed vocational nurse 
(LVN) peer review within the statute. The commenter recommended the references 
should be to Article 4525b rather than peer review rules promulgated by the 
Texas Board of Vocational Nurse Examiners. 
Response: The department disagrees and has not changed the language. Since the 
cited rules do address LVN peer review, the department believes the citation is 
appropriate. 
Comment: Concerning sec.115.21(b)(2)(G)(ii), three commenters recommended the 
rule be revised to read: "documentation concerning notification to the client of 
the availability of advance directives in the state of Texas according to 
applicable state laws" in order to clarify that agencies are required to inform 
clients of available advance directives but execution of the directives is not 
required. 
Response: The department agrees and has changed the language to read 
"documentation concerning notification to the client of the availability of 
durable power of attorney for health care, advance directive, or DNR orders in 
accordance with the applicable law." 
Comment: Concerning sec.115.21(b)(3)(B)(I)(I), one commenter stated the word 
"or" should follow the rule to allow a person other than the professionals named 
in subclause (I) to have one or the other of the qualifications addressed in 
subclauses (II) and (III). 
Response: The department understands the commenter's confusion. However, the 
format used follows Texas Register form and style and was not changed. The 
department suggests the commenter consider reading the rule as a list: "The 
administrator shall have I, II, or III." 
Comment: Concerning sec.115.21(b)(3)(B)(I)(III), three commenters stated the 
requirements for administrator should also recognize supervisory or 
administrative experience in hospice. 
Response: The department agrees and has changed the language as suggested.
Comment: Concerning sec.115.21(b)(3)(B)(ii) and sec.115.26(g)(3), three 
commenters recommended "enforcement action" be changed to "revocation of 
license." The commenters stated enforcement action includes suspension of a 
license and that the language could cause an agency to have to replace a current 
administrator without cause if the license was not revoked but was subsequently 
reinstated.
Response: The department disagrees that the language should be changed as the 
term "enforcement action" refers to any action described in sec.115.52 relating 
to Enforcement Action (license suspension, revocation, or denial or court action 
such as injunctive relief or civil penalties). Suspension, revocation or denial 
of a license reflects a final judgment was made by a
hearings examiner after a formal hearing conducted in accordance with the 
Administrative Procedure Act, Government Code, Chapter 2001, and the 
department's formal hearing procedures. Injunctive relief or the assessment of 
civil penalties reflect a decision by a district court after the appropriate 
legal proceedings have occurred. Any enforcement action is a recognition of 
serious concerns relating to the ability of an administrator and is an 
appropriate qualification for acting as an administrator. No changes were made. 
Comment: Concerning sec.115.21(b)(3)(C)(v), one commenter suggested deleting the 
word "all" from between the words "in" and "activities." 
Response: The department agrees and has deleted the word "all" as suggested.
Comment: Concerning sec.115.21(b)(4)(F), one commenter suggested changing 
certain wording to read, "An original record includes manually signed paper 
records, imaged copy of the manually signed paper, or an electronically signed 
computer record." 
Response: The department disagrees that the language should be changed because 
the sentence preceding the sentence on which the commenter commented includes 
optical disc imaging system as an acceptable form of a clinical record medium. 
No changes were made. 
Comment: Concerning sec.115.21(b)(4)(I)(iv), three commenters recommended the 
word "and" be changed to "or" to allow agencies to use one document to meet the 
requirements for both the care plan and plan of care. 
Response: The department agrees and has made the suggested change. 
Comment: Concerning sec.115.21(b)(4)(I)(x), one commenter stated that patients 
are overwhelmed by the information they receive at admission and believes that 
providing a copy of the entire policy is burdensome for both the agency and the 
patient. The commenter recommended the rule require that written information or 
a summary of the policy be provided. 
Response: The department disagrees. The department believes that it is important 
that clients receive the agency's policy on reporting abuse, neglect, or 
exploitation. No changes were made. 
Comment: Concerning sec.115.21(b)(4)(J) and sec.115.26(h)(1), three commenters 
stated the rule needs to make provision for record retention of minors which the 
commenter believes must be maintained for two years after the age of majority. 
Response: The department agrees that in some instances record retention for a 
minor should be based upon the age of majority. However, the department 
disagrees that the rule should be changed. The rule does not prohibit an agency 
from keeping records for a longer period of time. The language was not changed.
Comment: Concerning sec.115.21(b)(5)(C), one commenter stated it was the intent 
of the Informal Home and Community Support Services Task Force that the review 
of financial records would be conducted by a person qualified to do so, i.e. a 
certified public accountant, and that surveyors would not have the ability to 
request or review an agency's financial records. The commenter recommended the 
rule be rewritten to clarify the intent and provided suggested language. 
Response: The department agrees in part and has added the language suggested. 
Surveyors will be permitted to request such information. 
Comment: Concerning sec.115.21(b)(5)(C), one commenter asked what criterion is 
used to determine if an agency has the financial ability to carry out its 
functions and that the department consider that a registered nurse is capable of 
starting up an agency at a lower cost than a non-professional individual.
Response: The department will consider each applicant on a case-by-case basis. 
No change was made to the proposed text in response to this comment.
Comment: Concerning sec.115.21(c)(7), one commenter recommended the references 
should be to Texas Civil Statutes, Article 4525b rather than rules promulgated 
by the Texas Board of Vocational Nurse Examiners. 
Response: The department disagrees and did not make the change. 
Comment: Concerning sec.115.21(c)(8), four commenters recommended deleting 
"physician assistant" from the rule because these individuals are not employed 
by home and community support services agencies. 
Response: The department agrees and changed the language as suggested.
Comment: Concerning sec.115.21(e)(1), one commenter asked that the change from 
"psychiatrist" to "physician" become effective as soon as possible, but that the 
other provisions of the rules be effective at a later date to provide smoother 
implementation. 
Response: The department agrees and has added a new sec.115.21(g) to explain 
that sec.115.21 is effective August 1, 1997, but that the department will begin 
enforcing only subsection (e)(1) on August 1, 1997. The department will begin 
enforcing the remaining provisions of sec.115.21 on October 1, 1997. 
Comment: Concerning sec.115.21(e)(4)(C), three commenters stated that the 
requirement for cranial nerve assessment by a registered nurse (RN) is not part 
of a routine nursing assessment, it is a diagnostic assessment done by a 
physician and is inappropriate for these rules. The commenters strongly 
recommended the removal of the requirement. 
Response: The department disagrees that the requirement that a cranial nerve 
assessment be done should be deleted. Such an assessment is essential in 
assuring appropriate admission to psychiatric care by ruling out physiological 
indications which is many times discovered as a result of the nursing 
assessment. No change was made. 
Comment: Concerning sec.115.21(f)(5), one commenter stated that the language 
does not require the RN who satisfies the 24 hours per day availability to be 
competent in intravenous therapy. 
Response: The department disagrees. The department expects each agency to 
determine whether the RN assigned to provide availability is competent in 
intravenous therapy. No change was made. 
Comment: Concerning sec.115.21(f)(7), four commenters recommended "must teach" 
be changed to "may teach" in the rule because a client may not be willing to 
learn and the agency cannot force a client or family to learn a procedure they 
do not wish to learn. The commenters stated the standard is "willing and able." 
Response: The department agrees and has changed the wording to read, "If the 
client or caregiver are willing and able to safely administer the prescribed 
intravenous therapy, the agency must offer to teach the client or caregiver...."
Comment: Concerning sec.115.21(f)(12), three commenters recommended the addition 
of "employed or contracted by the agency" to the end of the rule to make it 
clear it is the agency's responsibility to provide nursing coverage for 
intravenous services. 
Response: The department agrees and changed the language. 
Comment: Concerning sec.115.21(g), one group of commenters recommended an 
earlier effective date for sec.115.21(e)(1) relating to physician direction of 
psychoactive treatments. 
Response: The department agrees with the commenters and has added a new 
subsection (g) to sec.115.21 specifying an effective date of August 1, 1997 for 
sec.115.21(e)(1). 
Comment: Concerning sec.115.22(b)(2)(A), four commenters stated the care plan 
should reflect only those services to be rendered and recommended the word 
"potential" be deleted from the rule. 
Response: The department agrees and deleted the word "potential" in 
sec.115.22(b)(2)(A). The department also deleted the word "potential" in 
sec.115.24(p)(2) for consistency. 
Comment: Concerning sec.115.22(c)(7), two commenters stated that RNs have 
adequate educational and practice background to teach a prescribed diet (as 
opposed to developing a diet plan) to a particular patient. The commenters 
recommended that the rule be clarified that the teaching of a prescribed diet 
plan by a RN is not considered "nutritional counseling" or that the teaching of 
a prescribed diet can be performed by a RN without the supervision of a 
dietitian. 
Response: The department agrees and has changed the language to read, "If 
nutritional counseling is provided, a dietitian or RN shall be employed by or 
under contract with the agency to provide services or supervision." 
Comment: Concerning sec.115.25(g), one commenter recommended the entire 
subsection be deleted. The commenter stated that the rule does not allow for 
patient choice; that requiring the assessment be completed within a particular 
time frame is in direct conflict with the basic hospice philosophy; and that the 
rule is more stringent and different than the requirements of the Medicare 
Conditions of Participation. 
Response: The department disagrees and did not delete subsection (g). The 
department believes the rule language does not infringe upon patient choice and 
is following the recommendations of the task force. The department and the task 
force believe that the language reflects the standard that all hospices 
currently follow and does not create undue hardship. Further, since the hospice 
philosophy is based upon a survival prediction of six months, requiring an 
assessment no later than 14 days of admission is a reasonable time frame.
Comment: Concerning sec.115.25(g)(2), one commenter stated that it is not 
reasonable to require an assessment visit occur prior to the start of care and 
that sometimes the client needs care during the first visit (the assessment 
visit). 
Response: The department agrees and added the sentence, "After the initial 
assessment is completed, services approved by the physician may be rendered."
Comment: Concerning sec.115.25(s), one commenter recommended changing "physician 
employee" to "hospice physician" which has the same meaning. The commenter added 
that changing the wording is in accord with proposed legislation and will not 
require a change in the rules should the terminology also change in the Medicare 
Conditions of Participation. 
Response: The department agrees that the wording has the same meaning and has 
made the change. The commenter did not specify the "legislation" mentioned or 
whether the legislation was federal or state. 
Comment: Concerning sec.115.25(t)(2), one commenter recommended deletion of the 
eligibility requirements in the rule because the Texas Legislature designated 
the Texas State Board of Examiners of Dietitians as responsible for identifying 
individuals who are qualified by education, experience and examination to 
provide nutrition and dietetic services. 
Response: The department disagrees that the language should be changed and has 
retained the proposed text. The law does not require a person to be a licensed 
dietitian in order to practice dietetics. 
Comment: Concerning sec.115.25(t)(4), one commenter stated the term "hand 
holding" in the rule is derogatory and unclear. The commenter recommended 
alternate language. 
Response: The department agrees and has changed the sentence to read, 
"Nonprofessional volunteers may be used for listening and social interaction 
with clients."
Comment: Concerning sec.115.26 in general and sec.115.26(e) in particular, one 
commenter stated the personal assistance services (PAS) regulations imply that 
PAS is a non-medical model, but the regulations do not explicitly make clear 
that PAS is a non-medical model. The commenter recommended sec.115.26(e) be 
rewritten to clarify that PAS is designed to meet the needs of persons and their 
families to engage in activities of daily living and that tasks that may be 
performed under a PAS category are non-medical, do not require extensive medical 
knowledge or technical skills, and do not require licensed nursing intervention 
or supervision by a RN. The commenter further recommended that all references to 
health related services be placed under licensed home health. 
Response: The department disagrees that the language is unclear. The language is 
consistent with the definition of "personal assistance services" in sec.115.2 
and in the Health and Safety Code, sec.142.001(20). No change was made to 
sec.115.26(e). 
Comment: Concerning sec.115.26(a), four commenters stated the language implies 
that an agency must have a separate license to provide PAS. The commenters 
recommended deleting the last sentence relating to a separate license. 
Response: The department disagrees that the language implies a separate license 
is required to provide personal assistance services and did not make the change. 
The language reads, "A separate license is required for each principle place of 
business." The language does not include wording relating to a category(ies) of 
service (e.g. personal assistance services) or limit the number of categories 
one license may hold. Section 115.11(g) makes clear that one or a combination of 
categories may be included under one license. No change was made. 
Comment: Concerning sec.115.26(e)(4), four commenters expressed support for the 
department's inclusion of physician delegation of health related tasks under the 
Medical Practice Act. 
Response: The department appreciates the support and has retained the language.
Comment: Concerning sec.115.26(f), one commenter (who identified the rule as 
sec.115.26(d)) stated the rule which requires the agency to develop 
organizational, operational, programmatic, and personnel policies requires 
clarification in order to determine if an agency is in compliance. 
Response: The department disagrees and believes the language is sufficiently 
clear while allowing each agency to develop policies specific to the agency's 
needs. No change was made. 
Comment: Concerning sec.115.26(g), one commenter recommended the requirements 
for an administrator of a PAS agency include either a degree in a health or 
human services field, or at least one year experience and training in caring for 
individuals with functional disabilities. Two other commenters added that the 
administrator should have a degree in medical, nursing, or social services or at 
least one year of experience and training in caring for individuals with 
functional disabilities. A fourth commenter stated that the qualifications for 
the administrator of a PAS agency should be at least equivalent to the 
requirements of a supervisor for PAS services. A fifth commenter supported the 
proposed text and stated that if the requirements or qualifications increase for 
the administrator of PAS, it will cause major problems for smaller agencies who 
are only providing personal assistance or respite services. 
Response: The department agrees with the first commenter and has added paragraph 
(6) to read, " The administrator or designee shall have at least one year 
experience or training in caring for individuals with functional disabilities." 
The department believes the recommendations made by the other commenters are 
more stringent than is necessary for this category. 
Comment: Concerning sec.115.26(h)(3)(A), one commenter (who identified the rule 
as sec.115.26(f)(3)(a)(1)) stated that applications to participate in programs 
(e.g. primary home, family care and community-based alternatives) administered 
by the Texas Department of Human Services (TDHS), are processed and maintained 
by TDHS and the agency is not provided with copies of the application. The 
commenter recommended in situations where the application is processed by an 
entity other than the agency, the agency should not be required to maintain the 
application. 
Response: The department agrees the language is confusing. The application 
referenced in the rule is the client's application for services to the agency. 
The department changed the language to read, "client application for services 
including, but not limited to..." to clarify the meaning. 
Comment: Concerning sec.115.26(h)(3)(B), one commenter stated that the rule 
language needs clarification as to which complaint procedures the department is 
referring. The commenter added that if these are the department's complaint 
procedures, then the department's toll-free complaint hotline should be listed.
Response: The department agrees and has added the word "agency's" between the 
word "the" and "complaint." Section 115.26(j)(16) requires an agency to develop 
a policy regarding the investigation of complaints. The department's complaint 
procedures are outlined in sec.115.53. 
Comment: Concerning sec.115.26(I), two commenters objected to the proposed 
deletion of the former sec.115.26(h)(3) because the commenter believes the rule 
clarifies that delegated tasks require RN supervision which otherwise may not be 
available in the PAS category. 
Response: The department disagrees and did not reinstate the language. The 
department believes supervision of delegated nursing tasks is sufficiently 
addressed in new sec.115.26(I)(3). 
Comment: Concerning sec.115.26(I)(3)(B), four commenters expressed appreciation 
to the department for clarifying that a client participating in the client 
managed attendant care programs funded by the TDHS or Texas Rehabilitation 
Commission is not required to meet the standards of a personal assistance 
services program supervisor. 
Response: The department acknowledges the comment, and has adopted the language 
as proposed. No change was made. 
Comment: Concerning sec.115.26(j)(2), one commenter recommended the rule be 
clarified as to what constitutes "input" and what is adequate "output."
Response: The department disagrees that the language is not clear. The language 
emphasizes the importance of input from the client or family; there is no 
wording relating to "output." 
Comment: Concerning sec.115.26(j)(3), three commenters stated the wording in the 
rule is not appropriate to the personal assistance services category and 
recommended substituting "client notes" for "clinical, progress notes or other 
notes." 
Response: The department agrees and has added the word "client" between the 
words "other" and "notes." 
Comment: Concerning sec.115.26(j)(20), one commenter stated that the rule does 
not contain a description as to the maximum amount of time service may lapse, a 
requirement for an after-hours emergency number, or a requirement that 
supervisory staff be available and reachable by phone after regular office 
hours. The commenter suggested that the department consider including a standard 
prohibiting any lapse in service beyond a certain amount of time, particularly 
for clients whose assessment may indicate that their health and safety may be 
compromised by more than two hours of lapsed service time. Another commenter 
suggested adding language requiring the back-up policy include a section on 
after-hours emergencies which includes a telephone number where supervisory 
staff can be reached. 
Response: The department disagrees and believes the language is sufficient. The 
rule does not require 24-hour service and the department believes the maximum 
amount of time service may lapse is a contract issue. The language was not 
changed. 
Comment: Concerning sec.115.26(k), two commenters stated the rule is confusing 
in that it reads as if the only setting in which feedings or medication 
administration via gastrostomy tube (g-tube) can occur is personal assistance 
services. The commenters recommended clarifying language to the subsection, 
deletion of paragraph (1) and subparagraphs (A) and (B), renumbering 
subparagraph (C) to be the new paragraph (1), and modification to the paragraph 
to reflect the changes. One of the commenters added that following these 
recommendations, paragraphs (2)-(4) should be referenced and not (3) and (4). 
Response: The department disagrees. In accordance with the memorandum of 
understanding between the department and the Board of Nurse Examiners, the only 
setting in which a g-tube feeding or medication administration does not 
constitute the practice of nursing is in the respite care setting. A g-tube 
feeding or medication administration in a setting other than respite is 
considered a skilled service and must take place under the categories of 
licensed home health services or licensed and certified home health services 
(hospice included). The rules do not preclude the provision of skilled services 
as respite under a category which already covers the provision of skilled 
services. No changes were made. 
Comment: Concerning sec.115.26(k), five commenters stated the rule is too 
prescriptive and unnecessary for an unlicensed person to perform the task of 
administering feedings or medication via a permanently placed g-tubes. Three of 
the commenters added that the memorandum of understanding between the department 
and the Board of Nurse Examiners already allows for the administration of oral 
medications in respite situations without intensive training and that many 
medical and nursing schools nationwide have developed generalized training 
curricula which is less prescriptive. These commenters also suggested using such 
a curricula instead of what has been outlined in the rules. Another commenter 
insisted that the training requirements are too excessive, cumbersome, and not 
in the norm of national practice. One other commenter added that g-tube feedings 
are not very difficult to administer and the unlicensed staff only limited 
client-specific training. This commenter also suggested that the unlicensed 
staff be authorized to give g-tube feedings when the parent or primary care 
giver trains the staff and documents to that effect. 
Response: The department disagrees. Consensus of the task force at their meeting 
on March 26, 1996, was that initial training of an unlicensed student trainer to 
teach feedings or medication administration via g-tube must be a physician, 
physician assistant or RN with an annual evaluation by one of these 
professionals to determine continued competency. One task force member 
dissented. This consensus was reached after department staff, the task force, 
and attending observers discussed the issue and reviewed the results of research 
of four independent school districts' practices on administering feedings or 
medication administration via g-tube in the schools. All four school districts 
required RN involvement to train or administer the feedings or medication 
administration via g-tube or accepted written physician preference as to whom 
would perform the feedings or administration of medication via g-tube. The 
department believes that the language in sec.115.26(k) relating to feedings and 
medication administration via g-tubes is necessary to ensure the health and 
safety of persons receiving the g-tube feedings and medication administration. 
It is essential that persons performing g-tube feedings or medication 
administration know how to perform the task, know what complications are 
possible when performing the task and how to identify these complications, know 
what to do when complications occur, know what information needs to be reported 
to whom (e.g. physician), and know when a g-tube feeding or medication 
administration should not be performed. Nurses, parents, or partners must 
receive this training prior to giving g-tube feedings and medications, which, if 
done incorrectly can result in severe complications leading to death (e.g. 
aspiration). The procedure detailed in the rules is not more stringent than the 
procedure nurses must learn to safely perform the same procedure. The rules 
require only the unlicensed initial trainer to be trained and found competent by 
a RN, physician or physician assistant to perform the procedure and train others 
in the procedure. Once trained, the unlicensed trainer may perform and teach the 
procedure to other unlicensed persons. The department does not believe this to 
be overly prescriptive. The department will review and consider alternative 
curricula mentioned by one of the commenters as soon as it is provided. No 
changes were made. 
Comment: Concerning sec.115.26(k), two commenters stated that the wording 
implies that g-tube feedings and medication administration may only be performed 
under the personal assistance services category. The commenters added that g-
tube feedings may occur in any category with RN or physician delegation and 
recommended the wording be changed to read, "Tube feedings through a permanently 
placed gastrostomy tube by unlicensed personnel may be performed in a short term 
respite care setting without nurse or physician delegation after the client...." 
Response: The department disagrees. In a setting other than respite, the g-tube 
feeding or medication administration is considered to constitute the practice of 
nursing (a skilled service). Skilled services must be provided under the 
categories of licensed home health, licensed and certified home health (home 
dialysis designation included), or hospice services. No changes were made. 
Comment: Concerning sec.115.26(k)(3)(C), one commenter suggested adding language 
to address protocols that an unlicensed person should follow if the g-tube comes 
out or is positioned incorrectly. The commenter stated that in such a scenario, 
medical attention must be provided within a certain period of time. 
Response: The department agrees and has added the sentence, "The description of 
conditions must include a plan to be effected if the g-tube comes out or is not 
positioned correctly to ensure medical attention is provided within one hour." 
Comment: Concerning sec.115.27(e), three commenters recommended additional 
language to clarify that agencies that are Medicare certified and provide 
services in the licensed and certified category of service must meet the 
Medicare Conditions of Participation. 
Response: The department disagrees that the language requires clarification. The 
department believes the requirement in sec.115.23 is sufficient to cover the 
commenter's concern. No changes were made. 
Comment: Concerning sec.115.51(a)(3), one commenter expressed concern and lack 
of confidence that a surveyor or even a departmental designee has the training, 
experience and background required to determine whether or not an agency is 
financially solvent. The commenter believes if the department's concern is to 
assure continuity of care and patient safety, then the requirement for a written 
contingency plan in sec.115.21(b)(2)(F) should be sufficient to assure 
continuity of care and patient safety. Any other department concerns should be 
spelled out and help from licensees should be solicited to assist in writing 
rules to solve the specific problem. 
Response: The department agrees and has changed the language to read as 
described in the department's response to the comment in sec.115.21(b)(5)(C).
Comment: Concerning sec.115.51(c), one commenter stated that the Joint 
Commission for Accreditation of Healthcare Organizations (JCAHO) accredits 
agencies for a three-year period, not a one-year period as the rule specifies.
Response: The JCAHO provides both a one-year and a more stringent three-year 
accreditation. The department agrees that the language should be clarified to 
include the three-year accreditation and has changed the language accordingly.
Comment: Concerning sec.115.51(c)(2), a commenter recommended the rule be 
deleted because it is too specific. The commenter recommended the reference to 
TXMHMR be deleted and replaced with another state agency. 
Response: The department agrees and has deleted the language as proposed. The 
department inserted new language that references sec.115.13(a)(1)(B) which 
states the initial survey following a change of ownership may be waived.
Comment: Concerning sec.115.51(f)(5), three commenters recommended that language 
be added to the rule to clarify that deficiencies should be based on trends of 
problems within the agency and not on isolated incidents or an isolated failure 
to document appropriately. 
Response: The department disagrees. A deficiency documents a violation of a 
rule. All agencies are required to follow the department rules. Trends or 
patterns of problems are identified by reviewing deficiencies cited over a 
period of time and could lead to more serious enforcement action. No change was 
made. 
Comment: Concerning sec.115.51(g)(2), one commenter stated that mandated home 
visits for clients of private pay agencies are inappropriate and an invasion of 
a client's privacy when the consumers are receiving privately arranged care. The 
commenter recommended that private-pay agencies be exempted from the proposed 
rule because the rigidities and requirements imposed on government contractor 
agencies have limited applications in the private market place.
Response: The department disagrees. The Health and Safety Code, sec.142.009(c) 
authorizes the department to conduct home visits as part of a survey of any 
agency. All home visits are conducted with the client's consent. All licensed 
agencies are subject to this rule in order to verify an agency's compliance with 
the law and the rules. No change was made. 
Comment: Concerning sec.115.51(g)(2) and (3), one commenter asked for 
clarification of the language, referring to HCFA's Regional Survey and 
Certification Letter No. 97-04 which addressed the timing of initial Medicare 
surveys and the number of admissions or records required for review. The 
commenter stated that the HCFA letter inappropriately sets a limit on the number 
of records and home visits a surveyor may conduct per agency and added that 
current regulations have no such requirement. The commenter expressed concern 
that surveyor decision will determine whether or not an agency will be surveyed 
and asked if a decision is applied uniformly or according to each surveyor. 
Response: The department responds that the HCFA letter referenced by the 
commenter is irrelevant to the rule language in sec.115.51(g)(2) and (3).
These rules address licensing requirements, not Medicare surveys. The department 
will forward the commenter's concerns to HCFA. No change was made. 
Comment: Concerning sec.115.51(h)(1), two commenters recommended the rule be 
clarified to state that the ten days allowed to submit the plan of correction 
begins from the date the agency receives written notification of deficiencies. 
Response: The department disagrees that the language is unclear. The language 
already reads the agency shall submit the plan of correction "no later that ten 
days from its receipt of a statement of deficiencies." No change was made.
Comment: Concerning sec.115.51(l), three commenters recommended a requirement 
that the department notify an agency in writing if their plan of correction is 
accepted. 
Response: The department responds that an agency is notified if a plan of 
correction is not acceptable. The department did not change the language as 
suggested. 
Comment: Concerning sec.115.52(a), three commenters pointed out that the word 
"temporary" in the rule should be deleted because the requirement for a 
temporary license was proposed for deletion. 
Response: The department agrees and changed the wording accordingly by deleting 
the list of types of licenses. 
Comment: Concerning sec.115.52(I), one commenter requested that clarifying 
language be added to the rule to reflect that a person may not apply for an 
agency license for one year following the date of revocation. 
Response: The department agrees and has added in the rule a reference to 
sec.115.52(g) which contains the one-year restriction. 
Comment: Concerning sec.115.52(k), one commenter pointed out that the rule 
addresses both the surrender and expiration of the license but the word 
"expiration" was not included in the six-month restriction at the end of the 
rule relating to the date. 
Response: The department agrees and has added the words "or expiration" to the 
end of the rule. 
Comment: Concerning sec.115.54(b)(1), one commenter stated that the language 
implies that criminal history checks are not required. 
Response: An agency is required to submit a request for a criminal history check 
on any unlicensed individual applying for employment with the agency if the 
agency intends to hire the applicant. The language provides the agency with the 
option to 1) use a private entity (e.g., consulting firm or law firm) to submit 
a request for a criminal history check, or 2) to submit the request directly 
from the agency to department. There is no option whether or not to submit a 
request for a criminal history check. No change to the language was made. 
Comment: Concerning sec.115.54(b)(7), three commenters objected to the rule's 
exclusion of criminal background checks for volunteers and independent 
contractors. The commenters expressed concern that certain volunteers and 
independent contractors do have hands-on contact with consumers and should be 
required to undergo criminal background checks. 
Response: The department agrees with the commenters' concerns, but has not 
changed the language. The requirements relating to criminal history checks on 
unlicensed persons is authorized under the Health and Safety Code, Chapter 250 
and does not provide the department the authority to require criminal background 
checks on volunteers or independent contractors. The rule does not prohibit an 
agency from using a private agency to process criminal background checks or from 
submitting criminal background checks directly to the Texas Department of Public 
Safety on any individual employed by, contracting with, or volunteering to the 
agency. The department, however, will not process such requests. No change was 
made. 
Comment: Concerning sec.115.54(b)(7) and sec.115.54(e), one commenter stated 
that the language is confusing. 
Response: The language in sec.115.54(b)(7) stipulates that an agency may only 
request a criminal history check on an individual to whom the agency has made an 
offer of employment. The language in sec.115.54(e) requires the agency to inform 
the individual applying for employment with the agency that the agency will 
conduct the criminal history check as a condition for offering employment. The 
language does not require the agency to conduct a criminal history check on an 
individual that an agency has decided not to employ. The language also requires 
the agency to conduct a criminal history check on an individual to whom an offer 
of employment is made. No changes were made to the text. 
In addition to the previously mentioned changes, the department made minor 
editorial and punctuation changes. Except as noted in sec.115.21(g), the rules 
are effective on October 1, 1997. 
The comments were from the Texas Association for Home Care; Texas Respite 
Resource Network; Texas Good Samaritan Home Health of Denton; The Arc of Dallas; 
United Cerebral Palsy of Texas, Inc.; Texas Planning Council for Developmental 
Disabilities; Advocacy, Inc.; Visiting Nurse Association; Private Providers 
Association of Texas; Community Care Consultants of Central Texas; Coalition of 
Texans with Disabilities Personal Assistance Task Force; Concepts of Care; 
Avalon Home Health; Goodcare Services; Senior Link Elder Link; UTMB Home Health; 
Life Line Home Nursing; National Association of Social Workers - Texas Chapter; 
Columbia Homecare Rockport; Hood General Hospital; Horizon Hospice Care, Inc.; 
Texas State Board of Examiners of Dietitians; Baptist Health System - St. Luke's 
Baptist Hospital; Foundation Management Services, Inc.; Small Craig & Werkenthin 
for Texas Home Health of America, Inc.; Methodist Home Care; Home and Community 
Support Services Agencies Task Force; individual social workers; and department 
staff. A majority of the commenters were opposed to the definition of "social 
worker" as containing insufficient education requirements. There was also some 
opposition from providers of personal assistance services regarding the training 
requirements of unlicensed individuals performing feedings and medications 
administration via gastrostomy tubes. Regarding other provisions of the rules, 
the commenters were neither for or against these provisions as a whole; however, 
they raised questions, expressed concerns, and suggested clarifying language 
concerning specific rule provisions. 

SUBCHAPTER A. General Provisions
25 TAC sec.115.1, sec.115.2
The amendments are adopted under the Health and Safety Code, sec.142.004(c), 
which provides the board with authority to adopt rules to require an applicant 
to provide documentation establishing the applicant has sufficient financial 
resources to provide services during the term of the license, a list of 
management personnel, a description of personnel qualifications, a plan for 
providing continuing training and education for personnel, documentation that 
the applicant is capable of meeting the minimum standards related to quality of 
care, and documentation that the applicant has a plan for the orderly transfer 
of care of clients if the applicant cannot maintain or deliver services under 
the license; under sec.142.008(b) which provides the board with authority to 
adopt rules to establish eligibility requirements for a branch office license; 
under sec.142.0085(b) which provides the board with authority to establish 
eligibility requirements for an alternate delivery site license; under 
sec.142.012 which provides the board with authority to adopt rules to set 
minimum standards relating to qualifications for professional and 
nonprofessional personnel (including volunteers), supervision of professional 
and nonprofessional personnel (including volunteers), the provision and 
coordination of treatment and services (including support and bereavement 
services), the management, ownership, and organizational structure (including 
lines of authority and delegation of responsibility and the composition of an 
interdisciplinary team), clinical and business records, financial ability to 
carry out the functions as proposed by the HCSSA, safety, fire prevention, and 
sanitary standards for residential and inpatient units, and any other aspects of 
home health, hospice, or personal assistance services as necessary to protect 
the public; under sec.142.023 which provides the board with the authority to 
establish minimum requirements for the issuance, denial, renewal, suspension, 
emergency suspension, and revocation of a permit to a home health medication 
aide, curricula to train a home health medication aide, minimum standards for 
the approval of home health medication aide training programs and for rescinding 
approval, the acts and practices that are allowed or prohibited to a permit 
holder, and minimum standards for on-site supervision of a permit holder by a 
registered nurse; and under Health and Safety Code, sec.12.001 which provides 
the board with the authority to adopt rules for the performance of every duty 
imposed by law upon the board, the department and the commissioner of health.  

sec.115.2. Definitions. 
The following words and terms, when used in these sections, shall have the 
following meanings, unless the context clearly indicates otherwise. 
Administrative support site - A facility or site where an agency performs 
administrative and other support functions but does not provide direct home 
health, hospice, or personal assistance services. This site does not require an 
agency license. 
Administrator - The person who is responsible for the day-to-day operations of 
an agency. 
Advanced practice nurse - A registered nurse approved by the Board of Nurse 
Examiners for the State of Texas to practice as an advanced practice nurse on 
the basis of completion of an advanced educational program. The term includes a 
nurse practitioner, nurse midwife, nurse anesthetist, and clinical nurse 
specialist. 
Alternate delivery site - A facility or site, including a residential unit or an 
inpatient unit: 
(A) that is owned or operated by an agency providing hospice services; 
(B)-(D) (No change.) 
Applicant - The owner of an agency which is applying for a license under the 
statute. This is the person in whose name the license will be issued. 
Assistance with medication or treatment regimen - Any needed ancillary aid 
provided to a client in the client's self-administered medication or treatment 
regimen, such as reminding a client to take a medication at the prescribed time, 
opening and closing a medication container, pouring a predetermined quantity of 
liquid to be ingested, returning a medication to the proper storage area, and 
assisting in reordering medications from a pharmacy. Such ancillary aid shall 
not include administration of any medication, unless the client has the 
cognitive ability to direct the administration of their medication and would 
self-administer if not for a functional limitation. 
Audiologist - A person who is currently licensed under Texas Civil Statutes, 
Article 4512j, as an audiologist. 
Branch office - A facility or site in the service area of a parent agency from 
which home health or personal assistance services are delivered or where active 
client records are maintained. This does not include inactive records which are 
stored at an unlicensed site. 
Client - An individual receiving home health, hospice, or personal assistance 
services from a licensed home and community support services agency. This term 
includes each member of the primary client's family if the member is receiving 
ongoing services. This term does not include the spouse, significant other, or 
other family member living with the client who receives a one-time service 
(e.g., vaccine) if the spouse, significant other, or other family member 
receives the service in connection with the care of a client.
Dietitian - A person who is currently licensed under the laws of this state to 
use the title of licensed dietitian or provisional licensed dietitian, or who is 
a registered dietitian. 
Director - The director of the Health Facility Licensing Division of the Texas 
Department of Health or his or her designee. 
Functional need - Needs of the individual which require services without regard 
to diagnosis or label. 
Licensed vocational nurse - A person who is currently licensed under Texas Civil 
Statutes, Article 4528c as a licensed vocational nurse.
Medication list - A list of a client's medications that includes the recommended 
dosage and the frequency and method of administration. The medication list is 
used to identify possible ineffective drug therapy or adverse reactions, 
significant side effects, drug allergies, and contraindications. The medication 
list does not include a medication profile. 
Notarized copy - A sworn affidavit stating that attached copies are true and 
correct copies of the original documents. 
Nutritional counseling - Advising and assisting individuals or families on 
appropriate nutritional intake by integrating information from the nutrition 
assessment with information on food and other sources of nutrients and meal 
preparation consistent with cultural background and socioeconomic status, with 
the goal being health promotion, disease prevention, and nutrition education. 
Nutritional counseling may include, but is not limited to, the following: 
(A) dialogue with the client to discuss current eating habits, exercise habits, 
food budget and problems with food preparation;
(B) discussion of dietary needs to help the client understand why certain foods 
should be included or excluded from the client's diet and to help with 
adjustment to the new or revised or existing diet plan; 
(C) a personalized written diet plan as ordered by the client's physician or 
practitioner, to include instructions for implementation;
(D) providing the client with motivation to help him or her understand and 
appreciate the importance of the diet plan in getting and staying healthy; or 
(E) working with the client or the client's family members by recommending ideas 
for meal planning, food budget planning, and appropriate food gifts. 
Occupational therapist - A person who is currently licensed under the 
Occupational Therapy Practice Act, Texas Civil Statutes, Article 8851 as an 
occupational therapist. 
Personal assistance services - Routine ongoing care or services required by an 
individual in a residence or independent living environment that enable the 
individual to engage in the activities of daily living or to perform the 
physical functions required for independent living, including respite services. 
The term includes health-related services performed under circumstances that are 
defined as not constituting the practice of professional nursing by the Board of 
Nurse Examiners through a memorandum of understanding with the department in 
accordance with Health and Safety Code, sec.142.016, and health-related tasks 
provided by unlicensed personnel under the delegation of a registered nurse or 
physician. 
Physical therapist - A person who is currently licensed under Texas Civil 
Statutes, Article 4512e as a physical therapist. 
Physician assistant - A person who is licensed under the Physician Assistant 
Licensing Act, Texas Civil Statutes, Article 4495-1 as a physician assistant. 
Physician delegated tasks - Tasks performed in accordance with the Medical 
Practice Act, Texas Civil Statutes, Article 4495d, sec.3.06 including orders 
signed by a physician which specify the delegated task(s), the individual to 
whom the task(s) is delegated, and the client's name. 
Practitioner - A person who is currently licensed in a state in which the person 
practices as a physician, dentist, podiatrist, or a physician assistant, or a 
person who is a registered nurse registered with the Board of Nurse Examiners 
for the State of Texas as an advanced practice nurse. 
Presurvey conference - A conference held with department staff and the applicant 
or his or her representatives to review licensure standards and survey documents 
and provide consultation prior to the on-site licensure survey. 
Psychoactive treatment - The provision of a skilled nursing visit to a client 
with a psychiatric diagnosis under the direction of a physician that includes 
one or more of the following: 
(A)-(D) (No change.) 
Registered nurse (RN) - A person who is currently licensed under the Nursing 
Practice Act, Texas Civil Statutes, Article 4513 et. seq. as a registered nurse. 
Registered nurse delegation - Delegation by a registered nurse in accordance 
with 22 Texas Administrative Code, sec.sec.218.1-218.11 (relating to Delegation 
of Selected Nursing Tasks by Registered Professional Nurses to Unlicensed 
Personnel). 
Respiratory therapist - A person who is currently licensed under Texas Civil 
Statutes, Article 4512l as a respiratory care practitioner.
Service area - The geographic area(s) established by an agency in which all or 
some of the agency's services are available. 
Social worker - A person who is currently licensed as a social worker under 
Human Resource Code, Chapter 50. 
Speech-language pathologist - A person who is currently licensed under the Texas 
Civil Statutes, Article 4512j as a speech-language pathologist.
Supervising nurse - The person responsible for supervising skilled services 
provided by an agency and who has the qualifications described in 
sec.115.21(b)(3)(C) of this title (relating to Licensure Requirements and 
Standards for Agencies Providing Licensed Home Health, Licensed and Certified 
Home Health, or Hospice Services). This person may also be known as the director 
of nursing or similar title. 
Survey - An inspection or investigation conducted by a representative of the 
department to determine if a licensee is in compliance with the statute and this 
chapter. A survey may be conducted onsite, by mail, by telephone or by 
electronic communication methods.  
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 June 30, 1997.
TRD-9708442
Susan K. Steeg
General Counsel
Texas Department of Health
Effective date: July 21, 1997
Proposal publication date: March 14, 1997
For further information, please call: (512) 458-7236

25 TAC sec.sec.115.4-115.7
The repeals are adopted under the Health and Safety Code, sec.142.004(c), which 
provides the board with authority to adopt rules to require an applicant to 
provide documentation establishing the applicant has sufficient financial 
resources to provide services during the term of the license, a list of 
management personnel, a description of personnel qualifications, a plan for 
providing continuing training and education for personnel, documentation that 
the applicant is capable of meeting the minimum standards related to quality of 
care, and documentation that the applicant has a plan for the orderly transfer 
of care of clients if the applicant cannot maintain or deliver services under 
the license; under sec.142.008(b) which provides the board with authority to 
adopt rules to establish eligibility requirements for a branch office license; 
under sec.142.0085(b) which provides the board with authority to establish 
eligibility requirements for an alternate delivery site license; under 
sec.142.012 which provides the board with authority to adopt rules to set 
minimum standards relating to qualifications for professional and 
nonprofessional personnel (including volunteers), supervision of professional 
and nonprofessional personnel (including volunteers), the provision and 
coordination of treatment and services (including support and bereavement 
services), the management, ownership, and organizational structure (including 
lines of authority and delegation of responsibility and the composition of an 
interdisciplinary team), clinical and business records, financial ability to 
carry out the functions as proposed by the HCSSA, safety, fire prevention, and 
sanitary standards for residential and inpatient units, and any other aspects of 
home health, hospice, or personal assistance services as necessary to protect 
the public; under sec.142.023 which provides the board with the authority to 
establish minimum requirements for the issuance, denial, renewal, suspension, 
emergency suspension, and revocation of a permit to a home health medication 
aide, curricula to train a home health medication aide, minimum standards for 
the approval of home health medication aide training programs and for rescinding 
approval, the acts and practices that are allowed or prohibited to a permit 
holder, and minimum standards for on-site supervision of a permit holder by a 
registered nurse; and under Health and Safety Code, sec.12.001 which provides 
the board with the authority to adopt rules for the performance of every duty 
imposed by law upon the board, the department and the commissioner of health. 
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 June 30, 1997.
TRD-9708441
Susan K. Steeg
General Counsel
Texas Department of Health
Effective date: July 21, 1997
Proposal publication date: March 14, 1997
For further information, please call: (512) 458-7236

SUBCHAPTER B. Application and Issuance of a License
25 TAC sec.115.11, sec.115.12
The repeals are adopted under the Health and Safety Code, sec.142.004(c), which 
provides the board with authority to adopt rules to require an applicant to 
provide documentation establishing the applicant has sufficient financial 
resources to provide services during the term of the license, a list of 
management personnel, a description of personnel qualifications, a plan for 
providing continuing training and education for personnel, documentation that 
the applicant is capable of meeting the minimum standards related to quality of 
care, and documentation that the applicant has a plan for the orderly transfer 
of care of clients if the applicant cannot maintain or deliver services under 
the license; under sec.142.008(b) which provides the board with authority to 
adopt rules to establish eligibility requirements for a branch office license; 
under sec.142.0085(b) which provides the board with authority to establish 
eligibility requirements for an alternate delivery site license; under 
sec.142.012 which provides the board with authority to adopt rules to set 
minimum standards relating to qualifications for professional and 
nonprofessional personnel (including volunteers), supervision of professional 
and nonprofessional personnel (including volunteers), the provision and 
coordination of treatment and services (including support and bereavement 
services), the management, ownership, and organizational structure (including 
lines of authority and delegation of responsibility and the composition of an 
interdisciplinary team), clinical and business records, financial ability to 
carry out the functions as proposed by the HCSSA, safety, fire prevention, and 
sanitary standards for residential and inpatient units, and any other aspects of 
home health, hospice, or personal assistance services as necessary to protect 
the public; under sec.142.023 which provides the board with the authority to 
establish minimum requirements for the issuance, denial, renewal, suspension, 
emergency suspension, and revocation of a permit to a home health medication 
aide, curricula to train a home health medication aide, minimum standards for 
the approval of home health medication aide training programs and for rescinding 
approval, the acts and practices that are allowed or prohibited to a permit 
holder, and minimum standards for on-site supervision of a permit holder by a 
registered nurse; and under Health and Safety Code, sec.12.001 which provides 
the board with the authority to adopt rules for the performance of every duty 
imposed by law upon the board, the department and the commissioner of health. 
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 June 30, 1997.
TRD-9708443
Susan K. Steeg
General Counsel
Texas Department of Health
Effective date: July 21, 1997
Proposal publication date: March 14, 1997
For further information, please call: (512) 458-7236

25 TAC sec.sec.115.11-115.16
The amendments and new sections are adopted under the Health and Safety Code, 
sec.142.004(c), which provides the board with authority to adopt rules to 
require an applicant to provide documentation establishing the applicant has 
sufficient financial resources to provide services during the term of the 
license, a list of management personnel, a description of personnel 
qualifications, a plan for providing continuing training and education for 
personnel, documentation that the applicant is capable of meeting the minimum 
standards related to quality of care, and documentation that the applicant has a 
plan for the orderly transfer of care of clients if the applicant cannot 
maintain or deliver services under the license; under sec.142.008(b) which 
provides the board with authority to adopt rules to establish eligibility 
requirements for a branch office license; under sec.142.0085(b) which provides 
the board with authority to establish eligibility requirements for an alternate 
delivery site license; under sec.142.012 which provides the board with authority 
to adopt rules to set minimum standards relating to qualifications for 
professional and nonprofessional personnel (including volunteers), supervision 
of professional and nonprofessional personnel (including volunteers), the 
provision and coordination of treatment and services (including support and 
bereavement services), the management, ownership, and organizational structure 
(including lines of authority and delegation of responsibility and the 
composition of an interdisciplinary team), clinical and business records, 
financial ability to carry out the functions as proposed by the HCSSA, safety, 
fire prevention, and sanitary standards for residential and inpatient units, and 
any other aspects of home health, hospice, or personal assistance services as 
necessary to protect the public; under sec.142.023 which provides the board with 
the authority to establish minimum requirements for the issuance, denial, 
renewal, suspension, emergency suspension, and revocation of a permit to a home 
health medication aide, curricula to train a home health medication aide, 
minimum standards for the approval of home health medication aide training 
programs and for rescinding approval, the acts and practices that are allowed or 
prohibited to a permit holder, and minimum standards for on-site supervision of 
a permit holder by a registered nurse; and under Health and Safety Code, 
sec.12.001 which provides the board with the authority to adopt rules for the 
performance of every duty imposed by law upon the board, the department and the 
commissioner of health. 

sec.115.11. Application and Issuance of Initial License.
(a) All first-time applications for a license are applications for an initial 
license. 
(b) Upon written request, the Texas Department of Health (department) will 
furnish a person with an application packet for an agency license. 
(c) If the applicant is an individual, the applicant shall be at least 18 years 
of age. 
(d) The applicant shall retain a copy of all documentation that is submitted to 
the department. 
(e) An agency operating in another state must receive a license as a parent 
agency in Texas in order to operate as an agency in Texas. 
(f) A separate license is required for each principal place of business. 
(g) The applicant shall apply for a license in accordance with this subsection. 
(1) The applicant may request one or a combination of the following categories 
under the license. An agency is not required to be licensed in more than one 
category if the agency's category covers the provided services:
(A) licensed and certified home health services; 
(B) licensed and certified home health services with home dialysis designation; 
(C) licensed home health services; 
(D) licensed home health services with home dialysis designation;
(E) hospice services which may include residential or inpatient units; or 
(F) personal assistance services. 
(2) The applicant for a license shall submit the information listed in 
subparagraphs (A) - (T) of this paragraph to the department within six months 
from the date the department mails the application packet to the applicant. If 
the department does not receive the information listed in subparagraphs (A) - 
(T) of this paragraph within six months from the mailing date, the applicant 
must request a new application packet. The following documents must be submitted 
with the original application form and shall be originals or notarized copies: 
(A) an accurate and complete application form which contains original 
signatures. The address provided on the application must be the address from 
which the agency will be operating and providing services. The address for its 
place of business to be licensed by the department must be located in the State 
of Texas; 
(B) a description of the agency's service area. The service area shall be 
established in accordance with sec.115.21(a)(6) of this title (relating to 
Licensure Requirements and Standards for Agencies Providing Licensed Home 
Health, Licensed and Certified Home Health, or Hospice Services) for agencies 
providing licensed home health, licensed and certified home health, or hospice 
services; or sec.115.26(b) of this title (relating to Standards for Personal 
Assistance Services) for agencies with the category of personal assistance 
services; 
(C) a nonrefundable license fee; 
(D) the name of the applicant; 
(E) a list of names of all persons who own at least a 10% interest in the 
applicant; 
(F) a list of any businesses with which the applicant subcontracts and in which 
the persons listed under subparagraph (E) of this paragraph hold at least 5% of 
the ownership;. 
(G) the name and business address of: 
(i) each limited partner and general partner if the applicant is a partnership; 
and 
(ii) each director and officer if the applicant is a corporation, limited 
liability company or other business entity; 
(H) if the applicant has held or holds an agency license or has been or is an 
affiliate of another licensed agency, the relationship, including the name and 
current or last address of the other agency and the date such relationship 
commenced and, if applicable, the date it was terminated;
(I) if the applicant is a subsidiary of another organization, the names and 
addresses of the parent organization, the names and addresses of the officers 
and directors of the parent organization and the name of each subsidiary of the 
parent organization; and 
(J) if the facility is operated by or proposed to be operated under a management 
contract, the names and addresses of any person and organization having an 
ownership interest of 10% or more in the management company; 
(K) for a parent agency: 
(i) a proposed budget covering the period of time of the license;
(ii) a notarized affidavit attesting to the following: 
(I) that the applicant has not been adjudged insolvent or bankrupt in a state or 
federal court during the seven-year period preceding the application date; 
(II) that the applicant is not a party in a state or federal court to a 
bankruptcy or insolvency proceeding with respect to the applicant; and 
(III) that the applicant has the financial resources to meet its proposed budget 
and to provide the services required by the statute and by the department during 
the term of the license; 
(iii) its organizational structure, a list of management personnel (including 
names and titles), and a job description of each administrative and supervisory 
position. The job description must contain at a minimum the job title, 
qualifications including required education and training, and job 
responsibilities. The applicant must submit a plan to provide annual continuing 
education and training for management personnel; 
(iv) the resume or curriculum vitae of the agency administrator. The resume or 
curriculum vitae shall reflect that the administrator has the qualifications 
described in sec.115.21(b)(3)(B) of this title for agencies providing licensed 
home health, licensed and certified home health, or hospice services; or 
sec.115.26(g) of this title for agencies providing personal assistance services; 
and 
(v) the resume or curriculum vitae of the agency supervising nurse (if 
applicable). The resume or curriculum vitae shall reflect that the supervising 
nurse has the qualifications described in sec.115.21(b)(3)(C) of this title; 
(L) a written plan for the orderly transfer of care of the applicant's clients 
and clinical records if the applicant is unable to maintain services under the 
license; 
(M) a notarized statement attesting that the applicant is capable of meeting the 
requirements of this chapter for the provision of home health, hospice, or 
personal assistance services; 
(N) if an applicant is a corporation, a current letter from the state 
comptroller's office stating the corporation is in good standing or a notarized 
certification that the tax owed to the state under the Tax Code, Chapter 171, is 
not delinquent or that the corporation is exempt from the payment of the tax and 
is not subject to the Tax Code, Chapter 171; 
(O) if accredited, documentation from: 
(i) the Joint Commission for Accreditation of Healthcare Organizations 
indicating the agency holds a current accreditation for the applicable service; 
or 
(ii) the Community Health Accreditation Program indicating the agency is 
accredited for the applicable service; 
(P) if accredited by another accrediting organization, documentation regarding 
the accrediting organization to show that the accrediting organization's 
standards meet or exceed this chapter; 
(Q) if certified by another state agency to deliver services for which a license 
is required under this chapter, documentation from the certifying state 
agency(ies) confirming the certification; 
(R) the following data concerning the applicant, the applicant's affiliates, and 
the managers of the applicant: 
(i) denial, suspension, or revocation of an agency license or a license for any 
health care facility in any state or any other enforcement action, such as court 
civil or criminal action; 
(ii) denial, suspension, or revocation of or other enforcement action against an 
agency license or a license for any health care facility in any state which is 
or was proposed by the licensing agency and the status of the proposal; 
(iii) surrendering a license before expiration of the license or allowing a 
license to expire in lieu of the department proceeding with enforcement action; 
(iv) federal or state Medicaid or Medicare sanctions or penalties relating to 
the operation of an agency or health care facility; 
(v) federal or state (any state) criminal felony convictions;
(vi) operation of an agency that has been decertified in any state under 
Medicare or Medicaid; or 
(vii) debarment, exclusion, or contract cancellation in any state from Medicare 
or Medicaid; 
(S) for the two-year period preceding the application date, the following data 
concerning the applicant, the applicant's affiliates, and the managers of the 
applicant: 
(i) federal or state (any state) criminal misdemeanor convictions;
(ii) federal or state (any state) tax liens; 
(iii) unsatisfied final judgements; 
(iv) eviction involving any property or space used as an agency in any state; 
(v) unresolved final state or federal Medicare or Medicaid audit exceptions; or 
(vi) injunctive orders from any court; and 
(T) notice that the agency has attended a presurvey conference at the office 
designated by the department, or that the designated survey office has waived 
the presurvey conference. The application is not considered complete and correct 
unless the department has received this notice. 
(i) It is the agency's responsibility to contact the designated survey office to 
schedule a presurvey conference. 
(ii) The administrator and supervising nurse (if applicable) shall attend the 
presurvey conference. 
(iii) The designated survey office shall verify compliance with the applicable 
provisions of this chapter and recommend that the agency be issued an initial 
license or that the application be denied pursuant to sec.115.52 of this title 
(relating to Enforcement Action). 
(3) Upon the department's receipt of the application form, the required 
information described in paragraph (2) of this subsection, and the fee from an 
applicant, the department shall review the material to determine whether it is 
complete and correct. 
(A) The time periods for reviewing the material shall be in accordance with 
sec.115.16 of this title (relating to Time Periods for Processing and Issuing a 
License). 
(B) If an agency receives a notice from the department that some or all of the 
information required under paragraph (2) of this subsection is deficient, the 
agency shall submit the required information no later than six months from the 
date of the notice. 
(i) An agency which fails to submit the required information within six months 
from the notice date is considered to have withdrawn its application for an 
initial agency license. The license fee will not be refunded.
(ii) An agency which has withdrawn its application must reapply for a license in 
accordance with this section, if it wishes to continue the application process. 
A new license fee is required. 
(C) Information received by the department relating to the competence and 
financial resources of the applicant is confidential and may not be disclosed to 
the public. 
(4) Once the department has determined that the application form, the 
information described in paragraph (2) of this subsection required to accompany 
the application form, and the license fee are complete and correct, the 
department shall issue the initial license. The initial license shall expire: 
(A) on the last day of the preceding month of the next year if issued on the 
first day of a month; or 
(B) on the last day of the month of issuance of the next year if issued on the 
second or any subsequent day of a month. 
(5) The department shall mail the initial license certificate to the licensee. 
The license certificate will designate the category(ies) of service the agency 
is authorized to provide at or from the designated place of business. 
(h) An agency may not admit a client or initiate services until it has received 
the initial license certificate. 
(i) The agency shall admit at least one client and initiate services during the 
initial license period. 
(1) Upon admitting the first client, the agency shall inform the designated 
survey office of the admission and the name of the client and request that an 
initial survey be conducted. 
(2) The agency is not required to admit a client(s) under each category 
authorized under the license in order to be surveyed by the department. 
(j) A department surveyor shall conduct an onsite survey of the agency after the 
issuance of the initial license. 
(1) Upon receiving an agency request for an initial survey, the designated 
survey office shall schedule the survey of the agency and shall inform the 
agency of the survey date and time. 
(2) An initial survey shall not be required if the agency has received 
accreditation by the Community Health Accreditation Program or the Joint 
Commission on Accreditation for Healthcare Organizations since the issuance of 
the initial license. 
(3) All applicants issued an initial license must be providing or have provided 
services to one or more clients at the time of the initial survey. 
(4) At the time of the initial survey, the agency shall:
(A) have the following available and ready for review by the surveyor upon the 
surveyor's arrival: 
(i) a list(s) of clients who are receiving services or who have received 
services from the agency. This list(s) must include the name(s), address(es), 
and telephone number(s) of the clients served and the service(s) provided; and 
(ii) the client record for each client admitted during the licensing period 
prior to survey; and 
(B) assure that the administrator and supervising nurse or designee(s), if 
applicable, are present at the entrance conference, available during the survey, 
and present at the exit conference. If the administrator and supervising nurse 
or designee(s) are not present at the surveyor's arrival, the survey will not be 
conducted, the initial license may be revoked and the renewal license denied in 
accordance with sec.115.52 of this title (relating to Enforcement Action). 
(5) The department will not renew the license unless the designated survey 
office has conducted an initial survey of the agency.
(k) A person who has requested the category of licensed and certified home 
health services on the initial license application shall also make application 
for certification by the United States Department of Health and Human Services 
(USDHHS) as a Medicare certified agency under the Social Security Act, Title 
XVIII. 
(1) Pending approval by the USDHHS Health Care Financing Administration (HCFA), 
the person: 
(A) will receive an initial license reflecting the category of licensed home 
health services; and 
(B) shall comply with the Medicare conditions of participation for home health 
agencies in 42 Code of Federal Regulations, Part 484, as if the person were duly 
certified. 
(2) Upon becoming certified by HCFA to participate in the Medicare program 
during the initial licensing period, the department shall send notice to the 
agency that the category of licensed and certified home health services has been 
added to the license. The agency shall submit a written request for deletion or 
retention of the licensed home health services category. 
(3) If HCFA denies certification to the person or if the person withdraws 
application for participation in the Medicare program, the person will retain 
the category of licensed home health services. An agency's retention of the 
licensed home health services category does not preclude the department from 
taking enforcement action, as appropriate, under sec.115.52 of this title. 
(l) Continuing compliance with the minimum standards and the provisions of this 
chapter for the services authorized to be provided under the license is required 
during the initial licensing period in order for a first renewal license to be 
issued. 
(1) An agency authorized under the license to provide licensed home health, 
licensed and certified home health, or hospice services shall comply with 
sec.115.21 of this title. 
(2) An agency authorized under the license to provide licensed home health 
services shall comply with sec.115.22 of this title (relating to Standards for 
Licensed Home Health Services). 
(3) An agency authorized under the license to provide licensed and certified 
home health services shall comply with sec.115.23 of this title (relating to 
Standards for Licensed and Certified Home Health Services). 
(4) An agency authorized under the license to provide home dialysis shall comply 
with sec.115.24 of this title (relating to Standards for Home Dialysis 
Designation). 
(5) An agency authorized under the license to provide hospice services shall 
comply with sec.115.25 of this title (relating to Standards for Hospice 
Services). 
(6) An agency which holds a license with the category of personal assistance 
services shall comply with sec.115.26 of this title (relating to Standards for 
Personal Assistance Services). 
(m) If the department determines that compliance with the minimum standards and 
the provisions of this chapter is not substantiated after the issuance of the 
initial license, the department may propose to revoke the initial license and 
deny the first renewal license and shall notify the applicant of a license 
revocation and denial as provided in sec.115.52 of this title.
(n) If an applicant decides not to continue the application process for an 
initial license, the application may be withdrawn. If a license has been issued, 
the applicant shall cease providing services and return the license to the 
department with its written request to withdraw. The department shall 
acknowledge receipt of the request to withdraw. The license fee will not be 
refunded. 
(o) A person may not engage in the business of providing home health, hospice, 
or personal assistance services, or represent to the public that the person is a 
provider of home health, hospice, or personal assistance services for pay or 
other consideration without a license. 

sec.115.12. Issuance and Renewal of License. 
(a) Eligibility for license renewal. 
(1) An agency shall renew a license annually. The Texas Department of Health 
(department) shall issue a renewal license to an agency which meets the minimum 
standards for a license. 
(2) The renewal license shall expire 12 months from the date of issuance. For 
each annual license period, the agency shall provide services to one or more 
clients and document the provision of services. The agency must show proof that 
services have been provided under the license within the previous 12 months. 
Such documentation shall be available for review by a department surveyor. 
(3) An agency with an initial license is eligible for first renewal of the 
license when the agency has met the provisions of sec.115.11(h)-(j) of this 
title (relating to Application and Issuance of Initial License), continues to 
comply with the provisions of this chapter applicable to the category(ies) 
authorized under the license, and has applied for renewal of the license in 
accordance with subsection (b) of this section. 
(4) An agency with a renewal license is eligible for subsequent renewal of the 
license annually when the agency continues to comply with the applicable 
provisions of this chapter and has applied for renewal of the license in 
accordance with subsection (b) of this section. 
(5) An agency is not required to admit a client(s) under each category 
authorized under the license as a condition for renewal of the license. 
(6) An agency license will not be renewed with the category of licensed and 
certified home health services if the agency withdraws from or is terminated 
(voluntarily or involuntarily) from participation in the Medicare program. 
However, if continued compliance with the requirements for licensed home health 
services is demonstrated, the license shall be renewed with the category of 
licensed home health services. 
(7) A license will not be renewed if renewal is prohibited by the Texas 
Education Code, sec.57.491 relating to defaults on guaranteed student loans. 
(8) A license will not be renewed if it is suspended under the Family Code, 
Chapter 232 relating to license suspension of delinquent child support obligors. 
(9) If an agency makes a timely application for renewal of a license, and action 
to revoke, suspend, or deny renewal of the license is pending, the license does 
not expire but does extend until the application for renewal is granted or 
denied after the opportunity for a formal hearing. A renewal license certificate 
will not be issued unless the department has determined the reason for the 
proposed action no longer exists but the department will issue a letter 
acknowledging the extension of the license. 
(b) Renewal application. 
(1) The department will send notice of expiration to an agency at least 60 
calendar days before the expiration date of the license. If the agency has not 
received notice of expiration from the department 45 calendar days prior to the 
expiration date, it is the duty of the agency to notify the department and 
request a renewal application for a license. 
(2) The agency shall submit to the department postmarked prior to the expiration 
date of the license: 
(A) a complete and correct application renewal form which includes updated 
disclosure information and ownership and management information as required by 
sec.115.11(g)(2)(R) and (S) of this title; 
(B) the renewal license fee; 
(C) if accredited, documentation from: 
(i) the Joint Commission for Accreditation of Healthcare Organizations 
indicating the agency holds a current accreditation for the applicable service; 
or 
(ii) the Community Health Accreditation Program indicating the agency is 
accredited for the applicable service; 
(D) if accredited by another accrediting organization, documentation regarding 
the accrediting organization to show that the accrediting organization's 
standards meet or exceed this chapter; 
(E) if certified by or contracting with another state agency to deliver services 
for which a license is required under this chapter, documentation from the 
certifying state agency(ies) confirming the certification or contract; and 
(F) if an applicant is a corporation, a current letter from the state 
comptroller's office stating the corporation is in good standing or a notarized 
certification that the tax owed to the state under the Tax Code, Chapter 171, is 
not delinquent or that the corporation is exempt from the payment of the tax and 
is not subject to the Tax Code, Chapter 171. 
(3) All documents submitted with the renewal application shall be notarized 
copies or originals. The time periods for processing an application shall be in 
accordance with sec.115.16 of this title (relating to Time Periods for 
Processing and Issuing a License). 
(c) Timely application required. An agency which fails to make timely and 
sufficient application for renewal of its license shall not provide home health, 
hospice, or personal assistance services after the expiration date of the 
license. If an agency fails to make timely and sufficient application for 
renewal of a license prior to the expiration date of the license, the agency 
must cease operation upon expiration of the license. In order to resume 
operations, the agency must apply for an initial license in accordance with 
sec.115.11 of this title. 
(d) Active military duty exception. If a licensee fails to timely renew his or 
her license on or after August 1, 1990, because the licensee is or was on active 
duty with the armed forces of the United States of America serving outside the 
State of Texas, the licensee may renew the license pursuant to this subsection. 
(1) Renewal of the license may be requested by the licensee, the licensee's 
spouse, or an individual having power of attorney from the licensee. The renewal 
form shall include a current address and telephone number for the individual 
requesting the renewal. 
(2) Renewal may be requested before or after the expiration of the license. 
(3) A copy of the official orders or other official military documentation 
showing that the licensee is or was on active military duty serving outside the 
State of Texas shall be filed with the department along with the renewal form. 
(4) A copy of the power of attorney from the licensee shall be filed with the 
department along with the renewal form if the individual having the power of 
attorney executes any of the documents required in this section. 
(5) A licensee renewing under this subsection shall pay the applicable renewal 
fee. 
(6) A licensee is not authorized to operate the agency for which the license was 
obtained after the expiration of the license unless and until the licensee 
actually renews the license. 
(7) This subsection applies to a licensee who is a sole practitioner or a 
partnership with only individuals as partners where all of the partners were on 
active duty with the armed forces of the United States serving outside the State 
of Texas. 
(e) Withdrawal of application. If an agency decides not to continue the 
application process for the renewal of a license, the application may be 
withdrawn. If a license has been issued, the applicant shall return the license 
to the department with its written request to withdraw and cease providing 
services. The department shall acknowledge receipt of the request to withdraw.  

sec.115.13. Change of Ownership or Services. 
(a) No license may be transferred from one person to another person. 
(1) A person who desires to receive a license in its name for an agency 
currently licensed under the name of another person or to change the ownership 
of any agency must comply with the following provisions. 
(A) The person must submit a license application prior to the date of the change 
of ownership. The application shall be, if applicable, in accordance with 
sec.115.11 of this title (relating to Application and Issuance of Initial 
License), sec.115.14 of this title (relating to Application and Issuance of a 
Branch Office License) or sec.115.15 of this title (relating to Application and 
Issuance of an Alternate Delivery Site License). The application shall include: 
(i) the effective date of the change of ownership; and 
(ii) a notarized affidavit signed by the previous owner acknowledging agreement 
with the change of ownership. If the applicant is a corporation, the application 
shall include a copy of the applicant's articles of incorporation. If the 
applicant is a business entity other than a corporation, the applicant shall 
include a copy of the sales agreement. 
(B) The on-site survey required by sec.115.11(i) of this title may be waived by 
the department. 
(C) When the person has complied with the provisions of sec.115.11 of this 
title, the department shall issue an initial license which shall be effective 
the date of the change of ownership. The department shall renew the license in 
accordance with sec.115.12 of this title (relating to Issuance and Renewal of 
License) without an initial survey if waived under subparagraph (B) of this 
paragraph. 
(D) The initial license issued to the new owner shall expire:
(i) on the last day of the preceding month of the next year if issued on the 
first day of a month; or 
(ii) on the last day of the month of issuance of the next year if issued on the 
second or any subsequent day of the month.
(E) The previous owner's license shall be void on the effective date of the new 
initial license and must be surrendered to the department.
(2) (No change.) 
(3) A change of ownership of a licensed agency under this subsection occurs when 
the name of the licensed person or entity as reflected on the license 
certificate and original application will be changed, unless a licensee who is a 
business entity is simply amending its official documents to revise its name. 
(4) A change of ownership for a parent agency is a change of ownership for the 
parent agency's branch office(s) or alternate delivery site(s) and requires the 
submittal of a new initial application(s) and fee(s) for the branch office(s) or 
alternate delivery site(s). 
(5) The provisions of this subsection are in addition to any applicable federal 
law or regulations relating to change of ownership or control. 
(b) An agency shall notify the department in writing and within 15 calendar days 
after any of the following: 
(1) change in state agency certification or accreditation status; and 
(2) cessation of operation of the agency, branch office, or alternate delivery 
site. The agency shall include in the written notice the reason for closure, the 
location of the client records, and the name and address of the client record 
custodian. If an agency closes with an active client roster, a copy of the 
active client record shall be transferred with the client to the receiving 
agency in order to assure continuity of care and services to the client. The 
initial license or renewal license shall be mailed or returned to the department 
at the end of the day services were terminated.
(c) An agency which wishes to add or delete a category to the license shall 
inform the department in writing 30 calendar days prior to the addition or 
deletion of the category. 
(1) The department will approve or disapprove the addition of a category. 
(A) At the discretion of the department, an agency shall attend a presurvey 
conference at the designated survey office prior to the department approving the 
addition of a category. 
(B) If disapproved, the department shall inform the agency of the reason for 
disapproval. 
(2) At the discretion of the department an on-site survey may be conducted 
following the approval of a category. 
(3) The department's receipt of an agency request to delete a category from the 
license does not preclude the department from taking enforcement action as 
appropriate in accordance with sec.115.52 of this title (relating to Enforcement 
Action). 
(d) If an agency changes the name under which it is doing business as but not 
the ownership, it must send written notification to the department within five 
business days after the effective date of the name change and a notarized copy 
of any documents required to be filed with the secretary of state or other 
governmental authority(ies) (e.g. an assumed name certificate) reflecting the 
name change. The department shall determine if the change is a transfer under 
subsection (a) of this section.  

sec.115.14. Application and Issuance of a Branch Office License. 
(a) The Texas Department of Health (department) may issue a branch office 
license to a person who holds a current agency license to provide home health or 
personal assistance services. A person who holds a current agency license is 
eligible to apply for a branch office license: 
(1) for an agency with an initial license, if the agency has received a license 
to provide home health or personal assistance services in the State of Texas and 
successfully completed an initial onsite survey to verify compliance with the 
statute and this chapter; or for an agency with a first renewal license or 
subsequent renewal license, if the agency has demonstrated substantial 
compliance with the statute and this chapter during the licensure period; and 
(2) if enforcement action against the agency license is not proposed under 
sec.115.52 of this title (relating to Enforcement Action).
(b) (No change.) 
(c) The parent agency applicant shall submit to the department:
(1) a complete and correct application; 
(2) the required license fee; 
(3) the organizational structure of the branch office which shows its 
relationship under the parent agency and includes the names and titles of the 
branch office management, supervisory, and administrative personnel; 
(4) a proposed budget specific to the branch office covering the period of time 
of the license; and 
(5) a description of the branch office's service area. The service area must 
meet the criteria in sec.115.27 of this title (relating to Standards for Branch 
Offices). 
(d) (No change.) 
(e) The department shall review the application and accompanying material to 
determine whether it is complete and correct. 
(1) The time frames for review shall be in accordance with sec.115.16 of this 
title (relating to Time Periods for Processing and Issuing a License). 
(2) An agency which fails to respond to the department's notice of an incomplete 
application for a branch office license described in sec.115.16(b) of this title 
within six months from the date of the notice is considered to have withdrawn 
the application for a branch office license. The branch office license fee will 
not be refunded 
(3) An agency which has withdrawn its application for a branch office license 
must reapply for a branch office license in accordance with subsection (c) of 
this section. A new branch office license fee is required.
(f) The department shall notify the designated survey office of the agency's 
request to establish a branch office. 
(g) The designated survey office will conduct a review of the applicant's 
request to establish a branch office. The survey office will recommend to 
approve or disapprove the branch office request. At the discretion of the 
department, the designated survey office may conduct an onsite survey of the 
branch office prior to recommending approval or disapproval of the branch office 
request. 
(h) The department may propose denial of the application according to sec.115.52 
of this title (relating to Enforcement Action) after consideration of the 
designated survey office's recommendation. 
(i) Upon approval of the branch office license application, the department will 
issue the branch office a license, which shall expire on the same expiration 
date as the parent agency's license and shall be renewed with the parent 
agency's license. 
(j) At the discretion of the department, an onsite survey of the branch office 
may be conducted after issuance of the license to determine compliance with the 
statute and this chapter. 
(k) The department will mail the branch office license to the licensee. The 
branch office license shall be posted in a conspicuous place on the licensed 
branch office premises. 
(l) The branch office shall comply with sec.115.27 of this title and the 
standards relating to the category(ies) authorized under the license. 

sec.115.15. Application and Issuance of an Alternate Delivery Site License. 
(a) The department may issue an alternate delivery site license to a person who 
holds a current agency license to provide hospice services. A person who holds a 
current agency license to provide hospice services is eligible to apply for an 
alternate delivery site license: 
(1) for an agency with an initial license, if the agency has received a license 
to provide hospice services in the State of Texas and has successfully completed 
an initial onsite survey to verify compliance with the statute and this chapter; 
or for an agency with a first renewal or subsequent renewal license, if the 
agency has demonstrated substantial compliance with the statute and this chapter 
during the licensure period; and 
(2) if enforcement action against the agency license is not proposed under 
sec.115.52 of this title (relating to Enforcement Action).
(b) Upon written request, the department shall furnish a hospice license holder 
with an application for an alternate delivery site license.
(c) The hospice shall submit to the department: 
(1) a complete and correct application; 
(2) the required license fee; 
(3) the organizational structure of the alternate delivery site which shows its 
relationship under the hospice and includes the names and titles of the 
alternate delivery site management, supervisory, and administrative personnel; 
(4) a proposed budget specific to the alternate delivery site covering the 
period of time of the license; and 
(5) a description of the alternate delivery site's service area. The service 
area must meet the criteria in sec.115.28 of this title (related to Standards 
for Alternate Delivery Sites). 
(d) The hospice shall retain a copy of all documentation that is submitted to 
the department. 
(e) The department shall review the application and accompanying material to 
determine whether it is complete and correct. 
(1) The time frames for review shall be in accordance with sec.115.16 of this 
title (relating to Time Periods for Processing and Issuing a License). 
(2) An agency which fails to respond to the department's notice of an incomplete 
application for an alternate delivery site license described in sec.115.16(b) of 
this title within six months from the date of the notice is considered to have 
withdrawn the application for an alternate delivery site license. The alternate 
delivery site license fee will not be refunded 
(3) An agency which has withdrawn its application for an alternate delivery site 
license must reapply for an alternate delivery site license in accordance with 
subsection (c) of this section. A new alternate delivery site license fee is 
required. 
(f) The department shall notify the designated survey office of the hospice's 
request to establish an alternate delivery site. 
(g) The designated survey office shall conduct a review of the hospice's request 
to establish an alternate delivery site. The survey office will recommend to 
approve or disapprove the alternate delivery site request. At the discretion of 
the department, the designated survey office may conduct an onsite survey of the 
alternate delivery site prior to recommending approval or disapproval of the 
alternate delivery site request. 
(h) The department may propose denial of the application according to sec.115.52 
of this title after consideration of the designated survey office's 
recommendation. 
(i) Upon approval of the alternate delivery site application, the department 
will issue the alternate delivery site a license, which shall expire on the same 
expiration date as the hospice's license, and shall be renewed with the 
hospice's license. The alternate delivery site license shall be posted in a 
conspicuous place on the licensed alternate delivery site premises.
(j) The alternate delivery site shall comply with sec.115.25 of this title 
(relating to Standards for Hospice Services) and sec.115.28 of this title. The 
designated survey office will conduct an on-site survey after a license has been 
issued to verify compliance with sec.115.25 of this title and sec.115.28 of this 
title. 
(k) If the designated survey office recommends that the licensed alternate 
delivery site seek a license as a hospice, a written report supporting the 
recommendation shall be submitted to the department for review. 

sec.115.16. Time Periods for Processing and Issuing a License. 
(a) General. 
(1) The date a license application is received is the date the application 
reaches the Health Facility Licensing Division (division), Texas Department of 
Health (department). 
(2) An application for an initial license is complete when the department has 
received, reviewed, and found acceptable the information described in sec.115.11 
of this title (relating to Application and Issuance of Initial License). 
(3) An application for a renewal license is complete when the department has 
received, reviewed and found acceptable the information described in sec.115.12 
of this title (relating to Issuance and Renewal of License). 
(4) An application for a change of ownership license is complete when the 
department has received, reviewed, and found acceptable the information 
described in sec.115.13 of this title (relating to Change of Ownership or 
Services). 
(b) Time periods. An application from an agency for an initial license, renewal 
license, or change of ownership license shall be processed in accordance with 
the following time periods. 
(1) The first time period begins on the date the division receives the 
application and ends on the date the license is issued, or if the application is 
received incomplete, the period ends on the date the facility is issued a 
written notice that the application is incomplete. The written notice shall 
describe the specific information that is required before the application is 
considered complete. The first time period is 45 days. 
(2) The second time period begins on the date the last item necessary to 
complete the application is received and ends on the date the license is issued. 
The second time period is 45 days. 
(c) Reimbursement of fees. 
(1) In the event the application is not processed in the time periods stated in 
subsection (b) of this section, the applicant has the right to request that the 
department reimburse in full the fee paid in that particular application 
process. If the department does not agree that the established periods have been 
violated or finds that good cause existed for exceeding the established periods, 
the request will be denied. 
(2) Good cause for exceeding the period established is considered to exist if: 
(A) the number of applications for licenses to be processed exceeds by 15% or 
more the number processed in the same calendar quarter the preceding year; 
(B) another public or private entity utilized in the application process caused 
the delay; or 
(C) other conditions existed giving good cause for exceeding the established 
periods. 
(d) Appeal. If the request for reimbursement as authorized by subsection (c) of 
this section is denied, the applicant may then appeal to the commissioner of 
health for a resolution of the dispute. The applicant shall give written notice 
to the commissioner requesting reimbursement of the fee paid because the 
application was not processed within the established time period. The department 
shall submit a written report of the facts related to the processing of the 
application and good cause for exceeding the established time periods. The 
commissioner will make the final decision and provide written notification of 
the decision to the applicant and the director. 
(e) Hearings. If a hearing is proposed during the processing of the application, 
the time periods in sec.1.34 of this title (relating to Time Periods for 
Conducting Contested Case Hearing) are applicable. 
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 June 30, 1997.
TRD-9708444
Susan K. Steeg
General Counsel
Texas Department of Health
Effective date: July 21, 1997
Proposal publication date: March 14, 1997
For further information, please call: (512) 458-7236

SUBCHAPTER C. Service Standards
25 TAC sec.115.21
The repeal is adopted under the Health and Safety Code, sec.142.004(c), which 
provides the board with authority to adopt rules to require an applicant to 
provide documentation establishing the applicant has sufficient financial 
resources to provide services during the term of the license, a list of 
management personnel, a description of personnel qualifications, a plan for 
providing continuing training and education for personnel, documentation that 
the applicant is capable of meeting the minimum standards related to quality of 
care, and documentation that the applicant has a plan for the orderly transfer 
of care of clients if the applicant cannot maintain or deliver services under 
the license; under sec.142.008(b) which provides the board with authority to 
adopt rules to establish eligibility requirements for a branch office license; 
under sec.142.0085(b) which provides the board with authority to establish 
eligibility requirements for an alternate delivery site license; under 
sec.142.012 which provides the board with authority to adopt rules to set 
minimum standards relating to qualifications for professional and 
nonprofessional personnel (including volunteers), supervision of professional 
and nonprofessional personnel (including volunteers), the provision and 
coordination of treatment and services (including support and bereavement 
services), the management, ownership, and organizational structure (including 
lines of authority and delegation of responsibility and the composition of an 
interdisciplinary team), clinical and business records, financial ability to 
carry out the functions as proposed by the HCSSA, safety, fire prevention, and 
sanitary standards for residential and inpatient units, and any other aspects of 
home health, hospice, or personal assistance services as necessary to protect 
the public; under sec.142.023 which provides the board with the authority to 
establish minimum requirements for the issuance, denial, renewal, suspension, 
emergency suspension, and revocation of a permit to a home health medication 
aide, curricula to train a home health medication aide, minimum standards for 
the approval of home health medication aide training programs and for rescinding 
approval, the acts and practices that are allowed or prohibited to a permit 
holder, and minimum standards for on-site supervision of a permit holder by a 
registered nurse; and under Health and Safety Code, sec.12.001 which provides 
the board with the authority to adopt rules for the performance of every duty 
imposed by law upon the board, the department and the commissioner of health. 
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 June 30, 1997.
TRD-9708445
Susan K. Steeg
General Counsel
Texas Department of Health
Effective date: July 21, 1997
Proposal publication date: March 14, 1997
For further information, please call: (512) 458-7236

25 TAC sec.sec.115.21-115.28
The amendments and new section are adopted under the Health and Safety Code, 
sec.142.004(c), which provides the board with authority to adopt rules to 
require an applicant to provide documentation establishing the applicant has 
sufficient financial resources to provide services during the term of the 
license, a list of management personnel, a description of personnel 
qualifications, a plan for providing continuing training and education for 
personnel, documentation that the applicant is capable of meeting the minimum 
standards related to quality of care, and documentation that the applicant has a 
plan for the orderly transfer of care of clients if the applicant cannot 
maintain or deliver services under the license; under sec.142.008(b) which 
provides the board with authority to adopt rules to establish eligibility 
requirements for a branch office license; under sec.142.0085(b) which provides 
the board with authority to establish eligibility requirements for an alternate 
delivery site license; under sec.142.012 which provides the board with authority 
to adopt rules to set minimum standards relating to qualifications for 
professional and nonprofessional personnel (including volunteers), supervision 
of professional and nonprofessional personnel (including volunteers), the 
provision and coordination of treatment and services (including support and 
bereavement services), the management, ownership, and organizational structure 
(including lines of authority and delegation of responsibility and the 
composition of an interdisciplinary team), clinical and business records, 
financial ability to carry out the functions as proposed by the HCSSA, safety, 
fire prevention, and sanitary standards for residential and inpatient units, and 
any other aspects of home health, hospice, or personal assistance services as 
necessary to protect the public; under sec.142.023 which provides the board with 
the authority to establish minimum requirements for the issuance, denial, 
renewal, suspension, emergency suspension, and revocation of a permit to a home 
health medication aide, curricula to train a home health medication aide, 
minimum standards for the approval of home health medication aide training 
programs and for rescinding approval, the acts and practices that are allowed or 
prohibited to a permit holder, and minimum standards for on-site supervision of 
a permit holder by a registered nurse; and under Health and Safety Code, 
sec.12.001 which provides the board with the authority to adopt rules for the 
performance of every duty imposed by law upon the board, the department and the 
commissioner of health. 

sec.115.21. Licensure Requirements and Standards for Agencies Providing Licensed 
Home Health, Licensed and Certified Home Health, or Hospice Services.  
(a) Conditions of license. An agency licensed to provide licensed home health, 
licensed and certified home health, or hospice services shall comply with the 
requirements in this section. 
(1) A license shall be displayed in a conspicuous place in the designated place 
of business. 
(2) A license may be transferred from one location to another without prior 
approval from the Texas Department of Health (department). If an agency is 
considering relocation, the agency shall notify the department 30 calendar days 
prior to the intended relocation. The department will provide written 
notification to the agency amending the annual license to reflect the new 
location. 
(3) The relocation of a branch office or alternate delivery site to a different 
parent agency shall require submission of a new application for the branch 
office or alternate delivery site and shall comply with sec.115.14 of this title 
(relating to Application and Issuance of a Branch Office License) and sec.115.15 
of this title (relating to Application and Issuance of an Alternate Delivery 
Site License) as appropriate. 
(4) An agency shall notify the department in writing of any change in its 
telephone number within 30 calendar days after the change.
(5) A license shall not be materially altered. 
(6) An agency shall provide services only within its service area. 
(A) The agency shall maintain adequate staff to provide services and to 
supervise the provision of services within the service area. 
(B) An agency may expand its service area at any time during the licensure 
period. To expand its service area, an agency must submit to the department a 
written notice for the expansion which includes revised boundaries of the 
agency's original service area, the effective date of the expansion, and an 
updated list of management and supervisory personnel (including names), if 
changes are made. The notice must be submitted either before or within 30 
calendar days after the effective date of the expansion. 
(C) An agency may reduce its service area at any time during the licensure 
period by sending the department written notification of the reduction, revised 
boundaries of the agency's original service area, and the effective date of the 
reduction. 
(D) A branch office or alternate delivery site shall be located within the 
parent agency's service area. 
(7) A separate license is required for each principal place of business. 
(b) Agency responsibilities. 
(1) General. 
(A) An agency shall adopt, implement, and enforce the provisions of the Human 
Resources Code, Chapter 102 (relating to Rights of the Elderly), for clients 55 
years and older. 
(B) An agency shall investigate complaints made by a client or the client's 
family or guardian or the client's health care provider regarding treatment or 
care that is (or fails to be) furnished or regarding the lack of respect for the 
client's property by anyone furnishing services on behalf of the agency and must 
document the receipt of the complaint and the disposition of the complaint. The 
investigation and documentation must be completed within 30 calendar days after 
the agency receives the complaint, unless the agency has and documents 
reasonable cause for a delay. 
(C) An agency shall meet the requirements set forth by the department in 
sec.sec.1.131 - 1.137 of this title (relating to Definition, Treatment, and 
Disposition of Special Waste from Health Care-Related Facilities). This 
requirement does not apply to disposition of special waste in a client's place 
of residence, but would apply to any special waste disposed of from an agency's 
office location. 
(D) An agency that provides laboratory services shall meet the Clinical 
Laboratory Improvement Amendments of 1988, 42 United States Code, sec.263a, 
Certification of Laboratories (CLIA 1988). CLIA 1988 applies to all agencies 
with laboratories that examine human specimens for the diagnosis, prevention, or 
treatment of any disease or impairment of, or the assessment of the health of, 
human beings. 
(E) An agency shall comply with the Nursing Practice Act, Texas Civil Statutes, 
Articles 4525a and 4525b, relating to professional nurse reporting and peer 
review. 
(F) An agency shall comply with 22 TAC sec.sec.240.11-240.13, relating to 
licensed vocational nurse peer review and reporting. 
(G) An agency can accept delegation from a physician only if the agency receives 
the following from the physician: 
(i) the name of the client; 
(ii) the name of the delegating physician; 
(iii) the task(s) to be performed; 
(iv) the name of the individual(s) to perform the task(s);
(v) the time frame for the delegation order; and 
(vi) if the task is medication administration, the medication to be given, 
route, dose, and frequency. 
(2) Provision of services. 
(A) An agency shall conduct an ongoing, comprehensive, integrated, self-
assessment of the quality and appropriateness of care provided, including 
services provided under arrangement. The findings are to be used by the agency 
to correct identified problems and to revise policies, if necessary. The agency 
staff responsible for the quality assurance program shall: 
(i) ensure that all service providers involved in the care of a client (e.g., 
contracted health care professional or another agency) are engaged in an 
effective interchange, reporting, and coordination of care regarding the client. 
The agency shall document the steps taken to meet this standard; 
(ii) implement and report on activities and mechanisms for monitoring the 
quality of care; 
(iii) identify and, when possible, resolve problems; and 
(iv) make suggestions for improving care. 
(B) If an agency utilizes independent contractors, there shall be a written 
agreement between such independent contractors (i.e. per hour, per visit) and 
the agency. The agreement shall be enforced by the agency and clearly designate: 
(i) that clients are accepted for care only by the licensed agency; 
(ii) the services to be provided; 
(iii) the necessity to conform to all applicable agency policies, including 
personnel qualifications; 
(iv) the plan of care or care plan to be carried out; 
(v) the manner in which services will be coordinated and evaluated by the 
licensed agency in accordance with subparagraph (A) of this paragraph;
(vi) the procedures for submitting information and documentation regarding the 
client's needs and services, including clinical and progress notes, if required; 
the scheduling of visits; and periodic client evaluation or supervision; and 
(vii) the procedures for determining charges and reimbursement.
(C) Services provided by an agency under arrangement with another agency or 
organization shall be subject to a written agreement conforming with the 
requirements specified in subparagraph (B) of this paragraph. 
(D) The agency shall provide for back-up services when an employee or contractor 
is not able to deliver the services. 
(E) A person who is not licensed to provide hospice services may not use the 
word "hospice" in a title or description of a facility, organization, program, 
service provider or services or use any other words, letters, abbreviations, or 
insignia indicating or implying that the person holds a license to provide 
hospice services. 
(F) The agency shall have a written contingency plan which is implemented in the 
event of dissolution to assure continuity of client care. The plan must be 
consistent with subparagraph (I) of this paragraph and include provisions for 
notifying the client of the agency's dissolution and for documenting the 
notification, and procedures for carrying out the notification. 
(G) The agency and the client or his family shall have a written agreement for 
services. The agency shall obtain an acknowledgment of receipt of the agreement. 
The agency shall comply with the terms of the agreement. The agreement shall 
include, but may not be limited to, the following: 
(i) notification of the Human Resources Code, Chapter 102 (relating to Rights of 
the Elderly), for clients 55 years of age and older; 
(ii) documentation concerning notification to the client of the availability of 
durable power of attorney for health care, advance directive or DNR orders in 
accordance with the applicable law; 
(iii) services to be provided; 
(iv) supervision by the agency of services provided; and
(v) agency charges for services rendered if the charges will be paid in full or 
in part by the client or the client's family, or on request.
(H) An agency shall maintain a current list of clients which includes the 
services being delivered by the agency and establish a record for each client 
which is maintained in accordance with and contains the information described in 
paragraph (4)(I) of this subsection. 
(I) Except in an emergency situation, an agency intending to transfer or 
discharge a client shall notify the client or the client's parent, family, 
spouse, significant other, or legal representative; and the client's attending 
physician not later than five days before the date on which the client will be 
transferred or discharged. 
(J) An agency may transfer or discharge a client without five days notice: 
(i) upon the client's request; 
(ii) if the client's medical needs require transfer (e.g., a medical emergency); 
(iii) in the event of a natural disaster where if not transferred, the client's 
health and safety is at risk; 
(iv) for the protection of staff or a client after the agency has made a 
documented reasonable effort to notify the client, the client's family and 
physician, and appropriate state or local authorities of the agency's concerns 
for staff or client safety, and in accordance with agency policy;
(v) according to physician orders; or 
(vi) if the client fails to pay for services, except as prohibited by federal 
law. 
(3) Staffing. 
(A) A personnel record shall be maintained on each employee and volunteer. All 
information shall be kept current. A personnel record shall include, but not be 
limited to, the following: 
(i) job description. In lieu of the job description and qualifications for 
employment, the personnel record may include a statement signed by the employee 
that the employee has read the job description and qualifications for the 
position accepted; 
(ii) qualifications; 
(iii) application for employment or volunteer agreement; 
(iv) verification of license, permits, reference(s), job experience, and 
educational requirements as appropriate; and 
(v) performance evaluations and disciplinary actions. 
(B) The agency shall appoint an administrator who shall administratively 
supervise the provision of all services. 
(i) The administrator shall: 
(I) be a physician, registered nurse, social worker, or nursing home 
administrator; 
(II) have a baccalaureate or postgraduate degree in administration in a health 
or human services field and at least one year of full-time administrative 
experience as the administrator of an agency or licensed health care facility; 
or 
(III) have training and experience in health service administration and at least 
one year of full-time supervisory or administrative experience in home health 
care, hospice, or related health programs. 
(ii) The administrator shall not have been employed in the last five years as an 
administrator with another agency at the time the agency was cited with 
violations of the statute or this chapter which resulted in enforcement action 
taken against the agency. 
(iii) The administrator shall not have been convicted of a felony or misdemeanor 
listed in sec.115.52(b)(2) of this title (relating to Enforcement Action). 
(iv) The administrator shall be able to read, write and comprehend English. 
(v) The administrator shall: 
(I) organize and direct the agency's ongoing functions; 
(II) assure documentation of services provided is accurate and timely; 
(III) employ qualified personnel and ensure adequate staff education and 
evaluations; 
(IV) ensure the accuracy of public information materials and activities; 
(V) implement an effective budgeting and accounting system; and 
(VI) authorize in writing an assistant administrator or other individual to act 
in his or her absence. The administrator, assistant administrator, or other 
designee shall be available during the agency's usual working hours. The 
administrator's designee shall be able to read, write, and comprehend English. 
(C) An agency with a license to provide licensed home health, licensed and 
certified home health, or hospice services shall appoint a supervising nurse. 
The supervising nurse shall designate an alternate to serve as supervising nurse 
in his or her absence, provided the alternate meets the qualifications of this 
subparagraph. The supervising nurse may also be the administrator of the agency 
if the supervising nurse meets the qualifications of an administrator described 
in subparagraph (B) of this paragraph. The supervising nurse or designee shall: 
(i) be a registered nurse; 
(ii) have at least one year experience in nursing obtained within the last 24 
months; 
(iii) be available at all times during operating hours; 
(iv) be able to read, write, and comprehend English; 
(v) participate in activities relevant to professional services furnished 
including the development of qualifications and assignment of agency personnel; 
(vi) assure a client's plan of care is executed as written;
(vii) assure a reassessment of a client's needs is performed by the appropriate 
health care professional: 
(I) when there is a significant health status change in the client's condition; 
(II) at the physician's request; or 
(III) after hospitalization; and 
(viii) if the agency holds the home dialysis designation, have the 
qualifications described in sec.115.24(r)(1)(A) of this title (relating to 
Standards for Home Dialysis Designation). 
(4) Client record. An agency shall establish and maintain a client record system 
to assure that the care and services provided to each client is completely and 
accurately documented, readily available, and systematically organized to 
facilitate the compilation and retrieval of information. 
(A) For each client an agency may keep a single file or separate files for each 
category provided to the client and the client's family. 
(B) The agency shall have written procedures which are adopted, implemented, and 
enforced regarding the removal of records and the release of information. An 
agency shall not release any portion of a client record to anyone other than the 
client except as allowed by law. 
(C) All information regarding the client's care and services shall be 
centralized in the client's record and be protected against loss or damage. 
(D) The agency shall establish an area for client record storage at the agency's 
place of business. The client record shall be stored at the place of business 
(e.g. parent agency location, branch office, or alternate delivery site) from 
which services are actually provided. Active client records shall not be stored 
at an administrative support site. 
(E) The agency shall ensure that each client's record is treated with 
confidentiality, safeguarded against loss and unofficial use, and is maintained 
according to professional standards of practice. 
(F) The clinical record shall be an original, a microfilmed copy, an optical 
disc imaging system, or a certified copy. An original record includes manually 
signed paper records or electronically signed computer records. Computerized 
records shall meet all requirements of paper records including protection from 
unofficial use and retention for the period specified in subparagraph (J) of 
this paragraph. Systems shall assure that entries regarding the delivery of care 
or services may not be altered without evidence and explanation of such 
alteration. 
(G) Each entry to the client record shall be accurate, signed, and dated with 
the date of entry by the individual making the entry. Correction fluid or tape 
shall not be used in the record. Corrections shall be made by striking through 
the error with a single line and shall include the date the correction was made 
and the initials of the person making the correction.
(H) Inactive client records may be preserved on microfilm, optical disc or other 
electronic means and may be stored at the parent agency location, branch office, 
alternate delivery site, or administrative support site. Security shall be 
maintained and the record must be readily retrievable by the agency. 
(I) Each client record shall include: 
(i) appropriate identifying information; 
(ii) name of the client's practitioner; 
(iii) initial assessment; 
(iv) care plan or plan of care. The plan of care shall include, as applicable, 
medication, dietary, treatment, and activities orders; 
(v) clinical and progress notes, if applicable. Such notes are to be written the 
day service is rendered and incorporated into the client record on a timely 
basis; 
(vi) medication list and medication administration record, if applicable; 
(vii) records of supervisory visits; 
(viii) documentation to show that effective interchange, reporting, and 
coordination of care occurs as described by the agency policy required in 
subsection (c)(23) of this section; 
(ix) acknowledgment of the client's receipt of a copy of the Human Resources 
Code, Chapter 102, Rights of the Elderly, for clients 55 years or older; 
(x) acknowledgment of the client's receipt of the agency's policy relating to 
the reporting of abuse, neglect or exploitation of a client;
(xi) client agreement to and acknowledgment of services by home health 
medication aides, if home health medication aides are used; and
(xii) discharge summary, including the reason for discharge or transfer and the 
agency's documented notice to the client, the client's physician, and other 
individuals as required in paragraph (2)(I) of this subsection.
(J) An agency shall retain original client records for a minimum of five years 
after the discharge of the client. The agency may not destroy client records 
that relate to any matter that is involved in litigation if the agency knows the 
litigation has not been finally resolved. 
(K) If an agency closes, there shall be an arrangement for the preservation of 
inactive records to insure compliance with this subsection. The agency shall 
send the department written notification of the reason for closure, the location 
of the client records and the name and address of the client record custodian. 
If an agency closes with an active client roster, a copy of the active client 
record shall be transferred with the client to the receiving agency in order to 
assure continuity of care and services to the client. 
(5) Financial solvency. An agency shall have the financial ability to carry out 
its functions. 
(A) An agency shall not intentionally or knowingly pay employees with checks 
from accounts with insufficient funds. 
(B) An agency shall have sufficient funds to meet its payroll.
(C) The agency shall make available to the department upon request financial 
records relating to its ability to carry out its functions. If there is a 
question relating to the accuracy of the records or financial ability, the 
department or its's designee may conduct a more extensive review of the records. 
Any financial review by the department shall be conducted by an individual who 
has the financial qualifications to review such records.
(D) An agency shall maintain business records in their original state. Each 
entry shall be accurate and dated with the date of entry. Correction fluid or 
tape shall not be used in the record. Corrections shall be made in accordance 
with standard accounting practices. 
(6) Administration of medication. Administration of medication must be ordered 
by the client's practitioner. A current medication list and medication 
administration records may be incorporated into one document. Notation will be 
made in clinical notes of medications not given and the reason. Any untoward 
action will be reported to a supervisor and documented in the client record. 
(c) Policies required. An agency shall develop, adopt, implement, and enforce a 
written policy(ies): 
(1) which includes written procedures governing the use and removal of records, 
the release of information, and the incorporation of clinical, progress or other 
notes into the client record; 
(2) describing protocols and procedures agency staff must follow when performing 
physician delegated tasks. The policy shall be consistent with subsection 
(b)(2)(G) of this section and address the time frame for the timely counter 
signature of a physician's verbal orders; 
(3) to ensure compliance of the agency and its employees and contractors with 
the Health and Safety Code, Chapter 85, Subchapter I, relating to the prevention 
of the transmission of human immunodeficiency virus and hepatitis B virus; 
(4) to ensure compliance of the agency and its employees and contractors with 
the Health and Safety Code, sec.161.091 et seq relating to the prohibition of 
illegal remuneration for securing or soliciting clients or patronage; 
(5) for publicly known natural disaster preparedness for clients receiving 
services. The written policy shall include a plan for the reasonable mechanism 
for triaging clients, the notification of appropriate personnel and clients in 
the event of a disaster if possible, the identification of appropriate community 
resources, and the identification of possible evacuation procedures. The plan 
need not require that the agency actually evacuate, transport, or triage the 
clients; 
(6) to ensure compliance with the rules of the Board of Nurse Examiners for the 
State of Texas adopted at 22 TAC Chapter 218 (relating to Delegation of Selected 
Nursing Tasks by Registered Professional Nurses to Unlicensed Personnel); 
(7) to ensure compliance with the rules of the Board of Vocational Nurse 
Examiners adopted at 22 TAC Chapters 231 - 240 relating to vocational nursing 
education, licensure and practice in the State of Texas;
(8) on pronouncement of death if that function is carried out by an agency 
registered nurse. The policy shall be in compliance with the Health and Safety 
Code, sec.671.001; 
(9) to ensure that the agency submits accurate billings and insurance claims; 
(10) addressing the orientation of all personnel to the policies, procedures, 
and objectives of the agency; 
(11) addressing participation by all personnel in appropriate employee 
development programs; 
(12) ensuring the periodic evaluation of employee and volunteer performance; 
(13) specifying the agency's personnel policies; 
(14) specifying the agency's client care policies; 
(15) addressing employee and volunteer disciplinary action(s) and procedures; 
(16) to include a job description (statement of those functions and 
responsibilities which constitute job requirements) and job qualifications 
(specific education and training necessary to perform the job) for each position 
within the agency; 
(17) addressing infection control including the prevention of the spread of 
infectious and communicable disease; 
(18) to include the agency's organizational structure and operational policies. 
Such policies must be clearly stated in writing and include the lines of 
authority and delegation of responsibility down to the client care level and the 
services provided; 
(19) to ensure a quality assurance program which provides for accountability and 
desired client outcomes. The policy shall meet the minimum requirements in 
subsection (b)(2)(A) of this section; 
(20) to provide for back-up services when an employee or contractor is not able 
to deliver the services; 
(21) describing protocols and procedures agency staff must follow when receiving 
physician orders; 
(22) addressing compliance with out-of-hospital do-not-resuscitate orders and 
advance directives. The policy shall: 
(A) be consistent with the Health and Safety Code, Chapter 674 relating to out-
of-hospital do-not-resuscitate; the Natural Death Act, Health and Safety Code, 
Chapter 672; and Civil Practice and Remedies Code, Chapter 135 relating to 
durable power of attorney for health care; and 
(B) address the provision of information regarding advance directives to its 
clients and assure its clients are allowed, but not required, to formulate such 
directives to the extent permitted by law; 
(23) to assure that all agencies providing services to a client are engaged in 
an effective interchange, reporting, and coordination of care regarding the 
client; 
(24) establishing time frame(s) for the initiation of care or services; 
(25) for the safe handling and disposal of biohazardous waste and materials, if 
applicable; 
(26) to implement and enforce the Human Resources Code, Chapter 102 relating to 
the rights of the elderly; 
(27) relating to the reporting of abuse, neglect or exploitation of clients; 
(28) relating to the use of volunteers if volunteers are used by the agency; 
(29) describing the agency's written contingency plan developed in accordance 
with subsection (b)(2)(F) of this section; 
(30) relating to the provision of psychoactive treatments, if applicable, 
consistent with subsection (e) of this section; 
(31) relating to the retention of records in accordance with subsection 
(b)(4)(J) of this section; 
(32) relating to the provision of hospice services, if applicable, in accordance 
with sec.115.25 of this title (relating to Standards for Hospice Services); 
(33) relating to criminal history checks of unlicensed personnel in accordance 
with sec.115.54 of this title (relating to Criminal History Checks); 
(34) relating to the supervision of branch offices or alternate delivery sites, 
if established. This policy shall be consistent with: 
(A) for a branch office, sec.115.14 of this title and sec.115.27 of this title 
(relating to Standards for Branch Offices); or 
(B) for an alternate delivery site, sec.115.15 of this title and sec.115.28 of 
this title (relating to Standards for Alternate Delivery Sites); 
(35) relating to the agency's procedures for investigating complaints. Such 
procedures shall require the agency to initiate a complaint investigation within 
10 days of the agency's receipt of the complaint and to document all components 
of the investigation; and 
(36) maintaining a current medication list and medication administration record. 
(d) Medicare certification optional. 
(1) An agency which makes application for participation in the Medicare program 
shall comply with the regulations in the Medicare Conditions of Participation 
for Home Health Agencies, 42 Code of Federal Regulations, Part 484, pending 
approval of certification granted by the Health Care Financing Administration 
(HCFA). 
(2) Upon the department's receipt of written approval from HCFA, the department 
will amend the licensing status of the agency to include the licensed and 
certified home health services category. 
(e) Psychoactive services. An agency that provides skilled nursing psychoactive 
treatments shall comply with the requirements of this subsection. 
(1) Skilled nursing psychoactive treatments shall be under the direction of a 
physician. Psychoactive treatments may only be provided by a physician or a 
registered nurse. 
(2) A registered nurse providing skilled nursing psychoactive treatments shall 
have one of the following qualifications: 
(A) a master's degree in psychiatric or mental health nursing;
(B) a bachelor's degree in nursing with one full-time year of experience in an 
active treatment unit in a mental health facility or outpatient clinic; 
(C) a diploma or associate degree with two full-time years of experience in an 
active treatment unit in a mental health facility or outpatient clinic; or 
(D) for a registered nurse for Medicare certified agencies, as allowed by the 
fiscal intermediary for Texas contracting with the United States Department of 
Health and Human Services (USDHHS) Health Care Financing Administration (HCFA). 
(3) An agency shall have written documentation that a registered nurse providing 
skilled nursing psychoactive treatments is qualified under paragraph (2) of this 
subsection. 
(4) The initial assessment of a client receiving skilled nursing psychoactive 
treatments shall include: 
(A) mental status including psychological and behavioral status;
(B) sensory and motor function; 
(C) cranial nerve function; 
(D) language function; and 
(E) other criteria established by an agency's policy. 
(f) Home intravenous therapy. An agency furnishing intravenous therapy directly 
or under arrangement shall comply with the following standards of care. 
(1) A physician's order shall be written specifically for intravenous therapy. 
(2) Intravenous therapy shall be provided by a licensed nurse. 
(3) To insure that prescribed care is administered safely, the licensed nurse 
shall have the knowledge and documented competency to interpret and implement 
the written order. 
(4) Responsibilities of the licensed nurse shall be clearly delineated in 
written policies and procedures. 
(5) A registered nurse shall be available 24 hours per day. 
(6) The client and caregiver shall be assessed for the ability to safely 
administer the prescribed intravenous therapy as per agency written criteria. 
(7) If the client or caregiver are willing and able to safely administer the 
prescribed intravenous therapy, the agency must offer to teach the client or 
caregiver such administration. The teaching process based on the client and 
caregiver needs may include written instructions, verbal explanations, 
demonstrations, evaluation and documentation of competency, proficiency in 
performing therapy, scope of physical activities and safe disposal of equipment. 
(8) Actions shall be implemented prior to and during all intravenous therapy to 
minimize the risk of anaphylaxis or other adverse reactions as stated in the 
agency's written policy. 
(9) An ongoing assessment of client and caregiver compliance in performing 
therapy related procedures shall be done at periodic intervals.
(10) Written policies and procedures regarding the agency's provision of 
intravenous therapy shall include, but are not limited to, addressing 
initiation, medication administration, monitoring, and discontinuation. 
(11) Care coordination shall be provided in order to assure continuity of care. 
(12) The client and caregiver shall be provided with 24-hour access to 
appropriate health care professionals employed by or contracted with the agency. 
(g) This section is effective August 1, 1997. However, the department will begin 
enforcing only subsection (e)(1) of this section on that date. The department 
will begin enforcing all other provisions in this section on October 1, 1997. 
Until October 1, 1997, agencies shall comply with the previous sec.115.21 as it 
was effective on July 1, 1997.  

sec.115.22. Standards for Licensed Home Health Services.
(a) In addition to the standards in sec.115.21 of this title (relating to 
Licensure Requirements and Standards for Agencies Providing Licensed Home 
Health, Licensed and Certified Home Health, or Hospice Services), an agency 
providing licensed home health services shall meet the standards of this 
section. 
(b) The agency shall accept a client for home health services on the basis of a 
reasonable expectation that the client's medical, nursing, and social needs can 
be met adequately in the client's residence. An agency has made a reasonable 
expectation that it can meet a client's needs if, at the time of the agency's 
acceptance of the client, the client and the agency have agreed as to what needs 
the agency would meet (i.e., the agency and the client could agree that some 
needs would be met but not necessarily all needs).
(1) The agency shall start providing licensed home health services to a client 
within a reasonable time from acceptance of the client and according to the 
agency's policy. The initiation of licensed home health services shall be based 
on the client's health service needs. 
(2) An initial assessment shall be performed in the client's residence by the 
appropriate health care professional prior to or at the time that licensed home 
health services are initially provided to the client. The assessment shall 
determine whether the agency has the ability to provide the necessary services. 
(A) If a practitioner has not ordered skilled care for a client, then the 
appropriate health care professional shall prepare a care plan. The care plan 
shall be developed after consultation with the client and the client's family 
and shall include services to be rendered, the frequency of visits or hours of 
service, identified problems, method of intervention, and projected date of 
resolution. The care plan shall be revised as necessary, but it shall be 
reviewed and updated by all appropriate staff members involved in client care at 
least annually. 
(B) If a practitioner orders skilled treatment, then the appropriate health care 
professional shall prepare a plan of care. The plan of care must be signed and 
approved by a practitioner in a timely manner. The plan of care shall be 
developed in conjunction with agency staff and shall cover all pertinent 
diagnoses, including mental status, types of services and equipment required, 
frequency of visits at the time of admission, prognoses, functional limitations, 
activities permitted, nutritional requirements, medications and treatments, any 
safety measures to protect against injury, and any other appropriate items. The 
appropriate health care personnel shall perform services as specified in the 
plan of care. The plan of care shall be revised as necessary, but it shall be 
reviewed and updated at least every six months. 
(c) An agency shall provide at least one home health service. All services shall 
be rendered and supervised by qualified personnel. The appropriate health 
professional shall be available to supervise as needed, when services are 
provided. 
(1) If nursing service is provided, a registered nurse shall be employed by or 
under contract with the agency to provide services or supervision.
(2) If physical therapy service is provided, a physical therapist shall be 
employed by or under contract with the agency to provide services or 
supervision. 
(3) If occupational therapy service is provided, an occupational therapist shall 
be employed by or under contract with the agency to provide services or 
supervision. 
(4) If speech-language pathology services are provided, a speech-language 
pathologist shall be employed by or under contract with the agency to provide 
services or supervision. 
(5) If audiology services are provided, an audiologist shall be employed by or 
under contract with the agency to provide services or supervision. 
(6) If medical social service is provided, a social worker with a bachelor's 
degree in social work from an accredited college or university shall be employed 
by or under contract with the agency to provide services or supervision. 
(7) If nutritional counseling is provided, a dietitian or registered nurse shall 
be employed by or under contract with the agency to provide services or 
supervision. 
(8) If services are provided by unlicensed personnel, a qualified person shall 
be employed by or under contract with the agency to provide the service and a 
registered nurse shall be employed by or under contract with the agency to 
perform the initial assessment, prepare the client care plan, as appropriate, 
and supervise the unlicensed personnel. 
(9) If respiratory therapy service is provided, a respiratory therapist shall be 
employed by or under contract with the agency to provide services. 
(d) An agency may utilize a home health aide who meets the qualifications in 
sec.115.61(a) of this title (relating to Home Health Aides) or other individuals 
under the delegation of a registered nurse or physician. This subsection applies 
only to an agency providing licensed home health services that implements a home 
health aide training and competency evaluation program.
(1) An agency providing licensed home health services is not required to utilize 
home health aides. Unlicensed personnel utilized by an agency providing licensed 
home health services are not required to undergo the training and competency 
evaluation program described in paragraphs (2)-(4) of this subsection. 
(2) An agency providing licensed home health services that implements a home 
health aide training and competency evaluation program shall meet the 
requirements in sec.115.61(d)-(f) of this title. 
(3) An agency providing licensed home health services that implements a home 
health aide competency evaluation program shall comply with sec.115.61(f) of 
this title. 
(4) Since the individual's most recent completion of a training and competency 
evaluation program or a competency evaluation program, if there has been a 
continuous period of 24 consecutive months during which the individual has not 
furnished home health services, the individual shall not be considered as having 
completed a training and competency evaluation program or a competency 
evaluation program.  

sec.115.24. Standards for Home Dialysis Designation.
(a) An agency may not provide peritoneal dialysis or hemodialysis services in a 
client's residence, independent living environment, or other appropriate 
location unless the agency holds a license to provide licensed home health or 
licensed and certified home health services and designated to provide home 
dialysis services. In order to receive a home dialysis designation, the agency 
shall meet the licensing standards specified in this section and the standards 
for home health services in accordance with sec.115.22 of this title (relating 
to Standards for Licensed Home Health Services) except for the standards 
sec.115.22(b)(2)(A) and (B) of this title. In the event there is a conflict 
between the standards specified in this section and those specified in 
sec.115.22 of this title, the standards specified in this section shall apply to 
the home dialysis services. 
(b) The agency shall have a governing body. The governing body shall appoint a 
medical director and the physicians who are on the agency's medical staff. The 
governing body shall annually approve the medical staff policies and procedures. 
The governing body on a biannual basis shall review and consider for approval 
continuing privileges of the agency's medical staff. The minutes from the 
governing body of the agency shall be on file in the agency office. 
(c) An agency shall establish an effective procedure for the immediate transfer 
to a local Medicare certified hospital for clients requiring emergency medical 
care. The agency must have a written transfer agreement with such a hospital, or 
all physician members of the agency's medical staff must have admitting 
privileges at such a hospital. 
(d) An agency which supplies home staff assisted dialysis shall have an 
agreement with a licensed end stage renal disease (ESRD) facility to provide 
backup outpatient dialysis services. 
(e) A home staff assisted dialysis agency must provide for the exchange of 
medical and other information necessary or useful in the care and treatment of 
clients transferred between treating facilities. This provision must also 
include the transfer of the client care plan, hepatitis status, and long term 
program. 
(f) (No change.) 
(g) The agency shall conduct routine testing of home dialysis clients and agency 
employees to ensure detection of hepatitis in employees and clients. 
(1) An agency shall offer hepatitis B vaccination to previously unvaccinated, 
susceptible new staff members in accordance with 29 Code of Federal Regulations, 
sec.1910.1030(f)(1)-(2) (relating to Bloodborne Pathogens).
(A) Staff vaccination records shall be maintained in each staff member's 
personnel file. 
(B) New staff members providing home dialysis care shall be screened for 
hepatitis B surface antigen (HBsAg) and the results reviewed prior to the staff 
providing client care, unless the new staff member provides the agency 
documentation of positive serologic response to hepatitis B vaccine.
(C) The agency shall establish, implement, and enforce a policy for repeated 
serologic screening of staff. The repeated serologic screening shall be based on 
each staff member's HBsAg/antibody to HBsAg (anti-HBs), and shall be congruent 
with Appendices i and ii of the National Surveillance of Dialysis Associated 
Disease in the United States, 1993, published by the United States Department of 
Health and Human Services (USDHHS). This document may be obtained by writing or 
calling the department at the Health Facility Licensing Division, 1100 West 49th 
Street, Austin, 78756-3199, 512-834-6647 or the USDHHS at the Public Health 
Service, Centers for Disease Control and Prevention, National Center for 
Infectious Diseases, Hospital Infection Program, Mail Stop C01, Atlanta, Georgia 
30333, 404-639-2318. 
(2) With the advice and consent of a client's nephrologist or attending 
physician, the agency shall make the hepatitis B vaccine available to a client 
who is susceptible to hepatitis B, provided that the client has coverage or is 
willing to pay for vaccination. 
(A) The agency shall make available to clients literature describing the risks 
and benefits of the hepatitis B vaccination. 
(B) Candidates for home dialysis shall be screened for HBsAg within one month 
before or at the time of admission to the agency. 
(C) Repeated serologic screening shall be based on the antigen or antibody 
status of the client. 
(D) Monthly screening for HBsAg is required for clients whose previous test 
results are negative for HBsAg. 
(E) Screening of HBsAg-positive or anti-HBsAg-positive clients may be performed 
on a less frequent basis, provided that the agency's policy on this subject 
remains congruent with Appendices i and ii of the National Surveillance of 
Dialysis Associated Diseases in the Unites States, 1993, published by the 
USDHHS. 
(h) All direct client care employees shall have current CPR certification. 
(i) The medical director must be a physician licensed in the State of Texas who: 
(1) is eligible for certification or is certified in nephrology or pediatric 
nephrology by a professional board; or 
(2) during the five-year period prior to September 1, 1996, has served at least 
12 months as director of a dialysis facility or program. 
(j) The medical director shall be responsible for: 
(1) participating in the selection of a suitable treatment modality for all 
clients; 
(2) assuring adequate training of nurses in dialysis techniques;
(3) assuring adequate monitoring of the client and the dialysis process; and 
(4) assuring the development and availability of a client care policy and 
procedures manual and its implementation. 
(k) All physicians, including the medical director, shall have on file the 
following: 
(1) a curriculum vitae which documents undergraduate, medical school, and all 
pertinent post graduate training; and 
(2) evidence of current licensure, and evidence of current United States Drug 
Enforcement Administration certification, Texas Department of Public Safety 
registration, and the board eligibility or certification, or the experience or 
training described in subsection (j) of this section.
(l) Assessment of the client's residence shall be made to ensure a safe physical 
environment for the performance of dialysis. The initial admission assessment 
shall be performed by a qualified registered nurse. A qualified registered nurse 
is a registered nurse who has at least 18 months experience in hemodialysis 
obtained within the last 24 months and has completed the orientation and 
training described in subsections (t) and (u) of this section. 
(m) The agency shall develop a long term program for each client admitted to 
home dialysis. Criteria shall be defined in writing which shall guide the agency 
in the selection of clients suitable for home staff assisted dialysis and in 
noting changes in a client's condition which would require discharge from the 
program. 
(n) If home staff assisted dialysis is selected, then the physician shall 
prepare orders outlining specifics of prescribed treatment. If these physician's 
orders are received verbally, they must be confirmed in writing within a 
reasonable time frame. An agency shall adopt, implement, and enforce a policy on 
the time frame for the timely countersignature of a physician's verbal orders. 
Medical orders for home staff assisted dialysis shall be revised as necessary 
but reviewed and updated at least every six months. 
(o) The initial orders for home staff assisted dialysis must be received prior 
to the first treatment and shall cover all pertinent diagnoses, including mental 
status, prognosis, functional limitations, activities permitted, nutritional 
requirements, medications and treatments, and any safety measures to protect 
against injury. Orders for home staff assisted dialysis shall include frequency 
and length of treatment, dry weight, type of dialyzer, dialysate, heparin 
dosage, and blood flow rate, and shall specify the level of preparation required 
for the care given (i.e. licensed vocational nurse or registered nurse). 
(p) The client care plan shall be developed after consultation with the client 
or the client's family by the interdisciplinary team. 
(1) The initial client care plan shall be completed by the interdisciplinary 
team within ten calendar days after the first home dialysis treatment. 
(2) The client care plan shall implement the medical orders and shall include 
services to be rendered, such as the identification of problems, methods of 
intervention, and the assignment of health care personnel. 
(3) The client care plan shall be in writing, personalized for the individual, 
and reflect the ongoing medical, psychological, social, nutritional, and 
functional needs of the client, including treatment goals.
(4) The client care plan shall include written evidence of coordination with 
other service providers (e.g., dialysis facilities or transportation providers) 
as needed to assure the provision of safe care.
(5) The client care plan shall include written evidence of the client's (or 
client's legal representative's) input and participation, unless they refuse to 
participate. At a minimum, the client care plan shall demonstrate that the 
content was shared with the client or the client's legal representative. 
(6) The client care plan for non-stabilized clients (e.g. change in modality, 
unacceptable laboratory work, uncontrolled weight changes, infections, and a 
change in family status) shall be reviewed at least monthly by the 
interdisciplinary team. Evidence of the review of the client care plan with the 
client and the interdisciplinary team to evaluate the client's progress or lack 
of progress toward the goals of the care plan, and interventions taken when 
progress toward stabilization or the goals are not achieved, shall be documented 
and included in the client record. 
(7) For a stable client, the client care plan shall be reviewed and updated as 
indicated by any change in the client's medical, nutritional, or psychosocial 
condition or at least every six months. The long term program shall be revised 
as needed and reviewed annually. Evidence of the review of the client care plan 
with the client and the interdisciplinary team to evaluate the client's progress 
or lack of progress toward the goals of the care plan, and interventions taken 
when the goals are not achieved, shall be documented and included in the client 
record. 
(q) An agency shall provide to each client a statement of client's rights and 
responsibilities, which shall include the following: 
(1) the right to be informed of all rules and regulations governing client 
conduct and responsibilities, services available in the facility, and the 
client's medical condition unless medically contraindicated; 
(2) the opportunity to participate in planning his or her medical treatment and 
to be transferred only for medical reasons, the client's welfare or that of 
other clients, or nonpayment of fees. Clients shall be given advance notice to 
ensure orderly transfer or discharge; 
(3) the right to be treated with consideration, respect, and full recognition of 
his or her individuality and personal needs; 
(4) the right to confidential treatment of his or her personal and medical 
records; and 
(5) the right to have assistance in understanding and exercising his or her 
rights. There shall be a written grievance mechanism under which a client can 
participate without fear of reprisal. 
(r) Medications shall be administered only by licensed personnel and if such 
medication is ordered by the client's physician. 
(s) An agency which provides home staff assisted dialysis shall, at a minimum, 
provide nursing service, nutritional counseling, and medical social service. 
These services shall be provided as necessary and appropriate at the client's 
home, by phone, or by a client's visit to a licensed ESRD facility. A qualified 
registered nurse (referenced in subsection (l) of this section) shall be 
available whenever dialysis treatments are in progress in a client's home. The 
agency administrator shall designate a qualified alternate to this registered 
nurse. A social worker qualified under paragraph (3) of this subsection and a 
dietitian shall be employed by or under contract with the agency to provide 
services. 
(1) The use of dialysis technicians in home dialysis is prohibited.
(2) Dialysis services shall be: 
(A) supervised by: 
(i) a registered nurse (RN) who: 
(I) has at least three years current experience in hemodialysis; or 
(II) has at least two years experience as an RN and holds a current 
certification from a nationally recognized board in nephrology nursing or 
hemodialysis; or 
(ii) a nephrologist or physician with training or demonstrated experience in the 
care of ESRD clients; and 
(B) provided by a qualified licensed nurse. A qualified licensed nurse is a 
person who: 
(i) is licensed as a registered or licensed vocational nurse in Texas; 
(ii) has at least 18 months experience in hemodialysis obtained within the last 
24 months; and 
(iii) has completed the orientation and training described in subsections (t) 
and (u) of this section. 
(3) A qualified social worker is a person who:
(A) is currently licensed under the laws of the State of Texas as a social 
worker and has a master's degree in social work from a graduate school of social 
work accredited by the Council on Social Work Education; or 
(B) has served for at least two years as a social worker, one year of which was 
in a dialysis facility or program prior to September 1, 1976, and has 
established a consultative relationship with a licensed master social worker . 
(4) A qualified dietitian must meet the definition in sec.115.2 of this title 
(relating to Definitions) and have at least one year of experience in clinical 
nutrition after obtaining eligibility for registration by the American Dietetic 
Association, Commission on Dietetic Registration.
(t) All personnel providing direct client care shall receive orientation and 
training and demonstrate knowledge of the following: 
(1)-(15) (No change.) 
(16) performance of laboratory tests (hematocrit and blood glucose); 
(17) the theory of blood products and blood administration; and 
(18) water treatment to include: 
(A) standards for treatment used for dialysis as described in sec.3.2.1 
(relating to Hemodialysis Systems) and sec.3.2.2 (relating to Maximum Level of 
Chemical Contaminants) of the American National Standard, Hemodialysis Systems, 
March 1992 Edition, published by the Association for the Advancement of Medical 
Instrumentation (AAMI), 3330 Washington Boulevard, Suite 500, Arlington, 
Virginia 22201. Copies of the standards are indexed and filed in the Health 
Facility Licensing Division, Texas Department of Health, 1100 West 49th Street, 
Austin, Texas, 78756 and are available for public inspection during regular 
working hours; 
(B) systems and devices; 
(C) monitoring; and 
(D) risks to clients of unsafe water. 
(u) The requirements concerning an orientation and training period are as 
follows. 
(1) The agency shall develop an 80-hour written orientation program including 
classroom theory and direct observation of the licensed nurse performing 
procedures on a client in the home. The orientation program shall be provided by 
a registered nurse qualified to supervise the provision of dialysis services 
under subsection (s)(1)(A) of this section. A written skills examination or 
competency evaluation shall be administered to the licensed nurse at the 
conclusion of the orientation program and prior to the time the licensed nurse 
delivers independent client care. 
(2) The licensed nurse shall complete the required theory of the classroom 
component as described in subsection (t)(1)-(5), (11)-(15), (17), and (18) of 
this section and satisfactorily return demonstrate the skills described in 
subsection (t)(6)-(10) and (16) of this section. The orientation program may be 
waived by written examination as described in paragraph (1) of this subsection. 
(3) A registered nurse qualified to supervise the provision of dialysis services 
shall complete an orientation competency skills checklist relating to the 
licensed nurse in order to reflect the progression of learned skills, as 
described in subsection (t) of this section. 
(4) Prior to the delivery of independent client care, the registered nurse 
qualified to supervise the provision of dialysis services shall directly 
supervise the licensed nurse for a minimum of three dialysis treatments and 
ensure satisfactory performance. Dependent upon the trainee's experience and 
accomplishments on the skills checklist, additional supervised dialysis 
treatments may be required. 
(5) Continuing education for employees shall be quarterly. Performance 
evaluations shall be annually. The registered nurse qualified to supervise the 
provision of dialysis services shall provide direct supervision to the licensed 
nurse monthly or more often if necessary. Direct supervision means that the 
supervisor described in subsection (s)(2)(A) of this section is on the premises 
but not necessarily immediately present where dialysis services are being 
provided. 
(v) In addition to the applicable information described in sec.115.21(b)(2) of 
this title (relating to Licensure Requirements and Standards for Agencies 
Providing Licensed Home Health, Licensed and Certified Home Health, or Hospice 
Services), records of home staff assisted dialysis clients shall include the 
following: 
(1) a medical history and physical; 
(2) clinical progress notes by the physician, qualified licensed nurse, 
qualified dietitian, and qualified social worker; 
(3) dialysis treatment records; 
(4) laboratory reports; 
(5) client care plan; 
(6) long term program; and 
(7) documentation of supervisory visits. 
(w) The agency shall ensure that the history and physical is conducted upon the 
client's admission or no more than six months prior to the date of admission, 
then annually after the date of admission. 
(x) The agency shall ensure that biohazardous waste (needles, syringes, 
artificial kidneys, arterial and venous lines, and any other blood contaminated 
material) is disposed according to state and local regulations and ordinances 
(i.e. incineration, Type 1 landfill, steam sterilization), as appropriate. 
(y) Water treatment for home dialysis shall be as follows.
(1) Water used for dialysis purposes shall be analyzed for chemical contaminants 
every six months. Additional chemical analysis shall be conducted if test 
results exceed the maximum levels of chemical contaminants listed in sec.3.2.2 
(relating to Maximum Level of Chemical Contaminants) of the American National 
Standards for Hemodialysis Systems, March 1992 Edition, published by the AAMI. 
Copies of the standards are indexed and filed in the Health Facility Licensing 
Division, Texas Department of Health, 1100 West 49th Street, Austin, Texas 78756 
and are available for public inspection during regular working hours. 
(2) Water used for dialysis shall be treated as necessary to maintain a 
continuous water supply that is biologically and chemically compatible with 
acceptable dialysis techniques. 
(3) Water used to prepare dialysate shall meet the requirements set forth in 
sec.3.2.1 (relating to Hemodialysis Systems) and sec.3.2.2 (relating to Maximum 
Level of Chemical Contaminants), March 1992 Edition, published by the AAMI. 
Copies of the standards are indexed and filed in the Health Facility Licensing 
Division, Texas Department of Health, 1100 West 49th Street, Austin, Texas 78756 
and are available for public inspection during regular working hours. 
(4) Records of test results and equipment maintenance shall be maintained at the 
agency. 
(z) The agency shall develop, implement, and enforce a written preventive 
maintenance program to ensure client care related equipment receives electrical 
safety inspections, if appropriate, and maintenance at least annually or more 
frequently if recommended by the manufacturer. The preventive maintenance may be 
provided by agency or contract staff qualified by training or experience in the 
maintenance of dialysis equipment. 
(1) All equipment used by a client in home dialysis shall be maintained free of 
defects which could be a potential hazard to clients, the client's family or 
agency personnel. 
(A) Agency staff shall be able to identify malfunctioning equipment and report 
such equipment to the appropriate agency staff. Malfunctioning equipment shall 
be immediately removed from use. 
(B) Written evidence of all preventive maintenance and equipment repairs shall 
be maintained. 
(C) After repairs or alterations are made to any equipment, the equipment shall 
be thoroughly tested for proper operation before returning to service. 
(D) An agency shall comply with the federal Food, Drug, and Cosmetic Act, 21 
United States Code (USC), sec.360i(b), relating to reporting when a medical 
device as defined in 21 USC sec.321(h) has or may have caused or contributed to 
the injury or death of an agency client. 
(2) In the event that the water used for dialysis purposes or home dialysis 
equipment is found not to meet safe operating parameters, and corrections can 
not be effected to ensure safe care promptly, the client shall be transferred to 
a licensed hospital (if inpatient care is required) or licensed ESRD facility 
until such time as the water or equipment is found to be operating within safe 
parameters. 
(aa) Reuse or reprocessing of disposable medical devices, including but not 
limited to, dialyzers, end-caps, and blood lines shall be in accordance with 
this subsection. 
(1) An agency's reuse practice shall comply with the American National Standard, 
Reuse of Hemodialyzers, 1993 Edition, published by the AAMI. A facility shall 
adopt, implement and enforce a policy for dialyzer reuse criteria (including any 
agency-set number of reuses allowed) which is included in client education 
materials. 
(2) A transducer protector shall be replaced when wetted during a dialysis 
treatment and shall be used for one treatment only. 
(3) Arterial lines may be reused only when the arterial lines are labeled to 
allow for reuse by the manufacturer and the manufacturer-established protocols 
for the specific line have been approved by the United States Food and Drug 
Administration. 
(4) An agency shall consider and address the health and safety of clients 
sensitive to disinfectant solution residuals. 
(5) An agency shall provide each client and the client's family or legal 
representative with information regarding the reuse practices of the agency, the 
opportunity to tour the reuse facility used by the agency, and the opportunity 
to have questions answered. 
(6) An agency practicing reuse of dialyzers shall: 
(A) ensure that dialyzers are reprocessed via automated reprocessing equipment 
in a licensed ESRD facility or a centralized reprocessing facility;
(B) maintain responsibility and accountability for the entire reuse process; 
(C) adopt, implement, and enforce policies to ensure that the transfer and 
transport of used and reprocessed dialyzers to and from the client's home does 
not increase contamination of the dialyzers, staff, or the environment; and 
(D) ensure that department staff has access to the reprocessing facility as part 
of an agency inspection. 
(bb) Provision of laboratory services shall be as follows.
(1) All laboratory services ordered for the client by a physician shall be 
performed by a laboratory which meets the Clinical Laboratory Improvement 
Amendments of 1988, 42 United States Code, sec.263a, Certification of 
Laboratories (CLIA 1988) and in accordance with a written arrangement or 
agreement with the agency. CLIA 1988 applies to all agencies with laboratories 
that examine human specimens for the diagnosis, prevention, or treatment of any 
disease or impairment of, or the assessment of the health of, human beings. 
(2) (No change.) 
(3) Hematocrit and blood glucose tests may be performed at the client's home in 
accordance with sec.115.21(b)(1)(D) of this title (relating to Licensure 
Requirements and Standards for Agencies Providing Licensed Home Health, Licensed 
and Certified Home Health, or Hospice Services). Results of these tests shall be 
recorded in the client's medical record and signed by the qualified licensed 
nurse providing the treatment. Maintenance, calibration and quality control 
studies shall be performed according to the equipment manufacturer's 
suggestions, and the results shall be maintained at the agency.
(4) Blood and blood products shall only be administered to dialysis clients in 
their homes by a licensed nurse or physician. 
(cc) (No change.) 
(dd) In addition to the policies and procedures described in sec.115.21(d) of 
this title, the agency shall have policies and procedures for emergencies 
addressing fire, natural disaster, and medical emergencies, as follows. 
(1)-(4) (No change.) 
(5) In the event of a medical emergency requiring transport to a hospital for 
care, the agency shall assure the following: 
(A)-(C) (No change.)  

sec.115.25. Standards for Hospice Services. 
(a) In addition to the standards in sec.115.21 of this title (relating to 
Licensure Requirements and Standards for Agencies Providing Licensed Home 
Health, Licensed and Certified Home Health, or Hospice Services), an agency 
providing hospice services shall meet the standards of this section.
(b)-(c) (No change.) 
(d) The hospice shall determine, implement, and monitor policies governing the 
hospice's total operation. An individual who is responsible for the day to day 
management of the hospice program shall be designated. The hospice shall ensure 
that all services provided are consistent with accepted standards of practice.
(e) The hospice shall have a medical director who: 
(1) is a hospice employee or volunteer; 
(2) is a doctor of medicine or osteopathy licensed in the State of Texas; and 
(3) assumes overall responsibility for the medical component of the hospice's 
client care program. 
(f) Subject to subsections (p) and (u) of this section, the hospice may arrange 
for another individual or entity to furnish services to the hospice clients. If 
services are provided under arrangement, the hospice shall meet the following 
standards. 
(1)-(5) (No change.) 
(g) The hospice shall perform and make available to each client admitted for 
hospice services a client-specific comprehensive assessment that identifies the 
client's need for hospice care and the client's need for medical, nursing, 
social, emotional, and spiritual care which includes, but is not limited to, the 
palliation and management of the terminal illness and related conditions. 
(1) The hospice shall complete the comprehensive assessment in a timely manner 
consistent with the client's immediate needs, but no later than 14 calendar days 
after the start of hospice care. 
(2) Prior to the start of care, the hospice physician or registered nurse shall 
make an initial assessment visit to determine the immediate care and support 
needs of the client. The initial assessment visit shall be held within 48 hours 
after the hospice's receipt of the physician's referral for hospice care, unless 
ordered otherwise. After the initial assessment is completed, services approved 
by the physician may be rendered. 
(3) The comprehensive assessment shall include: 
(A) input from the appropriate interdisciplinary team member(s) and an 
assessment of: 
(i) each client's physical condition, including functional ability and 
nutritional status; 
(ii) each client's pain and other symptoms and the management of discomfort and 
symptom relief; 
(iii) the client's and the client's family's social and emotional well-being; 
(iv) the client's spiritual orientation and needs; 
(v) the survivor risk factors to be considered in developing the bereavement 
care plan; and 
(vi) any other information necessary to develop an effective, interdisciplinary 
plan of care; 
(B) a review of the client's drug profile, repeated as necessary, and which 
includes over-the-counter drugs, to assure that all drugs are indicated and to 
identify any potential problems including, but not limited to: 
(i) ineffective drug therapy; 
(ii) significant side effects; 
(iii) significant drug interactions; 
(iv) significant drug or food interactions; 
(v) duplicate drug therapy; and 
(vi) noncompliance with drug therapy; and 
(C) a system of measures that captures significant outcomes that are essential 
to optimal hospice care, that are used in the care planning and coordination of 
services, and that are an essential part of the hospice's quality assessment and 
performance improvement program. The measures shall include, but are not limited 
to: 
(i) pain; 
(ii) nutritional status; 
(iii) continence; 
(iv) respiratory comfort; 
(v) infections; 
(vi) skin integrity; 
(vii) level of consciousness; 
(viii) anxiety; 
(ix) depression; 
(x) client emotional well being and satisfaction, including anxiety and 
depression; 
(xi) spiritual well being; 
(xii) social well being; 
(xiii) family knowledge and understanding; and 
(xiv) client and family satisfaction. 
(4) The comprehensive assessment shall be updated and revised: 
(A) as frequently as the condition of the client requires, as determined by 
changes in the client's physical, social, emotional or spiritual status, family 
environment, or suboptimal response to care, treatments or therapies; and 
(B) within 48 hours of the client's return home from an inpatient stay. 
(h) A written plan of care shall be established and maintained for each client 
admitted to the hospice program, and the care provided to a client shall be in 
accordance with the plan. The plan of care shall specify the care and services 
necessary to meet the client-specific needs identified in the comprehensive 
assessment described in subsection (f) of this section, include all client care 
orders, reflect planned interventions for problems identified, and ensure that 
care and services are appropriate to the severity level of each client's and the 
client's family's specific needs. 
(1) The plan shall be established by the attending physician, the medical 
director or physician designee, and interdisciplinary team prior to providing 
care. 
(2) The plan shall be reviewed and updated as necessary, at intervals specified 
in the plan, by the attending physician, the medical director or physician 
designee and interdisciplinary team. These reviews shall be documented. An 
updated plan must include information from the client's comprehensive assessment 
and information concerning the client's progress toward outcomes specified in 
the plan. 
(3) The plan shall include: 
(A) a comprehensive assessment of the client's needs and identification of the 
services including the management of discomfort and symptom relief. The plan 
shall state in detail the scope and frequency of services needed to meet the 
client's and family's needs; 
(B) interventions to facilitate the management of pain and symptoms; 
(C) frequency and mix of services necessary to meet the client and family 
specific needs identified in the comprehensive assessment; 
(D) measurable outcomes that the hospice anticipates will occur as a result of 
implementing and coordinating the plan of care; 
(E) drugs and treatments necessary to meet the needs of the patient as 
identified in the assessment; 
(F) medical supplies and appliances necessary to meet the needs of the client 
identified in the assessment; and 
(G) client and family understanding, agreement, and involvement with the plan as 
desired. 
(i) The hospice shall not discontinue care provided to or discharge a client 
because of the client's inability to pay for that care. The interdisciplinary 
team may reassess the client for an appropriate level of care, as long as the 
reassessment does not reduce core services. 
(j) The hospice shall ensure that an informed consent form that specifies the 
type of care and services that may be provided as hospice care during the course 
of the illness has been obtained for every client, either from the client or 
representative (a person, who because of the client's mental or physical 
incapacity, is authorized in accordance with state law to execute or revoke an 
election for hospice care or terminate medical care on behalf of the terminally 
ill client). The client or representative shall sign or mark the consent form. 
(1) The hospice shall provide a client or legal representative with a written 
notice of the client's rights in advance of furnishing care to the client or 
during the initial evaluation visit before the initiation of treatment. 
(2) The hospice shall protect and promote a client's rights.
(3) The hospice shall maintain documentation showing that it has complied with 
the requirements of this subsection and the client demonstrates understanding of 
their rights. 
(4) The client has the right to exercise his or her rights as a client of the 
hospice. 
(5) In the case of a client adjudged incompetent, the rights of the client are 
exercised by the person appointed by law to act on the client's behalf. 
(6) In the case of a client who has not been judged incompetent, any legal 
representative may exercise the client's rights to the extent permitted by law. 
(7) The client has the right to have his or her person and property treated with 
respect. 
(8) The client has the right to voice grievances regarding treatment or care 
that is or fails to be furnished, or regarding the lack of respect for property 
by anyone who is furnishing services on behalf of the hospice and shall not be 
subjected to discrimination or reprisal for doing so. 
(9) The hospice shall investigate complaints made by a client or the client's 
family or guardian regarding treatment or care that is or fails to be furnished, 
or regarding the lack of respect for the client's property by anyone furnishing 
services on behalf of the hospice, and must document both the existence of the 
complaint and steps taken to resolve the complaint. The investigation and 
documentation must be completed within 30 calendar days after the hospice 
receives the complaint unless the hospice has and documents reasonable cause for 
delay. 
(10) The client has the right to be informed, in advance about the care to be 
furnished, the plan of care, expected outcomes, barriers to treatment and of any 
changes in the care to be furnished. 
(11) The hospice shall advise or consult with the client or legal representative 
in advance of any change in the plan of care. 
(12) The client has the right to participate in the planning of the care. 
(A) The hospice shall advise the client in advance of the right to participate 
in planning the care or treatment and in planning changes in the care or 
treatment. 
(B) The client has the right to refuse care and services.
(C) The client has the right to be informed of the availability of short term 
inpatient care for pain control, management and respite purposes and the names 
of the facilities with which the hospice has a contract agreement.
(D) The client has the right to be informed, before care is initiated, of the 
extent to which payment may be expected from the client, third-party payers, and 
any other source of funding known to the hospice.
(k) The hospice shall provide a continuing systematic program for the training 
of its employees. The staff, including volunteers, shall be properly oriented to 
tasks performed, and these individuals shall be informed of changes in 
techniques, philosophies, goals, and products, relating to the client's care. 
(l) The hospice shall designate an interdisciplinary team or teams composed of 
individuals who provide or supervise the care and services offered by the 
hospice. 
(1) The interdisciplinary team or teams shall include at least the following 
individuals who are employees of the hospice: 
(A) a physician; 
(B) a registered nurse; 
(C) a social worker; and 
(D) a pastor or counselor. 
(2) The interdisciplinary team shall be responsible for: 
(A) participation in the establishment of the plan of care;
(B) provision and supervision of hospice care and services;
(C) periodic reviews and updates of the plan of care for each client receiving 
hospice care; and 
(D) establishment of policies governing the day to day provision of hospice care 
and services. 
(3) If the hospice has more than one interdisciplinary team, the hospice shall 
designate in advance the team it chooses to execute the functions described in 
paragraph (2)(D) of this subsection. 
(4) The hospice shall designate a registered nurse to coordinate the 
implementation of the plan of care for each client. 
(m) The hospice shall use volunteers in defined roles under the supervision of a 
designated hospice employee. 
(1) The hospice shall provide appropriate orientation and training that is 
consistent with acceptable standards of hospice practice. 
(2) Volunteers may be used in administrative and direct client care roles. 
(3) The hospice shall document active and ongoing efforts to recruit and retain 
volunteers. 
(4) The hospice shall document the cost savings achieved through the use of 
volunteers. Documentation shall include the following:
(A) the identification of necessary positions which are occupied by volunteers; 
(B) the work time spent by volunteers occupying those positions; and 
(C) estimates of the dollar costs which the hospice would have incurred if paid 
employees occupied the positions identified in subparagraph (A) of this 
paragraph for the amount of time specified in subparagraph (B) of this 
paragraph. 
(5) The hospice shall provide volunteer activity at the level and in the manner 
described below. 
(A) The hospice shall document and maintain a volunteer staff sufficient to 
provide administrative and direct client care in an amount that at a minimum, 
equals 5.0% of the total client care hours of all paid hospice employees and 
contract staff. 
(B) The hospice shall document a continuing level of volunteer activity. 
(C) The hospice shall record expansion of care and services achieved through the 
use of volunteers, including the type of services and the time worked. 
(6) The hospice shall document reasonable efforts to arrange for visits of 
clergy and other members of religious organizations in the community to clients 
who request such visits and shall advise clients of this opportunity. 
(n) The hospice and all its employees shall be currently licensed in accordance 
with applicable federal and state laws and regulations. 
(o) In accordance with accepted principles of practice, the hospice shall 
establish and maintain a clinical record for every client receiving care and 
services. Services provided to the client's family shall be documented in the 
clinical record. The record shall be complete, promptly and accurately 
documented, readily accessible and systematically organized to facilitate 
retrieval. 
(1) Each clinical record shall contain a comprehensive compilation of 
information. Entries shall be made for all services provided. Entries shall be 
made and signed by the person providing the services. The record shall include 
all services whether furnished directly or under arrangements made by the 
hospice. Each client's record shall contain: 
(A) the initial and subsequent assessments; 
(B) the plan of care; 
(C) identification data; 
(D) consent and authorization and election forms; 
(E) pertinent medical history; and 
(F) complete documentation of all services and events (including evaluations, 
treatments and progress notes). 
(2) The hospice shall safeguard the clinical record against loss, destruction 
and unauthorized use. 
(p) The hospice shall ensure that substantially all the core services described 
in subsections (q)-(t) of this section are routinely provided directly by 
hospice employees. The hospice may use contracted staff if necessary to 
supplement its employees in order to meet the needs of clients during periods of 
peak client loads or under extraordinary circumstances. If contracting is used, 
the hospice shall maintain professional, financial, and administrative 
responsibility for the services and assure that the qualifications of staff and 
services provided meet the requirements specified in subsections (q)-(t) of this 
section. 
(q) The hospice shall provide nursing care and services by or under the 
supervision of a registered nurse. 
(1) Nursing services shall be directed and staffed to assure that the nursing 
needs of the clients are met. 
(2) Client care responsibilities of nursing personnel shall be specified. 
(3) Services shall be provided in accordance with recognized standards of 
practice. 
(r) Medical social services shall be provided by a social worker with a 
bachelor's degree in social work from an accredited college or university and 
shall be under the direction of a physician. 
(s) In addition to palliation and management of terminal illness and related 
conditions, hospice physicians, including physician member(s) of the 
interdisciplinary team, shall meet the general medical needs of the clients to 
the extent that these needs are not met by the attending physician. The hospice 
physician may meet these requirements either by directly providing the services 
or through coordination with the attending physician. If the attending physician 
is unavailable, the hospice physician is responsible for the care of the client. 
(t) Counseling services shall be available to both the client and the family. 
Counseling includes bereavement counseling provided after the client's death as 
well as dietary, spiritual, and any other counseling services for the client and 
family provided while the client is enrolled in the hospice program. 
(1) Bereavement counseling service shall be available to the family. 
(A) There shall be an organized program for the provision of bereavement 
services under the supervision of the interdisciplinary team, a social worker, a 
mental health professional, a counselor, or other person with documented 
evidence of training and experience in dealing with bereavement and structured 
training in bereavement counseling. Persons providing bereavement counseling 
shall have documented evidence of training in personnel folders.
(B) The plan of care for these services shall reflect family needs, as well as a 
clear delineation of services to be provided and the frequency of service 
delivery (up to one year following the death of the client). 
(2) Dietary counseling shall be planned by a registered or licensed dietitian, a 
person who is eligible for registration by the American Dietetic Association, or 
an individual who has documented equivalency in education or training. Dietary 
counseling shall meet specific client needs as described in the client's plan of 
care. Although a dietitian need not be a full-time employee, there shall be a 
record of this individual's credentials on file in the hospice. Dietary 
counseling shall be supervised by a registered or licensed dietitian or a 
registered nurse. 
(3) Spiritual counseling shall include notice to clients as to the availability 
of clergy as required under subsection (l)(6) of this section. Spiritual 
counseling may be conducted by a clergy of the client's choice. 
(4) Counseling may be provided by other members of the interdisciplinary team as 
well as by other professionals qualified by license or education to perform the 
type of counseling provided as determined by the hospice. Counseling, other than 
bereavement, dietary, or spiritual shall be provided by persons qualified by 
license or education to perform the type of counseling to be provided in 
accordance with the client's plan of care. The counseling requirements do not 
preclude other members of the interdisciplinary team or other professionals from 
serving in the capacity of counselor. Nonprofessional volunteers may be used for 
listening and social interaction with clients.
(u) The hospice shall ensure that the services described in subsections (v)-(y) 
of this section are provided directly by hospice employees or under arrangements 
made by the hospice as specified in subsection (f) of this section. The hospice 
shall maintain a system of communication and integration of services, whether 
provided directly or under arrangement, that ensures the identification of 
client needs and the ongoing liaison of all disciplines providing care. 
(v) Physical therapy services, occupational therapy services, and speech-
language pathology services shall be available, and when provided, shall be 
offered in a manner consistent with accepted standards of practice.
(w) Home health aide and homemaker services shall be available and adequate in 
frequency to meet the needs of the clients. A home health aide shall be a person 
who meets the training and competency evaluation requirements or the competency 
evaluation requirements as specified in sec.115.61 (d)-(f) of this title 
(relating to Home Health Aides). 
(1) A registered nurse shall visit the residence site no less frequently than 
every two weeks when aide services are being provided, and the visit shall 
include an assessment of the aide services. The aide need not be present each 
supervisory visit. 
(2) Written instructions for client care shall be prepared by a registered 
nurse. 
(x) Medical supplies and appliances, including medications, shall be provided as 
needed for the palliation and management of the terminal illness and related 
conditions. 
(1) All medications shall be administered in accordance with accepted standards 
of practice. 
(2) The hospice shall have and enforce a policy for the disposal of controlled 
medications maintained in the client's residence when those medications are no 
longer needed by the client. 
(3) Medications shall be administered only by the following individuals: 
(A) a licensed nurse or physician; 
(B) a permitted home health medication aide; 
(C) the client if his or her attending physician has approved; or 
(D) another individual acting in accordance with applicable federal and state 
laws, or as specified in the rules adopted by the Board of Nurse Examiners at 
Title 22, Chapter 218 (relating to Delegation of Selected Nursing Tasks by 
Registered Professional Nurses to Unlicensed Personnel. 
(4) The persons who are authorized to administer medications shall be specified 
in the client's plan of care. 
(y) Inpatient care shall be available for pain control, symptom management, or 
respite purposes. 
(1) Inpatient care shall be provided by a freestanding hospice or a hospital or 
nursing facility that meets the requirements specified in subsection (z)(1) and 
(5) of this section, regarding 24-hour nursing service and client areas. 
(2) A hospice shall develop, implement, maintain and evaluate an ongoing, 
comprehensive integrated self assessment of the quality and appropriateness of 
care provided, including inpatient care, home care, and care provided under 
arrangement. The findings shall be documented and used by the hospice to correct 
identified problems and to revise hospice policies if necessary. Corrective 
action of performance shall be taken and tracked to ensure that improvements are 
sustained over time. 
(A) The hospice's quality assessment and performance improvement program shall 
include, but not be limited to, the use of objective measures to demonstrate 
improved performance with regard to: 
(i) the system of measures that the hospice uses to determine if individual and 
aggregate outcomes are achieved compared to a previous time period; 
(ii) current clinical practice guidelines and professional practice standards 
applicable to hospice care; 
(iii) utilization data, as appropriate (e.g., numbers of staff, types of visits, 
inpatient care); and 
(iv) effectiveness and safety of services (including services such as parenteral 
therapy or infusion controlling devices, if provided), including competency of 
clinical staff, promptness of service delivery, appropriateness of responses to 
client and family problems. 
(B) The hospice shall set priorities for performance improvement, considering 
prevalence and severity of identified problems and giving priority to 
improvement activities that affect clinical outcomes. The hospice must 
immediately correct identified problems that directly or potentially threaten 
the care and safety of clients. 
(z) A freestanding hospice that provides inpatient care directly shall comply 
with the following standards in addition to the standards in subsections (a)-(y) 
of this section. 
(1) A freestanding hospice that provides inpatient care directly shall have on-
site 24-hour nursing service provided by registered nurses and licensed 
vocational nurses. 
(A) The facility shall provide 24-hour nursing services which are sufficient to 
meet total nursing needs and which are in accordance with the client's plan of 
care. Each client shall receive treatments, medications, and diet as prescribed, 
and shall be kept comfortable, clean, well-groomed, and protected from accident, 
injury and infection. 
(B) Each shift shall include a registered nurse who provides and supervises 
direct client care. 
(2) The hospice shall have a written plan, periodically rehearsed with staff, 
with procedures to be followed in the event of an internal or external disaster 
and for the care of casualties (clients and personnel) arising from such 
disasters. 
(3) The hospice shall meet all federal, state, and local laws, regulations, and 
codes pertaining to health and safety, such as provisions regulating the 
following: 
(A) construction, maintenance, and equipment for the hospice;
(B) sanitation; 
(C) communicable and reportable diseases; and 
(D) post-mortem procedures. 
(4) Except as provided in this subsection, the hospice shall meet National Fire 
Protection Association 101, Code for Safety to Life from Fire in Buildings and 
Structures, 1994 Edition (NFPA 101), Chapter 12 (relating to new health care 
occupancies) and Chapter 13 (relating to existing health care occupancies), 
published by the National Fire Protection Association (NFPA). All documents 
published by the NFPA as referenced in this subsection may be obtained by 
writing or calling the NFPA at the following address and telephone number: Post 
Office Box 9101, Batterymarch Park, Quincy, Massachussetts 02169, 1-800-344-
3555. 
(A) The department recognizes the Health Care Financing Administration (HCFA) 
waiver of specific provisions of the NFPA 101 required by this paragraph for a 
certified hospice for as long as HCFA honors the waiver, if the waiver would not 
adversely affect the health and safety of the clients and rigid application of 
specific provisions of the NFPA 101 would result in unreasonable hardship for 
the hospice. The department may waive specific provisions of the NFPA 101 for a 
licensed hospice, if the waiver would not adversely affect the health and safety 
of the clients; and rigid application of specific provisions of the NFPA 101 
would result in unreasonable hardship for the hospice. 
(B) Any existing facility of two or more stories that is not of fire-resistive 
construction and is participating on the basis of a waiver of construction type 
or height, may not house blind, nonambulatory, or physically disabled clients 
above the street-level floor unless the facility is one of the following 
construction types (as defined in the NFPA 101): 
(i) Type II (1,1,1)-protected noncombustible; 
(ii) fully-sprinklered Type II (0,0,0)-noncombustible; 
(iii) fully-sprinklered Type III (2,1,1)-protected ordinary;
(iv) fully-sprinklered Type V (1,1,1)-protected wood frame; or 
(v) achieves a passing score on the Fire Safety Evaluation System (FSES) for 
Health Care Occupancies, National Fire Codes, Volume 10, NFPA 101A, Guide on 
Alternative Approaches to Life Safety, Chapter 3, 1995 Edition published by the 
NFPA. 
(5) The hospice shall be designed and equipped for the comfort and privacy of 
each client and family member. The hospice shall provide: 
(A) physical space for private client and family visiting;
(B) accommodations for family members to remain with the client throughout the 
night; 
(C) accommodations for family privacy after a client's death;
(D) decor which is homelike in design and function; and 
(E) accommodations where clients are permitted to receive visitors at any hour, 
including small children. 
(6) Client rooms shall be designed and equipped for adequate nursing care and 
the comfort and privacy of clients. Each client's room shall: 
(A) be equipped with or conveniently located near toilet and bathing facilities; 
(B) be at or above grade level; 
(C) contain a suitable bed for each client and other appropriate furniture; 
(D) have closet space that provides security and privacy for clothing and 
personal belongings; 
(E) contain no more than four beds; 
(F) measure at least 100 square feet for a single room or 80 square feet for 
each client for a multiclient room; and 
(G) be equipped with a device for calling the staff member on duty. 
(7) For an existing building, the department recognizes the HCFA waiver for the 
space and occupancy requirements of paragraph (6)(E) and (F) of this subsection 
for a certified hospice for as long as HCFA honors the waiver, if the department 
finds that the requirements would result in unreasonable hardship on the hospice 
if strictly enforced, and the waiver serves the particular needs of the clients 
and does not adversely affect their health and safety. For an existing building, 
the department may waive the space and occupancy requirements of paragraph 
(6)(E) and (F) of this subsection for a licensed hospice for as long as it is 
considered appropriate, if it finds that the requirements would result in 
unreasonable hardship on the hospice if strictly enforced and the waiver serves 
the particular needs of the clients and does not adversely affect their health 
and safety. 
(8) The hospice shall provide bathroom facilities. The bathroom facilities shall 
include the following: 
(A) an adequate supply of hot water at all times for client use; and 
(B) plumbing fixtures with control valves that automatically regulate the 
temperature of the hot water used by clients. 
(9) The hospice shall have available at all times, a quantity of linen essential 
for the proper care and comfort of clients. Linens shall be handled, stored, 
processed and transported in such a manner as to prevent the spread of 
infection. 
(10) The hospice shall make provisions for isolating clients with infectious 
diseases. 
(11) The hospice shall provide and supervise meal service and menu planning. The 
hospice shall: 
(A) serve at least three meals or their equivalent each day at regular times, 
with not more than 14 hours between a substantial evening meal and breakfast; 
(B) procure, store, prepare, distribute, and serve all food under sanitary 
conditions; 
(C) have a staff member trained or experienced in food management or nutrition 
if the staff member responsible for dietary services is not a dietitian. The 
person shall be a graduate of a dietetic technician or dietetic assistant 
training program, correspondence or classroom, approved by the American Dietetic 
Association; or shall be a graduate of a state-approved course that provided 90 
or more hours of classroom instruction in food service supervision and shall 
have experience as a supervisor in a health care institution with consultation 
from a dietitian; or shall have training and experience in food service 
supervision and management in a military service equivalent in content to the 
program in this paragraph. This staff member shall be responsible for:
(i) planning menus that meet the nutritional needs of each client, following the 
orders of the client's physician and, to the extent medically possible, the 
recommended dietary allowances of the Food and Nutrition Board of the National 
Research Council, National Academy of Sciences (Recommended Dietary Allowances 
(10th ed., 1989 that is available from the Printing and Publications Office, 
National Academy of Sciences, Washington, D.C. 20418). The menus shall be 
approved by a licensed dietitian. The hospice shall use written guidelines for 
substitutions that are approved by the licensed dietitian; and 
(ii) supervising the meal preparation and service that is conducted to ensure 
that the menu plan is followed; and 
(D) have the menus for those clients who require medically prescribed special 
diets planned by a dietitian who monitors the preparation and serving of meals 
to ensure that the client accepts the special diet. 
(12) The hospice shall provide appropriate methods and procedures for dispensing 
and administering medications. Whether medications are obtained from community 
or institutional pharmacists or stocked by the facility, the facility shall be 
responsible for medications for its clients, insofar as they are covered under 
the program, and for ensuring that pharmaceutical services are provided in 
accordance with accepted professional principles and appropriate federal and 
state laws. 
(A) The hospice shall employ a licensed pharmacist or have a formal agreement 
with a licensed pharmacist to advise the hospice on ordering, storage, 
administration, disposal, and recordkeeping of medications. 
(B) A physician shall order all medications for the client.
(C) If the medication order is verbal, the physician shall give it only to a 
licensed nurse, pharmacist, or another physician. 
(D) If the medication order is verbal, the individual receiving the order shall 
record and sign it immediately and have the prescribing physician sign it in a 
manner consistent with good medical practice. 
(E) Medications shall be administered only by one of the following individuals: 
(i) a licensed nurse or physician; 
(ii) a permitted home health medication aide or an employee as specified in the 
rules adopted by the Board of Nurse Examiners at Title 22, Chapter 218 (relating 
to Delegation of Selected Nursing Tasks by Registered Professional Nurses to 
Unlicensed Personnel); or 
(iii) the client if his or her attending physician has approved.
(F) The pharmaceutical service shall have procedures for control and 
accountability of all medications throughout the facility. Medications shall be 
dispensed in compliance with federal and state laws. Records of receipt and 
disposition of all controlled medications shall be maintained in sufficient 
detail to enable an accurate reconciliation. The pharmacist shall determine that 
medication records are in order and that an account of all controlled 
medications is maintained and reconciled. 
(G) The labeling of medications shall be based on currently accepted 
professional principles, and shall include the appropriate accessory and 
cautionary instructions, as well as the expiration date when applicable.
(H) In accordance with state and federal laws, all medications shall be stored 
in locked compartments under proper temperature controls and only authorized 
personnel shall have access to the keys. Separately locked compartments shall be 
provided for storage of controlled medications listed in Schedule II of the 
Comprehensive Drug Abuse Prevention and Control Act of 1970, 21 United States 
Code, sec.801 et seq and other medications subject to abuse, except under 
single-unit package medication distribution systems in which the quantity stored 
is minimal and a missing dose is readily detected. An emergency medication kit 
shall be kept readily available. 
(I) Controlled medications no longer needed by the client shall be disposed of 
in compliance with state requirements. The pharmacist and registered nurse shall 
dispose medications and prepare a record of the disposal.  

sec.115.26. Standards for Personal Assistance Services.
(a) An agency holding a license with the category of personal assistance 
services shall meet the standards of this section. A separate license is 
required for each principal place of business. 
(b) An agency shall provide personal assistance services only within its service 
area. 
(1) The agency shall maintain adequate staff to provide services and to 
supervise the provision of services within the service area. 
(2) An agency may expand its service area at any time during the licensure 
period. To expand its service area, an agency must submit to the department a 
written notice for the expansion which includes revised boundaries of the 
agency's original service area, the effective date of the expansion, and an 
updated list of management and supervisory personnel (including names), if 
changes are made. The notice must be submitted either before or within 30 
calendar days after the effective date of the expansion. 
(3) An agency may reduce its service area at any time during the licensure 
period by sending the department written notification of the reduction, revised 
boundaries of the agency's original service area, and the effective date of the 
reduction. 
(c) Personal assistance services may be performed by an unlicensed person who is 
at least 18 years of age and is competent to perform the tasks assigned by the 
supervisor. 
(d) The agency shall comply with sec.115.54 of this title (relating to Criminal 
History Checks). 
(e) Personal assistance services are designed to meet the needs of a person with 
functional disabilities and the person's family, allowing the person and the 
family to engage in activities of daily living. The following tasks may be 
performed under a personal assistance services category: 
(1) personal care (feeding, preparing meals, transferring, toileting, ambulation 
and exercise, grooming, bathing, dressing, routine care of hair and skin, and 
assistance with medications that are normally self administered);
(2) health-related tasks which may be delegated by an RN in accordance with the 
agency's written policy adopted, implemented and enforced to ensure compliance 
with the rules of the Board of Nurse Examiners for the State of Texas adopted at 
22 TAC, sec.sec.218.1 - 218.11, (relating to Delegation of Selected Nursing 
Tasks by Registered Professional Nurses to Unlicensed Personnel) except for 
nursing tasks that may not be delegated and nursing tasks that may not be 
routinely delegated; 
(3) health related tasks that are not the practice of professional nursing under 
the memorandum of understanding between the Texas Department of Health and the 
Board of Nurse Examiners; and 
(4) health related tasks that are delegated by a physician under the Medical 
Practice Act, Texas Civil Statutes, Article 4495d, sec.3.06.
(f) The agency shall develop organizational, operational, programmatic, and 
personnel policies consistent with the principles of individual and family 
choice and control, functional need, and accessible and flexible services.
(g) The agency shall have an individual to act as the administrator who assumes 
responsibility for the overall conduct of the agency and is responsible for 
compliance with all applicable laws and rules of the department. 
(1) The administrator of the agency shall: 
(A) administratively supervise the provision of services;
(B) organize and direct the agency's ongoing functions; 
(C) employ qualified staff; 
(D) ensure adequate education and evaluations of staff; 
(E) ensure the accuracy of public information materials and activities; and 
(F) implement an effective budgeting and accounting system.
(2) The administrator shall authorize in writing a person who meets the 
qualifications of an administrator to act as the administrator in the 
administrator's absence. 
(3) The administrator or designee shall not have been employed in the last five 
years as an administrator with another agency at the time the agency was cited 
with violations of the statute or this chapter which resulted in enforcement 
action taken against the agency. 
(4) The administrator or designee shall be able to read, write and comprehend 
English. 
(5) The administrator or designee shall not have been convicted of a felony or 
misdemeanor listed in sec.115.52(b)(2) of this title (relating to Enforcement 
Action). 
(6) The administrator or designee shall have at least one year experience or 
training in caring for individuals with functional disabilities. 
(h) The agency shall maintain a file for each client or family with all entries 
kept current, dated and signed by the recorder. 
(1) An agency shall retain original client files for a minimum of five years 
after the discharge of the client. The agency may not destroy client files that 
relate to any matter that is involved in litigation if the agency knows the 
litigation has not been finally resolved. 
(2) If an agency closes, there shall be an arrangement for the preservation of 
inactive client files to insure compliance with this subsection. The agency 
shall send the department written notification of the reason for closure, the 
location of the client files and the name and address of the client file 
custodian. If an agency closes with an active client roster, a copy of the 
active client file shall be transferred with the client to the receiving agency 
in order to assure continuity of care and services. 
(3) The client file shall include the following: 
(A) client application for services including, but not limited to: full name; 
sex; date of birth; name, address, and telephone number of parent(s) of a minor 
child, or legal guardian, or other(s) as identified by the individual; 
physician's name and telephone numbers, including emergency numbers; and 
services requested; 
(B) documentation that client or family has received a copy of the agency's 
complaint procedures, and Human Resources Code, Chapter 102 (relating to Rights 
of the Elderly), for clients 55 years and older; 
(C) acknowledgment of the client's receipt of the agency's policy relating to 
the reporting of abuse, neglect or exploitation of a client;
(D) documentation of determination of services based on an on-site visit by the 
supervisor where services will be primarily delivered and records of supervisory 
visits, if applicable; 
(E) an individualized service plan developed, agreed upon, and signed by the 
client or family and the agency to include, but not limited to, the following: 
(i) types of services, supplies, and equipment to be provided;
(ii) locations of services; 
(iii) frequency and duration of services, including the planned date of service 
initiation; 
(iv) charges for services rendered if the charges will be paid in full or in 
part by the client or significant other(s), or on request; and
(v) plan of supervision; 
(F) documentation that the services have been provided according to the 
individualized service plan, and to include a medication record, if applicable. 
The agency shall assure that the individualized service plan is followed through 
a documented quality management review of the plan and services provided under 
the plan; and 
(G) documentation that all agencies providing care to a client engage in an 
effective interchange, reporting, and coordination of care regarding the client. 
(i) The agency shall provide services with personnel who meet the qualifications 
and competencies to perform requested and agreed upon services of the client or 
family. The agency is responsible for: 
(1) orientation of personnel to their job responsibilities including, but not 
limited to: the philosophy and values of community integration and consumer-
driven care; report of abuse or neglect; and change in the client's health 
condition requiring emergency procedures or health services; 
(2) maintenance of documentation to demonstrate that an individual is competent 
in those services he or she performs; and 
(3) supervision of personnel in accordance with the agency's policies and 
applicable state laws and rules, including 22 Texas Administrative Code, 
sec.sec.218.1-218.11 relating to the delegation of selected nursing tasks by 
registered professional nurses to unlicensed personnel adopted by the Board of 
Nurse Examiners, and the Medical Practice Act, Texas Civil Statutes, Article 
4495d, sec.3.06 relating to physician delegation. 
(A) A supervisor must be a licensed nurse or have completed two years of full-
time study at an accredited college or university. An individual with a high 
school diploma or general equivalence diploma (GED) may substitute one year of 
full-time employment in a supervisory capacity in a health care facility, 
agency, or community-based agency for each required year of college.
(B) The client in a client managed attendant care program funded by Texas 
Department of Human Services or Texas Rehabilitation Commission is not required 
to meet the standard in subparagraph (A) of this paragraph.
(j) The agency shall adopt, implement, and enforce a policy(ies):
(1) establishing time frame(s) for the initiation of care or services; 
(2) addressing the supervision of personnel with input from the client or family 
on the frequency of supervision; 
(3) including written procedures governing the use and removal of records; the 
release of information; and the incorporation of clinical, progress or other 
client notes into the client record; 
(4) relating to the retention of records in accordance with subsection (h) of 
this section; 
(5) describing protocols and procedures agency staff must follow when performing 
physician delegated tasks. The policy shall include and address the time frame 
for the timely countersignature of a physician's verbal orders; 
(6) ensuring compliance of the agency and its employees and contractors with the 
Health and Safety Code, Chapter 85, Subchapter I, relating to the prevention of 
the transmission of human immunodeficiency virus and hepatitis B virus; 
(7) ensuring compliance of the agency and its employees and contractors with the 
Health and Safety Code, sec.161.091 et seq relating to the prohibition of 
illegal remuneration for securing or soliciting clients or patronage; 
(8) ensuring compliance with the rules of the Board of Nurse Examiners for the 
State of Texas adopted at 22 TAC Chapter 218, Delegation of Selected Nursing 
Tasks (relating to Delegation of Selected Nursing Tasks by Registered 
Professional Nurses to Unlicensed Personnel); 
(9) ensuring that the agency submits accurate billings and insurance claims; 
(10) addressing the orientation of all personnel to the policies, procedures, 
and objectives of the agency; 
(11) ensuring the periodic evaluation of employee performance;
(12) specifying the agency's personnel policies; 
(13) relating to criminal history checks of unlicensed personnel in accordance 
with sec.115.54 of this title; 
(14) specifying the agency's client care policies; 
(15) addressing employee disciplinary action(s) and procedures;
(16) relating to the agency's procedures for investigating complaints. Such 
procedures shall require the agency to initiate a complaint investigation within 
10 days of the agency's receipt of the complaint, and to document all components 
of the investigation; 
(17) including a job description (statement of those functions and 
responsibilities which constitute job requirements) and job qualifications 
(specific education and training necessary to perform the job) for each position 
within the agency; 
(18) including the agency's organizational structure and operational policies. 
Such policies must be clearly stated in writing and include the lines of 
authority and delegation of responsibility down to the client care level and the 
services provided; 
(19) ensuring a quality assurance program which provides for accountability and 
desired client outcomes. The policy shall meet the minimum requirements in 
subsection (h)(3)(E) and (F) of this section; 
(20) providing for back-up services when an employee or contractor is not able 
to deliver the services; 
(21) assuring that all agencies providing services to a client are engaged in an 
effective interchange, reporting, and coordination of care regarding the client; 
(22) implementing and enforcing the Human Resources Code, Chapter 102 relating 
to the rights of the elderly; 
(23) relating to the reporting of abuse, neglect and exploitation of clients; 
(24) relating to the use of volunteers if volunteers are used by the agency; 
(25) for publicly known natural disaster preparedness for clients receiving 
services. The written policy shall include a plan for the reasonable mechanism 
for triaging clients, the notification of appropriate personnel and clients in 
the event of a disaster if possible, the identification of appropriate community 
resources, and the identification of possible evacuation procedures. The plan 
need not require that the agency actually evacuate, transport, or triage the 
clients; 
(26) describing the agency's written contingency plan;
(27) addressing compliance with out-of-hospital do-not-resuscitate orders and 
advance directives. The policy shall: 
(A) be consistent with the Health and Safety Code, Chapter 674 relating to out-
of-hospital do-not-resuscitate; the Natural Death Act, Health and Safety Code, 
Chapter 672; and Civil Practice and Remedies Code, Chapter 135 relating to 
durable power of attorney for health care; and 
(B) address the provision of information regarding advance directives to its 
clients and assure its clients are allowed, but not required, to formulate such 
directives to the extent permitted by law; and 
(28) relating to the supervision of branch offices, if established. This policy 
shall be consistent with sec.115.14 of this title (relating to Application and 
Issuance of Branch Office Licenses) and sec.115.27 of this title (relating to 
Standards for Branch Offices). 
(k) Tube feedings through a permanently placed gastrostomy tube (g-tube) by 
unlicensed personnel may be performed only in a short-term respite care setting 
after the client has been admitted under the personal assistance services 
category. Such feedings and medication administration shall be in accordance 
with this subsection. 
(1) In a short-term respite care setting where the client is admitted under the 
personal assistance services category, g-tube feedings shall be performed: 
(A) under delegation by a physician in accordance with the Medical Practice Act, 
Texas Civil Statutes, Article 4495d, sec.3.06; 
(B) under delegation by an RN under 22 Texas Administrative Code, sec.sec.218.1-
218.11; or 
(C) by an unlicensed person after successful completion of the training and 
competency program described in paragraphs (3) and (4) of this subsection. 
(2) The training and competency program for the performance of g-tube feedings 
by an unlicensed person shall be taught by an RN, physician, physician assistant 
(PA) or qualified trainer as specified in paragraph (5) of this subsection, and 
shall meet the requirements in paragraphs (3) and (4) of this subsection. 
(3) The minimum training program shall include: 
(A) a description of the g-tube placement, including the purpose;
(B) infection control procedures and universal precautions to be utilized when 
performing g-tube feedings or medication administration through a g-tube; 
(C) a description of conditions which must be reported to the client or the 
primary caregiver, or in the absence of the primary caregiver, to the agency 
administrator, supervisor, or the client's physician. The description of 
conditions must include a plan to be effected if the g-tube comes out or is not 
positioned correctly to ensure medical attention is provided within one hour; 
(D) review of a written procedure for g-tube feeding or medication 
administration through a g-tube. The written procedure must be equivalent to 
current acceptable nursing standards of practice, including addressing the 
crushing of medications; 
(E) conditions under which g-tube feeding or medication administration shall not 
be performed; and 
(F) demonstration of a g-tube feeding and medication administration to a client. 
If the trainee will become a qualified trainer, the demonstration must be done 
by the RN, PA, or physician. If the trainee will not become a qualified trainer, 
the demonstration may be done by an RN, PA, physician, or qualified trainer. 
(4) The minimum competency evaluation shall be documented and maintained in the 
employee's file and shall include: 
(A) a score of 100% on a written multiple choice test that consists of 
situational questions to include the criteria in paragraph (3)(A)-(E) of this 
subsection and evaluate the trainee's judgment and understanding of the 
essential skills, risks, and possible complications of a g-tube feeding or 
medication administration through a g-tube; 
(B) a skills checklist demonstrating that the trainee has successfully completed 
the necessary skills for a g-tube feeding and medication administration via g-
tube, and if the trainee will become a qualified trainer, the skills checklist 
shall also demonstrate the ability to teach another person to perform the task. 
The skills checklist must be completed by an RN, physician, or PA if the trainee 
will become a qualified trainer. The skills checklist for a trainee who will not 
become a qualified trainer may be completed by an RN, physician, PA, or 
qualified trainer; and 
(C) documentation of an accurate demonstration of the g-tube feeding and 
medication administration performed by the trainee as required by paragraph 
(3)(F) of this subsection. If the trainee will become a qualified trainer, 
documentation of competency to teach this task shall be maintained in the file 
of the qualified trainer. The person responsible for the training of the trainee 
shall document the successful demonstration of the g-tube feeding and medication 
administration via g-tube by the trainee and the trainee's competency to perform 
this task in the trainee's file. 
(5) The following persons may teach the trainee and may conduct the training and 
competency evaluation program: 
(A) an RN, physician, or PA; or 
(B) a qualified trainer who: 
(i) has successfully completed the training and competency program described in 
paragraphs (3) and (4) of this subsection taught by an RN, physician, or PA; 
(ii) has demonstrated on return demonstration to an RN, physician or PA the 
performance of the task and the ability to teach the task; and 
(iii) has been deemed competent by an RN, physician, or PA to train unlicensed 
personnel in these procedures. Documentation of competency to perform, train and 
teach shall be maintained in the employee's or contractor's file. Competency 
shall be evaluated and documented by an RN, physician or PA annually. 
(6) The client or primary caregiver must provide information on the client's g-
tube feeding or medication administration to the agency supervisor. If the 
client is not capable of directing his or her own care, the client's primary 
caregiver must be present to instruct and orient the supervisor regarding the 
client's g-tube feeding and medication regime. A copy of the current regime 
including unique conditions specific to the client shall be placed in the 
client's file by the agency supervisor and provided to the respite caregiver. 
The respite caregiver must be oriented by the client, the client's primary 
caregiver, or the agency supervisor. The supervisor of the delivery of these 
services must have successfully completed a training and competency program 
outlined in paragraphs (3) and (4) of this subsection or be a qualified trainer. 
(7) Legend medications that are to be administered shall be in a legally labeled 
container from a pharmacy that contains the name of the client. Instructions for 
dosages according to weight or age for over the counter drugs commonly given the 
client shall be furnished by the primary caregiver to the respite caregiver 
performing the tube feeding or medication administration.  

sec.115.27. Standards for Branch Offices. 
(a) A parent agency is eligible to apply for a branch office license: 
(1) for an agency with an initial license, if the agency has successfully 
completed an initial onsite survey to demonstrate substantial compliance with 
the statute and this chapter; or for an agency with a first renewal or 
subsequent renewal license, if the agency continues to demonstrate substantial 
compliance with the statute and this chapter; and 
(2) if enforcement action against the agency license is not proposed under 
sec.115.52 of this title (relating to Enforcement Action).
(b) A branch office providing licensed home health or personal assistance 
services shall comply with the requirements of the rules relating to the parent 
agency and the standards relating to the provided category(ies).
(c) A branch office providing licensed and certified home health services shall 
comply with the standards for certified agencies in sec.115.23 of this title 
(relating to Standards for Licensed and Certified Home Health Services). 
(d) An branch office shall establish a service area within the parent agency's 
service area. 
(1) A branch office shall provide services only within its established service 
area. 
(2) The branch office shall maintain adequate staff to provide services and to 
supervise the provision of services within the service area. 
(3) A branch office may expand its service area at any time during the licensure 
period. To expand its service area, a branch office must submit to the 
department a written notice for the expansion which includes revised boundaries 
of the branch office's original service area, the effective date of the 
expansion, and an updated list of management and supervisory personnel 
(including names), if changes are made. The notice must be submitted either 
before or within 30 calendar days of the effective date of the expansion.
(4) A branch office may reduce its service area at any time during the licensure 
period by sending the department written notification of the reduction, revised 
boundaries of the branch office's original service area, and the effective date 
of the reduction. 
(e) A parent agency and a branch office providing home health or personal 
assistance services shall meet the following requirements. 
(1) On-site supervision of the branch office shall be conducted at least monthly 
by the parent agency administrator, administrator's designee, or supervising 
nurse or designee. More frequent supervision may be required considering the 
size of the service area and the scope of services provided by the parent 
agency. The supervisory visits must be documented and include the date of the 
visit, the content of the consultation, the individuals in attendance, and the 
recommendations of the staff. 
(2) Original personnel files may be kept in any location, as determined by the 
agency. Original personnel files shall be accessible and readily retrievable for 
inspection by the department at the site of the survey. 
(3) The clinical record may be kept at the branch or parent agency, as 
determined by the agency. Duplicate records are not required. 
(4) The parent agency shall approve all branch office policies and procedures. 
Such approval shall be documented and filed in the parent and branch office(s). 
(f) The department shall issue to or renew a branch office license for 
applicants who meet the requirements of this section. 
(1) Issuance or renewal of a branch office license is contingent upon compliance 
with the statute and this chapter by the parent agency and branch office. 
(2) The department may take enforcement action against a parent agency license 
for a branch office's failure to comply with the statute or this chapter. 
Enforcement action shall be in accordance with sec.115.52 of this title 
(relating to Enforcement Action). 
(3) Revocation, suspension, denial, or surrender of a parent agency license will 
result in the same enforcement action against all branch office licenses of the 
parent agency. 
(g) A branch office may offer fewer health services or categories than the 
parent office but may not offer health services or categories that are not also 
offered by the parent agency.  
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 June 30, 1997.
TRD-9708446
Susan K. Steeg
General Counsel
Texas Department of Health
Effective date: July 21, 1997
Proposal publication date: March 14, 1997
For further information, please call: (512) 458-7236

SUBCHAPTER D. Enforcement
25 TAC sec.sec.115.51-115.54
The amendments are adopted under the Health and Safety Code, sec.142.004(c), 
which provides the board with authority to adopt rules to require an applicant 
to provide documentation establishing the applicant has sufficient financial 
resources to provide services during the term of the license, a list of 
management personnel, a description of personnel qualifications, a plan for 
providing continuing training and education for personnel, documentation that 
the applicant is capable of meeting the minimum standards related to quality of 
care, and documentation that the applicant has a plan for the orderly transfer 
of care of clients if the applicant cannot maintain or deliver services under 
the license; under sec.142.008(b) which provides the board with authority to 
adopt rules to establish eligibility requirements for a branch office license; 
under sec.142.0085(b) which provides the board with authority to establish 
eligibility requirements for an alternate delivery site license; under 
sec.142.012 which provides the board with authority to adopt rules to set 
minimum standards relating to qualifications for professional and 
nonprofessional personnel (including volunteers), supervision of professional 
and nonprofessional personnel (including volunteers), the provision and 
coordination of treatment and services (including support and bereavement 
services), the management, ownership, and organizational structure (including 
lines of authority and delegation of responsibility and the composition of an 
interdisciplinary team), clinical and business records, financial ability to 
carry out the functions as proposed by the HCSSA, safety, fire prevention, and 
sanitary standards for residential and inpatient units, and any other aspects of 
home health, hospice, or personal assistance services as necessary to protect 
the public; under sec.142.023 which provides the board with the authority to 
establish minimum requirements for the issuance, denial, renewal, suspension, 
emergency suspension, and revocation of a permit to a home health medication 
aide, curricula to train a home health medication aide, minimum standards for 
the approval of home health medication aide training programs and for rescinding 
approval, the acts and practices that are allowed or prohibited to a permit 
holder, and minimum standards for on-site supervision of a permit holder by a 
registered nurse; and under Health and Safety Code, sec.12.001 which provides 
the board with the authority to adopt rules for the performance of every duty 
imposed by law upon the board, the department and the commissioner of health. 

sec.115.51. Survey Procedures. 
(a) An on-site survey shall determine if the requirements of the statute and the 
rules are being met. 
(1) The Texas Department of Health (department) or its authorized 
representative(s) (surveyor) may enter the premises of a license applicant or 
license holder at reasonable times to conduct an on-site survey incidental to 
the issuance of a license, and at other times as it considers necessary to 
ensure compliance with the statute and the rules adopted under the statute. A 
standard-by-standard evaluation is required before the first renewal license is 
issued unless waived in accordance with sec.115.13(a)(1)(B) of this title 
(relating to Change of Ownership or Services). 
(2) (No change.) 
(3) If there is a question relating to the accuracy of an agency's financial 
records relating to the operation of the agency or the agency's financial 
ability to carry out its functions, the department or designee may conduct an 
extensive review of the records. Any financial review by the department shall be 
conducted by an individual who has the financial qualifications to review such 
records. 
(4) The agency administrator, supervising nurse, or other authorized 
representative from the agency shall be present at the time of a survey by the 
department. 
(b) Except for a survey conducted for the purposes of issuing a first renewal 
license, a survey conducted by the department shall be unannounced.
(c) Except for the investigation of complaints, an agency licensed by the 
department is not subject to additional surveys relating to home health, 
hospice, or personal assistance services while the agency maintains 
accreditation for the applicable services from the Joint Commission on 
Accreditation of Healthcare Organizations, the Community Health Accreditation 
Program or certification as a home and community-based services or home and 
community-based services - OBRA agency by the Texas Department of Mental Health 
and Mental Retardation (TXMHMR). An initial survey after issuance of an initial 
license shall be done by the department: 
(1) if the agency is not yet accredited; or 
(2) unless waived under sec.115.13(a)(1)(B) of this title 
(d) The department's surveyor shall hold a conference with the person who is in 
charge of an agency prior to commencing the on-site survey for the purpose of 
explaining the nature and scope of the survey. The department's representative 
shall hold an exit conference with the person who is in charge of the agency 
when the survey is completed, and the department's representative shall identify 
any records that were duplicated. Any original agency records that are removed 
from an agency shall be removed only with the consent of the agency. 
(e) The department's authorized representative shall hold an exit conference and 
fully inform the person who is in charge of the agency of the preliminary 
findings of the survey and shall give the person a reasonable opportunity to 
submit additional facts or other information to the department's authorized 
representative in response to those findings. The response shall be made a part 
of the survey for all purposes and must be received by the department within ten 
calendar days of receipt of the preliminary findings of the survey by the 
agency. 
(f) After a survey of an agency, the department shall provide the person in 
charge of the agency specific and timely written notice of the findings of the 
survey including: 
(1) the specific nature of the survey; 
(2) any alleged violations of a specific statute or rule;
(3) the specific nature of any finding regarding an alleged violation or 
deficiency; 
(4) if a deficiency is alleged, the severity of the deficiency; and 
(5) if there are no deficiencies found, a statement indicating this fact. 
(g) The surveyor shall: 
(1) conduct a survey for all categories of services authorized under the 
license; 
(2) conduct a minimum of three home visits unless the agency has only three 
clients; 
(3) review a minimum of ten client records unless the agency has had less than 
ten clients; 
(4) obtain a client's signature consenting to the home visit. A client may 
refuse a home visit without effect on the level and nature of care or benefit to 
the client; 
(5) prepare a statement of deficiencies, if any; 
(6) obtain a plan of correction for deficiencies which is provided by the agency 
either on-site or within ten calendar days of the agency's receipt of the 
statement of deficiencies and which indicates the date(s) by which correction(s) 
will be made; 
(7) obtain the signature of the person in charge of the agency acknowledging the 
receipt of the statement of deficiencies and plan of correction form. The 
person's signature does not indicate the person's agreement with deficiencies 
stated on the form; 
(8) obtain within ten calendar days of the survey written comments, if any, by 
the person in charge of the agency. Additional facts, written comments or other 
information provided by the agency in response to the findings shall be made a 
part of the record of the survey for all purposes; and 
(9) inform the person in charge of the agency of the agency's right of 
reconsideration of any deficiency(ies) cited and of the procedures for 
requesting a reconsideration. A reconsideration requested by an agency does not 
excuse the agency from submitting a plan of correction required in subsection 
(h)(1) of this section. 
(h) The agency shall: 
(1) submit an acceptable written plan of correction for each deficiency no later 
than ten days from its receipt of a statement of deficiencies. A plan of 
correction date shall not exceed 45 days from the date the deficiency was cited; 
and 
(2) correct each deficiency no later than the plan of correction date for that 
deficiency. Failure of an agency to correct each deficiency by the plan of 
correction date may result in enforcement action in accordance with sec.115.52 
of this title (relating to Enforcement Action).
(i) If Medicare certification is denied by the Health Care Financing 
Administration (HCFA) or the agency withdraws from the Medicare program, the 
agency's license will revert to the category of and be governed by the standards 
for licensed home health services. The effective date of the change shall be the 
date indicated on the final termination letter issued the agency by HCFA. This 
change does not preclude the department from taking enforcement action, if 
appropriate, under sec.115.52 of this title. 
(j) If deficiencies are cited and the plan of correction is not acceptable, the 
department shall notify the agency in writing and request that the plan of 
correction be resubmitted no later than 30 calendar days of the agency's receipt 
of the department's written notice. Upon resubmission of an acceptable plan of 
correction, written notice will be sent by the department to the agency 
acknowledging same. 
(k) The department will provide upon completion of the review and processing of 
the survey: 
(1) information on the identity, including the signature, of each department 
representative conducting, reviewing, or approving the results of the survey and 
the date on which the department representative acted on the matter; and 
(2) if requested by the agency, copies of all documents relating to the survey 
maintained by the department or provided by the department to any other state or 
federal agency that are not confidential under state law. 
(l) The department shall verify the correction of deficiencies by mail or by an 
on-site survey within 90 days of the department's receipt of an acceptable plan 
of correction. 
(m) Acceptance of a plan of correction does not preclude the department from 
taking enforcement action as appropriate under sec.115.52 of this title. 
(n) Except as provided by subsection (b) of this section, an on-site survey must 
be conducted within 18 months after a survey for an initial license. After that 
time, an on-site survey must be conducted at least every 36 months. 
(o) If a person is renewing or applying for a license to provide more than one 
category under the statute or for a branch office or alternate delivery site 
license, the required surveys for each of the services or location(s) the 
license holder or applicant seeks to provide shall be completed during the same 
survey visit.  

sec.115.52. Enforcement Action. 
(a) The Texas Department of Health (department) may deny, suspend, suspend on an 
emergency basis, or revoke a license issued to an applicant or agency if the 
applicant or agency: 
(1)-(4) (No change.) 
(5) has aided, abetted, or permitted the commission of an illegal act; 
(6) fails to provide the required application or renewal information; 
(7) fails to comply with an order of the commissioner of health or another 
enforcement procedure under the statute; or 
(8) discloses action as described in sec.115.11(g)(2)(R) and (S) of this title 
(relating to Application and Issuance of Initial License) or sec.115.12(b)(2)(A) 
of this title (relating to Issuance and Renewal of License). 
(b) The department may suspend or revoke an existing valid license or disqualify 
a person from receiving a license because of a person's conviction of a felony 
or misdemeanor if the crime directly relates to the duties and responsibilities 
of a licensed agency. 
(1) In determining whether a criminal conviction directly relates, the 
department shall consider the provisions of Texas Civil Statutes, Article 6252-
13c. 
(2) The following felonies and misdemeanors directly relate because these 
criminal offenses indicate an inability or a tendency for the person to be 
unable to own or operate an agency. These offenses also relate to the holding of 
a home health medication aide permit or an entity approved under sec.115.62(o) 
of this title (relating to Home Health Medication Aides), to conduct a home 
health medication aide training program: 
(A) a misdemeanor violation of the statute; 
(B) a conviction relating to deceptive business practices;
(C) a misdemeanor or felony offense involving moral turpitude;
(D) the misdemeanor of practicing any health-related profession without a 
required license; 
(E) a conviction under any federal or state law relating to drugs, dangerous 
drugs or controlled substances; 
(F) an offense under the Texas Penal Code, Title 5, involving a client or client 
of a health care facility or agency; 
(G) a misdemeanor or felony offense under various titles of the Texas Penal 
Code, as follows: 
(i) Title 5, concerning offenses against the person; 
(ii) Title 7, concerning offenses against property; 
(iii) Title 9, concerning offenses against public order and decency; 
(iv) Title 10, concerning offenses against public health, safety, and morals; 
(v) Title 4, concerning offenses of attempting or conspiring to commit any of 
the offenses in clauses (i)-(iv) of this subparagraph; and
(vi) other misdemeanors and felonies which indicate an inability or tendency for 
the person to be unable to own or operate an agency, hold a permit, or receive 
program approval under sec.115.62(o) of this title (relating to Home Health 
Medication Aides), if action by the department will promote the intent of the 
statute, this chapter, or Texas Civil Statutes, Article 6252-13c. 
(3) Upon a licensee's felony conviction, felony probation revocation, revocation 
of parole, or revocation of mandatory supervision, the license shall be revoked. 
(c) If the department proposes to deny, suspend, or revoke a license, the 
department shall notify the agency by certified mail, return receipt requested, 
or personal delivery of the reasons for the proposed action and offer the agency 
an opportunity for a hearing. 
(1) The agency must request a hearing within 15 calendar days of receipt of the 
notice. Receipt of the notice is presumed to occur on the tenth day after the 
notice is mailed to the last address known to the department unless another date 
is reflected on a United States Postal Service return receipt. 
(2) The request for a hearing must be in writing and submitted to the Director, 
Health Facility Licensing Division, Texas Department of Health, 1100 West 49th 
Street, Austin, Texas 78756. 
(3) A hearing shall be conducted pursuant to the Administrative Procedure Act, 
Texas Government Code, Chapter 2001, and the department's formal hearing 
procedures in Chapter 1 of this title (relating to the Texas Board of Health). 
(4) If the agency does not request a hearing in writing within 15 [30] calendar 
days of receipt of the notice, the agency is deemed to have waived the 
opportunity for a hearing and the proposed action shall be taken. 
(5) If the agency fails to appear or be represented at the scheduled hearing, 
the agency has waived the right to a hearing and the proposed action shall be 
taken. 
(d) The department may suspend or revoke a license to be effective immediately 
when the health and safety of persons are threatened. The department shall 
immediately give the chief executive officer of the agency adequate notice of 
the action taken, the legal grounds for the action, and the procedure governing 
appeal of the action. The department shall also notify the agency of the 
emergency action including the legal grounds for the action and the procedure 
governing appeal of the action by certified mail, return receipt requested, or 
personal delivery of the notice and of the date of a hearing, which shall be not 
later than seven calendar days after the effective date of the suspension or 
revocation. The effective date of the emergency action shall be stated in the 
notice. The hearing shall be conducted pursuant to the Administrative Procedure 
Act, Texas Government Code, Chapter 2001, and the department's formal hearing 
procedures in Chapter 1 of this title (relating to the Texas Board of Health). 
(e) If a person violates the licensing requirements of the Act, the department 
may petition the district court to restrain the person from continuing the 
violation. 
(f) If a person operates an agency without a license issued under the Act, the 
person is liable for a civil penalty of not less than $1,000 nor more than 
$2,500 for each day of violation. 
(g) A person who has had an agency license revoked under this section, may not 
apply for an agency license for one year following the date of revocation. 
(h) If the department suspends a license, the suspension shall remain in effect 
until the department determines that the reason for suspension no longer exists. 
An authorized representative of the department shall conduct a survey of the 
agency prior to making a determination. 
(1) During the time of suspension, the suspended license holder shall return the 
license to the department. 
(2) If a suspension overlaps a renewal date, the suspended license holder shall 
comply with the renewal procedures in this chapter; however, the department may 
not renew the license until the department determines that the reason for 
suspension no longer exists. 
(i) If the department revokes or does not renew a license and the one-year 
period described in subsection (g) of this section has passed, a person may 
reapply for a license by complying with the requirements and procedures in this 
chapter at the time of reapplication. The department may refuse to issue a 
license if the reason for revocation or nonrenewal continues to exist. 
(j) Upon revocation or nonrenewal, a license holder shall return the license to 
the department. 
(k) After a survey in which deficiencies were cited by the surveyor, an agency 
may surrender its license before expiration or allow its license to expire in 
lieu of the department proceeding with enforcement action. An agency may 
surrender before the expiration date by returning its original license to the 
department. If an agency surrenders or allows expiration of the license, the 
agency, its owner(s), and its affiliates may not reapply for a license for six 
months from the date of the surrender or expiration.

sec.115.54. Criminal History Checks.
(a) (No change.) 
(b) An agency may not employ a person in a position, the duties of which involve 
direct contact with a consumer, unless the agency has applied for a criminal 
history check on the applicant for employment and unless there is an emergency 
situation. 
(1) An agency or a private entity working with the agency may submit a request 
for a criminal history check to the Texas Department of Health (department). 
(2) An agency may have a request submitted to the Texas Department of Public 
Safety (TDPS) by a private entity working with the agency, instead of submitting 
the request to the department. 
(3) If a private entity is used, it must submit requests in a timely manner. 
(4) If the agency is a parent agency, the parent agency must submit a request 
for a criminal history check on behalf of a branch office or alternate delivery 
site. 
(5) The requirement to request a criminal history check only applies if the 
person to be employed will have direct contact with a client of the agency. 
(6) A criminal history check is not required if the applicant for employment is 
licensed under Texas law and will be working within the scope of that license. 
(7) Criminal history checks may be requested only for applicants for employment 
to whom an offer of employment is made or, in the case of an agency's change of 
ownership, current agency employees. Criminal history checks may not be 
requested for persons who will not be employed by the agency, such as volunteers 
or independent contractors. An employee or applicant for employment is a person 
for whom the agency is or will be required to issue a W-2 form on behalf of the 
person. 
(8) A previous criminal history check on the person done under this section or 
through other means does not satisfy the requirements of the law or this 
section. A new criminal history check must be requested for any person each time 
an offer of employment is made to that person or for any person employed by an 
agency undergoing a change of ownership. 
(c) An agency may employ an applicant in an emergency situation requiring 
immediate employment under the following circumstances. 
(1) (No change.) 
(2) The prospective employee must furnish to the agency a written statement 
stating that he or she has no conviction for an offense described in the Health 
and Safety Code, sec.250.006, which lists the types of offenses which bar 
employment. 
(3) The written statements shall be maintained in the agency personnel records. 
(4) The agency or a private entity working with the agency must request the 
criminal history check within 72 hours of employment for a person employed in an 
emergency situation. 
(d) If an agency is not having the requests submitted directly to the TDPS by a 
private entity working with the agency, an agency shall file a request for a 
criminal history check on official forms of the department. The requests shall 
be forwarded to the designated representative of the department. The request 
must be completely filled out including the mailing address, other names or 
alias(es), date of birth, race, and sex of the applicant or employee.
(e) An agency must inform each person that applies for employment that the 
agency is required to conduct a criminal history check prior to making an offer 
of employment to the applicant (except in an emergency situation) and that the 
agency will request a criminal history check on each applicant to whom an offer 
of employment is made. 
(f) Convictions which are not reflected on the criminal history received from 
DPS do not trigger the requirements of this section or the Health and Safety 
Code, Chapter 250. 
(g) If the department receives a criminal history from DPS, the department shall 
notify the agency requesting the check of the results. Criminal histories for 
employees of or applicants for employment to a branch office or alternate 
delivery site will be sent to the parent agency. The parent agency shall notify 
the branch office or alternate delivery site of the findings.
(h) The agency shall inform the person how corrections to the criminal history 
may be made by contacting DPS. 
(1) Such corrections may include updating or making accurate the conviction 
information or clarifying that the conviction is actually the conviction of 
another person. 
(2) The department cannot provide assistance in correcting a criminal history. 
(3) It is the responsibility of the applicant for employment or the employee to 
correct errors of fact or identity in the criminal history received from DPS. 
The individual should contact DPS directly and provide whatever positive 
identification information may be required for a verification of the record and 
request a corrected criminal history. 
(i) The special provisions of the Health and Safety Code, Chapter 250, 
concerning nurse aides and the nurse aide registry do not apply to persons hired 
as home health aides. 
(j) An agency must immediately discharge any employee in a position the duties 
of which involve direct contact with a client if the criminal history reveals a 
conviction of a crime listed in the Health and Safety Code, sec.250.006 that 
bars employment. 
(k) It is not necessary for the agency to notify the department of any actions 
taken in response to the results of the criminal history on any individual. 
(l) The criminal history records and the information they contain may not be 
released or otherwise disclosed to any person or entity except on court order or 
with the written consent of the person being investigated.
(1) An agency may not share information with another agency or other providers 
except with the written consent of the person who is the subject of the criminal 
history check. 
(2) It is a criminal offense to release information in violation of the law. 
This agency hereby certifies that the adoption has been reviewed by legal 
counsel and found to be a valid exercise of the agency's legal authority.
Issued in Austin, Texas, on June 30, 1997.
TRD-9708447
Susan K. Steeg
General Counsel
Texas Department of Health
Effective date: July 21, 1997
Proposal publication date: March 14, 1997
For further information, please call: (512) 458-7236

SUBCHAPTER E. Home Health Aides and Medication Aides
25 TAC sec.115.61, sec.115.62
The amendments are adopted under the Health and Safety Code, sec.142.004(c), 
which provides the board with authority to adopt rules to require an applicant 
to provide documentation establishing the applicant has sufficient financial 
resources to provide services during the term of the license, a list of 
management personnel, a description of personnel qualifications, a plan for 
providing continuing training and education for personnel, documentation that 
the applicant is capable of meeting the minimum standards related to quality of 
care, and documentation that the applicant has a plan for the orderly transfer 
of care of clients if the applicant cannot maintain or deliver services under 
the license; under sec.142.008(b) which provides the board with authority to 
adopt rules to establish eligibility requirements for a branch office license; 
under sec.142.0085(b) which provides the board with authority to establish 
eligibility requirements for an alternate delivery site license; under 
sec.142.012 which provides the board with authority to adopt rules to set 
minimum standards relating to qualifications for professional and 
nonprofessional personnel (including volunteers), supervision of professional 
and nonprofessional personnel (including volunteers), the provision and 
coordination of treatment and services (including support and bereavement 
services), the management, ownership, and organizational structure (including 
lines of authority and delegation of responsibility and the composition of an 
interdisciplinary team), clinical and business records, financial ability to 
carry out the functions as proposed by the HCSSA, safety, fire prevention, and 
sanitary standards for residential and inpatient units, and any other aspects of 
home health, hospice, or personal assistance services as necessary to protect 
the public; under sec.142.023 which provides the board with the authority to 
establish minimum requirements for the issuance, denial, renewal, suspension, 
emergency suspension, and revocation of a permit to a home health medication 
aide, curricula to train a home health medication aide, minimum standards for 
the approval of home health medication aide training programs and for rescinding 
approval, the acts and practices that are allowed or prohibited to a permit 
holder, and minimum standards for on-site supervision of a permit holder by a 
registered nurse; and under Health and Safety Code, sec.12.001 which provides 
the board with the authority to adopt rules for the performance of every duty 
imposed by law upon the board, the department and the commissioner of health. 
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 June 30, 1997.
TRD-9708448
Susan K. Steeg
General Counsel
Texas Department of Health
Effective date: July 21, 1997
Proposal publication date: March 14, 1997
For further information, please call: (512) 458-7236

SUBCHAPTER F. Advisory Committees
25 TAC sec.115.71, sec.115.72
The new sections are adopted under the Health and Safety Code, sec.142.004(c), 
which provides the board with authority to adopt rules to require an applicant 
to provide documentation establishing the applicant has sufficient financial 
resources to provide services during the term of the license, a list of 
management personnel, a description of personnel qualifications, a plan for 
providing continuing training and education for personnel, documentation that 
the applicant is capable of meeting the minimum standards related to quality of 
care, and documentation that the applicant has a plan for the orderly transfer 
of care of clients if the applicant cannot maintain or deliver services under 
the license; under sec.142.008(b) which provides the board with authority to 
adopt rules to establish eligibility requirements for a branch office license; 
under sec.142.0085(b) which provides the board with authority to establish 
eligibility requirements for alternate delivery site license; under sec.142.012 
which provides the board with authority to adopt rules to set minimum standards 
relating to qualifications for professional and nonprofessional personnel 
(including volunteers), supervision of professional and nonprofessional 
personnel (including volunteers), the provision and coordination of treatment 
and services (including support and bereavement services), the management, 
ownership, and organizational structure (including lines of authority and 
delegation of responsibility and the composition of an interdisciplinary team), 
clinical and business records, financial ability to carry out the functions as 
proposed by the HCSSA, safety, fire prevention, and sanitary standards for 
residential and inpatient units, and any other aspects of home health, hospice, 
or personal assistance services as necessary to protect the public; under 
sec.142.023 which provides the board with the authority to establish minimum 
requirements for the issuance, denial, renewal, suspension, emergency 
suspension, and revocation of a permit to a home health medication aide, 
curricula to train a home health medication aide, minimum standards for the 
approval of home health medication aide training programs and for rescinding 
approval, the acts and practices that are allowed or prohibited to a permit 
holder, and minimum standards for on-site supervision of a permit holder by a 
registered nurse; and under Health and Safety Code, sec.12.001 which provides 
the board with the authority to adopt rules for the performance of every duty 
imposed by law upon the board, the department and the commissioner of health. 
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 June 30, 1997.
TRD-9708449
Susan K. Steeg
General Counsel
Texas Department of Health
Effective date: July 21, 1997
Proposal publication date: March 14, 1997
For further information, please call: (512) 458-7236

TITLE 28. INSURANCE
PART I. Texas Department of Insurance
CHAPTER 5.Property and Casualty Insurance
SUBCHAPTER E.Texas Catastrophe Property Insurance Association
28 TAC sec.5.4001
The Commissioner of Insurance adopts an amendment to sec.5.4001, the plan of 
operation of the Texas Catastrophe Property Insurance Association (TCPIA), 
concerning building code standards to qualify for coverage through the TCPIA, 
without changes to the proposed text published in the April 11, 1997 issue of 
the Texas Register (22 TexReg 3377). The amendments were considered by the 
Commissioner of Insurance in a public hearing on May 22, 1997, Docket Number 
2289. 
Pursuant to the Catastrophe Property Insurance Pool Act (Article 21.49 of the 
Insurance Code), the TCPIA was created by the Texas Legislature in 1971 and is 
composed of all property insurers authorized to transact property insurance in 
Texas. The purpose of the TCPIA is to provide windstorm and hail insurance 
coverage to residents in designated catastrophe areas who are unable to obtain 
such coverage in the voluntary market. Since its inception, the TCPIA has 
provided this coverage to residents of 14 coastal counties, including Aransas, 
Brazoria, Calhoun, Cameron, Chambers, Galveston, Jefferson, Kenedy, Kleberg, 
Matagorda, Nueces, Refugio, San Patricio and Willacy. The TCPIA also provides 
coverage to certain designated catastrophe areas in Harris County, including (i) 
effective March 1, 1996, the area located east of State Highway 146 and inside 
the city limits of the City of Seabrook and the area located east of State 
Highway 146 and inside the city limits of the City of La Porte (Commissioner's 
Order Number 95-1200, November 14, 1995); (ii) effective June 1, 1996, the City 
of Morgan's Point (Commissioner's Order Number 96-0380, April 5, 1996); and 
(iii) effective April 1, 1997, in areas located east of State Highway 146 and 
inside the city limits of the City of Shoreacres and the City of Pasadena 
(Commissioner's Order Number 97-0225, March 11, 1997). The adopted amendments 
are necessary to delete current subsection (e) of the plan of operation, 
relating to Building Codes, and to re-designate current subsection (f), relating 
to Mobile Homes, as subsection (e). The TCPIA building code standards and 
specifications contained in current subsection (e) are adopted without 
substantive changes under new sec.5.4007 to be applicable in designated 
catastrophe areas seaward of the Intracoastal Canal and in designated 
catastrophe areas inland of the Intracoastal Canal for structures constructed, 
repaired or to which additions are made prior to June 1, 1998. The building code 
standards and specifications contained in current subsection (e)(2) (relating to 
Code for windstorm resisting construction applicable to the area inland of the 
Intracoastal Canal) are adopted under new sec.5.4008(c) to be applicable in 
areas inland and west of a specified boundary line (as specified in newly 
adopted sec.5.4008(b)(2)(A)) for structures constructed, repaired or to which 
additions are made on and after June 1, 1998. The deletion of subsection (e) 
from sec.5.4001 (TCPIA plan of operation) and the adoption of new 
sec.sec.5.4007-5.4008 are the first part in a proposed reorganization of the 
TCPIA plan of operation which will include organizing the plan, which is 
currently contained in a single section (sec.5.4001), into multiple sections to 
make it easier to understand and follow. The public benefit anticipated as a 
result of enforcing the amended section will be a more effective and efficient 
organization of the TCPIA plan of operation. This improved organization will 
make it easier for consumers, builders, and others to find TCPIA building code 
standards and specifications in the plan of operation. 
The deletion of subsection (e) from sec.5.4001 (TCPIA plan of operation) will 
have no effect on the operation of the TCPIA or the building code standards 
required for structures in designated catastrophe areas to qualify for coverage 
through the TCPIA. The TCPIA building code standards and specifications 
contained in current subsection (e) are adopted without substantive changes 
under new sec.5.4007 to be applicable in designated catastrophe areas seaward of 
the Intracoastal Canal and in designated catastrophe areas inland of the 
Intracoastal Canal for structures constructed, repaired or to which additions 
are made prior to June 1, 1998. The building code standards and specifications 
contained in current subsection (e)(2) (relating to Code for windstorm resisting 
construction applicable to the area inland of the Intracoastal Canal) are 
adopted under new sec.5.4008(c) to be applicable in areas inland and west of a 
specified boundary line (as specified in newly adopted sec.5.4008(b)(2)(A)) for 
structures constructed, repaired or to which additions are made on and after 
June 1, 1998. The notice of the adoption of sec.sec.5.4007-5.4008 is published 
elsewhere in this edition of the Texas Register. No comments were received 
regarding adoption of the amendment. 
The amendment is adopted pursuant to the Insurance Code, Articles 21.49 and 
1.03A, and in accordance with the Government Code, sec.sec.2001.004-2001.038. 
Article 21.49, sec.6A specifies building code requirements and approval or 
inspection procedures for windstorm and hail insurance through the TCPIA. 
Article 21.49, sec.5(c) of the Insurance Code provides that the Commissioner of 
Insurance by rule shall adopt the TCPIA plan of operation with the advice of the 
TCPIA board of directors. Section 5(f) of Article 21.49 provides that any 
interested person may petition the Commissioner to modify the plan of operation 
in accordance with the Administrative Procedure Act (Government Code, title 10, 
subtitle A, chapter 2001). Article 21.49, sec.5(c) and (f), by their terms, 
delegate the foregoing authority to the State Board of Insurance. However, under 
Article 1.02 of the Insurance Code, a reference in the Insurance Code or another 
insurance law to the State Board of Insurance means the Commissioner of 
Insurance or the Texas Department of Insurance, as consistent with the 
respective powers and duties of the Commissioner and the Department under 
Article 1.02. 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. 
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 July 1, 1997.
TRD-9708571
Caroline Scott
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: July 21, 1997
Proposal publication date: April 11, 1997
For further information, please call: (512) 463-6327

28 TAC sec.5.4007, sec.5.4008
The Commissioner of Insurance adopts new sections sec.5.4007 and sec.5.4008, to 
the plan of operation of the Texas Catastrophe Property Insurance Association 
(TCPIA), concerning building code standards to qualify for coverage through the 
TCPIA, without changes to the proposed text as published in the April 11, 1997, 
issue of the Texas Register (22 TexReg 3382). The new sections were considered 
by the Commissioner of Insurance in a public hearing on May 22, 1997, Docket 
Number 2290.
Pursuant to the Catastrophe Property Insurance Pool Act (Article 21.49 of the 
Insurance Code), the TCPIA was created by the Texas Legislature in 1971 and is 
composed of all property insurers authorized to transact property insurance in 
Texas. The purpose of the TCPIA is to provide windstorm and hail insurance 
coverage to residents in designated catastrophe areas who are unable to obtain 
such coverage in the voluntary market. Since its inception, the TCPIA has 
provided this coverage to residents of 14 coastal counties, including Aransas, 
Brazoria, Calhoun, Cameron, Chambers, Galveston, Jefferson, Kenedy, Kleberg, 
Matagorda, Nueces, Refugio, San Patricio and Willacy. The TCPIA also provides 
coverage to certain designated catastrophe areas in Harris County, including (i) 
effective March 1, 1996, the area located east of State Highway 146 and inside 
the city limits of the City of Seabrook and the area located east of State 
Highway 146 and inside the city limits of the City of La Porte (Commissioner's 
Order Number 95-1200, November 14, 1995); (ii) effective June 1, 1996, the City 
of Morgan's Point (Commissioner's Order Number 96-0380, April 5, 1996); and 
(iii) effective April 1, 1997, in areas located east of State Highway 146 and 
inside the city limits of the City of Shoreacres and the City of Pasadena 
(Commissioner's Order Number 97-0225, March 11, 1997). The adopted sections are 
necessary to specify applicable building code standards to qualify for coverage 
through the TCPIA, as required by Article 21.49, sec.6A(f) of the Insurance 
Code, for structures located in designated catastrophe areas which were 
constructed, repaired, or to which additions are made prior to June 1, 1998 
(sec.5.4007) and for structures located in designated catastrophe areas which 
were constructed, repaired, or to which additions are made on and after June 1, 
1998 (sec.5.4008). The purpose of the two new sections, which are the result of 
a petition filed by Department staff on behalf of the Building Code Advisory 
Committee on March 27, 1997, is to: (i) adopt without substantive changes the 
TCPIA building code standards and specifications contained in former subsection 
(e) of sec.5.4001 (TCPIA plan of operation) to be applicable in designated 
catastrophe areas seaward of the Intracoastal Canal and in designated 
catastrophe areas inland of the Intracoastal Canal for structures constructed, 
repaired or to which additions are made prior to June 1, 1998 (sec.5.4007); (ii) 
adopt by reference the Windstorm Resistant Construction Guide (sec.5.4007(b)) 
developed by the Texas Department of Insurance (Department) to interpret and 
simplify the Standard Building Code, as amended May 8, 1973; (iii) adopt by 
reference the new TCPIA Building Code for Windstorm Resistant Construction 
(sec.5.4008(a) and (b)) to be applicable in certain designated catastrophe areas 
effective June 1, 1998; and (iv) adopt the use of the building code standards 
and specifications in the Standard Building Code, as amended May 8, 1973, and 
the Windstorm Resistant Construction Guide to be applicable in certain 
designated catastrophe areas on and after June 1, 1998 (sec.5.4008 (c)). 
Sections 5.4007 and 5.4008 are necessary in part because of the adoption of 
amendments to sec.5.4001 of this title (relating to the TCPIA plan of 
operation), which delete former subsection (e) of the plan of operation, 
relating to Building Codes, and notice of which is published elsewhere in this 
edition of the Texas Register. The TCPIA building code standards and 
specifications contained in former subsection (e) of sec.5.4001 (TCPIA plan of 
operation) are adopted without substantive changes under sec.5.4007 to be 
applicable in designated catastrophe areas seaward of the Intracoastal Canal and 
in designated catastrophe areas inland of the Intracoastal Canal for structures 
constructed, repaired or to which additions are made prior to June 1, 1998. The 
building code standards and specifications contained in former subsection (e)(2) 
(relating to Code for windstorm resisting construction applicable to the area 
inland of the Intracoastal Canal) are also adopted under new sec.5.4008(c) to be 
applicable in areas inland and west of a specified boundary line (as specified 
in sec.5.4008(b)(2)(A)) for structures constructed, repaired or to which 
additions are made on and after June 1, 1998. The deletion of former subsection 
(e) from sec.5.4001 (TCPIA plan of operation) and the adoption of new 
sec.sec.5.4007-5.4008 are the first part in a proposed reorganization of the 
TCPIA plan of operation which will include organizing the plan, which is 
currently contained in a single section (sec.5.4001), into multiple sections to 
make it easier to understand and follow. 
Obsolete Code Requirements in Certain Designated Areas. The new TCPIA building 
code requirements adopted in sec.5.4008(a) and (b) are necessary to update the 
current wind load requirements for risks in certain designated catastrophe areas 
to be eligible for coverage through the TCPIA. The current wind load 
requirements applicable to property insured by the TCPIA are the 1973 Edition of 
the Standard Building Code and the Guide for Windstorm Resistant Construction 
which is based on the 1973 Code. It is necessary to update these existing 
requirements to reflect the latest technology based on how wind affects 
buildings. This means applying nationally recognized design standards which are 
referenced in recent editions of all three of the major model building codes. 
Most cities along the Texas coast have adopted the 1991 or 1994 Edition of the 
Standard Building Code which references, in the wind load chapter, ASCE 7, a 
nationally recognized consensus design standard. The fact that 1973 code 
requirements are still being used in 1997 is in itself indicative that those 
standards are obsolete to some degree given the fact that building technology 
and techniques have not stood still for the past 24 years. This obsoleteness is 
further demonstrated by the many modifications made over the past 24 years by 
the Southern Building Code Congress International in the Standard Building Code. 
Some examples of inadequacy in the existing construction requirements include: 
(i) most of the prescriptive methods are nonengineered based; (ii) no 
requirements for continuous anchorage from the roof to the foundation on all of 
the structural wood framing members; (iii) no requirements that doors and 
windows be designed to meet any specified wind pressures; (iv) no requirements 
for protection of openings in the wall; (v) no bracing details for gable 
endwalls; and (vi) some of the methods for wall bracing are not intended for use 
in high wind areas. While municipalities along the coast have adopted more 
recent versions of the model building codes and have even adopted updated 
amendments to those codes, these updated municipal codes do not affect the TCPIA 
building code requirements, which are specified in the TCPIA plan of operation. 
The TCPIA guidelines are separate from and independent of the building code 
requirements enforced by the coastal municipalities. Municipalities adopt one of 
three model building codes, and each city may adopt variances to the model code 
adopted. This can result in both major and minor differences among the building 
codes used by Texas coastal cities. A separate wind resistant construction code 
for the TCPIA is necessary to implement uniform and adequate prescriptive 
standards for wind resistant construction in similarly located catastrophe 
areas. These prescriptive standards are imperative for mitigating property 
losses from a hurricane. The Building Code Advisory Committee (advisory 
committee) specifically recommended development of a separate building code for 
the TCPIA after a review of existing prescriptive building codes that were based 
on the national model codes. The advisory committee's recommendation was based 
on its findings that these other prescriptive building codes are difficult to 
work with and do not provide reasonable and varied design criteria that will 
allow flexibility in the construction of structures. 
Public Benefit. The public benefit resulting from the adoption of new building 
code standards in sec.5.4008(a) and (b) will be the availability of stronger 
building codes for the construction of structures in areas along the coastline 
that are the most susceptible to hurricanes. Implementation of stronger building 
codes will produce structures that are safer and less susceptible to damage from 
windstorms. Structures constructed to building codes that employ the latest 
technology and building specifications and standards aid in the reduction of 
loss of lives and reductions in property losses caused by windstorms and help 
stabilize the insurance market along the Texas coast. Consumers will also have a 
better opportunity to find insurance coverage through the voluntary market for 
residences built to the new TCPIA building code requirements. While adoption of 
the new code will not guarantee increased availability of homeowners insurance, 
insurers are more likely to write new business on risks built to updated, higher 
construction standards than on risks that are built to out-of-date, lesser 
standards. The cost effectiveness study, conducted by Texas A&M University at 
the Department's request, indicates that losses for a category 1, 2, or 3 
hurricane should be reduced by approximately 50% for homes built to the new code 
standards. If homes are built to a better standard, property losses should be 
reduced, thus creating a more attractive environment for insurers to write 
insurance. Adoption and implementation of the new code at least creates an 
opportunity for increased availability of insurance for coastal homeowners while 
failure to adopt it contributes to continued lack of availability. In addition, 
in the event of a major hurricane on the Texas coast which results in 
significant losses, the State could lose hundreds of millions of dollars in 
revenue from premium taxes because of the premium tax credits allowed property 
insurers for assessments to pay property losses. This would result in the losses 
on the Texas coast being paid by all of the citizens of Texas, thus making it 
extremely important to all citizens of Texas that risks covered through the 
TCPIA be built to reasonably strong and effective wind resistant standards. 
Building Code Advisory Committee. Article 21.49, sec.6A(f), Insurance Code, 
requires the Commissioner to appoint a Building Code Advisory Committee to 
advise and make recommendations to the Commissioner on building specifications 
in the TCPIA plan of operation for structures to be eligible for windstorm and 
hail insurance through the TCPIA. Article 21.49, sec.6A(f) requires that the 
advisory committee be composed of one representative of the TCPIA, a 
representative of the residential building industry in the catastrophe area, a 
representative of municipal building officials in the catastrophe area, a 
registered professional engineer who resides in the catastrophe area with 
knowledge of building codes, a representative of the Commissioner, a county 
commissioner or county judge, and other persons as may be deemed appropriate by 
the Commissioner. The Commissioner has also appointed seven consumer 
representatives and two representatives of the building trades to serve on the 
advisory committee, which is currently composed of 15 members. Pursuant to Texas 
Revised Civil Statutes, Article 6252-33, Rule 28 TAC sec.5.4002 was adopted 
(Commissioner's Order Number 94-0183 (February 18, 1994)) to specify the 
advisory committee's purpose and scope, tasks, reporting requirements, and 
composition and duration. 
Petition Filed on Behalf of Advisory Committee. The adoption of new 
sec.sec.5.4007-5.4008 was initiated by a petition filed by Department staff on 
behalf of the Building Code Advisory Committee on March 27, 1997 (Reference 
Number P-0397-09-I). In this petition, the advisory committee recommended (i) 
the adoption of the TCPIA Building Code for Windstorm Resistant Construction to 
be applicable in certain designated catastrophe areas; (ii) the continuation of 
building specifications in former subsection (e)(2) of the TCPIA plan of 
operation (28 TAC sec.5.4001) in the remaining designated catastrophe areas; 
(iii) that the TCPIA building codes be reviewed and updated periodically, and at 
least on an annual basis, by the Building Code Advisory Committee; and (iv) that 
the Commissioner of Insurance, under a separate rulemaking procedure, adopt 
premium credits for windstorm and hail insurance written by the TCPIA or the 
voluntary market for those structures located in the designated catastrophe area 
which are constructed to building specifications and standards that exceed the 
specifications and standards required by the TCPIA for the area in which the 
structure is located. The new sections implement the first three of these 
recommendations. 
Advisory Committee's Review. Pursuant to the advisory committee's charge in 
Board Order Number 59923 (October 1, 1992), the advisory committee undertook the 
review of the current TCPIA building code requirements for the purpose of making 
recommendations for revisions to these requirements. This approach permitted the 
advisory committee to determine if the existing TCPIA building code 
specifications were adequate or if it was appropriate and necessary to develop 
and recommend new building code specifications and standards to encourage better 
construction along the Texas seacoast. Initially, the advisory committee 
approached this task from the perspective that better construction would attract 
insurers to voluntarily write windstorm and hail insurance, thereby depopulating 
the number of risks insured in the TCPIA and reducing the ever increasing 
liability exposure in the TCPIA. Thus, the reduction in TCPIA's liability 
exposure was initially the reason for the development of the new TCPIA Building 
Code. This reason, however, was overshadowed by availability problems in 
seacoast areas as a result of the tremendous losses suffered by the insurance 
industry in the wake of Hurricane Andrew in Florida and the over-concentration 
of exposures along the coast for individual insurers. The advisory committee in 
reviewing the existing TCPIA building code standards and specifications found 
these requirements to be inadequate in the designated catastrophe areas compared 
to the current engineering technology and standard building code construction 
specifications and standards for wind-prone areas. In the petition filed on 
behalf of the advisory committee, the committee stated the opinion that it is 
appropriate to apply the new TCPIA Building Code for Windstorm Resistant 
Construction to the entire designated catastrophe area. However, based on a 
proposal by Department staff, the committee agreed that the more immediate need 
for enhanced building code standards is in areas seaward of the Intracoastal 
Canal and in areas inland of the Intracoastal Canal and within approximately 25 
miles of the Texas coastline.
Initial Development of New TCPIA Building Code. Based on recognition in the 
three major model building codes of engineered design standards (ASCE 7), the 
advisory committee selected the American Society of Civil Engineers (ASCE) 
Engineering Design Standard ASCE 7-93 as the design standard for determining 
wind forces on buildings. The translation of the engineering design standard 
into prescriptive construction methods for use by the building trades required 
the development of formulas and tables through computer modeling. The Department 
sought outside assistance to develop such formulas and tables. On April 15, 
1993, a contract was entered into by the Department and Texas Tech University in 
Lubbock, Texas, to translate the ASCE 7-93 engineering designs into formulas and 
tables as a basis for further development of a new building code that could be 
employed by non-engineer builders and contractors. The final formulas and tables 
were accepted by the Department on November 12, 1993, and, thereafter, were 
accepted by the advisory committee as the base document for the development of 
the new TCPIA Building Code, which is adopted by reference in sec.5.4008(a). 
User-friendly Code. One of the primary charges of the advisory committee to the 
Department was to develop a user-friendly code for easy use by builders and 
inspectors. The Department made every effort to ensure that the new code is 
user-friendly as well as technically correct. In addition to contracting with 
outside sources to translate the nationally recognized engineering design 
standards into a prescriptive building code that is more readily usable and 
easier to understand by non-engineers, the Department held 16 public hearings 
and distributed during the developmental stages numerous draft versions of the 
new code. The purpose of this extensive effort was to seek input from the 
public, including builders and other interested parties, on whether the document 
was developing in the intended user-friendly manner and to determine if 
sufficient construction options were being offered to builders. Many suggestions 
and comments obtained during the four and one-half year developmental process 
were incorporated into the code. To make the code more user-friendly, the 
Department included as many illustrations as possible to assist the builders in 
understanding the requirements of the new code. The new building code is based 
on a sound, recognized engineering design, ASCE 7-93, Minimum Design Loads for 
Buildings and Other Structures, (a national consensus standard, including wind 
load requirements,) which is referenced in the three major model building codes. 
Most cities along the Texas coast have adopted the 1991 or 1994 Edition of the 
Standard Building Code, which references the same wind design standard used to 
develop the new code, and thus, the building standards and methodology currently 
in effect in most coastal municipalities are the same as those in the new 
building code. Therefore, any builder or inspector who is able to understand 
current coastal municipality building codes should have no problem understanding 
and implementing the new code. In addition, to keep the code as technically 
correct and user friendly as possible, sec.5.4008(d) provides that the advisory 
committee review the building code standards periodically, and at least on an 
annual basis, so that any needed changes due to confusion or lack of clarity, as 
well as new testing or recently developed construction methods, may be 
considered for possible recommendation to the Commissioner for incorporation 
into the code.
Public Input. Because the newly adopted TCPIA Building Code will be used by non-
engineers in building the homes and small businesses of coastal residents, the 
advisory committee and the Department believed that it was necessary and in the 
public interest to hold public hearings to solicit comments on the code in its 
developmental stage. The Department conducted 16 public hearings along the Texas 
coast to solicit public comments for improving and modifying the code as it was 
being developed, including January 13, 1994, in Corpus Christi; January 20 and 
February 3, 1994 in Beaumont; February 10, 1994 in La Marque; February 15, 1994 
in Harlingen; February 16, 1994 on South Padre Island; February 16, 1994 in 
Brownsville; February 17, 1994 in Rockport; March 16, 1994 in Victoria; and 
March 17, 1994 in Lake Jackson; August 8, 1995 in Harlingen; August 9, 1995 in 
Port Lavaca; August 10, 1995 in Corpus Christi; August 22, 1995 in Beaumont; 
August 23, 1995 in League City; and August 24, 1995 in Lake Jackson. The 
Department attempted to notify all interested parties, including consumers, 
builders, and city officials of municipalities in the designated catastrophe 
areas, of these hearings through telephone, personal contacts, mailed notices, 
and press releases. The purpose of these hearings was to solicit public comments 
for improving and modifying the code as it was being developed. These hearings 
provided both the non-engineer builders and the public-at-large an opportunity 
to comment, criticize, and suggest changes to the new code in its developmental 
stages. In addition to these public hearings, all of the Building Code Advisory 
Committee's meetings on development of the new code were conducted in an open 
forum where anyone could participate. During the course of these public hearings 
and public meetings, homeowners, insurers, and representatives of the building 
industry were given the opportunity to provide comments and raise issues 
regarding their needs and interests. The advisory committee and Department staff 
received many constructive and useful comments and suggestions which were 
considered by the advisory committee and the Department in finalizing the code. 
As a result of this input, the Department made several changes to the code 
before it was proposed for adoption. Those comments and suggestions that did not 
damage the overall integrity of the specifications and standards of ASCE 7-93 
were incorporated into the new building code. Some of these changes included: 
(i) the limitations on the floor plan dimensions were increased to permit the 
application of the prescriptive portion of the new code to homes with larger 
building dimensions; (ii) the method of determining the required shearwall 
lengths was simplified; (iii) a method for bracing the garage door opening which 
permitted a shorter return width at the corners was included; (iv) the nailing 
pattern on the underlayment and top plates was simplified; (v) the code was 
changed to provide that holddown connectors be required only at the building 
corners instead of at the end of every shearwall segment; (vi) the selection of 
load bearing studs was simplified; (vii) the code was changed to use the concept 
of unblocked diaphragms which eliminated blocking in the roof and floor 
diaphragms; and (viii) the format of the wind load section was completely 
revised to make it more understandable. 
Cost Effectiveness Analysis. To ensure that the more stringent specifications 
and standards in the new TCPIA Building Code to be applicable on and after June 
1, 1998 (as provided in sec.5.4008(a) and (b)) are cost beneficial to persons 
who must comply with the code, the Department entered into a contract with Texas 
A&M University for a cost-effectiveness study. This study was an integral part 
in the overall development of the new TCPIA Building Code. The purpose of the 
study was to determine if the additional cost required to comply with the new 
code is justified by the reduction in losses from windstorms. Based on 
specifications supplied by the Department, the study compared the cost of 
compliance with the existing TCPIA building code to the cost of compliance with 
the new TCPIA Building Code. The Texas A&M analysis was accepted by the 
Department on March 9, 1995. This analysis compared the costs of labor and 
materials under the existing code and under the new code in the construction of 
eight residential risks in Galveston (four inland and four seaward) and eight 
residential risks in Corpus Christi (four inland and four seaward). The study 
results indicated that the additional cost of compliance with the new building 
code ranged from 2% to 5%, depending upon the size and location of the 
structure. Significantly, the cost effectiveness analysis also demonstrated that 
the reduction in losses justified the additional cost. The damageability ratio 
to the structure and the contents indicated a reduction of approximately 50% for 
categories 1, 2, and 3 hurricanes. Using damageability, the variance of interest 
rates, and the life expectancy of the structure in analyzing the new code, a 
break-even cost was determined. The study then analyzed the break-even cost and 
the additional cost of construction to implement the new code to determine the 
actual cost effectiveness for compliance with the new code. The study found that 
in each and every case the estimated cost to implement the new code is less than 
the determined break-even cost, indicating that over a short period of time, the 
new code will be cost effective and that the reduction in losses resulting from 
the implementation of the code will justify the additional cost to implement the 
code. The Commissioner has determined that the 2% to 5% increase in building 
cost under the new code determined in the 1994 Texas A&M study is valid to 
determine the estimated increase in today's building costs under the new code. 
Therefore, based on the cost effectiveness study conducted by Texas A&M, the 
Commissioner has determined that the new TCPIA Building Code is cost effective 
and the reduction in losses from windstorms that will result from the 
implementation of the code justifies the additional cost at the time of 
construction. 
Advisory Committee's Recommendation. The advisory committee's initial 
recommendation (November 30, 1995) was for adoption of the new TCPIA Building 
Code for application in the entire designated catastrophe area (14 first tier 
coastal counties and limited areas of Harris County). This initial 
recommendation included a two-tiered approach for implementation of the new 
TCPIA Building Code. All structures located in the designated catastrophe areas 
would have been subject to the new TCPIA Building Code with additional wind 
resistant requirements included for those structures located seaward of the 
Intracoastal Canal. The advisory committee's final recommendation, however, 
limited the areas in which the new TCPIA Building Code would be required for 
structures to qualify for coverage through the TCPIA. This final recommendation 
of the advisory committee (on March 20, 1997, with 11 members for; 4 members 
absent), which is contained in sec.5.4008, employs a three-tiered approach: (i) 
structures located seaward of the Intracoastal Canal are subject to the new 
TCPIA Building Code with the additional wind resistant requirements 
(sec.5.4008(a)); (ii) structures located inland of the Intracoastal Canal and 
within approximately 25 miles of the Texas coastline and east of the boundary 
line specified in sec.5.4008(b)(2)(A) (referred to as "areas inland of the 
Intracoastal Canal and within approximately 25 miles of the Texas coastline") 
and the designated catastrophe areas in Harris County are subject to the new 
TCPIA Building Code without the additional wind resistant requirements 
(sec.5.4008(b)); and (iii) structures located inland and west of the boundary 
line specified in sec.5.4008(b)(2)(A) will continue to be subject to the 
existing TCPIA building code standards specified in the TCPIA plan of operation 
(sec.5.4008(c)).
This three-tiered approach resulted from a proposal by the Department and the 
advisory committee's agreement that there is a more immediate need for enhanced 
building code specifications and standards for structures located in areas 
seaward of the Intracoastal Canal and in areas inland of the Intracoastal Canal 
and within approximately 25 miles of the Texas coastline. Structures in these 
areas are more susceptible to greater damage as a hurricane makes landfall. 
Therefore, based on the advisory committee's recommendation, the Commissioner 
has determined that the more immediate need for enhanced building code standards 
is in areas seaward of the Intracoastal Canal and in areas inland of the 
Intracoastal Canal and within approximately 25 miles of the Texas coastline, and 
that the existing TCPIA building code specifications (sec.5.4007 and 
sec.5.4008(c)) provide adequate construction standards for structures located in 
the remaining designated catastrophe areas further inland. The Commissioner has 
determined that structures located further inland, although susceptible to 
damage, are adequately constructed under the existing TCPIA building code 
specifications and standards, as long as those specifications and standards are 
properly enforced. The Commissioner has determined that this three-tiered 
approach is beneficial in that it provides: (i) necessary building code 
specifications and standards for structures most susceptible to severe damage 
from hurricanes at the point of landfall; (ii) necessary building code 
specifications and standards for structures susceptible to severe damage from 
hurricanes moving immediately inland, within approximately 25 miles of the Texas 
coastline; (iii) adequate building code specifications and standards for 
structures susceptible to damage from hurricanes moving even further inland; and 
(iv) a reasonable approach to implementing necessary building code 
specifications and standards without producing an overly burdensome impact on 
the building industry and consumers, as well as minimizing the adverse impact to 
economic development of the Texas coast. The advisory committee also recommended 
that the committee periodically review, on at least an annual basis, the 
building code standards specified in the plan of operation and recommend to the 
Commissioner any changes to these standards that the advisory committee deems 
appropriate (sec.5.4008(d)). 
Legislative Recommendation. The Texas House of Representatives Committee on 
Insurance was charged on January 8, 1996, by the Speaker of the House with four 
interim charges. One of these charges was to review proposals to change building 
specifications in the TCPIA plan of operation. The Insurance Committee held 
hearings on the charge, and on December 19, 1996, submitted its report and 
recommendations for consideration by the 75th Legislature. The Insurance 
Committee recommended that the Commissioner immediately adopt stronger and more 
up-to-date building specifications that will insure the greatest possible 
protection of human life and property, in accordance with the recommendations of 
the Building Code Advisory Committee. The adoption of sec.sec.5.4007-5.4008 as 
proposed and published in the April 11, 1997 issue of the Texas Register (22 
TexReg 3382) fulfills the Insurance Committee's recommendation.
sec.5.4007. New sec.5.4007 specifies the applicable building code standards in 
designated catastrophe areas for structures constructed, repaired or to which 
additions are made prior to June 1, 1998, the effective date of the new TCPIA 
Building Code, for such structures to qualify for coverage through the TCPIA. 
Subsection (a) of sec.5.4007 specifies the building code standards for areas 
seaward of the Intracoastal Canal. Subsection (a) contains the same provisions 
and applies to the same designated catastrophe areas as former subsection (e)(1) 
of the TCPIA plan of operation (sec.5.4001). Subsection (b) of sec.5.4007 
specifies the building code standards for areas inland of the Intracoastal 
Canal. Subsection (b) contains the same provisions and applies to the same 
designated catastrophe areas as former subsection (e)(2) of the TCPIA plan of 
operation (sec.5.4001). In addition, subsection (b) provides for the adoption by 
reference of the Windstorm Resistant Construction Guide, which has been 
developed by the Department to interpret and simplify the specifications and 
standards in the Standard Building Code, as amended May 8, 1973. This guide 
translates structural wind load requirements contained in the Standard Building 
Code, 1973 Edition, into a prescriptive building code format that can be used by 
non-engineers in the construction of structures and is user friendly to the 
building trades. The construction guide provides explanations and examples of 
various construction methods, including acceptable conventional carpentry 
methods, that, when employed, will meet the structural wind load requirements of 
the Standard Building Code, 1973 Edition. Subsection (c) of sec.5.4007 specifies 
the designated catastrophe areas in which the Standard Building Code, 1973 
Edition, and the Windstorm Resistant Construction Guide shall apply prior to 
June 1, 1998. Subsection (c) contains the same provisions as former subsection 
(e)(3) of the TCPIA plan of operation (sec.5.4001). Subsection (d) of sec.5.4007 
specifies what constitutes insurable property by the TCPIA in the designated 
catastrophe area based on the date on which structures were constructed, 
repaired, or to which additions were made. Subsection (d) tracks the provisions 
in former subsection (e)(4) of the TCPIA plan of operation (sec.5.4001). 
sec.5.4008. New sec.5.4008 specifies the applicable building code standards and 
specifications in certain designated catastrophe areas for structures 
constructed, repaired or to which additions are made on and after June 1, 1998, 
for such structures to qualify for coverage through the TCPIA. Subsection (a) of 
sec.5.4008 specifies the new building code standards for structures located in 
areas seaward of the Intracoastal Canal. These standards were recommended by the 
Building Code Advisory Committee. The standards are contained in a document 
entitled Building Code for Windstorm Resistant Construction which is adopted by 
reference in subsection (a) of new sec.5.4008. Subsection (b)(1) of new 
sec.5.4008 specifies the new building code standards for areas inland of the 
Intracoastal Canal and within approximately 25 miles of the Texas coastline and 
east of the boundary line specified in subsection (b)(2)(A) and certain areas in 
Harris County. Subsection (b)(1) provides that the Building Code for Windstorm 
Resistant Construction, which is adopted by reference in subsection (a) of new 
sec.5.4008, shall apply to structures located in these areas which are 
constructed, repaired, or to which additions are made on and after June 1, 1998. 
Subsection (b)(2)(A) specifies the boundary line in detail and provides that all 
areas east of this boundary line, except for areas inside the city limits of a 
city or town divided by the boundary line, are subject to the new TCPIA Building 
Code. Cities subject to the new code include: Brownsville, Corpus Christi, 
Portland, Rockport, Aransas Pass, Port Lavaca, Matagorda, Brazoria, Lake 
Jackson, Angleton, Galveston, Anahuac, Nederland, and Port Arthur. Subsection 
(b)(2)(B) specifies that areas located east of State Highway 146 and inside the 
city limits of the cities of Seabrook, La Porte, Shoreacres, Pasadena, and 
Morgan's Point (all in Harris County) are subject to the new TCPIA Building 
Code. Subsection (c) of new sec.5.4008 specifies the building code standards and 
specifications applicable on and after June 1, 1998, to areas inland and west of 
the boundary line specified in subsection (b)(2)(A) of sec.5.4008. Subsection 
(c) provides that the Standard Building Code, as amended May 8, 1973, and the 
Windstorm Resistant Construction Guide, which is adopted by reference in 
sec.5.4007(b), apply to structures located west of the boundary line specified 
in subsection (b)(2)(A) of sec.5.4008 and constructed, repaired, or to which 
additions are made on and after June 1, 1998, and to structures located inside 
the city limits of cities and towns divided by the boundary line specified in 
subsection (b)(2)(A) of sec.5.4008 and constructed, repaired, or to which 
additions are made on and after June 1, 1998. These areas include, but are not 
limited to, the areas inside the city limits of the cities of Harlingen, 
Raymondville, Kingsville, Robstown, Sinton, Refugio, Bay City, Friendswood, 
Alvin and Beaumont. Subsection (d) requires the Building Code Advisory Committee 
to periodically review, on at least an annual basis, the building code standards 
specified in the plan of operation and to recommend to the Commissioner any 
changes to these standards that the committee deems appropriate. This provision 
will ensure a means of integrating into the TCPIA building codes new 
technologies and materials that are developed and introduced periodically. 
Consumers will thereby be provided with the most modern and effective methods of 
construction to minimize the damage to their property in the event of a major 
hurricane. 
For: East/West Associates, Corpus Christi; Citizens for Common Sense Government, 
Corpus Christi; Office of Public Insurance Counsel; State Farm Insurance 
Companies; Farmers Insurance Group; USAA; Texas Association of Insurance Agents; 
Insurance Institute for Property Loss Reduction; American Insurance Association 
(AIA); National Association of Independent Insurers (NAII); Texas Insurance 
Organization (TIO); Association of Fire and Casualty Companies in Texas (AFACT). 
Against: Anderson Homes, Beaumont; East End Lumber Company, Victoria; Gateway 
Homes, Houston; Chuck Sebbert Builder, Inc., Corpus Christi; Marino Home 
Builders, Beaumont; Greater Houston Builders Association, Houston; Homebuilders 
Association of Southeast Texas, Beaumont; Select Homes, Corpus Christi; Voss and 
Voss Engineering and Land Surveying, Corpus Christi; Texas Association of 
Builders; Texas Institute of Building Design; National Association of Home 
Builders; and one legislator and one building materials supplier. On: Texas 
Catastrophe Property Insurance Association. 
Twenty-six commenters submitted written comments and/or presented oral comments 
at the May 22 hearing on the proposal. Twelve commenters expressed support for 
adoption of the code as proposed, including two consumer interest entities, one 
home builder in Corpus Christi, three large residential property insurers, three 
state organizations, and three national organizations. Fourteen commenters 
expressed opposition to all or parts of the code as proposed with nine of these 
commenters requesting that adoption of the code be delayed. Those opposing all 
or parts of the new code included seven home builders, four builders 
associations, one building design association, one building materials supplier, 
and one coastal legislator. 
1. Present code adequacy 
Comment: Seven commenters objected to the adoption of the new code because there 
is no proof that the present code is inadequate. 
Response: The Department disagrees. The current wind load requirements 
applicable to property insured by the TCPIA are the 1973 Edition of the Standard 
Building Code and the Guide for Windstorm Resistant Construction which is based 
on the 1973 Code. It is necessary to update these existing requirements to 
reflect the latest technology based on how wind affects buildings. This means 
applying nationally recognized design standards which are referenced in recent 
editions of all three of the major model building codes. Most cities along the 
Texas coast have adopted the 1991 or 1994 Edition of the Standard Building Code 
which references ASCE 7, a nationally recognized consensus design standard, in 
their wind load chapter. Common sense dictates that the use of the 1973 Standard 
Building Code in 1997 indicates that those standards are obsolete to some degree 
given the fact that building technology and techniques have not stood still for 
the past 24 years. This is further demonstrated by the many modifications made 
over the past 24 years by the Southern Building Code Congress International in 
the Standard Building Code. Some examples of inadequacy in the existing 
construction requirements include: (i) most of the prescriptive methods are 
nonengineered based; (ii) no requirements for continuous anchorage from the roof 
to the foundation on all of the structural wood framing members; (iii) no 
requirements that doors and windows be designed to meet any specified wind 
pressures; (iv) no requirements for protection of openings in the wall; (v) no 
bracing details for gable endwalls; and (vi) some of the methods for wall 
bracing are not intended for use in high wind areas. 
Comment: One of these commenters stated that homes built correctly using present 
requirements have performed well in all hurricanes, including Andrew, and it is 
not possible to build a "hurricane proof" home. 
Response: The Department does not agree that one can say definitively that the 
1973 code requirements will perform well when properly enforced. A major 
hurricane has not hit the Texas coast since the state windstorm inspection 
program began in 1988. However, major losses occurred in 1983 from Hurricane 
Alicia hitting the Texas coast, and the current 1973 Standard Building Code was 
in effect, which raises the issues of the 1973 code adequacy and enforcement. 
The requirements for wind resistant construction in Florida, either before 
Hurricane Andrew or after Hurricane Andrew, cannot be compared to the existing 
building requirements in Texas since they are not exactly the same; 
specifically, the wall bracing requirements for wood frame construction are more 
stringent in Florida. The Department agrees that it is not reasonable to build a 
home that is completely "hurricane proof." However, as indicated in the Texas 
A&M cost-benefit analysis, damage to those homes built to the new code will be 
reduced by approximately 50% for categories 1, 2 and 3 hurricanes. The intent of 
the new code is to achieve a reasonable level of wind resistance and damage 
mitigation to a structure. The State of Florida currently has building codes and 
prescriptive construction standards that contain construction techniques and 
standards similar to those in the new code. Some examples of these similar 
techniques and standards included in the new code are the requirements for 
exterior wall framing, connections for exterior wall framing, exterior 
shearwalls, roof sheathing, bracing of the roof system, and asphalt shingle roof 
covering sections of the new code. Many of these construction techniques were 
developed as a result of storm damage surveys conducted after Hurricane Andrew. 
From the storm damage surveys, observers noted that the door and window openings 
were breached by high winds; roof coverings and roof decking performed poorly 
especially at the corners, eaves, and at gable endwalls where the highest 
pressures occur; many homes experienced failures at gable endwalls due to a lack 
of bracing; asphalt shingles appeared to have the least wind resistance in 
comparison to other roofing materials; and a continuous load path from the roof 
down to the foundation was not being maintained. As a result of these surveys, 
the State of Florida adopted new codes which included new standards and 
prescriptive methods to address the areas of the residential structure which did 
not perform well in a high wind event. These new requirements were adopted by 
the State of Florida in response to the extensive damage inflicted by Hurricane 
Andrew and are included in the new TCPIA building code. Hurricane Andrew is the 
single greatest natural disaster in the history of the United States with 
insured property damage exceeding $16 billion. Losses of this magnitude refute 
the commenter's argument that homes have performed well in major hurricanes like 
Andrew. 
Comment: Three commenters stated that it is not accurate to say that the 
existing building code is 20 years old because there are many updated guidelines 
in the code. According to one of these commenters, local code enforcement people 
have kept their codes updated; for example, in Corpus Christi, they are 
enforcing the 1985 version, amended in 1991. 
Response: The Department disagrees. The existing construction guide is based on 
the 1973 Standard Building Code, and it has not been updated since the TCPIA 
windstorm inspection program began. Interpretations of the existing construction 
guide do not impose any greater requirements on construction standards than 
those contained in the 1973 Standard Building Code. The Department agrees that 
municipalities along the coast have adopted more recent versions of the model 
building codes and have even adopted updated amendments to those codes. However, 
because so many builders are opposing the adoption of updated TCPIA building 
code requirements, the Department questions whether such updated codes are being 
enforced by cities. If cities were enforcing the updated codes, there would be 
little reason for concern from commenters regarding the TCPIA updating its 
building code requirements. In addition, these updated municipal codes do not 
affect the TCPIA building code requirements which are specified in the TCPIA 
plan of operation. The TCPIA guidelines are separate from and independent of the 
building code requirements enforced by the coastal municipalities. The 
Department agrees that most cities have adopted more recent versions of model 
codes which reinforces the Department's position that the existing TCPIA 
building requirements are obsolete and need to be updated, which is the purpose 
of the new code. 
Comment: One commenter stated that there have been great improvements to the 
code since 1973 and that the code today is different from the code used prior to 
1983 when there was a hurricane in Houston that inflicted great losses.
Response: The Department disagrees. While the Standard Building Code Congress 
International has made many modifications and improvements to the Standard 
Building Code since 1973; the TCPIA building code requirements are based on the 
1973 Edition of the Standard Building Code without any modifications or updates 
to the 1973 Standards. 
2. Increased costs 
Nine commenters stated that the new code will greatly increase construction 
costs. 
Comment: Several commenters stated that the new code will increase construction 
costs, which will in turn raise the price of a new home beyond the reach of many 
home buyers. One of these commenters expressed the opinion that this is 
particularly true for first-time buyers and low-to moderate income buyers. 
Another commenter stated that the Department must ensure that the enactment of 
this code will not destroy the affordable housing market along the coast.
Response: The Department agrees that there will be increased construction costs 
as a result of the new code; however, it is the Department's position that the 
reduction in losses justifies the additional costs, as the Texas A&M cost-
benefit analysis demonstrates. The Department does not agree with the 
substantial increases in total home costs or building component costs estimated 
by some commenters. Commenters have only provided speculation and no concrete 
information or analysis, to substantiate the claim that the increase in costs 
will prevent the first time buyer in Texas from being able to purchase a home. 
It is the Department's position that the benefits to all consumers, regardless 
of their economic status, from the new code outweigh any additional costs 
because the amount of losses to the home after a hurricane should be reduced. 
Following a hurricane, low-income homeowners who can least afford the loss will 
hopefully be able to move back into their homes with minimal damage to the 
homes. The Department does not believe that the adoption of the new building 
code will destroy the affordable housing market along the coast based on other 
states' experience with more stringent and costly codes. While there has been no 
formal study in Texas, in other states where building codes have been upgraded, 
the Department has not seen any evidence to indicate the housing market is 
adversely affected to an unreasonable degree. 
Comment: Three commenters provided estimated cost increases for compliance with 
the new code. One commenter provided a detailed analysis of cost increases 
prepared by "a major builder" in the designated catastrophe area. The builder 
documented a $5,128.32 increase on a 2,500 square foot one-story home and a 
$7,548.41 increase on a 4,000 square foot two-story home. The second commenter 
stated that the cost difference between the same 2,200 square foot one-story 
home built inland and one built in Galveston County is $2,900. A 3,000 square 
foot two-story home cost difference would be $4,000. According to this 
commenter, if the 30-mile line is adopted the cost difference of a one-story and 
two-story home will increase an additional $3,000 and $4,600 respectively. The 
third commenter stated that a "major builder in the affected area" estimates 
that the new code will increase the cost of a one-story home by almost $6,000 
and a two-story home by almost $9,000. 
Response: The Department disagrees with all of the commenters' cost estimates. 
The Department disagrees with the first commenter's "major builder's" cost 
analysis. The total costs in the estimate provided by the "major builder" 
includes costs from code interpretations which are not applicable in considering 
the impact of the new code. The estimate also includes the costs of inspection 
fees twice and the cost of certifying the slab which is not a windstorm 
inspection requirement. The second commenter did not provide any documentation 
to support the projected cost increases, and the Department is unable to 
evaluate the commenter's analysis. However, using the first and second 
commenters' cost estimates and assuming approximately $60 per square foot for 
the cost of a home, the estimated additional costs by these two commenters are 
still within the 2% to 5% range estimated in the cost-benefit analysis by Texas 
A&M. The third commenter's estimates are considerably higher than the estimates 
by the other commenters and were not supported by any analysis or documentation 
nor did the commenter indicate the square footage on which the estimates were 
based. Without such documentation, the Department is unable to analyze the cost 
estimates, but believes them to be inaccurate because of the fully documented 
and extensive Texas A&M cost-benefit analysis which projects a 2% to 5% increase 
in construction costs under the new code and demonstrates that the reduction in 
losses justifies the additional costs. 
Comment: Two commenters stated that the number of home buyers will decrease as 
the housing costs increase. For every $1,000 price increase, 18,000 buyers can 
no longer qualify for home ownership (based on additional costs due to code 
changes after Hurricane Andrew in Florida). 
Response: The Department has never received any analytical evidence or 
documentation to substantiate that an increase in the cost of a house will 
decrease the number of qualified homebuyers along the Texas coast. In addition, 
the Department does not have adequate information on the Florida analysis to 
evaluate its validity, but it is the Department's position that the Florida 
analysis is not entirely applicable to Texas because of differences in cost of 
labor and material and differences in construction techniques. 
Comment: One commenter expressed the opinion that there are other less costly 
means to achieve the same level of windstorm protection and that there is no 
need for a third tier. 
Response: The Department is unaware of other less costly means to achieve the 
same level of windstorm protection, and the commenter did not provide any 
information as to what these other means might be. The new code incorporates 
commonly used and tested construction techniques with building materials 
commonly available to the building industry which will achieve the proper level 
of wind resistance. The new code provides in several instances for less costly 
construction methods than earlier draft versions of the code. These methods were 
incorporated as a result of public comment into the code before it was published 
as a proposal. For example, (i) in the earlier drafts, the floor and roof 
systems were based on the use of blocked diaphragms; the new code uses the 
concept of unblocked diaphragms; (ii) the earlier drafts in the shearwall 
section required holddown connectors to be located at each end of the shearwall 
segments; the new code requires holddown connectors to be located only at the 
building corners; and (iii) the nailing pattern on the roof felt and the top 
plates has been simplified in the new code. 
Comment: One commenter estimated that the windborne protection requirements in 
the new code will increase building costs approximately $1,000 per house.
Response: The Department agrees there will be some increased cost for windborne 
protection (opening protection). The commenter did not provide any documentation 
to the $1,000 estimate, and the Department is unable to evaluate the components 
of this estimate. The cost of impact protection systems will be dependent on the 
number and extent of exterior openings on a home protected by the systems and 
the type of impact protective system used; however, the commenter's estimate is 
in line with the estimates specified in the Texas A&M cost-benefit study. The 
Department believes strongly that the windborne protection requirements are 
necessary because opening protections are valuable to reduce losses to contents 
of a structure and are cost effective measures for reducing losses, as is 
evidenced by the Texas A&M cost benefit analysis. 
Comment: Another commenter objected to adoption of the new code stating that to 
date the sole result of Department standards and procedures has been an increase 
in cost due to additional materials and delays resulting in additional 
inspections, and these costs are reflected only in increased housing costs.
Response: The Department disagrees. As stated previously, the Department agrees 
that there will be additional costs associated with implementation of the new 
code as demonstrated in the Texas A&M cost-benefit analysis; however, the 
analysis also demonstrates that any additional costs are justified by the 
reduction in property losses in the event of a hurricane. The Department is 
uncertain as to exactly what the commenter meant regarding delays resulting in 
additional inspections, and the commenter did not provide any specific examples. 
The Department's Windstorm Inspection Program has always specified a minimum of 
four inspections for new structures: foundation, rough framing, final framing, 
and mechanical. In many cases, the windstorm inspector typically performs an 
average of eight inspections on a new risk where the structure does not have 
many deficiencies or problems; however, by statute (Article 21.49 sec.6A of the 
Insurance Code), the Department is required to provide periodic inspections to 
allow building to proceed without halting construction. In addition, the 
Department is required to conduct inspections within 48 hours of the time an 
inspection request is made. The inspectors do not have the authority to stop or 
"red tag" construction. The inspector is only permitted to leave a list of 
deficiencies. The contractor is not required to correct the deficiencies since 
the TCPIA building code standards are not mandatory. The standards are only 
mandatory if a homeowner wants to obtain coverage from the TCPIA because the 
homeowner is unable to obtain wind and hail coverage in the voluntary market. If 
the deficiencies on a risk are not corrected, whether the structure is inspected 
by the Department or a Texas registered professional engineer, the structure 
would not be eligible for coverage through the TCPIA. If a builder constructs a 
home in accordance with the TCPIA building code requirements, the builder should 
not experience any delays in construction nor should the structure need 
additional inspections. 
Comment: One commenter stated that the Department's estimated 5% increase in 
cost does not consider industry marketing costs. According to the commenter, 
there is little doubt that marketing time will increase until the public 
accepts, if they do accept, homes designed with less street appeal and scenic 
views due to the restrictions on window and opening locations and sizes. 
Response: The Department believes the 2% to 5% increase in cost to build to the 
new building code is a correct estimate based on the comprehensive cost analysis 
conducted by Texas A&M University. The fact that the new building code will not 
permit the inclusion of certain construction features the public may want is not 
relevant to the cost-benefit analysis conducted by Texas A&M to determine 
whether the additional costs required to comply with the new code is justified 
by the reduction in property losses from windstorms. The Department does not 
agree that there will be increases in marketing costs simply because of a new 
building code. The cost of the structure may increase but marketing the 
structure should remain relatively unchanged. A new building code which produces 
a stronger and safer structure should be an asset for the purpose of marketing 
that structure. It is the Department's position that most home buyers in the 
coastal area will understand the priority for adequate and necessary 
construction standards over design if they realize that the construction 
standards will not only make their home eligible for windstorm insurance 
coverage through the TCPIA, but will also reduce damage to the home in the event 
of a hurricane. 
Comment: This same commenter also pointed out that, assuming the added 
construction cost is passed along to the buyer at no markup by the builder, the 
added cost to the buyer will be considerably more over the life of the typical 
mortgage loan. Current mortgage rates are around eight and a half percent. 
Therefore, an added construction cost of the $4,400 (5% increase for average 
cost of $89,182 per home) will result in an increase in a monthly 30-year 
mortgage payment of $33.83 a month or $12,179 over the life of the loan. 
Response: The Department agrees that any increase in costs for a home will be 
reflected over the life of a mortgage. It is the Department's position that any 
increase in costs to comply with the new building code is, in a short period of 
time, cost effective and justifiable because of the reductions in property 
losses from windstorms. The buyers of homes built to the new building code will 
be able to purchase windstorm coverage through the TCPIA when they may not be 
able to purchase such coverage through the voluntary market and they should have 
less property damage loss in the event of a hurricane. In addition, reduced 
losses are a major factor in reducing insurance costs. 
Comment: This same commenter objected to adoption of the new code because there 
are hundreds, if not thousands, of existing homes that have alcove, bay windows 
and/or wall openings located such that they cannot be rebuilt in compliance with 
the new code. The commenter expressed concern about who would pay--the TCPIA or 
the homeowners insurance policy--to cover the cost of redesign and 
reconstruction to comply with the new code in the event of fire or storm damage 
to the existing structure. 
Response: Under all existing residential property insurance policies, coverage 
for increases in cost because of a law or ordinance are not covered. Therefore, 
if the cost to repair a risk is increased because of new building code 
requirements (fire, wind, etc.) the property insurance policy does not pay and 
has never paid for that increased cost. This, however, has not prevented cities 
from adopting updated building codes. And, it is not reasonable to use this as a 
reason to not adopt new TCPIA building codes. In addition, this objection is not 
valid for the new TCPIA building code because the TCPIA has agreed to provide 
limited coverage for increased costs due to law and ordinances in the windstorm 
policy and to provide a mechanism for the insured to purchase additional law and 
ordinance coverage. The Department agrees that if an existing home experiences a 
severe loss that the home will have to be redesigned to meet the Department's 
requirements if windstorm coverage is to be obtained through the TCPIA. The 
Department agrees that the location of door and window openings will have to be 
considered to assure compliance with the prescriptive portions of the new code. 
The homeowner also has the option of having a Texas registered engineer design 
the home which may permit window and door openings at an existing location. 
Comment: This same commenter stated that regardless of who is required to pay 
the bill, this is a potential cost not included in the Texas A&M cost-benefit 
analysis because the cost-benefit analysis only addresses the homes built under 
a new code and does not address the true cost of the new code to the existing 
homeowner who is underinsured the instant the new code is adopted. 
Response: The Department agrees that the cost-benefit analysis determined the 
difference in building costs under the existing code and building costs under 
the proposed code as adopted and did not consider any increase in costs due to a 
law and ordinance exclusion under the TCPIA policy. The increase in costs 
because of the law and ordinance exclusion have no bearing on the cost-benefit 
analysis. There is no need to consider this increase in costs because this 
increase is a constant that always applies when there is a change in building 
code standards--whether the change is in municipal codes or in the TCPIA code. 
For example, a residence built prior to the 1973 Standard Building Code 
requirements must pay this same increase in costs to comply with the 1973 
Standard Building Code requirements should the residence suffer a windstorm 
loss. The Department does not agree that the homeowner insured through the TCPIA 
(the only ones who must comply with the TCPIA building code requirements) will 
necessarily be underinsured the instant the new code is adopted because the 
TCPIA has agreed to provide limited coverage for increased costs due to law and 
ordinances in the windstorm policy and, in addition, to provide a mechanism for 
the insured to purchase additional law and ordinance coverage. 
Comment: One commenter objected to the increased cost due to the galvanized nail 
requirement for framing not exposed to weather because this requirement is 
unjustified for areas like Beaumont which are 40 miles inland. According to the 
commenter, based on personal experience, in houses as old as 80 years old the 
non-galvanized nails are just as good as the day the house was built. Another 
commenter objected to the galvanized nail requirement as unnecessary and which, 
according to the commenter, adds $425 in cost to a one-story house and $565 in 
cost to a two-story house. 
Response: The Department disagrees that there are increased costs because of the 
galvanized nail requirement in the new code. The existing standards also require 
that all fasteners be corrosion resistant except for anchor bolts in the inland 
areas. Therefore, the increased cost argument is not valid since the TCPIA 
building specifications and standards have always contained this requirement. 
This requirement is necessary because metal connectors, anchors and all other 
fasteners are exposed directly to weather or subject to salt corrosion in 
coastal areas. Even though some of the fasteners will not be exposed after the 
completion of construction, all fasteners will be exposed during the actual 
construction of the home, which could be several months. The Department and the 
advisory committee, however, intend to review this issue and may recommend 
changes in the galvanized nail requirement. 
3. Code development 
Several commenters objected to the adoption of the new code because they do not 
believe that it was properly developed. 
Comment: Three commenters stated that the Department should have balanced the 
needs of all parties, including the building industry, homeowners, and insurance 
companies. 
Response: It is the Department's position that the needs of all relevant parties 
were considered in the development of the code. The legislature statutorily 
specified the makeup of the Building Code Advisory Committee in Article 21.49 
sec.6A(f) of the Insurance Code. The legislature created a balanced committee 
with diverse representation from the coastal area to study building codes. The 
advisory committee must, at a minimum, be composed of at least one 
representative of the TCPIA; at least one representative of the residential 
building industry in the catastrophe area; a representative of municipal 
building officials in the catastrophe area; a registered professional engineer 
who is a resident in the catastrophe area with knowledge of building codes; a 
representative of the Commissioner; a county commissioner or county judge; and 
other persons as deemed appropriate by the Commissioner. The Commissioner has 
also appointed seven consumer representatives and two representatives of the 
building trades to serve on the advisory committee. All of the Building Code 
Advisory Committee's meetings are conducted in an open forum where anyone may 
participate, including during the code development process. The advisory 
committee selected the use of ASCE 7 as the basis for the new building code 
because it is a national consensus standard for building loads and is referenced 
in the structural loads chapters of the major model building codes. In the 
further development of the code, the Department conducted 16 public hearings 
along the Texas coast to solicit public comments for improving and modifying the 
code as it was being developed. During the course of these hearings from January 
13, 1994, through August 24, 1995, homeowners, insurers, and representatives of 
the building industry provided comments and raised issues regarding their needs 
and interests. These comments and issues were considered by the advisory 
committee and the Department in finalizing the code. As a result of this input, 
the Department made several changes to the code before it was proposed for 
adoption. A few of these changes include: (i) the limitations on the floor plan 
dimensions were increased to permit the application of the prescriptive portion 
of the new code to homes with larger building dimensions; (ii) the method of 
determining the required shearwall lengths was simplified; (iii) a method for 
bracing the garage door opening which permitted a shorter return width at the 
corners was included; (iv) the nailing pattern on the underlayment and top 
plates was simplified; (v) the code was changed to provide that holddown 
connectors be required only at the building corners instead of at the end of 
every shearwall segment; (vi) the selection of load bearing studs was 
simplified; (vii) the code was changed to use the concept of unblocked 
diaphragms which eliminated blocking in the roof and floor diaphragms; and 
(viii) the format of the wind load section was completely revised to make it 
more understandable. In addition to considering the needs and interests of all 
parties identified by the commenters, the Department also considered another 
essential party who has a vested interest in mitigating losses on the Texas 
coast. That party is the citizens of the State of Texas. In the event of a major 
loss on the Texas coast, the State has the exposure of losing hundreds of 
millions of dollars in revenue from premium taxes because of the premium tax 
credits allowed property insurers for assessments to pay property losses. This 
would result in the losses on the Texas coast being paid by all of the citizens 
of Texas. 
Comment: One commenter stated that what is needed is a new code that is 
technically correct yet user friendly for builders and inspectors. Two other 
commenters opposed the new code because it is an incredibly complex technical 
document which is difficult for inspectors, builders, and engineers to work 
with. One of these commenters stated that the new code requires the builder to 
sit down with their engineer and run calculations and figure out wind loads and 
how many panels are needed if the customer requests windows in certain 
locations, thereby making the code too difficult to work with. 
Response: It is the Department's position that the new code is technically 
correct and user friendly for builders and inspectors. One of the primary 
charges of the advisory committee to the Department was to develop a user-
friendly document for the builders and inspectors to use. The code is based on 
the wind provisions of ASCE 7-93, Minimum Design Loads for Buildings and Other 
Structures. ASCE 7 is a national consensus standard, including wind load 
requirements, which is referenced in the three major model building codes. In 
fact, most cities along the Texas coast have adopted the 1991 or 1994 Edition of 
the Standard Building Code which references the same wind design standard used 
to develop the new code. The Department has made every effort to assure that the 
new code is technically correct and user-friendly. On the recommendation of the 
advisory committee, the Department contracted with outside sources to translate 
the nationally recognized engineering design standards into a prescriptive 
building code to be more readily usable and easier to understand by non-
engineers. The Department entered into a contract with Texas Tech University to 
produce the foundation documentation for use in the development of the code. The 
purpose of the 16 public hearings and the numerous drafts developed and 
distributed by the Department during the developmental stages of the code was to 
seek input from the public, including builders and other interested parties, on 
whether the document was developing in the intended user-friendly manner and to 
determine if sufficient construction options were being offered to builders. 
Many suggestions and comments obtained during the four and one-half year 
developmental process were incorporated into the code. On the advisory 
committee's instructions, the Department included as many illustrations as 
possible to assist the builders in understanding the requirements of the new 
code. In addition, to keep the code as technically correct and user friendly as 
possible, the advisory committee recommended, and the Department is adopting, a 
requirement that the committee review the building code standards periodically, 
and at least on an annual basis, so that new testing or recently developed 
construction methods may be considered for possible recommendation to the 
Commissioner for incorporation into the code. The Department believes that the 
new building code is based on a sound and acceptable engineering design from 
which a reasonable prescriptive building code has been developed that can be 
readily used by non-engineer builders and inspectors. As to the technical 
difficulty of the new code, the Department believes that any builder or 
inspector who is able to understand current coastal municipality building codes 
should have no problem understanding and implementing the new code. The building 
standards and methodology currently in effect in most coastal municipalities are 
the same as those in the new building code. The Department does agree, however, 
that any builder who is planning on building a home to qualify for coverage 
through the TCPIA will have to read the code and plan the design of the building 
accordingly. The builder will have to determine the proper amount of wall 
bracing required for each home; however, the builder will not be required to 
perform any calculations or determine the wind loads on the structure. These 
computations have already been performed by Texas Tech University and the 
Department and are included in the new code. The Department agrees that, like 
any other new building code, there will be a learning curve for builders in the 
beginning of implementation of the new code and that the builder will have to be 
involved with planning the design of the home before the structure is built. 
Comment: Two commenters objected to the new code because it does not contain a 
provision for consensus based code changes and maintenance, and another 
commenter opposed the new code because the commenter has a policy of supporting 
only industry standards and codes that are developed in a consensus process. One 
of these commenters stated that it is essential that builders, home designers, 
and other interested parties in the building profession have the opportunity to 
suggest changes to an ever-evolving code. 
Response: While the Department agrees that the code itself does not contain the 
"consensus process" for changes and amendments to the code, the code is adopted 
under the Administrative Procedure Act (Government Code, sec.sec.2001.004-
2001.038) which provides for public initiation of changes to the code and public 
input on any proposed changes to the code. Any interested party may initiate 
consideration of changes to the code at any time. These proposals will be 
reviewed by the advisory committee and the Department for possible 
recommendation to the Commissioner for adoption. The Building Code Advisory 
Committee and the Department agree that the code will have to be updated to 
reflect on-going advances in materials and systems. Any such proposed updates 
and changes will be published for public comment, and a public hearing will be 
held in which anyone may provide input, both pro and con, to the Commissioner. 
The three national building codes are developed in a consensus process because 
it is important to limit the number of national building codes and that the 
methods employed by national model code organizations be the more acceptable 
"consensus process" developed national standards. The TCPIA building code, 
unlike the national building codes, is not used all over the U.S. in many 
different construction environments, but rather its purpose is to mitigate wind 
storm losses on the Texas coast. The advisory committee did not recommend 
adoption of one of the "consensus process" developed national building codes for 
use as the TCPIA code because at the time the committee began developing a new 
code in 1992, the national model codes had not produced a comprehensive user-
friendly, nonengineered prescriptive code for builders. In the absence of such a 
"national" user-friendly prescriptive code, the advisory committee recommended, 
and the Department adopted, a code specifically for the TCPIA that is more 
flexible in design allowances and more user-friendly than the national model 
codes. 
Comment: Two commenters opposed the adoption of the new code even though there 
may be provisions to periodically update and change the code because, according 
to one of the commenters, it is far better and easier to start off with a good, 
rational and relevant set of rules than to try to change later on. The other 
commenter noted that the potential costs of training, retraining, rewriting, and 
confusion are not worth it. 
Response: The Department disagrees. The Department believes that the code is a 
good, rational and relevant set of rules. The code is based on nationally 
recognized design standards; it incorporates updated wind-resistant technology 
methods and standards; it is based on actual storm damage investigations 
conducted after Hurricanes Hugo and Andrew; it contains similar construction 
techniques to those being used in the state of Florida; it was developed at the 
direction of and is recommended by an advisory committee representing many 
relevant constituencies in the designated catastrophe area, including the 
residential building industry, municipal building officials, building trades 
industry, and homeowners. It is the Department's position that to wait on 
implementation of a new building code simply because there may be better methods 
and standards in the future does nothing more than impede the progress of 
mitigating near future hurricane losses and delays the opportunity for consumers 
to have better constructed homes in hurricane prone areas along the Texas coast. 
Thus, the Department believes that any costs resulting from any necessary 
training, retraining, rewriting and confusion are justified. If the commenters 
are suggesting that nothing be done until a code is developed that will not need 
changing for many years, a new building code will never be adopted. Building 
codes by their very nature are evolutionary and must be changed periodically--
sometimes more often than at other times--as technology advances and new 
construction methods and new building products are introduced into the housing 
markets. It is unreasonable to deny consumers the opportunity to have better 
built homes simply because there may be some changes in construction methods and 
technology on the horizon. 
Comment: Three commenters objected to the adoption of another building code when 
there are national building codes and municipal building codes already in 
existence. One of these commenters, who supports adoption of only national 
building codes statewide, stated that it is a problem and confusing for builders 
and engineers who have to design and construct residential structures to several 
different building codes throughout the United States. Another commenter stated 
that there must be a resolution between the different codes that exist between 
municipalities on the coast and the TCPIA code. According to the commenter, 
uniformity and consistency are essential in providing affordability in the 
housing market. One of the commenters requested consideration of a state 
standard building code. 
Response: The Department agrees that greater consistency between coastal 
municipality codes and the new building code is a worthwhile goal; however, it 
is the Department's position that it is not worthwhile to achieve consistency at 
the expense of a less effective TCPIA building code. Before consistency can be 
attained between the TCPIA building code and municipal building codes, it is 
necessary to attain consistency between the various city building codes. 
Municipalities adopt one of three model building codes, and each city may adopt 
variances to the model code adopted. This can result in both major and minor 
differences among the building codes used by Texas coastal cities. A separate 
wind resistant construction code for the TCPIA is necessary to implement uniform 
and adequate prescriptive standards for wind resistant construction in similarly 
located catastrophe areas. These prescriptive standards are imperative for 
mitigating property losses from a hurricane. The Department supports development 
of a single building code at the state and municipal levels in the coastal area 
so long as the code is effective and reasonable for wind resistant construction 
and for mitigating property losses. The Department will not under any condition 
support a single code that contains ineffective wind resistant construction 
standards just for the sake of implementing a single code for the ease and 
convenience of builders. The Department believes that there is a need for the 
TCPIA code in addition to the national building codes. It is the Department's 
position that there are currently no national prescriptive building codes that 
are as user-friendly for builders as the new TCPIA building code. The Building 
Code Advisory Committee specifically recommended development of a separate 
building code for the TCPIA after a review of existing prescriptive building 
codes that were based on the national model codes. The advisory committee's 
recommendation was based on its findings that these other prescriptive building 
codes are difficult to work with and do not provide reasonable and varied design 
criteria that will allow flexibility in the construction of structures. As to 
the consideration of the mandated state code requested by one of the commenters, 
the Department does not have the statutory authority to adopt or implement a 
statewide building codes. The Department's statutory authority is to adopt a 
building code for structures located in the designated catastrophe area to be 
eligible for wind and hail coverage through the TCPIA. 
Comment: Two commenters stated that the Department should have considered the 
adoption of several other documents in existence today that adequately address 
the requirements for residential construction in high wind areas--including the 
1995 Standard Building Code High Wind Edition, Wood Frame Construction Manual 
for one and two-family dwellings. This document, according to the commenters, is 
based on the requirements of the 1994 Standard Building Code with 1995 
amendments and was included recently in the working draft of the International 
Building Code. 
Response: The Department agrees that there are other credible prescriptive 
hurricane resistant construction manuals which have been developed in recent 
years, including the one mentioned by the commenters; however, at the 
recommendation of the advisory committee the Department developed and adopted a 
building code based on the ASCE 7 design standard. The Wood Frame Construction 
Manual (WFCM) referenced by the commenters did not exist in 1992 at the time the 
advisory committee began its development of a recommended code. At that time, 
there was only one prescriptive hurricane resistant construction manual, the 
Standard for Hurricane Resistant Construction, SSTD 10-90, which was published 
by the Standard Building Code Congress International. This document was also 
known as the "Deemed-to-Comply" document. The advisory committee reviewed this 
document and determined that it would be very difficult for the builders and 
inspectors to use because of its highly technical nature. In addition, not all 
of the cities along the Texas coast have adopted the Standard Building Code. In 
fact, all three model national building codes have been adopted by 
municipalities in the first tier counties. The advisory committee in the course 
of its work on the new code examined the model codes as well as other codes used 
in other coastal states such as Florida and North Carolina. The Department 
developed and adopted, at the advisory committee's recommendation, a 
prescriptive construction guide based on a nationally recognized standard which 
would be user-friendly to the builders as well as the inspectors. Because all 
three of the major model building codes have been adopted by the communities 
along the Texas coast, the advisory committee selected ASCE 7 as the design 
standard for determination of wind loads--a nationally recognized consensus 
standard referenced in all three of the major model building codes. The 
prescriptive document referenced by the commenters is not adequate for purposes 
of the TCPIA and could not be adopted without changes. While the document does 
provide prescriptive standards for wood frame construction in high wind areas, 
it does not address masonry construction, roof coverings, or exterior coverings. 
Before the WFCM could be adopted for use as the TCPIA building code, it would 
have to be supplemented with additional standards or prescriptive requirements 
to cover all of the necessary structural components of the home that are 
required to be built to TCPIA building code standards to be eligible for 
coverage through the TCPIA.
Comment: Another commenter opposed adoption of the new code because a lot of 
conventional building techniques in past building codes do work, and the 
commenter is involved in testing and research to support this position. 
Response: The Department and the advisory committee have agreed to review all 
testing and research of construction techniques, including conventional building 
techniques for possible recommendation for inclusion in the new code. The 
Department is unable to fully respond since the commenter did not provide 
specific examples of conventional building techniques which may perform well in 
a high wind area. The Department agrees that there may be some conventional 
building techniques which perform well in high wind areas; however, to date, the 
Department has not received any test information to support this argument and 
the commenter did not provide or refer the Department to any supporting test or 
research data. The Department agrees that the model building codes do include 
some conventional building techniques; however, the conventional building 
techniques specified in the wood chapter of the model building codes are 
intended for light frame construction in general use for structures having light 
loads, i.e., for use in noncoastal areas. The prescriptive construction 
requirements contained in the newly adopted code are based upon nationally 
recognized standards for wood, concrete, and masonry construction and were 
determined using wind loads specified in a nationally recognized standard for 
building loads. Other prescriptive documents for construction in high wind 
areas, which contain similar construction techniques outlined in the new code, 
are currently being used in the State of Florida. 
Comment: Three commenters opposed the adoption of the code, arguing that the 
issue is whether field tested construction methods are sound or if theoretical, 
textbook engineering solutions are necessary and cost effective. According to 
one commenter, the code should not be adopted because it uses engineering 
principles and there are no results from testing real houses that have been 
built to these principles. This same commenter stated that the problem with 
basing the new code standards on engineering principles is that one is dealing 
with the engineering of several different individual units of a house, for 
example, the individual shear wall panels, and houses do not necessarily perform 
that way. According to the commenter, the finished materials add strength that 
cannot be engineered, and the strength is real and it does transfer loads, but 
there are no engineering principles to take that into account. Another commenter 
objected to the adoption of the code because it is based on a strictly 
engineering method. 
Response: The Department disagrees. The Department finds the building industry's 
questioning of the use of engineering principles to develop a building code to 
be disingenuous. All three of the model building codes are based to a great 
degree on engineering principles and those codes are in effect throughout the 
United States. It is the Department's position that to base the standards of 
building for wind resistance on the trial and error of individual builders while 
ignoring modern technology and engineering principles is totally irresponsible 
as well as deceptive to the citizens of Texas. The new code is based on commonly 
used and tested construction methods and not solely on theory. The new code 
includes details which are recommended by those individuals who performed storm 
damage investigations after Hurricanes Hugo and Andrew. These investigations 
identified areas of the structure such as building corners, roof edges and 
eaves, exterior doors and windows, and garage doors which did not perform well 
during the high winds of these major hurricanes. The hurricane damage 
investigations also determined that the major reasons for structural failure 
were improper anchorage of framing members to resist uplift wind loads and the 
lack of straps to transfer the loads. To remedy these identified structural 
failures, the new code addresses the importance of a continuous load path from 
the roof to the foundation. The State of Florida currently has building codes 
and prescriptive construction standards that contain construction techniques and 
standards similar to those in the new code. Some examples of these techniques 
and standards are included in the new code requirements for exterior wall 
framing, connections for exterior wall framing, exterior shearwall, roof 
sheathing, bracing of the roof system, and asphalt shingle roof covering 
sections of the new code. Most cities along the Texas coast have adopted the 
1991 or 1994 Edition of the Standard Building Code which references various 
editions of the ASCE 7 design standard for wind load requirements and is the 
same design standard used to develop the new code. As indicated in the Texas A&M 
cost-benefit analysis, damage to those homes built to the new code will be 
reduced by approximately 50% for categories 1, 2 and 3 hurricanes. The 
Department and the advisory committee welcome any recognized test data on 
materials and methods as it is developed and intend to regularly revise the code 
to incorporate appropriate new construction materials and methods, including any 
results from the testing of "real houses". 
4. Benefits 
Four commenters questioned the benefits of the new code. 
Comment: One commenter questioned the safety benefits of the new code in 
relation to the additional costs. 
Response: The question of safety benefits of the new code in relation to the 
additional cost is not directly relevant since the purpose of a new building 
code for the TCPIA is to reduce property damage losses to real or personal 
property insured by the TCPIA and not to address life safety issues. However, in 
the event that a resident remains in the home during the passage of a hurricane, 
a more structurally sound home will afford better protection to the occupants. 
Under the new code, homes will be more structurally sound because the 
prescriptive requirements contained in the code are based on nationally 
recognized design standards for wind, wood, concrete, and masonry construction. 
Utilizing these design standards, the prescriptive requirements are intended to 
mitigate losses and reduce damage to structures during a high wind event. As 
indicated in the Texas A&M cost-benefit analysis, damage to those homes built to 
the new code will be reduced by approximately 50% for categories 1, 2 and 3 
hurricanes. Mitigating structural damage to the home will mean that the home 
will be more likely to withstand damage in a high wind event, and there will be 
a greater chance to have a home to return to after a hurricane.
Comment: One commenter stated that the new code will not depopulate the TCPIA. 
The commenter cited figures for rate of growth of TCPIA exposure for a five-year 
period (347% increase) compared to rate of growth of single-family residences in 
Corpus Christi (under 4%), noted that the city accounts for over 90% of the 
total residential growth for Nueces County, noted that neighboring counties of 
Kleberg and San Patricio have experienced comparable growth in TCPIA exposure, 
and that as a result, one can only conclude that there is no correlation between 
TCPIA exposure and growth rates in Nueces County. The commenter explained that 
despite the creation of construction standards and implementation of inspection 
procedures by the Department in 1989, the most rapid period of growth in the 
TCPIA occurred after 1990, and that, therefore, neither code revisions nor 
enforcement procedures will lead to depopulation of the TCPIA. 
Response: While it is true that the advisory committee initiated development of 
a new code from the perspective that better construction would attract insurers 
to voluntarily write windstorm and hail insurance and thereby depopulate the 
number of risks insured in the TCPIA and reduce the ever increasing liability 
exposure in the TCPIA, in the course of development of the code, that 
perspective became overshadowed by availability problems in the coastal areas. 
The availability problems are a result of the tremendous losses suffered by the 
insurance industry in the wake of Hurricane Andrew in Florida and the over-
concentration of exposures along the coast for individual insurers. Thus, the 
growth rate of the exposure in the TCPIA is for two reasons: (i) insurers 
restricting voluntary writings in the first tier of counties because of 
unacceptable concentration of exposures, thus forcing consumers to seek 
insurance through the TCPIA; and (ii) in certain counties, Nueces County in 
particular, extreme slab damage losses causing insurers to withdraw from the 
market, thus forcing consumers to seek windstorm insurance through the TCPIA. It 
is the Department's position that while the new code will not necessarily lead 
to depopulation of the TCPIA, it may provide incentive for insurers to re-enter 
the coastal markets and thereby, alleviate the residential property insurance 
availability problem. 
Comment: This same commenter argued that adoption of the new code is not 
worthwhile because not that many more residences will be made more wind 
resistant. The commenter presented a lengthy statistical analysis to argue that 
it will take 84 years to reach the point where 50% of the residences in Nueces 
County are in compliance with any new code, and that along with the fact that so 
many homes have been grandfathered from the building code requirements because 
they were built prior to 1971 means that there are many residences in Nueces 
County that will not be subject to the new code. According to the commenter, 
neither the standards created in 1971 nor the changes in the new code will make 
a large number of residences more wind resistant nor more attractive to 
insurers. 
Response: The Department disagrees with the commenter's reasoning for not 
implementing the new code. On the contrary, the commenter's estimation of the 
time required for homes to meet the latest standards reinforces the need for 
immediate adoption of a building code based on the latest wind load standards. 
Building codes that incorporate the latest wind load technology are not short 
term solutions for reducing damageability caused by hurricanes, but are 
essential to any long range solution to this problem. The issue of existing 
housing stocks and how best to upgrade that stock to more current building 
standards is a totally separate issue from adoption of new building codes for 
new construction. These upgrade solutions, which could include retrofitting 
existing houses to different standards or specifications than those for new 
homes, were not part of the Department's consideration about whether to adopt 
new building code standards for new construction. Furthermore, it is the 
Department's position that the size of existing housing stock is not a good 
reason to prevent owners of newly constructed homes from benefiting from the 
latest in wind load technology so that their homes may be better able to 
withstand hurricane force winds.
Comment: One commenter questioned the windborne protection requirements in the 
new code. This commenter stated that the new code is more restrictive in 
windborne debris protection requirements than the national building codes. 
According to this commenter, there is no major building code that requires 
windborne debris protection like that in the new code, and this requirement goes 
beyond anything that is required in other codes, including the recently approved 
Standard Building Code Standard SSTD 12-97. According to the commenter, the 
Standard Building Code standard for windborne debris, which represents the most 
recent and best technology, requires the large missile to impact the test 
specimen at 40 feet per second (in 100-110 mile per hour areas) while the new 
code requires the large missile to impact the test specimen at 50-52 feet per 
second. The commenter recommended the adoption of the Standard Building Code's 
impact standard in lieu of the impact standard in the new code. 
Response: The Department disagrees that there are no major building codes that 
require protection against windborne debris. Currently, three counties in 
Florida have adopted an impact standard for protection against windborne debris. 
The impact standard in the new code was developed using information from impact 
protection requirements specified in the South Florida Building Code (which is 
used by the Florida counties of Dade and Broward) and the windborne debris 
standard SSTD 12-94 of the Southern Building Code Congress International, which 
has been adopted by Palm Beach County, Florida. This standard is adopted because 
it parallels other recognized standards. The requirement that the large missile 
impact the test specimen at 50 feet per second is consistent with similar 
requirements contained in the South Florida Building Code windborne debris 
requirements and SSTD 12-94 of the Southern Building Code Congress 
International. The Department is aware that a new standard for windborne debris 
protection has been adopted by the Southern Building Code Congress International 
for inclusion in the Standard Building Code. It is the Department's 
understanding that this revised standard was published on April 1, 1997. The 
Department and the advisory committee have not had an opportunity to consider 
this revised standard since the last changes to the new code were reviewed and 
approved for recommendation by the advisory committee in March of this year. The 
Department and the advisory committee intend to review any new recognized 
techniques, methods, and standards that have been developed and tested for the 
purposes of wind resistance of a structure. This new SSTD 12-97 standard will be 
reviewed and if the standard is acceptable, it will be recommended for inclusion 
in the TCPIA building code. 
Comment: One commenter opposed adoption of the new code because there has not 
been one new or used home blown down by a hurricane in Beaumont in the last 50 
years The commenter requested that the Commissioner consider letting Beaumont be 
governed by city codes and not state windstorm codes.
Response: The City of Beaumont has the option of requesting removal from the 
designated catastrophe area, thereby allowing the City of Beaumont code to be 
used in lieu of the TCPIA code and thereby removing Beaumont homeowners from 
eligibility for coverage through the TCPIA. This could be done by petitioning 
the Commissioner pursuant to Article 21.49 of the Insurance Code. The City of 
Beaumont, however, has adopted a building code (1994 Standard Building Code) 
that contains the same wind load standards (ASCE 7) on which the new code is 
based. If residential construction in the City of Beaumont is not exempt from 
the wind load provisions in the model building code adopted by the City, then 
the construction requirements in the new code should be very similar to those in 
Beaumont's code, and there would be no reason to remove Beaumont from state 
windstorm code requirements and inspection. 
5. Cost-benefit analysis 
Two commenters stated that the Texas A&M cost-benefit analysis is flawed.
Comment: One commenter argued that a "valid cost benefit analysis should be 
performed, not the flawed attempt" done by Texas A&M. There should be, according 
to this commenter, positive proof and test data supporting the code change and 
experts in their respective fields should be consulted. 
Response: The Department believes that the cost-benefit analysis by Texas A&M is 
valid and that it meets the objective of determining whether the additional cost 
required to comply with the new code is justified by the reduction in losses 
from wind storms. To meet this objective, the major tasks performed in the study 
included a historical analysis of extreme wind characteristics along the Texas 
coast, a selection of structures to be included in the cost-benefit analysis, an 
analysis of the existing and the new code, an estimation of the reduction in 
damage to the buildings and contents that would result from the implementation 
of the new code, and the performance of a cost-benefit analysis. The specific 
steps in the study were: 
(i) Define structures to be used in the analysis; 
(ii) Define physical sites for the structures; 
(iii) Obtain hurricane hazard risk models for the sites; 
(iv) Compute probability of occurrence of hurricanes of various intensities;
(v) Assign resistances to the selected structures to reflect the current code 
and the new code; 
(vi) Estimate structural damage for hurricane category; 
(vii) Estimate content damage for each hurricane category; 
(viii) Assume interest rates and useful life values for the structure;
(ix) Compute the break-even costs for code cost-effectiveness; 
(x) Summarize estimated cost to implement codes; and 
(xi) Evaluate the cost-effectiveness of the new code. 
The principles used to define the characteristics of the wind hazard were 
developed on the basis of state-of-the-art meteorology and wind engineering. 
Whenever possible, engineering calculations were used for the assignment of 
resistances to the building components. The theory of Structural Reliability and 
Risks Analysis was used for the estimation of damage to the structure and its 
contents. In fact, the specific damageability model used in this study has 
recently been validated using loss data reported for thousands of buildings in 
Hurricane Andrew in Miami (1992) and Hurricane Hugo in South Carolina (1989). 
The cost analysis was performed using standard procedures and data published in 
the open literature. The guiding principles behind the cost analysis were (i) 
only items affected by the new code were considered, (ii) local labor rates and 
material costs were included wherever possible, and (iii) the opinions of local 
building experts on specific construction practices were included. The cost-
benefit analysis followed the standard procedures defined in the subdiscipline 
of Engineering Economic Analysis; namely, if the Net Present Value is positive, 
the investment is worthwhile. The useful life of the structure and the interest 
rates were varied in the sensitivity analysis. To the knowledge of the 
Department, to-date, this study is the most comprehensive cost-benefit study 
performed on a wind-resistant code. Previous studies were limited to estimating 
the costs to implement a code; in those studies, the reduction in loss due to 
the implementation of the code was not considered. This study shows that the 
reduction in damage resulting from the implementation of the code is justified 
by the additional costs to implement the code. 
Comment: Another commenter was highly critical of the A&M cost-benefit analysis 
for the following reasons: 
Such a study should take into account many factors besides any cost savings a 
new code might produce in terms of reduced hurricane damage relative to initial 
up-front increase in building cost. 
There is nothing in the Texas A&M equations to take into account the impact in 
human terms to the thousands of people who will give up hope of ever owning a 
home of their own and thus give up on the American Dream for themselves and then 
perhaps, to choose to give up school, go on welfare or resort to crime. 
Study should have included other factors like true benefit to consumers and 
detrimental impact to coastal economy. 
Any true cost-benefit study should include these and other relevant factors as 
well as incorporate a scientific approach based on sound theory that is 
supported by valid and reliable data. The A&M study is suspect in both regards. 
The commenter does not question the A&M researchers' credentials but believes 
their theoretical approach is overly narrow and excludes many relevant variables 
or factors (like those listed). 
According to the commenter, to argue that such factors as true benefits to 
consumers and detrimental impact to the coastal economy were excluded from their 
theory because (1) they are beyond the scope of the study as charged, or (2) 
were too difficult to quantify begs the basic research question that should be 
addressed before the code is adopted--are the benefits to the people of Texas 
shown to outweigh any increase in costs they might incur. 
Response: The purpose of the cost-benefit analysis conducted by Texas A&M 
University at the request of the Department was to determine if the additional 
cost required to comply with the new code is justified by the reduction in 
losses from wind storms. The analysis addressed only those factors that are 
significant to this determination. The analysis did not address factors that are 
impossible to quantify or irrelevant to the study focus (i.e., loss of hope of 
ever owning a home, "true benefit to consumers," detrimental impact to coastal 
economy, and unspecified "other factors"). The Department does not agree that 
this response begs the basic research question that should be addressed before 
the code is adopted because it is impossible to include factors in this type of 
analysis that cannot be quantified and unwise to include irrelevant factors. It 
is disingenuous to argue that irrelevant and unquantifiable factors should be 
included in such an analysis. The focus of the A&M cost-benefit analysis, i.e., 
whether additional costs required to comply with the code is justified by the 
reduction in losses from windstorms, is a relevant factor for the Commissioner 
to consider in determining whether to adopt the code. The Department agrees that 
there are more factors to evaluating the benefits of the code; however an 
analysis of all the possible factors was not the point of the cost-benefit 
analysis. In fact, there are many more factors to evaluating the benefits of the 
code to the people of Texas than those identified by the commenter, some of 
which appear to not even be contemplated by the commenter. For example, citizens 
of the entire state of Texas have an interest in homes on the coast being built 
to up-to-date wind load requirements because in the event of a major loss on the 
Texas coast, the State has the exposure of losing hundreds of millions of 
dollars in revenue from premium taxes because of the premium tax credits allowed 
insurers. This would cause the losses on the Texas coast to be paid by all of 
the citizens of Texas. For these reasons, the Department believes that the 
commenter's criticism is inaccurate, misleading, and shows a lack of 
understanding of the purpose of a cost-benefit study and of the purpose and need 
for such a limited scope analysis. 
Comment: This same commenter also criticized the cost estimates used in the 
study of windows. The study used a cost of $25/square foot for a conventional 
window with aluminum frame. According to the commenter, a more accurate or true 
cost is $3.82/square foot for single pane and $7.17/square foot for double pane 
windows (commenter cites cost from Southerlands catalogue 5/4/97). 
Response: The costs for the windows were obtained from a Florida-based company, 
Extech (Exterior Technologies, Inc.). The utilization of data for this study 
from a Florida-based company resulted from the fact that Texas-based companies 
were unable to provide any estimates of the cost to upgrade a window to the 
standards in the new code. The estimates in the difference between current costs 
and costs to implement the window requirements in the new code ranged from $4-
$6/square foot. Only the difference of $4-$6/square foot is pertinent to the 
outcome of the cost-benefit analysis, not the differences in the initial or 
final costs as cited by the commenter which are irrelevant. Comparison of final 
costs of windows like those referenced by the commenter indicates a lack of 
understanding of the methodology used in the cost-benefit analysis. 
Comment: This same commenter stated that a more serious example of excessive 
variance that calls to question the A&M Study's validity can be found on pages 
6, 7, and 24 of the study. According to the commenter, anyone can see the 
estimates from the respondents given in Table 6 vary greatly for nearly every 
subsystem in the Table. According to the commenter, the authors recognized this 
to some extent by using the National Construction Estimator for estimates for 
some subsystems. The commenter stated that if there were more than four values 
the high and low values were deleted before calculating the mean. If there were 
four or fewer values, initially all values were used in the calculation of the 
mean. The commenter provided a table which gives the commenters' analysis of the 
subsystems, estimates and means in which the commenter calculated the standard 
deviations and 95% upper and lower confidence limits for each subsystem (based 
on R.E. Heckle, Tests of Significance. London: Sage Publications, 1982). The 
upper and lower confidence limits give the range within which one can have 95% 
confidence that the true parameter lies, given the number of observations or 
samples and the variance across these observations. For example, although 
average or mean estimate of the true change in labor time to attach the roof 
decking for the new versus old code is 39.5 (in the A&M study), according to the 
commenter, the true value could be anywhere between 82.27 to -3.27! Clearly the 
reliability of these data, according to the commenter, are suspect. According to 
the commenter, this then calls to question the validity of any conclusions using 
these data. The commenter stated that at the very least a sensitivity analysis 
should have been reported showing how the overall study results would change if 
the true value were at the upper or lower confidence limit. 
Response: The Department disagrees. The Department believes that the data 
reported in Table 6 of the cost-benefit analysis are reliable for at least two 
reasons: (i) the data are based on the opinions of professionals with many years 
of experience, and (ii) the variation in the estimate of the mean times (which 
can be measured by the ratio of the standard deviation of the mean divided by 
the mean) are in the same order of magnitude as, for example, the variation in 
the strength of concrete. This variability in the mean time is expected and is 
acceptable for this analysis. The Department disagrees with the commenter's 
analysis and criticism for the following reasons. The commenter is exaggerating 
the variance in the data. This is evident from the statement that "anyone can 
see the estimates from the respondents given in Table 6 vary greatly for nearly 
every subsystem in the table." The commenter's calculation of the 95% upper and 
lower 95% confidence limits is 82.27 and -3.27, respectively. These values were 
obtained by using the two-tailed t distribution for 3 degrees of freedom: 
FIGURE-28 TAC sec.5.4007 and sec.5.4008 PREAMBLE: SUMMARY OF COMMENTS AND AGENCY 
RESPONSE, COST BENEFIT ANALYSIS. 
6. Impact on coastal economy 
Four commenters stated that the new building code would have an adverse impact 
on the coastal economy. 
Comment: According to one commenter, the code will have a negative impact on 
economic development and fewer Texans will be able to afford housing in the 
coastal counties. According to another commenter, the impact of the new code on 
the cost of housing, will virtually bring building in Jefferson County to a 
standstill and drive economic development further inland into areas where 
affordable housing has not been regulated out of existence. One commenter 
expressed concern that the coastal building industry will be adversely affected 
by the increased costs of construction. Another commenter stated that there will 
be detrimental economic impact to the coastal economy due to a higher cost of 
living, slower growth, the potential loss of Navy support for Naval Station 
Ingleside and Naval Air Station Corpus Christi.
Response: The Department disagrees with any flat statement that the new building 
code will have a negative or detrimental impact on the economic development of 
the coastal area, including the coastal building industry. Although compliance 
with the new building code will increase the cost of a residence from 2% to 5%, 
the Department is unaware of any documented evidence that the implementation of 
the new building code will adversely affect the coastal economy, cause a higher 
cost of living overall, or slow growth in any given area, and no commenter has 
offered any such documentation to the Department. These claims are 
unsubstantiated speculation by the commenters. Unless there is an economic 
impact study conducted to determine the effect of new building codes on any 
given area, no one can accurately conclude that the impact will be negative, 
positive, or neutral. While there has been no formal study in Texas, in other 
states where building codes have been upgraded, the Department has not seen any 
evidence to indicate that local economy is adversely affected to an unreasonable 
degree. The commenter presents no evidence that adoption of the new code will 
result in loss of Naval support for military installations in Corpus Christi. 
The article submitted by the commenter addresses two primary issues--lack of 
rental housing and insufficient housing allowances. Available and affordable 
housing is a multi-faceted issue that cannot be resolved by continuing to insure 
coastal homes in the TCPIA that are built to inadequate, out-of-date wind load 
requirements. 
7. Impact on home designs 
Comment: Three commenters objected to adoption of the new code because it will 
have an adverse impact on home designs. Two commenters argued that the windstorm 
code is going to dictate how houses are designed--where windows and doors are 
placed and not allow for them in places that the buyers want. According to one 
of these commenters, homeowners cannot pay a couple more dollars to the 
insurance company and get the windows exactly where they want them. One 
commenter stated that the new code requires changing the total design of the 
house. Another commenter stated that the new code will cause a loss of a lot of 
aesthetic value of houses, making it tough to sell to the consumer and that a 
lot of design techniques used now will not be able to be used.
Response: The Department agrees that the construction requirements in the new 
code are more stringent than current requirements and that minimal adjustments 
in designs may be necessary as a result of the new code. The Department 
disagrees that home designs will have to be changed in total. The only major 
design change necessary under the new code will be in window and door openings 
which will have to be designed and located to accommodate adequate wall bracing. 
Windows and doors will not be able to be placed at the corner of a house, but 
will have to be at least two feet four inches from the corner of a house with a 
wall height of eight feet. These requirements are necessary to create a more 
wind resistant structure by transferring the loads from the roof down to the 
foundation. Shearwalls are provided to transfer the lateral wind loads from the 
roof and floor systems down to the foundation. The minimum widths at the corners 
of buildings is part of the shearwall requirements. As to the public's 
willingness to pay higher premiums for preferred placement of windows, the 
Department is unaware of any such willingness, and based on the Department's 
experience, it is not likely that the public is so willing. While the Department 
disagrees that the new code will cause a loss in the aesthetic value of houses, 
the purpose of building codes is to mitigate property damage losses, whether 
those losses be from fire, windstorm, or other perils. It is illogical to argue 
that building codes should emphasize aesthetic value over safer and stronger 
construction techniques. Although aesthetic value may be important in designing 
a home to sell, the proper construction designs and techniques to provide a 
safer and stronger structure must outweigh any aesthetic considerations. In 
addition, most coastal cities and towns in Texas have adopted model building 
codes that include design standards similar to those in the new code. It is the 
Department's position that most home buyers in the coastal area will understand 
the priority for adequate and necessary construction standards over design if 
they realize that the construction standards will not only make their home 
eligible for windstorm insurance coverage through the TCPIA, but will also 
reduce damage to the home in the event of a hurricane. 
8. Incentives 
Several commenters stated that builders and consumers have no incentives to 
build to the new code and that there should be increased availability of 
homeowners insurance and lower premiums as a result of complying with the new 
code. 
Comment: One commenter stated that the main beneficiaries of the new code will 
be the TCPIA and the insurance companies in the form of windfall profits since 
any proposed rate reductions will not offset the increase in construction costs. 
According to this commenter, any windfall profits to the TCPIA as a result of 
the new code will do little to improve its solvency in a relative sense since 
any catastrophic hurricane would do many times more damage in monetary terms 
than the current fund balance. In addition, according to this commenter, the 
private insurers have never committed to even publicly discuss these issues much 
less write more policies under the new code, and with good reason since they 
have windfall profits to gain and nothing to lose by doing so. 
Response: The Department disagrees that the TCPIA will have windfall profits 
because the increase in costs for construction to the new building code is not 
offset by a sufficient rate decrease. To have "windfall profits," some 
previously existing exposure for which premium was paid must be eliminated. An 
example of "windfall profits" is when a specific coverage is eliminated from a 
policy for which premiums have been paid for many years, and the premium for the 
policy is not reduced at the time the coverage is eliminated. That is a 
"windfall profit" to insurers because they are collecting a premium that was 
determined on historical premium and loss data, but the potential for loss has 
been eliminated with the removal of the coverage. The new building codes will 
apply only to new construction from a specified date forward. That will not 
produce "windfall profits" to insurers or to the TCPIA. The implementation of 
the new building code has nothing to do with the solvency of the TCPIA. The 
TCPIA is as solvent as its member companies, and as long as there are insurers 
to assess, the TCPIA will continue to pay claims. The Department agrees that a 
major storm will cause many more losses than the trust fund balance. Because of 
that possibility, the real issue is the effect that major losses will have on 
the revenue to the State of Texas. The more losses that insurers must pay 
through TCPIA assessments, the greater the potential of the loss of future 
premium tax revenue for the State of Texas. It is coastal consumers and the 
State of Texas and all its citizens who are the greater beneficiaries of 
stronger building codes--the coastal consumers because their property is less 
likely to be severely damaged and the citizens of Texas because reduced insured 
losses means a reduced exposure to premium tax losses. The Department, however, 
agrees that private insurers have never committed publicly to write more 
insurance policies under the new building code. This has nothing to do with 
windfall profits but rather is because the restrictions in writing insurance 
along the coast is based on more than just building code issues. Excessive 
concentrations of exposures by individual insurers that could affect the 
solvency of the individual insurer is the primary reason for the restructured 
market along the coast. 
Comment: Three commenters argued that adoption of the new code does not assure 
increased availability of insurance for homeowners. One of these commenters 
stated that to date there is no evidence that the building industry nor the 
public will realize any benefit in the way of availability of insurance, other 
than the TCPIA. 
Response: While the Department agrees that adoption of the new code will not 
guarantee increased availability of homeowners insurance, logic dictates that 
insurers are more likely to write new business on risks built to updated, higher 
construction standards than on risks that are built to out-of-date, lesser 
standards. As indicated in the Texas A&M study, the losses for a category 1, 2, 
or 3 hurricane should be reduced by approximately 50% for homes built to the new 
code standards. If homes are built to a better standard, property losses should 
be reduced, thus creating a more attractive environment for insurers to write 
insurance. Therefore, adoption and implementation of the new code at least 
creates an opportunity for increased availability of insurance for coastal 
homeowners while failure to adopt it contributes to continued lack of 
availability. 
Comment: Four commenters opposed adoption of the new code because there is no 
rate relief for homeowners who comply with the new code. As a result, according 
to one commenter, builders and consumers have no incentive to build to the new 
code. This same commenter stated that consumers spend $3,000 to $6,000 to meet 
windstorm requirements yet they pay the same rate per thousand as a 50-year old 
poorly built home. 
Response: The Department disagrees that builders and consumers have no incentive 
to build to the new building code. The Department agrees, however, that 
consumers who pay additional costs to meet building codes pay the same rate per 
thousand as consumers living in a 50-year-old home because the rate per thousand 
is the same for similar risks regardless of the age of the risks, i.e., a new 
frame home is subject to the same rate per thousand as a 50-year-old frame home, 
regardless of its location and regardless of which building code applies. 
However, because consumers living in homes that meet windstorm code requirements 
have homes that are stronger and that will have less damage in the event of a 
major hurricane, there is incentive for builders to build to the new code. 
Consumers have the incentive to buy a residence that is likely to suffer less 
damage in a hurricane, will be there after the storm, will provide greater 
protection to the contents of the home, and will be eligible for windstorm 
insurance coverage through the TCPIA. 
Comment: One commenter stated that the Department should also recognize the 
lower risk resulting from enactment of the code by lowering premiums for 
consumers. Another commenter stated that insurance companies need to commit 
themselves to be part of the formula. This same commenter said discounts of 
greater than 6% need to happen, and that if the damageability is 50% less then 
the consumer should be rewarded as well as the insurance company. 
Response: The Department does not agree that there must be an immediate premium 
reduction because of the implementation of the new building code. A reduction in 
the amount of damage to homes built to the new code will be reflected in fewer 
losses which will be reflected in reduced premiums over a period of time. Even 
so, the concerns about lower premiums were addressed by the 75th Legislature 
which enacted a law (H.B. 3383) that will require the Commissioner to consider a 
rate reduction for those risks required to meet the new building code. Under the 
new legislation, the Commissioner must hold a hearing within 180 days after 
implementation of the new code to consider the appropriate rate reduction. The 
legislation provides no limitation on the amount of rate reduction; however, if 
the Commissioner fails to hold the hearing within the 180 days, on the 181st 
day, the rates are automatically reduced by 6% for risks subject to the new 
building code. The Commissioner may determine as a result of the hearing that 
rate reductions of greater than 6%, or lesser than 6%, are warranted. 
9. Implementation delay 
Nine commenters requested that implementation of the new code be delayed.
Comment: Several commenters urged delay because more time is needed for research 
and testing or until a proper investigation involving the proper sources is 
conducted. Three commenters requested that the Department study independent 
testing information and incorporate that information into the new code, 
specifically, the testing of Texas Tech University and the National Association 
of Home Builders who are presently testing the effects of wind on structures, 
and the American Plywood Association. Another commenter suggested waiting for 
the new ASCE 7-98 which is likely to include the initial results of the National 
Science Foundation/NAHB Research Center wind map modeling. The commenter 
suggested waiting for the International Code Council family of codes which are 
expected to be complete in the year 2000 and may be more appropriate and 
universally acceptable. 
Response: The Department strongly disagrees with any further delay in adoption 
of the code. The new code is based on the wind load requirements of ASCE 7-93,  
Minimum Design Loads for Buildings and Other Structures. ASCE 7 is a national 
consensus standard, including wind load requirements, which is referenced in the 
three major model building codes. The prescriptive requirements contained in the 
new code are based upon nationally recognized standards for wood, concrete, and 
masonry construction. These design standards are also referenced in the three 
major model building codes. All of the municipalities along the Texas coast 
continually adopt more updated building codes. Unlike the current TCPIA code 
which dates from 1973, most municipalities have adopted the 1991 or 1994 Edition 
of the Standard Building Code. The commenters did not specifically identify what 
tests are being conducted by Texas Tech University and the American Plywood 
Association nor did they provide any documentation on such testing. In response 
to a Department inquiry, Texas Tech University stated that they are not 
currently performing any tests which would result in information that could be 
incorporated directly into the TCPIA building code. The National Association of 
Home Builders is currently performing testing of shearwalls; however, it is the 
Department's understanding that the testing has not been completed nor has any 
specific test information been provided to the Department for consideration. 
Therefore, it is impossible for the Department to respond to test information 
which has not been completely developed or supplied to the Department for 
review. The Department does not and has not opposed reviewing test results for 
possible inclusion in the new code and, in fact, has included construction 
techniques in the new code based on test information. For example, the 
Department included in the new code a detail for a shorter return at garage door 
openings based on test information submitted by the American Plywood Association 
(the Department does not know if this is the testing referred to by the 
commenter) and the Florida Wood Council. The Department also does not agree that 
the adoption of the new code should be delayed to wait for the new ASCE 7-98 or 
any other future revisions to ASCE 7 or to wait for the consolidation of the 
model building codes in the year 2000. Building codes, as well as electrical 
codes, plumbing codes, mechanical codes, and fire codes have always evolved over 
time and must be continually updated to reflect the latest technology and design 
standards. Research and testing is a never ending cycle which can be argued as 
the reason for eternal delay of the implementation of revised building codes. 
Both the Department and the advisory committee recognize that there will always 
be ongoing development and testing of new construction materials and techniques 
and realize the importance of updating the code as new technology is developed. 
If new testing and research yield acceptable methods of construction that can be 
incorporated into the new building code, the Department and the advisory 
committee will recommend these methods to the Commissioner for inclusion in the 
new building code. This new code, however, is needed to incorporate the latest 
wind-resistant construction technology since 1973. The development and drafting 
of the code took four and one-half years. The Department and the advisory 
committee believe that this is sufficient time for proper development. In 
addition, the new code, which will not become effective until June 1, 1998, 
should not be further delayed since Texas coastal cities have realized the need 
to update their own building codes and have already adopted codes which 
reference the same design standards as the new code. To further delay the 
implementation of this code will mean that the TCPIA wind resistant building 
standards will continue to be unnecessarily out-of-date and woefully lagging 
behind the coastal city codes. As new design standards, methods of construction, 
or codes (including the new ASCE 7-98 and the International Code Council family 
of codes) are developed, consumers, builders, and any other interested parties 
as well as the advisory committee and the Department may make recommendations to 
the Commissioner to adopt these new methods and standards. 
Comment: One commenter stated that the effective date of June 1, 1998, does not 
provide enough time to educate both large and small builders adequately about 
the code. This commenter observed that no assurances have been made to develop 
seminars and training sessions for builders, home designers, and other 
interested parties in the building profession. According to the commenter, it is 
essential that these groups have the opportunity to understand the requirements 
and standards of the code. 
Response: The Department agrees that it is essential that builders, home 
designers, and other interested parties in the building profession have the 
opportunity to understand the requirements and standards of the code, but the 
Department does not agree that there is not sufficient time before June 1, 1998, 
to prepare and educate these groups for implementing the new building code. The 
Department is in the process of preparing the necessary educational materials 
and will hold seminars on the Texas coast for inspectors, builders, and any 
other interested parties. The Department will host as many seminars as possible 
before June 1, 1998, and will continue to provide educational training as needed 
after June 1, 1998. 
Comment: One commenter stated that the June 1, 1998, effective date does not 
allow enough time for builders to change construction techniques to meet the new 
code standards. 
Response: The Department disagrees. The effective date of June 1, 1998, for 
implementation of the new code provides builders with ample time to change 
construction techniques and rework home designs before the new building code is 
implemented. Most builders are already well aware of many of the requirements in 
the new building code, and it is the Department's position that nearly a year is 
more than sufficient lead time to make any necessary adjustments to building 
practices. 
Comment: One commenter stated that it is essential that builders, home 
designers, and other interested parties in the building profession not have the 
new standards enforced during inspections until the actual effective date of the 
code has passed. 
Response: The Department does not have the authority to inspect and enforce the 
new building code prior to its adopted effective date of June 1, 1998, and 
therefore, has no intention of doing so. However, if a builder chooses to build 
to the new code sooner than June 1, 1998, the Department will cooperate by 
inspecting to the new code. That is the only condition under which the 
Department will inspect to the new building code prior to its June 1, 1998, 
effective date. 
10. Plan review and appeals 
Comment: One commenter opposed the new code because there is no plan review 
mechanism like there is at the city level for review of building design. This 
plan review, according to the commenter, enables city officials to point out 
problems with the design and to provide the builder and field inspector with a 
commentary and list of things that need to be clarified. This commenter 
recommended decentralizing enforcement at the state level and putting plan 
review personnel in the local offices and running it like a building inspection 
program. 
Response: The Department agrees that plan review may be beneficial for 
implementing the new building code; however, currently there is not sufficient 
Department staffing for such plan review. The Department will review the 
possibility of implementing a plan review process to determine if such a process 
is feasible. This issue, however, is complicated by the question of whether the 
State should have to expend money and resources to review plans that have been 
designed by a professional who is or should be aware of building code 
requirements.
Comment: This commenter noted that the Department does not have the proper 
resources for enforcement of the new code. 
Response: The Department disagrees. The Department believes there is adequate 
staffing at this time to effectively enforce the new building code in accordance 
with the procedures and practices currently in operation in the Department's 
windstorm field offices. The Department has 37 inspectors in 13 regional offices 
along the coast and 11 staff members in its Austin office. The Department has 
had adequate staffing to effectively enforce the existing code requirements for 
the last eight years. If the Department finds that the current staffing is 
inadequate to effectively enforce the new code, the Department will take the 
appropriate action to ensure that the statutory inspection requirements are met. 
Comment: This same commenter opposed adoption of the new code because there is 
no appeal process like there is at the local level in which the building 
designer has the option of appealing the building inspector's ruling to a 
committee. 
Response: The Department agrees that the windstorm inspection program does not 
have an official appeals process as established by building officials when a 
model code is adopted. There is, however, a process of appeal, both informally 
through the windstorm inspection management as well as formally through the 
Commissioner and the courts. Any builder has the right to contact the supervisor 
of the Department's local field offices as well as the Department's windstorm 
management in the Austin office if they are unhappy with an inspector's 
decision. Any builder may appeal any decision of the Department staff to the 
Commissioner and may petition the Commissioner for changes in the building code. 
11. FR-10 
Comment: Four commenters requested that the Department's interpretation (FR-10) 
clarifying the intent of the Windstorm Resistant Construction Guide regarding 
wall bracing requirements be changed.
Response: Code interpretation FR-10 was not proposed or posted for consideration 
in the proceeding to consider the adoption of the new code and may not properly 
be considered as part of this action. The commenters, however, may petition the 
Commissioner for a separate hearing on this matter. 
The new sections are adopted pursuant to the Insurance Code, Articles 21.49 and 
1.03A, and in accordance with the Government Code, sec.sec.2001.004-2001.038. 
Article 21.49, sec.6A specifies building code requirements and approval or 
inspection procedures for windstorm and hail insurance through the TCPIA. 
Article 21.49, sec.6A(f), Insurance Code, requires the Commissioner to appoint a 
Building Code Advisory Committee to advise and make recommendations to the 
Commissioner on building specifications in the TCPIA plan of operation for 
structures to be eligible for windstorm and hail insurance through the TCPIA. 
Article 21.49, sec.5(c) of the Insurance Code provides that the Commissioner of 
Insurance by rule shall adopt the TCPIA plan of operation with the advice of the 
TCPIA board of directors. Section 5(f) of Article 21.49 provides that any 
interested person may petition the Commissioner to modify the plan of operation 
in accordance with the Administrative Procedure Act (Government Code, title 10, 
subtitle A, chapter 2001). Article 21.49, sec.6A(f) and sec.5(c) and (f), by 
their terms, delegate the foregoing authority to the State Board of Insurance. 
However, under Article 1.02 of the Insurance Code, a reference in the Insurance 
Code or another insurance law to the State Board of Insurance means the 
Commissioner of Insurance or the Texas Department of Insurance, as consistent 
with the respective powers and duties of the Commissioner and the Department 
under Article 1.02. 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. 
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 July 1, 1997.
TRD-9708570
Caroline Scott
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: July 21, 1997
Proposal publication date: April 11, 1997
For further information, please call: (512) 463-6327

CHAPTER 11.Health Maintenance Organizations
SUBCHAPTER S.Solvency Standards for Managed Care Organizations Participating in 
Medicaid
28 TAC sec.11.1804
The Texas Department of Insurance adopts an amendment to sec.11.1804, which 
concerns the guarantees of sponsoring organizations of managed care 
organizations ("MCOs") participating in the State Medicaid Program without 
changes to the proposed text as published in the April 11, 1997, issue of the 
Texas Register (22 TexReg 3392). No one requested a hearing. The proposed 
amendments allow a MCO to participate in a "state defined" program controlled 
and defined by the State Medicaid Office for Texas subject to reduced net worth 
and statutory deposit requirements for MCOs as provided in this subchapter if 
its sponsoring organization is a taxing authority as defined therein and 
participating solely in the section 1115 waiver expansion program. 
Article 4413(502) sec.sec.16A-16G of the Texas Statutes (as amended by Senate 
Bill 10 enacted in the 74th Legislature) provides for the development of a 
health care delivery system for the State Medicaid Program, and grants the 
Commissioner of Insurance the authority to promulgate regulations creating 
standards of solvency for participating managed care organizations. Moreover, 
Article 1.61 of the Texas Insurance Code (as amended by Senate Bill 600 enacted 
in the 74th Legislature) requires the Texas Department of Insurance, in 
conjunction with the Texas Department of Health, to establish fiscal solvency 
standards for managed care organizations serving State Medicaid clients. This 
amendment to the existing regulation has been presented to and approved for 
publication by the State Medicaid Office and the advising MCAC Committee. 
This amendment assists in the implementation of a new health care delivery 
system for Medicaid, which is estimated to include approximately 400,000 
additional children and teenagers of Texas, and a "state defined HMO" as allowed 
by federal legislation and related regulations. This amendment allows for 
reduced net worth and statutory deposit requirements for a MCO if its sponsoring 
organization is a taxing authority as defined therein and the MCO is 
participating solely in the section 1115 waiver expansion program. 
The original sections were adopted in conjunction with the related regulations 
being adopted and/or amended by the Texas Health and Human Services Commission, 
1 TAC Chapter 353 (21 TexReg 7303), the Texas Department of Health, 25 TAC 
Chapter 30 (21 TexReg 7322), and the Texas Department of Mental Health and 
Mental Retardation, 25 TAC Chapter 401 (21 TexReg 7335). 
Section 11.1804, as amended, allows a MCO which is participating solely in the 
Medicaid section 1115 waiver expansion program and is sponsored by a taxing 
authority to possess reduced net worth and statutory deposit requirements of 
$500,000 and $100,000, respectively. However, the amendments by the Texas 
Legislature to the minimum net worth and statutory deposit requirements for HMOs 
affect the reductions as provided in this amendment by changing any such 
reductions to equal the minimums stated in the amendments. 
Comments received. 
General. The Department received a letter written on behalf of the Lubbock 
County Hospital District and the Nueces County Hospital District which expressed 
much concern over the cost of obtaining a license from the Department for a new 
entity attempting to participate in this new Medicaid program. The commenters 
requested consideration be given to decreasing those costs so that more "net" 
funds may be used to deliver the health care services. 
Agency Response: Neither this amendment nor the original sections address the 
licensing requirements of Texas law; therefore they do not affect the related 
costs of licensure. The concerns of the commenters can not be addressed through 
rulemaking by the Department but only through statutory change. 
Comments received in favor of the rule as proposed but expressed concern about 
the costs of licensing requirements: Lubbock County Hospital District and Nueces 
County Hospital District. 
No comments were received against the rule as proposed. 
This amendment is adopted pursuant to Article 1.61 of the Texas Insurance Code 
which directs the Commissioner of Insurance to adopt fiscal solvency standards 
for the State Medicaid Program, and Article 4413(502) sec.sec.16A-16G of the 
Texas Civil Statutes which provides for the development of a system to deliver 
Medicaid benefits including the creation of solvency standards. Article 1.03A of 
the Texas Insurance Code authorizes the Commissioner of Insurance to promulgate 
and adopt rules and regulations for the conduct and execution of duties and 
functions by the Texas Department of Insurance. 
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 July 1, 1997.
TRD-9708572
Caroline Scott
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: July 21, 1997
Proposal publication date: April 11, 1997
For further information, please call: (512) 463-6327

CHAPTER 21.Trade Practices
SUBCHAPTER J.Prohibited Trade Practices
28 TAC sec.21.1006
The Commissioner of Insurance adopts new sec.21.1006, concerning unfair 
competition and unfair practices. The rule is adopted with changes to the 
proposed text as published in the May 6, 1997, issue of the Texas Register (22 
TexReg 3982). No party requested a public hearing on the proposal. 
This rule addresses unfair competition and promotes the availability of 
insurance by prohibiting insurers from declining to write residential property 
insurance based on the age or minimum value of the residential property. Many 
writers of residential property insurance in Texas use underwriting guidelines 
which exclude residential properties over a certain age or below a minimum value 
regardless of the actual physical condition of the property. Because many houses 
in Texas are older and/or of lower value than the guidelines allow, such 
restrictions make insurance unavailable for large numbers of Texans, especially 
those who live in inner city and rural areas. This rule will also promote fair 
competition in the residential property market. Three residential property 
insurers, representing nearly 50% of the Texas market, have agreed through 
consent decrees or conciliation agreements with the U.S. Department of Housing 
and Urban Development (HUD) not to use age and minimum value as bases for 
declining to write residential property insurance. Nationwide Mutual Insurance 
Company v. Cisneros, 52 F.3d 1351 (6th Cir. 1995), cert. den. 1996. This rule 
will promote fair competition in the Texas market by prohibiting all writers of 
residential property insurance in Texas from engaging in these practices. The 
Commissioner of Insurance is the regulator of Texas insurance practices and has 
jurisdiction for eliminating unfair trade practices and unfair competition in 
Texas. The Commissioner's exercise of his regulatory authority over these 
underwriting practices asserts his jurisdiction over insurance underwriting 
rather than ceding authority to a federal housing agency. Neither the federal 
agreements nor this rule prohibit insurers from basing their decisions to insure 
property on the actual physical condition of a particular piece of property or 
on other factors which would increase the risk such as historical designations 
which require rebuilding with historical accuracy. This rule is adopted to 
promote compliance with Texas and federal law, to maintain fair competition 
among Texas insurers and to promote availability of insurance in inner city and 
rural areas of Texas. In response to comments received by the agency, the rule 
is adopted with changes to the proposed text. In subsection (a), the reference 
to farm and ranch owners' policies has been deleted from the definition of 
residential property insurance because recent legislation has moved those 
policies from personal into commercial lines. In subsection (b), the phrase 
"such as" has been replaced with "including" to clarify that the subsequent list 
of property conditions is in no way exclusive. Also in subsection (b), the name 
of the Association is changed from the Texas Catastrophe Insurance Association 
to the Texas Windstorm Insurance Association to reflect the statutory name 
change effective September 1, 1997. Subsection (c) has been reworded to clarify 
that the rule prohibits only the use of minimum property values. Subsection (d) 
is added to make the rule effective on September 1, 1997. 
Section 21.1006(a) defines residential property insurance. Subsection (b) 
prohibits declining to write residential property insurance based on the age of 
the property sought to be insured and clarifies that the rule does not prohibit 
declining to write coverage based on the physical condition of the property. It 
also clarifies that the rule does not change building code standards set by law 
for coverage by the Texas Windstorm Insurance Association (until September 1, 
1997, the Texas Catastrophe Property Insurance Association). Subsection (c) 
prohibits declining to write residential property insurance based on a minimum 
property value. Subsection (d) states that the rule takes effect September 1, 
1997. 
The Department received comments on the proposed rule from thirteen groups or 
persons. The Austin Tenants' Council, Office of Public Insurance Counsel, City 
of Dallas, Dallas Homeowners' League and an individual insurance agent offered 
support for the rule. 
Texas Insurance Organization and Frontier General Insurance Agency, Inc. 
supported the proposed rule with certain suggested changes. Farmers Insurance 
Group of Companies wrote that it had no serious objections to the proposed rule 
but offered certain suggestions. Texas Farm Bureau Insurance Companies and Apex 
Lloyds Insurance Company did not express support or opposition for the rule but 
made certain suggestions for changes. State Farm Insurance Companies and 
National Association of Independent Insurers opposed the proposed rule.
Comment: The commenters who supported the proposed rule stated that its adoption 
will increase the availability of residential property insurance in Texas, 
especially insurance for low-income minorities, families with children and 
persons with disabilities. An insurance agent commented that if a property is 
properly maintained and has updated wiring and plumbing, age should not be a 
factor. Likewise, he stated that there are many small $30,000 homes (exclusive 
of lot value) that are in excellent repair and show a pride of ownership that 
deserves the best rating. Another commenter stated that neighborhoods would see 
an immediate positive impact from adoption of the rule. Response: Texas 
Department of Insurance ("TDI") agrees. 
Comment: One commenter suggested that the word "homeowners" be deleted from the 
introductory paragraph because the rule applies to all residential property 
insurance. Response: TDI agrees; the word is deleted. 
Comment: Several commenters objected to TDI's reference to the federal actions 
against three major residential property insurers, stating that the rule should 
be based on state law authority alone and that neither a Texas court, the 5th 
Circuit Court of Appeals nor the U.S. Supreme Court has ruled on the Department 
of Housing and Urban Development's position that it has the authority to 
regulate insurance practices under the Fair Housing Act.
Response: The rule is based on state law. Article 21.21 sec.13(a) permits the 
Commissioner to "order such provision as is necessary in the accomplishment of 
the purposes of the Article and Article 21.20, including, but not limited, to, 
such express provision within the purposes of these Articles as it deems 
necessary or as is required to affect necessary uniformity with the laws of
other states or the United States. . . " Reference to the federal actions is 
intended to support TDI's contention that the rule furthers the legislative 
goals of promoting fair competition and the availability of residential property 
insurance for Texans and to illustrate the practical effect of the rule which is 
to standardize the practice in Texas. This standardization both increases the 
availability of residential property insurance and forestalls further federal 
litigation against companies doing business in Texas. While it is true that no 
court in the 5th Circuit has ruled on HUD's contentions that age and value 
restrictions have been used in violation of the Fair Housing Act, the 6th 
Circuit Court of Appeals has ruled that HUD has the jurisdiction to make such a 
determination (Nationwide Mutual Insurance Company v. Cisneros, 52 F.3d 1351 
(6th Cir. 1995.), cert den. 1996).
Federal law requires that great deference be paid to the determination of the 
regulatory authority. Chevron v. Natural Resources Defense Council, 467 U.S. 
837,842-845 (1984). Therefore, it is sound public policy for the Commissioner to 
adopt a rule consistent with state law that promotes the legitimate goal of 
increasing availability of residential property insurance and also has the 
effect of forestalling litigation by a federal regulatory authority in an area 
that is regulated by the state insurance commissioner.
Comments: One commenter stated that it is dangerous precedent to base state 
rulemaking on federal agency interpretation. Response: This rule is not based on 
a federal agency interpretation. This rule is based on state law favoring fair 
competition and availability of residential property insurance. However, when 
companies writing almost 50% of the residential property insurance in Texas, are 
operating under agreements with a federal agency based on that agency's 
interpretation of federal law, it is legitimate to cite that interpretation in 
explaining this rule. 
Comment: Two commenters objected to imposing on all insurers underwriting 
restrictions which were agreed to by only some insurers, stating that by 
imposing across the board prohibitions on underwriting, the rule inhibits 
competition.
Response: TDI disagrees. The rule stimulates competition by prohibiting across 
the board exclusions that prevent properties in good condition from being 
insured simply because of their age or because they are not expensive enough.
Comment: A commenter stated that it is unwise and unnecessary to force insurers 
to forego underwriting guidelines based on age and value where there is no 
evidence of disparate impact and no reason to believe that disparate impact 
analysis is even appropriate to analyze those underwriting guidelines.
Response: This rule is not based on a disparate impact theory, a theory which 
means that an action which may not be intentionally discriminatory is alleged to 
be illegal because it has a "disparate impact" on a protected class. It is 
undisputed that many companies decline to write residential property insurance 
for properties over a specified age or below a specified value, regardless of 
the condition of the property. Many older or lower value properties are in inner 
cities or rural areas, where insurance availability is a serious problem. This 
rule promotes the important public policy of making insurance available to 
acceptable risks. 
Comment: Texas should encourage diversity in underwriting. Response: TDI agrees 
with this statement. This rule promotes competition and diversity in 
underwriting by prohibiting across the board underwriting standards and 
encouraging evaluation of individual risks. 
Comment: Several commenters suggested that TDI delete the reference to farm and 
ranch owners' policies in the definition of residential property insurance as 
recent legislation has moved those policies into commercial lines.
Response: TDI agrees; the rule has been revised. 
Comment: Several commenters suggested that "decline to write" is more proper 
terminology than "deny." Response: TDI agrees, recognizing that "decline to 
write" does not narrow the application of the rule; the rule has been revised.
Comment: Several commenters questioned whether TDI intended to prohibit the use 
of maximum property value as an underwriting guideline. They pointed out that 
such a restriction could force carriers to insure risks beyond their legal 
capacity to do so. Response: TDI agrees. The rule has been clarified to express 
TDI's intent that only use of a minimum value is prohibited. 
Comments: Several commenters suggested that the rule should apply only to "owner 
occupied" dwellings and not to renters' policies. Response: The agency declines 
to restrict the rule to owner occupied dwellings. Recent calls to the Department 
from Tarrant County consumers reveal that it is difficult to obtain insurance 
for rental properties in inner city areas where there is a great need for 
adequate rental housing. Whether residential properties are owner or tenant 
occupied should not have any relation at all to restrictions on using age and 
value to decline coverage. The rule does not prohibit underwriting based on the 
physical condition of a particular piece of property or based on whether the 
property is vacant or occupied. 
Comments: One commenter suggested that the phrase "but not limited to" be 
inserted before enumerated physical conditions given as examples of conditions 
upon which an insurer can base its decision to write or deny coverage, because 
without this phrase the list may be construed as exclusive. Response: Staff 
disagrees that the phrase "but not limited to" is required but has revised the 
rule to use "including" rather than "such as" to clarify that the list of 
physical conditions which may be considered is explanatory and not restrictive 
in any way. Consideration of major structural defects and the physical condition 
of the property are not restricted by this rule. 
Comment: The rule should include an exception for underwriting guidelines 
supported by sound underwriting or actuarial principles. Response: TDI believes 
that the rule as written is necessary to promote availability and fair 
competition and that the change suggested would make the rule difficult to 
enforce. In fact, the rule does permit sound underwriting based on the condition 
of the property. 
Comment: Two commenters suggested that the rule specify that insurers may use 
age and value guidelines to place business with company groups or affiliated 
insurers. Response: TDI declines to enact this suggestion because it would 
defeat the purpose of the rule. "Decline to write" applies to each company, not 
the group as a whole. TDI staff notes that this commenter has informed the 
Department that it intends to write residential property insurance in only one 
company within its group, so the issue should be irrelevant to this commenter. 
Comment: Some commenters stated that the rule should clarify that underwriting 
guidelines based on insurance to value, replacement cost, and actual cash value 
are not prohibited and that this rule is not intended to prohibit any rating 
plans or factors utilizing age or value. Response: The rule as written does not 
affect any requirement of the amount of insurance relative to the actual cash 
value of the property or replacement cost. It does not prohibit filing of rating 
plans or factors which may be considered subclasses of existing classes as long 
as those subclasses are actuarially based. No change to the rule is necessary. 
Comment: The rule should clarify that it does not limit an insurer's ability to 
utilize age or value in determining whether a risk may be bound by an agent.
Response: Binding authority is established by contract between the agent and the 
company and is not specifically addressed in the rule. TDI does not expect 
insurers to restrict binding authority based on age or minimum value; however, 
if this becomes an obstacle to the availability of insurance, TDI may revise the 
rule to address the issue. 
Comment: A commenter asked that the rule also not allow a company to cancel, 
non-renew or underwrite differently based on age or value. Response: A company 
could not evade the rule by canceling or non-renewing for any reason that it 
could not have used to decline a risk in the first place. Therefore, revision to 
prohibit use of age or value in cancellation or non-renewal is not necessary. A 
prohibition on "underwriting differently" goes beyond the intended scope of the 
rule. 
Comment: One commenter suggested that TDI revise its statistical plan to require 
insurance companies to submit the age of residential properties insured so that 
TDI could measure the effect of the rule. Response: The Department declines to 
make the suggested change at this time, believing there may be other more cost 
effective means to monitor the rule's effect. However, TDI staff will consider 
this change during its next revision of the statistical plan. 
Comment: Several commenters asked if the rule could allow insurers more time to 
comply with the rule, such as making changes in underwriting guidelines 
simultaneously with rate filing instead of immediately upon adoption of the 
rule. Response: It is important that this rule be effective quickly so that 
insurance consumers can begin to enjoy the increased availability and companies 
will be competing fairly. Recognizing that the rule will require some companies 
to change their underwriting guidelines and inform their agents of changes, the 
effective date of the rule is extended to September 1, 1997. 
Comment: A few commenters stated that the Department had underestimated the cost 
to comply. One commenter explained that the prohibition on age would require an 
insurer to inspect each property in order to underwrite it properly, imposing a 
significant ongoing cost. Response: TDI disagrees with this comment. Companies 
use different methods to underwrite residential property and compliance with 
this rule could be accomplished in ways that involve minimal or no extra cost to 
the companies. Commenters submitted no evidence to suggest that the age or value 
of a risk alone makes a physical inspection necessary. In addition, there are 
ways that the company could minimize inspection costs, such as acceptance of an 
inspection certificate like that provided in Texas Insurance Code, Article 
3.55B, Voluntary Inspection Program. TDI received no comments suggesting what an 
appropriate cost estimate would be or even what a commenter's own cost of 
compliance would be. Without specific information about why costs would increase 
so dramatically and how much the increase would be, TDI believes its cost 
estimate is reasonable.
The new sections are proposed pursuant to the Insurance Code, Articles 21.21, 
5.98, 5.33B and 1.03A and in accordance with the Government Code 
sec.sec.2001.004-2001.038. Article 21.21 sec.1(a) provides that the purpose of 
Article 21.21 is to regulate trade practices in the business of insurance by 
defining, or providing for the determination of, all such practices in this 
state which constitute unfair methods of competition or unfair or deceptive acts 
or practices and by prohibiting the trade practices so defined or determined. 
Article 21.21sec.1(b) provides that Article 21.21 shall be liberally construed 
and applied to promote its underlying purposes as set forth in sec.1 of Article 
21.21. Article 21.21 sec.3 provides that no person shall engage in the state in 
any trade practice which is defined in Article 21.21 as, or determined pursuant 
to Article 21.21 to be, and unfair method of competition or an unfair or 
deceptive act or practice in the business of insurance. Article 21.21 sec.13(a) 
provides that the Commissioner of Insurance may promulgate and enforce 
reasonable rules and regulations and may order such provision as is necessary in 
the accomplishment of the purposes of Article 21.21, including but not limited 
to, such express provision within the purposes of these Articles as deemed 
necessary or as is required to effect necessary uniformity with the laws of 
other states or the United States. Article 5.33B establishes a voluntary 
inspection program to further the availability of residential property insurance 
for those properties that meet minimum standards for property condition 
insurability. Article 5.33B sec.6 provides that the Commissioner may adopt rules 
appropriate to accomplish the purposes of the article. Article 5.98 provides 
that the Commissioner of Insurance may adopt reasonable rules that are 
appropriate to accomplish the purposes of Chapter 5, Texas Insurance Code, 
entitled Rating and Policy Forms, and which contains statutes governing 
residential property insurance. Article 21.21 sec.13(a) and Article 5.98, by 
their terms, delegate the foregoing authority to the State Board of Insurance. 
However, under Article 1.02 of the Insurance Code, a reference in the Insurance 
Code or another insurance law to the State Board of Insurance means the 
Commissioner of Insurance or the Texas Department of Insurance, as consistent 
with the respective powers and duties of the Commissioner and the Department 
under Article 1.02. Article 1.03A authorizes the Commissioner of Insurance to 
adopt rules and regulations, which must be for general and uniform regulation, 
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 administrative agency.

sec.21.1006.Prohibition Against Declining to Write Residential Property 
Insurance Based on the Age or Value of the Property.
(a) "Residential property insurance" means insurance against loss to real or 
tangible personal property at a fixed location provided in a homeowners policy 
or residential fire and allied lines policy. 
(b) An insurer may not decline to write residential property insurance based on 
the age of the property sought to be insured. This provision does not prohibit 
an insurer from declining to write coverage based on physical conditions of the 
property, including wiring, heating, air conditioning, plumbing, and roofing. 
This provision shall not prohibit the Texas Windstorm Insurance Association from 
requiring, in accordance with the provisions of Article 21.49 of the Insurance 
Code, different building code standards to qualify for coverage based on the 
date that the structure was constructed, repaired, or additions were made. 
(c) An insurer may not decline to write residential property insurance based on 
a minimum value of the property sought to be insured. 
(d) This rule takes effect September 1, 1997. 
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 July 1, 1997.
TRD-9708646
Caroline Scott
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: September 1, 1997
Proposal publication date: May 6, 1997
For further information, please call: (512) 463-6327

CHAPTER 23.Prepaid Legal Service
28 TAC sec.23.1
The Commissioner of Insurance adopts an amendment to sec.23.1, concerning the 
scope of, and definitions pertaining to, Chapter 23, Prepaid Legal Service 
without changes to the proposed text as published in the May 6, 1997, issue of 
the Texas Register (22 TexReg 3983). The amendment revises the definition of 
"person" in sec.23.1(b)(12). The amendment was proposed by the Texas Department 
of Insurance ("Department") in response to a public petition filed with the 
Department pursuant to the Government Code, sec.2001.021 and 28 TAC sec.1.60. 
The amendment revises the definition of "person" in sec.23.1(b)(12) to include 
both natural persons and entities. The broader definition makes this definition 
consistent with other definitions of "person" in the Texas Insurance Code and 
the rules of the Department. The broader definition also will ensure that a 
natural person or entity associated with a for-profit or nonprofit prepaid legal 
service corporation is not prejudiced by an unnecessarily narrow definition of 
"person." For example, in sec.23.1(b)(2), an "applicant" is defined as a "person 
applying for a legal services contract for performance of legal services . . .." 
The adopted definition of "person" will preclude any interpretation of Chapter 
23 which would suggest that only a natural person can apply for a prepaid legal 
service contract, and will allow prepaid legal service corporations to market to 
businesses as well. In addition, the definition of "person," as adopted, will 
aid the Department in holding both natural persons and entities associated with 
legal service corporations accountable for their actions. 
The amendment changes the definition of "person" in sec.23.1(b)(12) from "a 
natural person or persons" to "any individual, partnership, corporation, 
association, joint stock company, trust, unincorporated organization, 
governmental subdivision or any public or private entity of any character other 
than a state agency (as "state agency" is defined by the Government Code, 
sec.2001.003(7))." Chapter 23 of TAC applies to both for-profit prepaid legal 
services governed by the Insurance Code, article 5.13-1, and nonprofit prepaid 
legal services governed by the Insurance Code, Chapter 23. Therefore, the 
definition of "person," as adopted, applies to every kind of prepaid legal 
service that may be offered in Texas. 
No comments were received regarding adoption of the amendment. 
The amendment is adopted under the Insurance Code, Articles 5.13-1 and 1.03A and 
Chapter 23. Article 5.13-1 gives the Department jurisdiction over for-profit 
prepaid legal service providers. Subsections (c) and (d) of Article 5.13-1 
authorize the Commissioner to promulgate rules related to writing and issuance 
of prepaid legal service contracts. Chapter 23 gives the Department jurisdiction 
over nonprofit prepaid legal service providers. Throughout Chapter 23, the 
Legislature delegates to the Commissioner the authority to set standards and 
promulgate rules. Specific rulemaking authority is referenced in Articles 23.01, 
23.12, 23.16, 23.19, 23.23 and 23.24. The rulemaking delegations in these 
statutes often refer to the "State Board of Insurance" (which no longer exists) 
rather than the Commissioner. However, under the Insurance Code, Article 1.02, a 
reference in the Insurance Code or another insurance law to the State Board of 
Insurance means the Commissioner of Insurance or the Texas Department of 
Insurance, as consistent with the respective powers and duties of the 
Commissioner and the Department under Article 1.02. Article 1.03A authorizes the 
Commissioner of Insurance to adopt rules and regulations for general and uniform 
application regarding the conduct and execution of the duties and functions of 
the Department, provided that such rules or regulations are authorized by 
statute. 
This agency hereby certifies that the adoption has been reviewed by legal 
counsel and found to be a valid exercise of the agency's legal authority. 
Issued in Austin, Texas, on July 1, 1997.
TRD-9708569
Caroline Scott
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: July 21, 1997
Proposal publication date: May 6, 1997
For further information, please call: (512) 463-6327